Year End Guide / 2013
Dominion Payroll Services (DPS) would like to take this opportunity to thank you for your business and to wish you a happy holiday season and a prosperous New Year. Please review this year end guide carefully to ensure that you are aware of any and all action items that may affect your company. Following the guidelines and meeting the deadlines in this guide will allow us to ensure accurate year end reports and timely filings with the various tax authorities.


Dear Friends of Dominion Payroll Services,

It is that time of year again… year-end is upon us! This document is a crucial part of ourfourth quarter and year-end education process and will help you guide you smoothly through a successful end of the year. Please read this document carefully and respond to us with any adjustments and notifications as soon as possible.

As always, if you have questions that are not addressed in these documents or need further clarification, you may contact our Richmond Operations Office by dialing804.355.3430.

Thank you,

The Dominion Payroll Services Team

Table of Contents

Important Deadlines and HolidaysPg. 3

How to Review Employee Information and SchedulesPg. 4

Vacation, Sick, PTO reviewPg. 5

1099 Miscellaneous FormsPg. 5

Bonus/Holiday Checks – Things to ConsiderPp. 5

Do’s and Don’tsPp. 6

Health Care Reporting on W-2Pg. 7

Tax Changes for 2014Pg. 7

State Unemployment and Deposit Frequency NoticesPg. 7

W-2 and 1099 deadlinesPg. 8

End of Year CDPg. 8

Important Deadlines for Year End

  • December 13 – Review year-end guide and respond with any changes or adjustments
  • December 30 – Last day to process 2013 payrolls
  • January 24 – W-2’s and 1099’s delivered to clients no later than this date.

Upcoming Holidays

  • November 28 – Thanksgiving;DPS and banks are closed.
  • December 24 –DPShopes to close at noon.
  • December 25–Christmas Day;DPS and banks are closed.
  • January 1 – New Year’s Day; DPS and banks are closed.
  • January 20 – Martin Luther King, Jr. Federal Holiday;DPS and banks are closed.

Important E-mail Addresses

Customer Service –

Processing –

Tax –

Year-end AdjustmentProcessing Deadline

Please notify us no later than December 13, 2013 of any year-end payroll adjustments. This will provide sufficient time to record adjustments prior to your last payroll of 2013. We understand that some information related to closing your 2013 payroll records may not be available by this date, but keep in mind that reporting adjustments after your last payroll in 2013could delay your 4th quarter and year-end returnsas well as causing additional processing fees. Examples of adjustments are as follows:

Void and/or manual checks

Third party sick payments

Fringe benefits

Year-end distributions

Bonuses and other gifts given to employees

Heath Insurance Premiums (only for employers with 250 or more W-2s filed in 2012, due by Jan. 15, 2014)

Vendor 1099 payment recording

How to review and confirm accuracy of your company and employees’ information

Employee W2 Information

Internet clients (using Paychoice Online):

  1. Log into the Payroll module.
  2. Select Web Reports.
  3. Select Emp W2 and SSN.
  4. Select to open the report in PDF, Excel, or Word.
  5. Print and review the report.
  6. Make updates in Paychoice Online prior to processing your final payroll of 2013.

Non-Internet Clients:

Contact your Payroll Specialist for your company’s Employee W-2 Verification report.

Incorrect informationcan affect your employee’s W-2 filing and social security wage benefits as well as cause additional fees for corrections made after the 2013 payroll year has closed.

ACA Reports

If your company filed 250 or more W-2s in 2012, you will be required by the IRS to report the amount of money paid in medical insurance premiums for your employees on each of their W-2s. Please consult Box C of your 2012 Form W-3 to confirm the number of W-2s filed in 2012 so that you can prepare to report premiums if necessary.

If your company employs 50 or more full-time equivalent employees (FTEs), ACA requirements will go into affect for your business starting in 2014. Review your employee count to ensure that you are aware of your status. If you do employ 50 or more FTEs and need more information regarding ACA and how it affects your business, please contact our customer service department for resource recommendations.

