Payroll Year End Guide 2022

Getting Ready for Year End

In this Guide....

Dear Valued Client
 
I would like to take this opportunity to personally THANK YOU for allowing FlexChecks to serve you in 2022. I am grateful 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 information 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.
 
If you have not yet been upgraded to iSolved and are interested in a more robust platform, please feel free to reach out to me or your Client C.A.R.E. Team Leader anytime!
 
Again, thank you for your confidence and loyalty over the past year. We look forward to serving you in 2023 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
President

FlexChecks Holiday Schedule

We provide time off for Christmas and New Year’s Day for our outstanding, committed staff so they can spend time with family and friends.  With both holidays falling on Sunday, FlexChecks will be closed on the following Mondays.  

When submitting payrolls during the Holiday’s, 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 (Observed):
Monday, December 26th: CLOSED

  • Two (2) business days are required for direct deposit processing. Be sure to send your payroll by 2:00pm at least 2 business days in advance to ensure timely delivery.
  • UPS can only guarantee delivery the week of Christmas if you ship via UPS Next Day Air services. To avoid additional shipping fees, consider printing your payroll on-site. Contact your client C.A.R.E. Team Leader for details.
  • See the UPS Holiday Shipping Guide below

New Year’s Day (Observed): Monday, January 2nd:

  • Two (2) business days are required for direct deposit processing. Be sure to send your payroll by 2:00pm at least 2 business days in advance to ensure timely delivery.
  • UPS can only guarantee delivery the week of New Year’s if you ship via UPS Next Day Air services. To avoid additional shipping fees, consider printing your payroll on-site. Contact your client C.A.R.E. Team Leader for details.
  • See the UPS Holiday Shipping Guide below
Any and all adjustments to your 2022 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, 2022, you may be assessed additional fees. If we receive changes to 2022 AFTER December 31, 2022, 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.
 
**IF YOU ANTICIPATE NEEDING TO MAKE ADJUSTMENTS AFTER DECEMBER 31, PLEASE COMPLETE OUR 2022 PAYROLL ADJUSTMENT FORM AND SEND TO US IMMEDIATELY!** 
 
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 2022.
  • 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 click HERE to view the IRS’s 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 2022, 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 2022, 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 2022. 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 2022.

FlexChecks 2022/2023 Fee Guide

  • W-2 Shipping: $24.00 (minimum)
  • Duplicate W-2 (per employee): $10.00
  • W-2 Correction - change to data: name, address, SSN: $50.00 each
  • W-2 Correction - change to figures $150.00 each
  • HOLD W-2's Fee: $200.00
  • 1099 Base Fee: $45.00
  • Per Employee 1099: $7.95 (minimum)
  • 1099 Correction (per): $100.00
  • Re-Open Prior Year for Adjustment: $250.00
  • Open Prior Quarter: $200.00
  • Amended Return (per): 100.00
  • Manual Check: $15.00
  • Off Calendar Run (Any payroll or adjustment processed outside of your normally scheduled payroll): Normal Processing Fee + $50.00
  • Next Day Direct Deposit: 100.00
  • Same Day Direct Deposit: $250.00
  • Void Check - Live: $25.00
  • Reverse Payroll: $50.00
If you have any questions about the above services or fee, please contact your Client Care Team Leader.
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. 
  • Bonus checks can be effective on a day different than your normal payroll. 
  • 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 by the Internal Revenue Service (IRS) and the Social Security Agency (SSA) 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 processing@flexchecks.com.

FlexChecks will check the “Retirement Plan” box on the W-2 for all employees who either made contributions to a retirement plan in 2022, 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 2023.

The Affordable Care Act requires that employers who had 250 or more W-2s in 2022 report the cost of coverage under an employer-sponsored group health plan for 2023. 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 2022. 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.

W-2 printing will begin Saturday, December 31st. If you have requested a W-2 hold for the 2022 year (see Hold W-2 section), your W-2’s will be printed in our third wave at the end of January.

If you’re using our new payroll system, iSolved, you can now preview your W-2’s. To do so, go to your Report Archive and view the W-2 preview report that automatically runs with every payroll in November and December. If you’re still on our legacy payroll system and are interested in switching to iSolved, please let your Client CARE Team Leader (CCTL) know right away!

If you would like FlexChecks to prepare 1099 forms for your contractors and vendors not previously reported with your regular payroll, please provide us with the following information by January 7, 2022:
  • 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).
For pricing information, please see our Fee Guide.  Forms will be prepared after January 17, 2023. 

Please see the Department Of Labor’s guide to minimum state wages to determine if your state has increased it’s minimum wage.

Click HERE to view our 2023 Payroll Calendar!

Your W-2’s will be processed unless you notify us in advance of your last payroll. Some clients may have a case where W-2’s need to be held because they are unable to close out the 2022 year. FLEXCHECKS REQUIRES YOU NOTIFY US IF YOU NEED TO HOLD 2022 W-2’S BEFORE THE PROCESSING OF YOUR LAST PAYROLL OF THE YEAR.

Please be aware that we will begin our Blackout period December 30th at 5pm through January 22, 2023. Adjustments will begin Monday, January 23rd. After we receive your adjustment, 10 business days will be required for us to be able to complete your adjustment.

If your account is on a W-2 hold, your W-2’s will be printed in our third wave of W-2’s at the end of January. 

1095C Reporting Requirements

Employers who meet the requirements for 1095 filing are responsible for two important components of ACA Year End requirements: Furnishing and Filing. You need to furnish individual 1095 forms to all employees who were full-time during 2022. These forms will contain information about when/if coverage was offered, whether the offered coverage was affordable (based on the IRS guidelines), and if self-funded, which employees and dependents were covered throughout the year. Depending on individual state requirements, employees may need this form to provide proof of coverage for tax year 2022.

FlexChecks provides a 1095 service. All 1095 processing fees are per contract. FlexChecks will electronically file your 1094 & 1095 forms to the IRS only after your ACA Forms have been approved in the system. 

 

isolved is teaming up with TurboTax, America’s #1 tax preparation provider, to simplify tax filing and help your employees get their biggest possible tax refunds.

Your employees easily import W-2s directly from isolved People Cloud into TurboTax which saves employees time on  data entry.

Share the following link and/or QR code with your employees and help them get started today! 

iSolved TurboTax Integration

Employers should already be compiling and analyzing data now to determine offers of coverage and affordability. It is the employer’s responsibility to carefully review, make any necessary corrections, override portions of the forms that cannot be automated, and approve ACA forms by the February 6th deadline. If you do not approve your forms by January 20th – we cannot guarantee delivery or filing to meet the IRS deadline. Additional fees will apply for late approvals. Should you have any questions, please reach out to your customer support team for assistance.

Due 1/31/2023

Due 2/28/2023

Due 3/31/2023

2023 Limits and Additional Withholding

Retirement Plan Maximum Contribution Limits for 2023

401(k)/403(b): $22,500 Catch-up: $7,500
SIMPLE Plan: $15,500 Catch-up: $3,500

FSA Limits

Max annual FSA contribution increased to $3,050
Dependent Care FSA - $5000 for married filing jointly or head of household and $2,500 for married filing separately

Social Security Wage base

$160,200

Standard Mileage Rate

IRS had not released this information at the time of printing

Federal Minimum Wage

$7.25/hour

Health Savings Accounts

Single $3,850 Family $7,750 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, you MUST inform your Client CARE Team Leader. Please see UPS's Year End Shipping guide below. Please note: UPS Next Day Air charges vary by shipping location and you will be charged accordingly. In order to obtain an estimate of these charges, please contact your Client CARE Team Leader.