With the end of the year comes the promise of new beginnings and a fresh start. But in the world of human resources, before you can look forward to the new year, there are quite a few responsibilities to get done.
To help you feel confident going into next year, review this checklist to make sure you’ve got everything covered from benefits to payroll to taxes.
Conduct an end-of-year payroll audit to ensure each of the following is correct:
Once each item is reviewed, schedule and confirm the final payroll. Once the final payroll is complete, you can move forward with tax forms and filing. You should also save your pay records, as under the Fair Labor Standards Act (FLSA) employers must keep payroll records on file for three years.
This is also the time to prepare your payroll with the updated social security wage base, minimum wage, benefit premium rates, 401(k) contribution limits, and mileage reimbursement rate for 2022—if applicable.
Form W-2 must be filed with the Social Security Administration and shared with each employee you have. Form W-3 must also be filed, summarizing your W-2s. Double-check that any taxable cash and non-cash benefits are included (i.e. company car or other taxable fringe benefits). To avoid errors with this filing, make sure employees have reviewed their W-4s and their personal information—particularly mailing address, social security number, and withholdings—prior to the end of the year.
Employers must provide information returns to the IRS through Form 1099. Form 1099-NEC should be filled out for non-employee payments and Form 1099-MISC should be filled out for miscellaneous payments. You should request a W-9 Form from all payees before you prepare these 1099 forms. A summary of payments for Form 1099-NEC and 1099-MISC should be filed with the IRS as well, using Form 1096.
Form 940 and Form 941 are used to report tax. Form 940 reports federal unemployment tax while Form 941 reports income taxes, social security taxes, and Medicare tax withholdings. Both forms must be filed with the IRS.
Remember to submit for ARPA tax credits and employee retention tax credits too. ARPA tax credits are dollar-for-dollar tax credits to refund employers for qualifying wages covering sick and family leave time paid to employees affected by COVID-19. And if your company has 50 or more employees, you also have to prepare and distribute 1095-C forms to employees as part of the Affordable Care Act. 1095-C forms will determine your eligibility for the premium tax credit.
Paid solicitors, sales tax, liquor licenses, and other professional licenses expire annually and must be renewed through a renewal application in each state you do business. License renewals will vary by business and might expire on a less frequent basis, but the end of the year is always a good time to review if you have a license renewal coming up.
If your business has changed in name, location, structure, ownership, or size, there may be other activities to complete or changes you have to report through “Articles of Amendment” or other documents within the states you do business.
Review time off policies to ensure your PTO, vacation, sick time, and leaves of absence are compliant with changing laws and regulations around leave and wages. Update your COVID-19 protocols to ensure compliance with OSHA, CDC, and local guidance.
This is also the time to review your employee handbook and make any necessary changes—especially as things continue to be impacted by COVID-19.
Develop a calendar of required training for managers and employees such as harassment prevention, workplace safety, and discrimination trainings. And take note of other important dates. Almost every month has important deadlines for form filings.
Obsidian HR can relieve the administrative burden that the end of the year brings by managing your payroll and filing tax forms on your behalf. We’ll also remind you of other important dates and HR requirements.
Get started and prepare for next year with our 2022 HR Calendar. And if you’re ready to spend less time dealing with these administrative end-of-year tasks—and more time celebrating the new year—reach out to us!