Year-End HR Guide

Our HR experts have compiled monthly tasks, important information, and handy resources to make year-end HR processing easier.

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October & November

Update Employee Contact Information

Audit employee data to ensure you are not missing critical Form W-2 information like complete Social Security numbers, employee names, and addresses. The Internal Revenue Service (IRS) may impose a penalty for each Form W-2 with a missing or incorrect Social Security number or employee name. If there are errors, you would then be subject to the following penalties:

Large Businesses with Gross Receipts of More Than $5 Million

Time Returns Files/ProvidedNot More Than 30 Days31 Days Late - August 1After August 1 - Not at AllIntentional Disregard
Due 1/1/2020 - 12/31/2020$50 per return or statement -
$556,500 maximum
$110 per return or statement -
$1,669,500 maximum		$270 per return or statement -
$3,339,000 maximum		$550 per return or statement -
No limitation

Small Businesses with Gross Receipts $5 Million or Less
Time Returns Files/ProvidedNot More Than 30 Days31 Days Late - August 1After August 1 - Not at AllIntentional Disregard
Due 1/1/2020 - 12/31/2020$50 per return or statement -
$194,500 maximum		$110 per return or statement -
$556,500 maximum		$270 per return or statement -
$1,113,000 maximum		$550 per return or statement -
No limitation

Furthermore, employee Forms W-2 and 1095-C must match what is printed on social security cards. For example, if an employee’s name is hyphenated on their social security card, but not on their Form W-2 or Form 1095-C, the IRS will return this as an error. Failure to verify this information as correct may result in penalties.

If you are not careful, these types of errors can add up to a large penalty. For some employees, updated addresses can be garnered from a new W-4 if their withholding allowances have changed or will change next year. Remind employees to fill out a new W-4 if their situation has changed:

  • Ensure employee names are entered correctly
  • Confirm accuracy of employee addresses
  • Confirm accuracy of employee Social Security numbers

Employers need to make sure all employee data is accurate so they can avoid W-2 reprint fees. Employers who use a payroll processing company may have an online service where employees can review and correct data. If so, encourage your employees to use it as a means to review and edit critical data.

Forms W-2 and 1099 Filing Deadlines

Due DateDeadline
January 31, 2020Supply W-2s to employees and ex-employees who worked in 2019. Supply 1099s to independent contractors who worked in 2019, as well as other payees.
January 31, 2020File paper W-2s and 1099s.
January 31, 2020e-File W-2s and 1099s.

It is recommended you distribute W-2s and 1099s before the end of January. Mail or e-File copies of Forms W-2 and 1099 with government agencies. Send W-2s and W-3s to the Social Security Administration. Submit 1099s along with Form 1096 to the IRS. You may also have to mail or e-File copies of these forms to a certain state(s), along with any state transmittal forms required, so make sure to check the requirements. Many localities also require copies of informational returns, so double-check this as well.

Prepare for FUTA Tax Filings

Submit Form 940 for Federal Unemployment Insurance (FUTA). The FUTA tax rate is 6.0 percent, which applies to the first $7,000 you paid each employee as wages during the year. However, if you pay your state unemployment taxes on time, your FUTA rate will be reduced to 0.6 percent. For additional information, please visit our FUTA Credit Reduction page. If your company owes more than $500 in FUTA tax for the calendar year, you are required to deposit at least one quarterly payment. See the IRS' Publication 926 Household Employer's Tax Guide for more information.

Form 940 Filing Deadlines

Due DateDeadline
January 31, 2020Submit Form 940 and deposit FUTA if your company owes any remaining amount.
February 8, 2020 (not recommended)File Form 940 if your company has paid all deposits on time.

Something to Consider: If your company is filing 250 or more Form W-2s, the Social Security Administration (SSA) requires they be filed electronically unless a waiver has been granted. You may file electronic W-2s using the SSA's Business Services Online (BSO) website. There is no charge for this service and you can register online.

PREPARE FOR BENEFITS RENEWAL AND OPEN ENROLLMENT

This timeline can vary depending on your company’s benefits year. Review benefits renewals with current carriers and prepare eligible employee/participant census to market a group for optional coverage with carriers.

