1 Payroll Year-End Processing

This chapter contains the following topics:

Section 1.1, "Overview"
Section 1.2, "Release Levels"
Section 1.3, "Year-End Processing Features"
Section 1.4, "Changes Supported by U.S. Year-End Processing in 2019"
Section 1.5, "Preparing for Year-End Reporting"
Section 1.6, "Year-End Processing Cycle"
Section 1.7, "Year-End Process Information Flow"
Section 1.8, "Year-End Processing Checklist"

1.1 Overview

This guide includes tasks for payroll year-end processing, including:

Year-end rollovers
Integrity reporting
Year-end form processing
Year-end information reporting

Year-end forms include the following:

W-2 for employees
499R-2 for employees who work in Puerto Rico
1099 for contract, retired, or pension employees

These year-end forms serve as important tax documents for your employees, the Social Security Administration (SSA), and the Internal Revenue Service (IRS).

These forms provide an employee's total earnings and tax information for the calendar year. You submit a copy of these forms to the SSA to update an individual's earnings information for retirement, disability, and Medicare. You also submit the forms to the IRS for reporting purposes, and to verify employees' earnings and taxes.

Form	Description
W-2	Formally the Wage and Tax Statement, this form reports employees' earnings. It is the IRS form employers use to report wage and tax data for employees.
499R-2	The Withholding Statement - Commonwealth of Puerto Rico is the form you use to report wages for employees who work in Puerto Rico during the tax year. The IRS accepts this Commonwealth of Puerto Rico form.
1099-R	Use this tax form to report taxable income for distributions from profit-sharing plans, Individual Retirement Accounts (IRAs), pensions, annuities, and so on. It is formally the 1099-R Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
1099-MISC	Formally, the Statement for Recipients of Miscellaneous Income, this IRS form reports taxable earnings for contract employees or any other non-employees who work for a business.

Caution:

The IRS requires electronic filing if you have a specific number of returns. The Accounts Payable system can also produce 1099 returns. Therefore, you should consider the number of returns that you generate by both the Accounts Payable and the Payroll systems when determining whether the government requires you to use electronic filing reporting. Contact your IRS office for more information about electronic filing reporting requirements.

See Appendix B, "Sample Forms"

1.2 Release Levels

The software for processing year-end information is available for JD Edwards World release A9.2 and all subsequent releases.

Use the current cumulative update software for your release level. A cumulative update from a previous tax year might not be valid for reporting information for the current tax year.

The documentation in this guide is based on JD Edwards World release A9.4. If you use another release of the software, you might notice differences between what appears in the documentation and what appears on your screen.

1.3 Year-End Processing Features

Payroll year-end processing includes the following features:

Feature	Description
Error checking	You determine parameters that the system uses to audit data for errors. To minimize errors, the system limits user responsibilities intentionally.
Flexibility	You determine reporting rules and decide how to handle information at the company and tax identification level.
Control reporting	You can use online reviews and summary reports to verify how the system derives the numbers that it uses.
Printing	JD Edwards World supports Laser forms printing. JD Edwards World does not support Year-End Continuous Forms or Continuous Forms (Line Feed) printing.

1.4 Changes Supported by U.S. Year-End Processing in 2019

The software supports the following changes for 2019:

Changes have been made on the W-2 form to report the Oregon statewide transit tax. According to the Oregon Department of Revenue regulations, employers are required to report the statewide transit tax with the designation ”ORSTT” in Box 14 of Form W-2.
Changes have been made on the W-2 form to report the PFML employee contributions in the Massachusetts state. According to the regulations of the state of Massachusetts, employees are required to report their PFML employee contributions with the designation ”MAPFML” in Box 14 of Form W-2.

1.5 Preparing for Year-End Reporting

The following information helps you determine when to prepare for year-end reporting.

1.5.1 Deadline Information

Form	Description
W-2 copies	The deadline for issuing W-2 copies to employees is typically January 31 of the year following the tax year you are reporting.
W-2c and W-3c copies	You should file forms W-2c and W-3c as soon as possible if you discover errors after you submit your electronic file. You should create W-2c and W-3c forms only after you submit electronic filing. You should also provide the W-2c form to employees as soon as possible.
499R-2 copies	The deadline for issuing 499R-2 copies to employees is typically January 31 of the year following the tax year you are reporting.
1099 copies	The deadline for issuing 1099-MISC or 1099-R copies to employees is typically January 31 of the year following the tax year you are reporting.
Electronic filing	If you are filing electronically over the internet, the due date is January 31 of the year following the tax year you are processing. You can file by: Uploading the file Using the Social Security Administration's entry screen at www.socialsecurity.gov/employer Transmitting files via BSO or EDT Contact your SSA Employer Service Liaison Officer if you have any questions about when your information is due.

