U.S. Payroll Year-End Processing Features
U.S Payroll year-end processing includes the following features:
Data integrity
Specify the parameters that the system uses to audit data for errors. To minimize errors, your responsibilities are intentionally limited.
Flexibility
Determine reporting rules and decide how to handle information at the company and tax identification level.
Control over reporting
Review data online or by using summary reports, to verify that the system derives data correctly.
The system enables you to produce the following year-end forms:
W-2s for employees who work in the U.S.
499R-2s for employees who work in Puerto Rico.
1099-MISCs and 1099-Rs for contract, retired, or pension employees.
1099-NEC form for nonemployee compensation.
These year-end forms serve as important tax documents for the 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 must submit copies of these forms to the SSA to update each employee's earnings information for retirement, disability, and Medicare. You also send these forms to the IRS for reporting purposes, and to verify employees' earnings and taxes. The following table describes each year-end form:
Form |
Description |
|---|---|
W-2 |
The formal name of this form is Wage and Tax Statement. You use this form to report employees' earnings. Employers use this IRS form to report wage and tax data for employees. |
499R-2 |
The formal name of this form is Withholding Statement - Commonwealth of Puerto Rico. Employers use this form to report wages for employees who work in Puerto Rico during a tax year. The IRS accepts this form. |
1099-R |
The formal name of this form is Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Employers use this form to report taxable income for distributions from profit-sharing plans, Individual Retirement Accounts (IRAs), pensions, annuities, and so on. |
1099-MISC |
Use the 1099-MISC to report payments in excess of $600 to any individual or corporation for items such as rent or payments to an attorney, or payments where Federal income tax was withheld, regardless of the amount. Do not use 1099-MISC to report non-employee compensation, which is now reported on form 1099-NEC. |
1099-NEC |
Use form 1099-NEC to report payments of $600 or more to someone who is not your employee (including parts and materials) or certain other payments, such as some attorney fees. Also report payments where Federal income tax was withheld, regardless of the amount. |