Dear Valued Client
I would like to take this opportunity to personally THANK YOU for allowing FlexChecks to serve you in 2020. I am honored to have some of the best clients in the world and an excellent staff to provide service and applications that you have come to rely on. 
Whether you’re a FlexChecks veteran or this is your first year-end with us, please read this booklet very carefully! By doing so, you will help us complete W-2’s as quickly as possible, so you can get them in the hands of your employees shortly after the first of the year.  
I’m sure you have heard our exciting news about changing to the iSolved platform! Moving to iSolved is one of the best decisions we have made as a business and I cannot wait to share this technology with you! If you are interested in converting your payroll to iSolved, please feel free to reach out to me anytime!    
Again, thank you for your confidence and loyalty over the past year. We look forward to serving you in 2021 and beyond. Please feel free to contact me or any of my outstanding staff members if you have any questions or concerns.
Diane K Pelak

FlexChecks Holiday Schedule

To allow our employees to spend time with their families, FlexChecks is closed the following days during the Christmas Season. Keep in mind that payrolls should be submitted to FlexChecks at least two (2) business days in advance (taking Federal Reserve Holidays into consideration). If your payroll is NOT received two business days in advance, your direct deposits will be delayed until the day after your scheduled payroll date (to allow the Federal Reserve two (2) days to process). If you need next day direct deposits, please call us.

Christmas Eve:
Thursday, December 24th: FlexChecks Closed at 12pm

Friday, December 25th: CLOSED

Thursday, November 26th: CLOSED

Friday, November 27th: CLOSED

New Year’s Eve: Thursday, December 31st: FlexChecks CLOSED at 12pm

New Year’s Day: Friday, January 1st: CLOSED

Any and all adjustments to your 2020 payroll must be completed by your final payroll of the year. This allows us to process your Forms W-2 following your final payroll. If we receive an adjustment after your final payroll, but prior to December 31, 2020, you may be assessed additional fees. If we receive changes to 2020 AFTER December 31, 2020, you may be assessed fees, and additionally will be required to sign a liability agreement, stating that you understand the implications and the potential tax penalties you could receive.
The Payroll Adjustment form can be found on our website under Client Resources >> Payroll Resources >> Year End Resources Section: Payroll Adjustment Form.
Generally, wages include all non-cash payments, fringe benefits, tips and other compensation (whether or not withholding was deducted at the time of payment). Below you will find a list of common payments that must be included in W-2 wages: 
  • Manual checks: If you paid employees net pay outside a normal payroll run that has not been forwarded to our office for inclusion with a regular payroll, be sure to forward the information to our office before your final payroll for 2020.
  • Non-cash payments: Employers that provide taxable non-cash fringe benefits to their employees must include the cash value of such benefits as wages. One of the most common fringes is personal use of a company vehicle. It is fully taxable. Please report this to FlexChecks no later than your last payroll of the year. Contact your accountant for the calculation, or refer to the link on our website which can be found under Client Resources -> Payroll Resources -> Year End Resources Section: Employer’s Tax Guide to Fringe Benefits.
  • Group-term life insurance in excess of $50,000.
  • Non-qualified moving expense reimbursement.
  • Third-party sick pay: If you have not reported ANY 3rd party Sick Pay benefits to FlexChecks for 2020, you should contact your provider to confirm they will be handling all filings including processing of W-2 and any federal and state returns. If you have processed 3rd Party Sick Pay benefits with FlexChecks for 2020, any portion still to be included as income must be submitted no later than your last payroll of the year. We suggest you allow FlexChecks to include the information on W-2’s and to notify your provider that it will be handled in that manner. If you choose for your provider to complete the W-2 reporting, you will be responsible for all necessary filings. 
  • Health Savings Account (HSA) contributions: All amounts contributed to an HSA need to be reported. This includes amounts deducted from the employee as well as employer contributions. If you made contributions for employees and have not included them as a benefit through payroll, please contact us so we can add the amounts paid.
  • Non-accountable business expenses, reimbursements, or allowances: Payments made under reimbursement arrangements that use per diem or mileage allowances do not have to be reported on Form W-2 UNLESS they compensate more than the IRS specified rates. The excess amount paid is fully taxable and must be reported to FlexChecks by your final payroll of 2020. If you have any questions relating to business expenses, please contact FlexChecks directly.
  • Deferred Compensation Plans: In general, amounts deferred to Section 457 plans and non-qualified deferred compensation plans with a substantial risk of forfeiture become taxable for FICA and FUTA when the employee becomes vested (the employee’s substantial risk of forfeiture lapses). This is not necessarily in the same year that the wages were earned. When an employee becomes vested, please provide your Client CARE Team Leader with the following information:
    • The date the employee became vested.
    • The amount of employee and employer current year’s contributions before the vested date.
    • The total amount of employee’s and employer’s current year contributions for prior years.
    • The amount of employee FICA you collected on the employee and employer contributions.
  • When a vested employee receives a distribution, please report the following to your Client CARE Team Leader:
    • The distribution amount.
    • Whether this is a partial or full distribution.
    • The amount of federal tax withheld on the distribution.
    • If the distribution is attributed to employee or employer contributions.
  • S-Corp Health Insurance:  Health and accident insurance premiums paid on behalf of a greater than 2% S Corporation shareholder must be reported on Form W-2, and are subject to federal, state, and local income taxes.  They are not subject to FICA or FUTA taxes. The shareholder is eligible for a deduction for premiums paid on their individual income tax return if certain requirements are met.
If you have payments that are not covered above (adoption benefits, stock options, deferred compensation, education assistance, achievement awards, etc.) and need more information on how these payments should be reported, please contact our office directly.  Any and all of these adjustments must be included in your final payroll of 2020.
If you plan to process bonus checks for year end, please be aware of the following:
Bonus checks can be effective on the same day as your normal payroll. This will result in combined reporting for the normal payroll and bonus run and will minimize your cost.
  • Bonus checks can be effective on a day different than your normal payroll. This will result in separate reports.
  • Bonus runs can include adjustments to normal payroll as follows:
  • Deductions & Benefits: You can specify which deductions or benefits you would like calculated.
  • Paid time off: You can specify if you want paid time off calculated.
  • Direct Deposit: You can choose to have direct deposits or not (on any or all bonus checks).
  • Withholding: You can specify how you would like taxes withheld, or calculate at normal rates.
  • Bonus checks can be grossed up (you give us the net, we can determine what the gross amount should be).
All of the above can be transmitted to FlexChecks by using our Miscellaneous Payroll Form, which can be found here.
IMPORTANT: Any net pay bonus over 100K to one individual will need to be wired or submitted 5 business days in advance. 
Special Information about Bonus Payrolls with federal tax liabilities in excess of $100,000:  Federal tax liabilities in excess of $100,000 must be deposited by the next banking day after the check date to avoid penalties and interest. FlexChecks Tax Service clients must report this payroll to FlexChecks at least five business days prior to the check date. In addition, FlexChecks also applies certain restrictions to large bonus payrolls that may require a wire transfer prior to check date. If these restrictions apply to your bonus payroll, FlexChecks will supply you with the necessary wire instructions.