Deadline Extensions and Waivers of Reporting Requirements

The IRS is responsible for granting deadline extensions to individual companies. If your company needs an extension, you must file Form 8809 (Request for Extension of Time to File Information Returns).

The IRS Commissioner might waive the electronic filing requirement for an employer if the employer submits a waiver request that documents hardship. The employer must file the waiver request (Form 8508) with the IRS at least 45 days before the due date of the returns for which the employer is requesting a waiver.

1.5.2 Government Regulations

JD Edwards World believes the IRS information in this guide to be accurate as of the date of its publication, but you should not rely on it as your sole source of information when filing reports or returns with the IRS. You should refer to the appropriate IRS publication or regulation for more information and for guidance about filing requirements.

The following IRS filing requirements apply to the year-end processing information in this guide:

IRS Filing Requirements	Description
Electronic filing requirements	The IRS requires employers who file more than a certain number of Copy A for W-2, 499R-2, or 1099-R forms to file electronically instead of mailing Copy A forms. Some states also require employers to file state copies electronically. Contact your IRS office to research electronic filing requirements.
Employer ID numbers	The IRS regards each employer identification number (EIN) as a separate entity for information on W-2, 499R-2, and 1099-R forms. In the software, all companies that have the same federal tax identification number can report under the same identification (ID) number. You can summarize to this level, or you can process each company independently.

1.5.3 IRS and SSA Resource List

To obtain forms and publications, do one of the following:

Direct-dial the IRS fax machine at 703-368-9694.
Order by phone from 1-800-TAX-FORM (1-800-829-3676).
Visit your local IRS office.
Download the forms from www.irs.gov.

Note:

The forms that you print from the Internet are for reference only. Do not reproduce these forms for filing.

To contact the IRS, call any of the following telephone numbers:

Reporting hotline: 1-304-263-8700 or toll-free 1-866-455-7438
Telecommunications device for the deaf: 1-304-267-3367

To contact the SSA, do one of the following:

Access www.ssa.gov.
For general information, call 1-800-772-6270
For electronic filing information, call 1-800-772-6270 or contact your Employer Service Liaison Officer.

1.6 Year-End Processing Cycle

The payroll year-end processing cycle consists of the following tasks:

Task	Description
Install the update	You must install the update to run year-end programs. The update contains changes that comply with the most current government legislation. Perform the following steps: 1. Install the year-end payroll software update for the current year. 2. Complete the application-specific instructions (ASIs) for the update. This guide does not include software installation instructions and the necessary ASIs.
Verify payroll history	Review both the Taxation History Integrity report and the PDBA History Integrity report for accuracy. Correct any inaccurate history records to ensure that you report the correct information to the government.
Run year-end rollover programs	Run the Year-End Payroll Month Rollover and the Year-End Calendar Month Rollover programs to carry forward employee pay type, deduction, benefit, and accrual (PDBA) balances to the new year.
Verify setup	Verify that employee, company, PDBA, and tax type information is accurate. You can also set up next numbers at this time. Caution: You might need to process a conversion program to ensure that all employee names are in the correct format. If employee names are not in the correct format, government reporting agencies do not accept your year-end information. See Section 4.1.1, "Verifying Employee Names and Addresses" for instructions for correcting employee names. You can verify W-2/IRS defined codes. You can set up wage adjustments, pay types for 1099 processing, and descriptions for amounts that you report in Box 12 and 14. You can also verify that each employee in your organization has a valid Social Security Number before you create and submit year-end information.
Set up special handling code tables	Set up special handling code tables to group PDBAs that you need to report in addition to wages that are already in tax history.
Enter third-party sick pay	Enter third-party sick pay for separate W-2, regular W-2 forms, and electronic filing reporting.
Build the year-end workfile	Create the W-2/1099 workfile ID, add special handling code tables to the workfile, and review workfile build information online.
Print audit reports	Print audit reports and run payroll balancing reports to verify year-to-date history and information.
Print forms	Print all year-end forms.
Create electronic filing	Create federal and state electronic files and send the information via electronic filing.
Print W-2c forms	If necessary, correct errors and print W-2c forms to report accurate information.

