Important Year-End Dates

The Consolidated Appropriations Act of 2016 includes a provision requiring the accelerated W-2 and 1099 filing due date. Due to increased tax fraud and Identity theft, the IRS has implemented a provision requiring employers to report W2 and 1099 data by January 31^st to the Social Security Administration. It’s essential for businesses to prepare as soon as possible in the months leading up to the due date. 

This means organizations must participate in advanced planning to ensure they submit documentation accurately and on time. We encourage human resources and payroll teams to begin planning now.  Prioritize submitting changes and year-end adjustments early. Please pay close attention to timelines and important cut-off dates in our Year-End Guide.  

Standard Processing Deadlines

Payrolls must be submitted by 3 PM EST at least two banking days in advance of the pay date.  

• This allows sufficient time for payroll funding and employee direct deposits to be received and posted by the check date.    

• These payrolls will require a wire prior to payroll being finalized: 

• Payrolls adding up to $100,000 or more in federal tax liability in a single deposit period. 

• Total ACH debit beyond pre-determined system limit.  

Year-End Processing Deadlines

Any 2024 payrolls and adjustments must be complete before we can process 2025 payrolls. Please remember:  

• Bonuses, manual checks, and additional payrolls: If you’re paying bonuses or have any extra payrolls to include in your 2024 W-2s, notify us by Monday, December 18, 2024. (Wiring of funds may be required).  

• Payroll adjustments: Avoid additional adjustment fees of $150 base per quarter plus $50 per hour.  Be sure payroll corrections/updates (e.g., voided checks, in-house checks, fringe benefits) are completed before your last 2024 payroll is processed.  

• Fringe Benefit Adjustments: Identify and schedule special payroll adjustments, such as group term life, auto allowances, 2% shareholder and other fringe benefits. Some of these fringe benefits require tax withholdings.  They will need to be entered at the same time as a normal payroll run before the end of the year.  

• Third Party Sick pay (3PSP) reporting: Determine if you have Third Party Sick Pay information that must be reported for 2024.  Please contact your provider and request the information before our 3 PM EST cut-off on December 30^th. In many cases, the provider can assist you with needed information, so you can include it in your final regular payroll of 2024.  

• Employee W-2 informational changes: Changes to an employee’s Social Security Number, Legal Name and Address must be made prior to Monday, December 30, 2024, to be guaranteed to generate accurately on form W-2.  

• Year-End adjustment cut-off date: Payroll adjustments must be processed by 3:00 PM EST, Monday, December 30, 2024, or before a payroll with a January 2025 check date is processed, whichever is earlier. This deadline helps mitigate any potential penalties or fees associated with late tax payments. We recommend you process any adjustments with payroll to ensure the taxes are withheld correctly. Please remind your accountant to report payroll adjustments no later than our cut-off date. For adjustments processed after December 30, 2024, there will be an additional fee and a year-end processing delay. Please remember that tax agencies may consider filing and payments late, and you’ll be responsible for any penalties and interest incurred.  

Important: Payrolls processed in 2024 with a pay date of 2025 will show up as wages on the 2025 W-2, regardless of the pay period. These wages will not be part of your 2024 YTD totals. 

Audit Employee Information  

Employee W-2 information must be correct, as the IRS may charge a penalty for filing W-2 forms with incorrect information. Comprehensively audit your employee records.  

• Please verify the Social Security Number, name, and address for each employee.  The name must be exactly as it appears on the employee’s Social Security card. Social Security Numbers that are flagged as being invalid will appear on all documents as 000-00-0000. This is the employer’s responsibility to correct prior to year-end. 

• For your convenience, please use the following reports for verification purposes:    

• Reports > Client Reports > Employee W2 Verification > Run report.   

• Reports > Client Reports > Employee W2 Preview > Run report.  

• Any name, Social Security number, or address updates should be made immediately. Access your employee records and make corrections in isolved as follows: Employee Management > Employee Maintenance > General.  

State Tax Registrations / ID Numbers 

• Please review the Exceptions report for missing or invalid tax information via: Payroll Processing > Preview Payroll > Preview > Exceptions (from the dropdown)> Go. Please provide proof of assigned ID to MP or reach out for clarification on what is needed in order to ensure timely tax filing and payments for all jurisdictions.  
• If you have a remote or hybrid workforce, it is important to ensure your work locations are set up appropriately for HR compliance and taxation purposes. This generally should be based upon where the employee is physically performing their work, however, please review your state-specific requirements or reach out to your HR Partner for further guidance. 