Review your employee setup data to be certain addresses and Social Security numbers are correct. If data is inaccurate, you may be assessed a penalty that could range from $15 to $1,000 per W-2 for incorrect or mismatched Social Security numbers.  FlexChecks offers a Social Security Verification option, in which we verify your new employee’s Social Security number with their first payroll.  Our charge is $5 per new hire.  When you choose this option, you can be sure you will not incur these penalties. To subscribe to the service, send an email to

FlexChecks will check the “Retirement Plan” box on the W-2 for all employees who either made contributions to a retirement plan in 2020, or who have the deduction setup in their profile but did not make contributions. The reporting rules vary depending on whether your plan is a defined benefit or defined contribution plan. Please contact your retirement plan specialist to determine if this is necessary for your plan. If you have employees who did not contribute, but the box needs to be checked (employees who are eligible to participate but did not), please notify us. 

If you submit payroll for employees only working in Michigan, you do not need to send us your UIA rate, as we can access it online. If you have payroll for any employees outside of Michigan, you must forward us the UIA rate determination once you receive it. We must have your rate before processing any payrolls in 2021.

The Affordable Care Act requires that employers who had 250 or more W-2s in 2019 report the cost of coverage under an employer-sponsored group health plan for 2020. This amount will be reported in box 12 on the W-2, and in general, should include both the portion paid by the employer and the employee. Contact your Client CARE Team Leader for additional details if this applies to you. 

If your IRS depositing frequency changes from monthly to semi-weekly, the IRS will notify you by  letter by early December.  It is your responsibility to notify FlexChecks immediately.  Any penalties assessed due to your failure to notify FlexChecks will be your responsibility.

Your W-2 billing will be included with your final Payroll invoice of 2020. If you have any questions on your W-2 costs and how this will affect your final payroll, please contact us. FlexChecks will ship your W-2’s, and if you  currently use our online payroll portal, they will be available to you electronically as well. As the employer, you have the option to furnish your employees with the paper form that we provide you, or you can receive consent for your employees to only receive electronically. You must meet applicable disclosure requirements if you will only be providing electronic Forms.  For more information, please contact us.

If you would like FlexChecks to prepare 1099 forms for your contractors and vendors not previously  report-ed with your regular payroll, please provide us with the following information by January 10, 2021:   
Full Name, address, telephone number, Social Security number or EIN.
Amount and type of payment (MISC, DIV, INT, etc.).  Payments of less than $600 do not require a 1099 (unless paid to an attorney).
FlexChecks charges a $45.00 base fee, plus $8.00 per 1099.  Forms will be prepared after January 17, 2021. 

Michigan minimum wage from $ per hour to $9.87 beginning January 1, 2021; $10.10 in 2022,  $10.33 in 2023, $10.56 in 2024, $10.80 in 2025, $11.04 in 2026, $11.29 in 2027, $11.54 in 2028, $11.79 in 2029; and $12.05 in 2030. 

1095C Reporting Requirements

Employers who meet the requirements for 1095 reporting will be required to provide Forms 1095C  to employees and to the IRS for 2020. FlexChecks can assist with these requirements. Deadlines are shown on below: 

2021 Limits and Additional Withholding

Retirement Plan Maximum Contribution Limits

401(k)/403(b): $19,500 Catch-up: $6,500
SIMPLE Plan: $13,500 Catch-up: $3,00

Standard Mileage Rate

IRS had not released this information at the time of printing

Health Savings Accounts

Single $3,600 Family $7,200 Catch-up (age 55 or older) $1,000

Year End Payroll Delivery Considerations

We cannot guarantee timely US Postal Service delivery during the holiday season. We suggest delivery of your payroll by UPS, which is trackable. If you prefer to temporarily change your shipping method, inform your Client CARE Team Leader.