Payroll Schedules for 2014

Schedules are determined based on your current company policy but can be thrown off when holidays occur and when check dates fall on weekends. 2014 schedules are available for review now.

Internet clients (using Paychoice Online):

  1. Log in to the Payroll module.
  2. Select Payroll.
  3. Select Dates.
  4. Select View Company Schedule.
  5. Select to open the report in PDF, Excel, or Word.
  6. Print and review the report.
  7. Notify DPS of any changes that need to be made.

Non-Internet Clients:

Contact your Payroll Specialist for your company’s 2014 Payroll Schedule

Vacation, Sick and/or PTO Balances

The system default is that all employee vacation, sick, and PTO balances will be reset to zero after the first payroll in January unless prior communication regarding carry-over has been received. If you have communicated your carry-over preference in past years, your balances are set to carry forward accordingly. If you have not carried forward balances in past years but would like to start doing so this year, please communicate this information to us by sending an email to rior to the end of December.

1099 Miscellaneous Forms

If you have paid 1099 miscellaneous income through the payroll system in 2013, DPS will produce these forms. If you have additional 1099’s (for vendors or contractors who were paid earlier in the year and not reported), enter them using manual adjustments before you process your last payroll for 2013. Always use 1099 Earnings codes to pay 1099 contractors and/or vendors in the payroll system to ensure that the 1099 tax forms are generated properly.

Special Payrolls

Many companies issue bonus checks and other supplemental wage payments in December, and these checks can be run with a regular payroll. If a separate payroll check date or period end date is desired, the bonus checks must be run on a separate payroll. You can also issue live checks for bonuses instead of direct deposit. This can be done by stopping direct deposit for the entire company for a specific payroll or by stopping it on individual checks.

Bonus/Holiday Checks – Things to Consider

  1. Run bonus checks as separate checks on the same payroll or as a separate pay run altogether. Our recommendation? Run them as a separate payroll altogether so you can use global settings to make the process more efficient. Also, if you run them on the same payroll as your normal checks, the bonus amount is going to show in the YTD on the check stub, and you'll give away the surprise!
  2. If you're running a separate payroll, clearlycommunicate what the check date for the bonus payroll run should be. Should it be the same as your normal payroll check date? Should it be the date of your holiday party? Should it be a different date entirely?
  3. Tell uswhich deductions, if any, should come out of the bonus checks. Some employers withhold only taxes on bonuses, whereas some employers have 401(k) contributions calculate on bonuses.
  4. Pick a tax frequency or percentage. Do you want to take out lots of withholding taxes or a little bit or none at all? This becomes important particularly on larger amounts, which you may want to tax on a quarterly or annual tax frequency rather than your normal one. If you go with the percentage option, the one we see most often used is 25% for federal withholding and 6% for state withholding, which is in line with IRS guidelines for supplemental wage taxation.

5.Let us know if the checks should be grossed-up. Do you want your employees to receive a nice, round figure (and no, we’re not talking about "0") as their net check? If you do, would you like us to gross the checks up for just FICA/Medicare taxes or for withholding taxes as well?

6.Specify whether you'd like the bonus checks to be paper checks or direct deposit vouchers.

7.Keep in mind that if your employees access their check stubs online, those bonus check stubs will be posted when we run the payroll. If you do not what the employees to be able to see the bonus check stubs online, pleaselet us know ahead of time so that we can turn off the check stub view for the employees that week.