State Tax Registrations / ID Numbers 

Adjustments payrolls needed for prior quarters/years will incur fees of $150 per quarter plus $50 per hour. Report payroll changes and additions before the last day of each quarter’s end (December 30th for Quarter 4). Due to filing deadlines, adjustment payrolls will not be processed during the months listed below: 

April for Quarter 1 Filing	July for Quarter 2 Filing
October for Quarter 3 Filing	January for Quarter 4 Filing

Employer Portion of Health Care  

The Affordable Care Act requires employers to report the cost of employer-provided health care coverage on W-2 Forms if you’re filing 250 or more Forms W-2.  

• The amount reported should include both the portion paid by the employer and the portion paid by the employee.  Both are required to be recorded in isolved for accurate reporting.  

• Please contact your MP support representative to discuss the entry of the employer portion of your group health insurance plans.  

FUTA Credit Reduction  

Some states take federal unemployment loans if they lack funds to pay unemployment benefits for state residents. If a state has outstanding loans with the federal government, the FUTA credit rate for employers in that state is reduced until the loan is repaid.  

The results of being an employer in a credit reduction state is a higher tax due on Form 940. This higher tax is considered incurred in the 4th quarter. Therefore, your company will owe additional federal unemployment taxes that must be impounded. Future communication will include details regarding the FUTA credit reduction calculations.   

IRS and State Notifications for 2025

Unemployment rates and tax filing frequencies are mailed to the taxpayer. It’s imperative these tax related communications are forwarded to MP immediately. We require this information to ensure your taxes are paid accurately and on time in 2025.  

Please note: Late tax payments result in interest and penalty charges. If your federal and state tax filing frequency is changed, and you do not notify MP, we won’t be responsible for any penalties or interest that may be applied. 

2025 Limit Changes  

Below are the wage base limits for 2025, as announced by the Social Security Administration:  

• Social Security:  $176,100 

• Medicare:  1.45% with no wage base limit  

• Additional Medicare Tax: 0.9% for all wages paid in excess of $200,000. Please note: this tax applies to employees only.  

• Maximum Contribution for 401(k), 403(b), 457: $23,500 with $7,500 maximum catch-up   

• Maximum Contribution for Simple IRA: $16,000 with $3,500 maximum catch-up   

• Please Note: The above limits are as of November 2024. Please consult with your tax advisor to determine if any of the above limits have been revised.  

Forms W-2 & 1099 Delivery  

W2s will be processed and delivered on or before Friday, January 31, 2025, for all employees who did not consent to electronic year-end delivery. We will be printing and shipping all Forms W-2 to the requested W-2 delivery address or primary delivery address on file for the company. This must be a physical address, as this information cannot be delivered to a P.O. Box. Please contact your primary MP support representative to verify addresses on file prior to processing your last payroll of 2024. 

Note: MP will not send W-2/1099/1095 Forms directly to employees or independent contractors, nor will we supply postage for the documents to be sent. 

Forms W-2 and 1099 will be available for viewing and printing within Employee Self Service effective Tuesday, January 16, 2025. Please reach out to your MP support representative if you’d like these to be accessible sooner. We are unable to print hard copies of forms for employees who consented to electronic year-end delivery. 

Year-End Related Fees  

• Year-End Processing – $250.00 base, plus $6.95 per W-2, 1099 and 1095  

• Form W-2/1099/1095 Reprint – $25 each  

• Form W-2/1099/1095 correction to name or address- $50 each  

• SSN/ITIN/EIN Change – $150 per affected quarter  

• Wage adjustments requested after deadline – $150 base, plus $50 per hour  

Year-End fees will be included on your invoice for the first payroll in 2025. Adjustments made after your deadline will result in additional processing fees. Please note: the timeframe for completion of adjustments requiring amended returns is 6-8 weeks.  

W-4 Forms

Send a reminder to your employees regarding submitting a new W-4 for 2025. Employees who are currently claiming to be exempt from withholding must submit a new Form W-4 by February 15, 2025, to maintain that status. Employers are required to begin withholding federal tax for those employees who fail to provide a new W-4 by that date. Additionally, any employees who experienced a life event may need to submit a new W-4 due to potential changes in tax liability.  

ACA Reporting for 2024  

Employers are subject to the Affordable Care Act filing if you meet either of the following criteria:  

• If you averaged at least 50 full-time employees (including full-time equivalent employees) during the prior calendar year, you are considered an Applicable Large Employer (ALE). The IRS has defined a specific formula for this and there is a report available in the system to assist in this calculation.  

• If you offer Self-funded medical insurance, regardless of the size of your company. If you are unsure if this applies to you, please check with your broker or insurance provider. 
   