1.7 Year-End Process Information Flow

The following graphic illustrates the year-end process information flow:

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1.8 Year-End Processing Checklist

Refer to the following checklist as you process year-end information:

Task	Corresponding Information and Topics in this Guide	CompleteYes/No
Install the update.	This guide does not include software installation instructions and the necessary application-specific instructions (ASIs).
Verify the integrity of payroll history and correct inaccurate history records by running the following reports: Taxation History Integrity Report PDBA History Integrity Report	See the following for more information: Working with Tax History Integrity Working with PDBA History Integrity
Process year-end rollovers. When you run year-end rollover programs, the system carries PDBA balances forward to the new year. To ensure that beginning PDBA balances are correct for the new tax year, run the following programs: Year-End Payroll Month Rollover Year-End Calendar Month Rollover	See Reviewing Year-End Rollover Reports for more information.
Confirm that the information you report to the government and to your employees is accurate by verifying the following information: The format of employee names and addresses in the Address Book system. Note: If you do not format employee names correctly, government-reporting agencies might not accept the year-end information that your organization submits. You might have to process a conversion program to ensure that all employee names are in the correct format. That each employee has a valid Social Security Number. That employee records are set up so that the system correctly marks box 13 with statutory and retirement plan information. That tax information is set up correctly to generate 499R-2 forms for employees in Puerto Rico. That the information for employees who work in multiple states prints on the correct year-end form. Enter any outstanding third-party sick-pay information.	See the following for more information: Verifying Employee Information Verifying Employee Names and Addresses Verifying Employee Social Security Numbers Entering Third-Party Sick Pay Information
Verify company and constants information is setup and correct, by reviewing the following information: The format of the company name and address is correct in the Address Book system. That parent company information is set up correctly if you summarize and report multiple companies under one parent company. The statutory code for box 15 (State) and the local tax area description line for box 20 (Locality). Numbers are not valid for box 15. That Who's Who Category Code 10 for railroad companies is up to date. That the federal Employer Identification Number (EIN) contains no punctuation or spaces for Federal A Corporate Tax IDs.	See Verifying Company Information for more information.
Verify the setup of pay types, deductions, benefits, and accruals (PDBAs) to ensure that you report PDBA information correctly. Review the PDBA descriptions for boxes 12 and 14. For items that are in box 12, assign the appropriate code to the W-2 IRS Defined Code field on the Year-End Parameters screen. For box 14, add up to three characters to the Special Handling Description of the PDBA on the Year-End Parameters screen. This description prints in box 14. If you are adding PDBA amounts for an employee who works in multiple states, you might need to add the PDBA to specific states. If so, set up state wage adjustments.	See Setting Up DBAs for Year-End Processing for more information.
Set up special handling code tables that you need to group PDBAs, in addition to wages that are already in tax history. Also include the following items for these forms: W-2 - include any items that you did not tax during the year but are reportable by the employee. This reporting also includes amounts in non-wage boxes, such as boxes 12 and 14. W-3 and electronic filing - include items such as pension and group term life insurance. 1099 - include items such as gross distributions and other income. 499R-2 - include items such as wages or deferred arrangement (CODA) plans and commissions.	See Entering Additional Year-End Form Information for more information.
Build the W-2/1099 workfile by completing the following tasks: Create a W-2/1099 ID and complete the workfile build. Use the screen-specific function keys to add selection criteria, if necessary. Add special handling code tables to the workfile build. Run the workfile build program.	See Chapter 5, "Setting Up the Year-End Workfile" for more information.
Review the following information online to verify that it is correct before you print year-end forms: W-2 Version Review forms to review all workfile build information W-2 Inquiry to review specific forms and to print individual forms	See Verifying Employee Information for more information.
Print audit reports and payroll balancing reports to verify year-to-date history.	See Reviewing Additional Year-End Audit Reports for more information.
Print the year-end forms and balance audit reports to year-end forms.	See Working with Year-End Forms for more information.
Create federal and state electronic filing tables, and submit them electronically.	See Creating Electronic Filing for more information.
Correct errors and print W-2c forms to report accurate information.	See Working with W-2c Forms for more information.
After completing the reporting process for year-end information, complete the following tasks to back up year-end information: Back up the library W2LIBXXX (where XXX is the Workfile Build ID number). Back up the summary tables in the production library that begin with F067. Keep a copy of the federal electronic filing that you send to the Social Security Administration.	Contact your system administrator for assistance with backing up year-end information.