Carriers require a complete census showing all eligible employees and all employees currently enrolled in benefits, along with the following:

  • Dates of birth and gender for all employees, spouses, and dependents.
  • Zip codes for residence and work-site locations.

Utilize your benefits administration system to conduct your benefits renewal reviews and prepare your census. This will ensure all your data is accurate prior to submitting benefits plan information to your providers.

PREPARE FOR ACA ANNUAL REPORTING

Determine if you had 50 or more full-time and full-time equivalent (FTE) employees in the previous calendar year and what type of insurance (self-insured or fully insured) you offered. If your provider offers an FTE Calculator, you can use it to determine how many full-time and FTE employees you had in the previous calendar year. With this number and the type of coverage you offer, determine what Forms you must use to report:

  • 50 or More Employees – Complete and file Forms 1095-C and 1094-C.
  • Less Than 50 Employees (Self-Insured) – Complete and file Forms 1095-B and 1094-B.
  • Less Than 50 Employees (Fully Insured) – Insurer is responsible for filing on behalf of the employer.
  • Less Than 50 Employees (No Insurance) – Reporting is not required.

Note: When the combined total of full-time and FTE employees in a controlled group is 50 or more, each individual employer is subject to reporting.
If you are required to report, gather the information you need to complete applicable forms and determine which reporting method you will be using. Depending on the method you use, you will need to compile information like:

  • Employee’s name, SSN or date of birth (if SSN is unavailable), and address.
  • Employer’s name, EIN, telephone number, and address.
  • The months in which the employer offered coverage.
  • The employee’s share of the monthly premium for self-only coverage (in certain cases).
  • The months in which a safe harbor (or other situation) applied (e.g.., the employee was not a full-time employee).
ACA Annual Reporting Deadlines

Due DateDeadline
January 31, 2020Supply Forms 1095-C to employees.
February 28, 2020File paper Forms 1095-C with transmittal Form 1094-C.
March 31, 2020e-File Forms 1095-C with transmittal Form 1094-C.

REVIEW EMPLOYEE CLASSIFICATIONS

Review employee classifications on a regular basis to ensure compliance. Refer to the duties tests and guidance provided by the Department of Labor to manage your employee classification.

REVIEW MEDICARE PART D REPORTING

For employer-sponsored plans providing prescription drug coverage, Medicare Part D reporting is due on October 15 and creditable coverage disclosure notices are to be distributed to Medicare-eligible participants. The Centers for Medicare and Medicaid Services (CMS) provides guidance and sample notice forms.

CONDUCT BUDGET PLANNING FOR THE NEXT YEAR

Now is the time of year to start reviewing your existing budget and planning for next year. Here are some things to consider:

  • Consult All Departments – You need a clear picture of what is required to run each department smoothly.
  • Estimate Your Revenues for the Year – Know how your company is ending the year to determine the budget needed to reach next year’s revenue goals.
  • Determine Your Expenses – Some expenses are concrete, while others can be moving targets. Take everything into consideration when coming up with a figure.
  • Don’t Forget Other Expenditures – Items like computers, company vehicles, and furniture need to be factored into budgeting.
  • Calculate Your Cash Flow – Generating your existing income statement is essential to determining your projected cash flow for the next year.
  • Be Conservative in Your Budget – It’s great to have positive projections for the next year, but be realistic too. Leave some wiggle room just in case company goals are not met.
  • Start Planning Early – Ideally, you want to begin talking about the budget in October to ensure there is as much detail as possible. However, it’s never too late to start as an annual budget should be monitored and adjusted as needed.
  • Monitor and Evaluate – Don’t go through the process of creating a budget just to forget about it in a few months. It’s important to monitor your budget to see how things are trending and evaluate if any changes need to made.

End-Year Tips:

Open Enrollment

Open enrollment is a huge part of your yearly HR tasks and can be overwhelming - but it doesn’t have to be. Ask yourself the following questions and consider using a unified solution that can simplify your benefits administration:

  • What is your open enrollment process currently like?
  • How many transactions are involved in your enrollment process?
  • How confident are you with your current
    enrollment process?
  • What happens if you do or don’t make a change?
  • What are the long-term effects of the changes made?