Under the Affordable Care Act’s employer shared responsibility provisions, applicable large employers (ALEs) must either offer minimum essential coverage that is “affordable” and that provides “minimum value” to their full-time employees (and their dependents), or potentially make an employer shared responsibility payment to the IRS.  

MP provides an ACA Reporting Service to assist employers who are required to report. If you have signed up for MP’s ACA Reporting Service, please read the instructions below regarding previewing and reviewing your ACA Forms. If you are unsure whether you need to report for 2024, please contact your MP service representative for assistance. 

Previewing your ACA Forms in isolved  

You may preview your ACA Forms in the isolved system under Client Management > ACA Setup Options > ACA Forms Approval. If you’re unable to see your Forms approval for 2024, you may not be enrolled in our ACA service, or the set-up for 2024 has not been completed. Please reach out to your MP service representative for more information.  

When previewing your forms, please:  

1. Ensure there is a 1095-C form for each eligible employee who was employed in 2024.  

2. Review the “ACA Success” document in detail while reviewing your ACA Forms. If you haven’t received a copy of this guide from MP, you may download a copy on your isolved Client Landing Page under “Quick Links.”  

Note: While MP will produce and file ACA forms for clients who have signed up for ACA Reporting Services, it is your responsibility to review each ACA form and ensure the information reflected is accurate. It is also the employer’s responsibility to distribute copies of Form 1095 to your employees by the IRS-defined deadline. This form contains the information they may need to report as part of their income tax submission for the 2024 tax year. To meet 2024 reporting requirements and deadlines, employers should already be compiling and analyzing data now to determine coverage and affordability. 

Important Deadlines for ACA Reporting

• On January 2, 2025 – Begin approving forms. 

• By February 5^th, 2025* – Employers must approve forms 1094/1095 for calendar year 2024 in isolved no later than this date to guarantee delivery on or before 3/3. These forms are not automatically approved on your behalf. Any filings that are not approved will not be included in the transmission file to the IRS. Please review the “How to approve your ACA Filing in isolved” document for step-by-step instructions on this process. A copy can be downloaded on your isolved Client Landing Page under “Quick Links.”  

• By March 3, 2025 – Employers must provide an annual statement (a copy of Form 1095-C or Form 1095-B, depending on which applies to your company) to employees in all other states. MP will send all 1095s to your company’s primary delivery address. You’ll be responsible for handing out or postmarking the forms for mailing by the IRS-defined deadline. Please check https://www.irs.gov/affordable-care-act to stay updated on the IRS timelines. 

*Some states like California may require distribution of ACA forms to employees prior to the 3/3 deadline. Please consult the IRS for those deadlines and plan accordingly. 

*Note: ACA-related billing will occur when you process your first payroll after forms have been approved.  

List of Important Year-End Reminders (Based on the above information) 

 Now through early December: 

• Review Upcoming Key Dates on page 1 for important deadlines and holiday closures. 

• Notify MP by 12/18/2024 if you need to process bonus payments to be included in 2024 reporting. Be prepared to wire funds if processing bonus payrolls that exceed $100,000 in federal tax liability or have a debit that exceeds the pre-determined system limit. 

• Confirm the Delivery Address for your W-2s. If you have changed mailing addresses, reach out to your support team BEFORE your last payroll of 2024 processes to ensure proper delivery.  

• Perform an audit of employee data related to SSN, name and address. 

• Review the Exceptions report for missing or invalid tax information. 

• Call your assigned representative with any year-end payroll questions so that there will be sufficient time to resolve any questions. Items that should be considered as being a priority include but are not limited to fringe benefits, bonus payments, third-party sick pay, taxability issues, HSA Contributions, employee SSN updates, name changes, and employee address updates. 

 Items to complete prior to your last scheduled payroll of 2024: 

• Make necessary updates to SSN, name and mailing address before you process the last payroll with a 2024 pay date. Notify your assigned rep of any name or SSN changes made directly in isolved.   

• Ensure any employee benefit plan start dates/status/hire dates are current.  

• Include any fringe benefits to be reported on 2024 W-2s with or before the final payroll of the year. 

• Reach out to Third-Party Sick Pay providers and request information to be included in 2024 reporting. 

• Enter any additional, manual, and/or voided checks that need to be recorded in 2024 with or prior to the final payroll of the year. 

• All wages needing to be included in 2024 reporting must be recorded with a pay date in 2024. 

After January 1, 2025: 

• Update minimum wage in isolved for any employees in states with a 2025 minimum wage increase. 
• Send a reminder to employees regarding submitting a new W4 form for 2025 if applicable.