W2 Calendar YearEnd Processing AASBO CONFERENCE BREAKOUT SESSION

W-2 & Calendar Year-End Processing AASBO CONFERENCE BREAKOUT SESSION Vivian Lovorn – Homewood City Board of Education September 19, 2016 1

Agenda 1. Deadlines a) Electronic Reporting to SSA b) Electronic Reporting to Alabama Department of Revenue 2. 3. Preparation a) Update your SSA Business Services Online (BSO) user information and change your password. b) Download Accuwage c) Download or Print Publication 15 from www. irs. gov d) Verify W 2 codes, Fringe benefits 4. and Deductions. Payroll e) Payroll Verification Report f) Run Quarterly reports g) Thoughts on Balancing 2 Process a) W 2 Adjustments b) Adjustment List c) Generate Error Listing and Summary d) Testing the file e) W 2 Report f) Printing W 2’s g) Single W 2 or Restarting W 2’s Preparing for 2017 Payroll Processing a) Update Federal Tax Tables b) Reset Deduction Limits and Total Deducted c) Calendar Year End Initialization

Electronic filing of W-2 data to the Social Security Administration and to the Alabama State Department of Revenue is now due on January 31 st of each year. 3

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BSO User Id/Password Update Go to the website: www. ssa. gov/bsowelcome. htm Select “Register” to create a new Business Services Online (BSO) user id. Select “Log In” to update your information and change your password. Passwords for existing user ids expire after 90 days. 5

Download Accuwage from SSA Go to the website: http: //www. ssa. gov/employer/accuwage Click on: Download Accu. Wage – 2016 Tax Year 6

Download Accuwage from SSA A screen will appear and you will need to confirm that you want to install Accu. Wage. 7

Print or Download Pub 15 Go to the website: www. irs. gov Select “Pub 15”. When the publication opens, verify that it references “For Use in 2017” 8

Verify W 2 Codes Payroll Setup, Payroll Code Maintenance. I, Tab 1. W 2 -Codes • Verify that all W 2 codes are setup. • Harris School Solutions annual Calendar Year-End Memo has provided all districts with the most up to date list of W 2 codes. You should use that list to ensure that your parameter file is accurate. • Additional notes have also been provided in the Year-End Memo. Please be sure to review their notes and suggestions for changes you may need to make. 9

W 2 Codes Report PR Setup, PR Parameter Report, Payroll Validation Code Report Check W 2 Code Category Generates a report with all the W 2 codes and related information. 10 Make corrections in PR Maint 1, Tab 1

Verify Fringe Benefit Codes Payroll Code Maintenance II, Tab 6 Benefits should include, but are not limited to: L – Life Insurance W 2 Code 5 M – Miscellaneous V - Vehicle 11

Verify Deductions and their W 2 codes PR Setup, Deduction Master Maintenance The above deduction will print CAF in Box 14 of the W 2 because it’s W 2 code is 1 which is a Section 125 (Cafeteria Plan). The deduction above has a W 2 code of R which tells Nextgen to print “RET” in Box 14 of the W 2 form. 12

Payroll Verification Report Under Calendar YE Procedures, run the Payroll Verification Report for each quarter. This report compares employees check details to the QTD Earning tables. If check records are different from quarterly records, it will show up here. Check the employee you wish to update, and press the save button. Some items you will not want to update. Investigate the differences first. You only want to update if Check Records are correct. 13

Run Quarterly Reports Run the Quarter/YTD Report (Print Grand Totals Only option) for all quarters to balance the W 2 data. 14

Thoughts on Balancing • Each quarter, balance your tax deposits for Federal, State, Social Security and Medicare to the amount shown on the Quarter YTD report • Each quarter, re-run the Quarter/YTD Report (Grand Totals Only option) for each prior quarters. Verify that there are no changes in the amounts from the prior quarter(s). • Manually calculate each taxable wage (Federal, State, Social Security and Medicare) to ensure that deductions are proper set up for sheltering and for reporting on the W 2. • After verifying your deposits and verifying your taxable wages, print the other quarterly reports and balance these to your Quarter YTD totals. 15

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W 2 Table Maintenance The Retirement Systems of Alabama provides to all school districts a file containing the IRS required “Employer Sponsored Health Coverage Cost” which must be reported on each employee’s W-2. You will use this transaction to import the data in this file each year as part of your W 2 preparation. Click on the button labeled: “Import TTRS Amounts”. Browse to the location where the file from RSA has been downloaded. Select the file. Enter the tax year (2016) for the Adjustments. This transaction may also be used to import reportable Health Coverage Costs from providers other than RSA using the Import Employer Paid Benefits button. 18