A core HR solution using a centralized database that includes benefits administration with carrier connections for transmission of paperwork to benefits providers makes open enrollment a much easier process to manage.

Are You Eligible for Disaster Assistance and Emergency Relief?

Special tax law provisions may help businesses recover financially from the impact of a disaster. Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes. Visit the IRS website for more information.

December

REVIEW AND UPDATE FILES FOR COMPLIANCE

Review and modify existing records, documents, and systems for updated laws, regulations, internal operations, jobs, compensation, benefits, and employees’ personal situations:

  • Policies – Review policies in your employee handbook and make changes according to new or modified laws, regulations, or internal operations.
  • Job Descriptions – If any employee’s job duties, titles, and/or FLSA exemption status have changed, job descriptions should be modified.
  • Compensation and Payroll – Adjust payroll to reflect changes in salary/wage adjustments, merit increases, minimum wage increases, and changes to withholding for benefits or taxes.
  • Benefits – Change benefit levels for defined contribution and benefit plans; adjust benefit contributions; and make changes per health care reform provisions.
  • Performance Reviews – Update employees’ files with their year-end performance review. Document the review in your HR information system (or another applicable database).
  • Rewards and Training – Update employees’ files and your HR information systems/databases with their documented rewards, recognition, training, and development from this past year.
  • Employee Information – Update employees’ address, personal, demographic, and emergency information in your HRIS or files.

FINISH UPDATING EMPLOYEE CONTACT INFORMATION

Audit employee data to ensure you are not missing critical Form W-2 information like complete Social Security numbers, employee names, and addresses. The Internal Revenue Service (IRS) may impose a penalty for each Form W-2 with a missing or incorrect Social Security number or employee name. If there are errors, you would then be subject to the following penalties:

Large Businesses with Gross Receipts of More Than $5 Million

Time Returns Files/ProvidedNot More Than 30 Days31 Days Late - August 1After August 1 - Not at AllIntentional Disregard
Due 1/1/2020 - 12/31/2020$50 per return or statement -
$556,500 maximum
$110 per return or statement -
$1,669,500 maximum		$270 per return or statement -
$3,339,000 maximum		$550 per return or statement -
No limitation

Small Businesses with Gross Receipts $5 Million or Less
Time Returns Files/ProvidedNot More Than 30 Days31 Days Late - August 1After August 1 - Not at AllIntentional Disregard
Due 1/1/2020 - 12/31/2020$50 per return or statement -
$194,500 maximum		$110 per return or statement -
$556,500 maximum		$270 per return or statement -
$1,113,000 maximum		$550 per return or statement -
No limitation

Furthermore, employee Forms W-2 and 1095-C must match what is printed on social security cards. For example, if an employee’s name is hyphenated on their social security card, but not on their Form W-2 or Form 1095-C, the IRS will return this as an error. Failure to verify this information as correct may result in penalties.

If you are not careful, these types of errors can add up to a large penalty. For some employees, updated addresses can be garnered from a new W-4 if their withholding allowances have changed or will change next year. Remind employees to fill out a new W-4 if their situation has changed:

  • Ensure employee names are entered correctly
  • Confirm accuracy of employee addresses
  • Confirm accuracy of employee Social Security numbers

Employers need to make sure all employee data is accurate so they can avoid W-2 reprint fees. Employers who use a payroll processing company may have an online service where employees can review and correct data. If so, encourage your employees to use it as a means to review and edit critical data.

Forms W-2 and 1099 Filing Deadlines

Due DateDeadline
January 31, 2020Supply W-2s to employees and ex-employees who worked in 2019. Supply 1099s to independent contractors who worked in 2019, as well as other payees.
January 31, 2020File paper W-2s and 1099s.
January 31, 2020e-File W-2s and 1099s.

It is recommended you distribute W-2s and 1099s before the end of January. Mail or e-File copies of Forms W-2 and 1099 with government agencies. Send W-2s and W-3s to the Social Security Administration. Submit 1099s along with Form 1096 to the IRS. You may also have to mail or e-File copies of these forms to a certain state(s), along with any state transmittal forms required, so make sure to check the requirements. Many localities also require copies of informational returns, so double-check this as well.