DOS AND DON’TS

Topic / Do / Don’t
Void Checks / Do void fourth quarter checks on or before your last payroll process for 2013. / Do not void prior quarter checks. Send a note to the processing team to let them know about prior quarter checks to be voided.
Manual Checks / Do enter them on or before your last payroll process for 2013. / Do not enter negative manuals for prior quarters without consulting a DPS representative.
Address Changes / Do make all address changes on or before your last payroll process for 2013.
Payroll Calendar / Do verify payroll processing schedule/calendar by 12/13/2013.
Verification / Do review the following reports under Web Reports and Company Setup for online clients:
Emp W2 and SSN Report
Employee W-2 Verification Report
Tax IDs and Rates
1099 master file information / Internet customers enter online/non-internet clients submit to the Processing Department before you process the last payroll of 2013.
1099 Information / Internet customers enter online/non-internet clients submit 1099 earnings to the Processing Department before you process the last payroll of 2013.
Payroll Tax Information / Do send all payroll tax documents received from federal, state and/or local tax authorities to the Tax Department.
Group Term Life (GTL) / Do enter on or before your last payroll process for 2013. / Do not enter GTL on terminated employees or use manual adjustments for 2013 figures after the last 2013 payroll. Call DPS for instructions.
Third Party Sick Pay / Send all 3rd Party Sick Pay to the Processing Department on or before your last payroll process for 2013.
Fringe Benefits / Do report any additional fringe items on or before your last payroll process for 2013. / Do not enter manual adjustments after the last 2013 payroll process. Send them to the Customer Service department for processing.

Health Care Reporting on W-2 –Requirement for Large Employers

If your company filed more than 250 W-2's in 2012, the ACA W-2 reporting requirement applies and you are responsible for reporting the total costs (regardless of employee-paid portion vs. employer-paid portion) of health insurance on their 2013 W-2's.

Typical costs to include are those behalf of the employees for group health insurance plans. For more detailed explanation of these items, please refer to the IRS website[1].

Since this information may not be available until after the close of the 2013 calendar year, we ask that you compile a list of the employees and their premiums in January of 2014 and send us the spreadsheet by January 15th so that we can add those values to your W-2s.

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IRS Notes for 2014

FICA Social Security will remain at 6.2%.

Medicare tax rate increased in 2013 from 1.45 percent to 2.35 percent on wages earned above $200,000 for single filers and $250,000 for joint filers ($125,000 for a married individual filing separately), and the new rate remains in effect.

This increase only applies to the employee Medicare portion of the Federal Insurance Contributions Act (FICA) tax. Consequently, employers do not have to match the increased Medicare tax amount from employee’s wages.

NOTE: The employer is required to withhold the increased amount from all workers with wages exceeding $200,000, regardless of the marital status claimed on the employee’s Form W-4. Over- and under-withholding for the employee will be reconciled upon the filing of his/her tax return.

Social Security Tax Wage Base increase: In 2013, that maximum is $113,700. It will rise in 2014 to $115,500.*

401k contribution limits: Steady at $17,500 with catch-up of $5,500 for employees age 50+.*

Simple IRA contribution limits: Steady at $12,000 with catch-up of $2,500 for employees age 50+.*

*These amounts have not been finalized as of October 3, 2013.

State Unemployment Rate and State Deposit Frequency

You should receive your 2014 state unemployment rate and your state deposit frequency during the next two months. Once you receive these notices, please fax them to us at 804.355.3432 or email them to the Tax Department (). This will ensure the accuracy of your tax liability calculation and timely deposits of the associated taxes.

W-2 and 1099 Deadlines

W-2 deliveries will begin Monday, January 13th. W-2's will be shipped to your offices no later than January 24th. The forms will be in a separate package labeled 'W-2'.

If you are a paperless client, we will deliver paper W-2's to your delivery address on file.

2013 End of Year CD

In February 2014, you will receive a CD with all of your 2013payroll information. The disc contains:

  • Reports of every payroll run,
  • quarterly returns,
  • employee check stubs,
  • and copies of all W2s and 1099s.

As an employer, you are required by law to retain copies of all payroll information for seven (7) years.

The CD archival fee ranges from $49 to $199, depending upon the amount of data included in the archive (related to the size of your company). If you choose to opt out of this service, please let us know in advance by sending an email to stating your client code and that you decline the CD archival service.

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