W 2 Table Maintenance In addition to importing the data from RSA, you may use this transaction to enter employee wage, withholding or benefit adjustments (including extra fringe benefits) for boxes 11, 12, and 14 on the W 2 form. Also used for adjustment to YTD wages, withholdings, or benefits as needed. Note: SS# must contain dashes 19

W 2 Adjustment Report Used to verify adjustments that were entered in the W 2 Table Maintenance 20

Generate W 2 Data The W 2 Generate combines all the adjustments that were imported and entered along with the employee’s yearly payroll data to output a file for storing and printing W-2 information §Pin number is issued by SSA. It is needed to print on the magnetic media file to identify site. §Check the “Submitting Magnetic Media to State”. Selecting this option will cause the program to generate the records required by the Alabama State Department of Revenue. §BROWSE to the drive where you need to save the file and enter the file name §Press Enter (F 1) to create the to create W 2 file and the error listing. **Note that checking the “Re. Generate Magnetic Media Only” will only create a new 21 magnetic media file, but it will not regenerate the data in the workfile.

Generate Error Listing §Nextgen will now allow W 2’s to be processed without an address in an employee’s maintenance. §RED warnings will be rejected by the SSA. These will usually include negative amounts. If those employees are to be included, corrections must be made through the W 2 Maintenance Table. §Any Unchecked SSN’s will be excluded from the W 2 file. §Carefully review any errors you receive. It is likely you will need to make corrections and regenerate the file. However, there may be circumstances where this would not be the case. 22

Summary W 2 Data §Print this page for your records. §Data should be compared with the 941 report or QYTD reports and the amounts imported or entered through the W 2 Table Maintenance. Any time adjustments are added or check records are effected by changes the generate MUST be run again to include the new information. 23

Test the Magnetic Media File Run the Magnetic Media File through the Accu. Wage 2016. This software will identify any errors in the file generated by Nextgen. Note: Accu. Wage must be downloaded each year to perform required edits for the new calendar year. Be sure you are using Accu. Wage 2016. • “Start Testing” button will prompt you to find the Magnetic Media file that was generated. • Once you “open”, it will scan the file and produce an error report. • Errors must be corrected before you can send the file to the SSA. 24 • Once the corrections are made in Nextgen you MUST Generate again.

Print W 2 Report Note: Magnetic Media File should be tested before running report. If corrections were made, file had to be generated again. Reports employee wage, withholding and benefit information that is recorded in the W 2 Report export file. Alabama districts will have both the RW and RS records since we are to submit electronically to the State. 25

W 2 Printing Harris School Solutions provides three different methods for printing W 2 forms at your district. The options are: • Printing forms through the Next. Gen Payroll System • Printing forms through Harris School Solutions Document Services application • Printing forms through Soft. Docs Doc e Serve application. In addition, Harris School Solutions also offers a service through which they will printing the W 2 forms for your district. Please refer to the Harris School Solutions Calendar Year End Memo for specific instructions regarding printing since these instructions will vary depending on your choice for how your will print the forms. 26

Submit file to Social Security Administration • Electronically upload the file to the Social Security using the Accu. Wage System. • In addition, upload the W 2 REPORT file to the Alabama Department of Revenue. This is done through the same website where you make your monthly Alabama tax payments. 27

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Reset Deduction Limits and Total Deducted Each calendar year, you must reset the Social Security Total Deducted back to zero. To do this go to Mass Change Deduction under Employee Maintenance. Enter your Social Security Deduction number. Then select Total Deducted. You will ignore the Old Amount and set everyone to $0. 00. You will also reset the Limit if the IRS Social Security Wage base changes for 2017. Please refer to Pub 15 and the Harris School Solutions Calendar Year End Memo for this information. Use this transaction for resetting you limits and total deduction amount on tax sheltered annuities as well. This transaction can be run either before or after W 2 processing, but MUST be run before any payroll for the new calendar year is computed. 29

Calendar Year End Initialization This transaction creates new deduction quarterly total records, fringe benefit quarterly total records and earnings records for all employees. You will enter the NEW Calendar Year 2017 You may get a message that information already exists in the new years tables and it will not be updated. You should click YES to continue. Usually it is because you have already added a new person in the new Cal Year. This transaction can be run either before or after W 2 processing, but MUST be run before any payroll for the new calendar year is computed. 30

Update Federal Tax Tables This transaction updates the Federal Tax Table and the Annual Federal Exemption amount. As part of the calendar year end program update, Harris School Solutions provides a file to all districts with the new values. However, you should double check the accuracy of the tables and the Federal Exemption Amount from the Circular E-Pub 15 on the IRS website. When running this transaction, you will select the two boxes shown and click F 1 (Enter) to import the new tax information. This transaction can be run either before or after W 2 processing, but MUST be run before any payroll for the new calendar year is computed. 31