Form 940 Filing Deadlines

Due DateDeadline
January 31, 2020Submit Form 940 and deposit FUTA if your company owes any remaining amount.
February 8, 2020 (not recommended)File Form 940 if your company has paid all deposits on time.

Submit Form 940 for Federal Unemployment Insurance (FUTA). The FUTA tax rate is 6.0 percent, which applies to the first $7,000 you paid each employee as wages during the year. However, if you pay your state unemployment taxes on time, your FUTA rate will be reduced to 0.6 percent. For additional information, please visit our FUTA Credit Reduction page. If your company owes more than $500 in FUTA tax for the calendar year, you are required to deposit at least one quarterly payment. See the IRS' Publication 926 Household Employer's Tax Guide for more information.

Something to Consider: If your company is filing 250 or more Form W-2s, the Social Security Administration (SSA) requires they be filed electronically unless a waiver has been granted. You may file electronic W-2s using the SSA's Business Services Online (BSO) website. There is no charge for this service and you can register online.

REVIEW YOUR INFORMATION FOR ACA ANNUAL REPORTING

If you have determined you need to report, review your information to avoid any errors. If your payroll provider offers ACA reporting with an error-checking algorithm, you should be able to perform the following tasks automatically:

  • Complete your Form 1094-C.
  • Import and populate your 1095-C data.
  • Review your 1095-C forms, make edits, correct any conflicts, or manually add a 1095-C.
  • Approve and print your 1094-C and 1095-C forms for distribution to employees and reporting to the IRS.

REVIEW YOUR RECORD RETENTION STANDARDS

Verify your department is adhering to record retention standards by keeping or purging certain records each year. Below are record retention guidelines with length of time to keep certain records and the types of records to retain:
Length of TimeRecords to Keep
1 yearPhysical exam results; employment tests, results and validation; ADA applications and other personnel records and requests for reasonable accommodation (keep for 1 year after personnel action).
2 yearsVETS-100; applications, resumes, other inquires sent to employer; help wanted ads, job opening notices, notices for opportunities for training, promotions, overtime, job opening notices sent to employment agencies or labor unions; employee personnel files (including hiring, disciplinary notices, promotions, demotions, discharges, training, tests, physicals, transfers, layoffs and recalls, job evaluations, merit systems, seniority systems).
3 yearsI-9s (or 1 year after termination); FMLA documentation (3 years after hire or 1 year after termination); polygraph tests; business records, including yearly total sales volume, total goods purchased; union contracts and individual employee contracts.
5 yearsDrug testing; OSHA forms 101, 200, 300A, and 301; compensation insurance, or for occupational injury or disease; first aid records of job injuries causing loss of work time.
6 yearsStandard ERISA documents (benefits plan, disclosure of Plan Description, Annual Reports Summary of Annual Reports, and Summary Plan Description).
7 yearsEmployee wage records (time cards, wage rate tables, shift schedules, hours and days) explaining wage differentials, deductions from pay; all payroll records.
30 yearsRequired medical exams and exposure records (OSHA).

REVIEW RETIREMENT PLAN CONTRIBUTIONS

Review your retirement plan contributions and prepare annual or semi-annual employer contributions to retirement plans.

PREPARE FOR FORMS W-2 AND 1099-MISC DISTRIBUTION

Reconcile your accounts and prepare for W-2s and 1099s to be distributed to employees and contractors in January. You’ll also want to take this time to prepare employer required tax filings.

End-Year Tips

Is the Minimum Wage Rate Changing in Your State?

The federal minimum wage rate has been $7.25 an hour since 2009. Currently, 29 states and Washington D.C. have minimum wage rates higher than the federal level. Find out how you’re affected by checking out the Minimum Wage Rates by State.

Are You Prepared for ACA Annual Reporting?

Did you know there are 18 potential conflicts between lines 14 and 16 on the Form 1095-C? An ACA reporting solution with an error-checking algorithm ensures codes are valid and data is formatted correctly for reporting to the IRS. Learn more about Form 1095-C reporting codes.

Are You Eligible for Disaster Assistance
and Emergency Relief?

Special tax law provisions may help businesses recover financially from the impact of a disaster. Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes. Visit the IRS website for more information.

January & February

CONDUCT STRATEGIC PLANNING

Review existing policies and procedures, accrual balances, and next year communications to employees including holiday schedules and pay schedules. Plan for operations, upcoming projects, and strategic/continuous improvement initiatives. Those may include:
Planning TopicWhat to Review
Hiring & StaffingMeet with your hiring managers to evaluate their staffing needs by department staffing needs and plan sourcing strategies. Consider retirements, terminations, promotions, turnover, company strategy, and other changes to staffing levels.
Training & DevelopmentReview employee development plans, training needs and/or requests, performance reviews, or training needs assessments to evaluate training needs. Schedule training and development activities for 2020.
Employee RelationsPlan an employee engagement survey to evaluate morale. Plan, schedule, and update critical employee events, activities, initiatives, paid holidays, etc. Distribute attendance and vacation calendars/planners to supervisors and managers.
Performance ManagementAfter reviews are finished, plan for the next performance management cycle, including goal setting for 2020. Work with managers to schedule follow-up, feedback, and support activities to enhance performance.
Management DevelopmentReview exit surveys, employee feedback, and other information about managers. Schedule recently promoted supervisors or managers requiring additional training for supervisory training or leadership development.
CompensationEvaluate compensation and incentive practices for each of your employees and plan new pay programs. Schedule which salary surveys you will participate in next year. Budget for 2020 pay adjustments and/or merit increases.
BenefitsReview ACA compliance and reporting regulations in effect in 2020 and schedule dates and tasks for compliance. Plan your benefits strategy for the upcoming year including benefit additions, enhancements, and removals.
ComplianceConduct an HR audit. Review federal and state compliance trends for 2020. Plan proactive efforts to maintain compliance or modifications to existing practices to ensure compliance.
Continuous ImprovementPlan initiatives (like deploying an HRIS) to streamline and make HR processes more efficient. Enhance processes and systems to reduce errors and improve quality of deliverables. Evaluate vendors for HR services. For other systems in use, install updates for the most efficient use of systems and reporting.

REVIEW OSHA FORM 300A FOR ANNUAL REPORTING

Review your company’s OSHA Form 300A for required annual posting from February 1 – April 30 in a common area for employees.

POST UPDATED FEDERAL AND STATE COMPLIANCE POSTERS

It is important to post the appropriate compliance posters or employers may be subject to penalties. Depending on the employer, these posters may include:

  • Job Safety and Health Protection (OSHA)
  • Equal Employment Opportunity
  • Fair Labor Standards Act (FLSA)
  • Family Medical Leave Act (FMLA)

Visit the Department of Labor (DOL) for assistance on complying with poster requirements. Make sure you also visit your state’s labor department page to determine which state compliance posters you are required to post.

CONDUCT FORECASTING FOR FUTURE HIRING NEEDS

When forecasting for future hiring, it’s important to look at where your company is today and where it is headed. Are you planning for growth? Most companies look to see sustainable growth from year to year. The way to achieve those goals and stay on target is to grow your workforce. Some things to consider when planning for future hiring:

  • Will your company be launching new products that will require additional talent for a smooth process?
  • Is your company planning to expand into other states or open other locations?
  • What is your current employee turnover rate?
  • Do you anticipate any changes in your workforce? For example, do you have several employees who will be retiring soon?
  • Is your company planning to invest in any new technology? For example, are you planning to implement new HR software next year?
  • Are there going to be any changes to your company’s goals going into next year?

Before your first 2020 payroll

REVIEW AND UPDATE EMPLOYEE DEDUCTIONS

The first payroll of the year is a great time to review and update your employee deductions. You’ll want to review deductions like:

  • Medical
  • Dental
  • Life Insurance
  • Retirement deductions such as 401(k)
  • Other voluntary deductions

REVIEW AND UPDATE RETIREMENT PLAN CATCH-UP CONTRIBUTIONS

Retirement plan regular and catch-up contributions will deduct automatically out of the first payroll for 2020. Review your retirement plans and report any changes needed and submit those updates with your first payroll for 2020.

FINISH ACA REPORTING

Make sure you wrap up ACA annual reporting and filing to avoid penalties for late or incomplete paperwork:

  • Failure to file complete and accurate Forms 1094-C by the form deadlines will result in penalties equal to $270 per return.
  • Failure to file and provide correct information on Form 1095-C could result in a $270 penalty per return.

REVIEW STATE MINIMUM WAGE CHANGES

Click here to get complete Minimum Wage Changes by state. If any changes apply to your business, be sure to update the information with your payroll provider.

END OF JANUARY 2020

COMMUNICATE WITH EMPLOYEES ABOUT THEIR FORM W-2S

If your employees are receiving paper copies only, communicate when they can expect to receive their Form W-2s in the mail. If you have the option to provide your employees with online access to their W-2s, let them know how they can access their copies.

FILE YOUR FORMS W-2

January 31, 2020 is the deadline to file Forms W-2 by paper or electronically.

FILE YOUR FORMS 1099-MISC

January 31, 2020 is the deadline to file your 1099-MISCs with a Form 1096.

Form 1099-MISC is the miscellaneous income form that employers must file for non-employees who are paid compensation of $600.00 or more (including fees, commissions, prizes, and awards) during the year. Forms 1099 are typically issued to contractors.

DISTRIBUTE W-2S AND 1099S TO EMPLOYEES AND CONTRACTORS

January 31, 2020 is the deadline to distribute W-2s to your employees and 1099s to contractors.

DISTRIBUTE 1095-CS TO EMPLOYEES

January 31, 2020 is the deadline to distribute Forms 1095-C to your employees.

END OF FEBRUARY 2020

FILE FORMS 1094-C AND 1095-C

February 28, 2020 is the deadline to file paper Forms 1094-C and 1095-C. If you are filing electronically, you have until March 31, 2020 to file.

End-Year Tips

You’re Almost Done with Year-End Processing!

Make sure you distribute Form W-2s to your employees by January 31, 2020.

What’s Your Plan for ACA Reporting Next Year?

If ACA compliance and reporting was a headache this past year, make 2020 the year of change! Take the complexity out of ACA compliance and reporting with a solution that unifies your human capital management processes.

Are You Eligible for Disaster Assistance and Emergency Relief?

Special tax law provisions may help businesses recover financially from the impact of a disaster. Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes. Visit the IRS website for more information.

YEAR-END RESOURCES

Year-End HR Checklist
Use this checklist to keep track of your important year-end HR tasks.

SUTA Wage Bases
Find out what your SUTA wage base is for the new year.

FUTA Credit Reduction States
Check to see if your state has a FUTA credit reduction.

Payroll Taxes: Rates and Changes
Stay up-to-date on payroll tax changes from year to year.

Minimum Wage Rates
Look to see what the current minimum wage rates are for each state.

ACA Reporting and Compliance
Use this handy guide for navigating the year-end ACA reporting and compliance.

APS SOlutions for your business

Benefits Administration with Carrier Connections - easily conduct online enrollment, submit information to your plan providers, and adjust benefits plans as needed.
Manager and Employee Self Service - save time and empower your managers and employees with online access to their payroll information.
APS Hire - attract, hire, and onboard top talent with our recruiting and onboarding solution.

YEAR-END LINKS

HELPFUL ARTICLES

THE ONLY YEAR-END CHECKLIST YOU’LL EVER NEED

Keep track of all your monthly year-end HR tasks with our handy checklist.

Get Yours Today

How APS Can Help

The APS Affordable Care Act Solution makes it easy to manage ACA compliance and reporting with features like part-time staff management, measurement period management, and e-filing of Forms 1094-C and 1095-C. Employees can also review and correct their data when needed with the APS employee self-service portal. HR managers can then review changes and commit them to employees’ records, saving critical time during year-end processing.

If your organization is not utilizing a benefits administration system, conducting open enrollment can be a challenge. APS Benefits Administration houses this necessary information in a truly unified database, making it easy to manage online open enrollment, multiple benefit plans, and reporting.

 

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