Year Round Compass

Tax season is approaching. Here are some important tax deadlines that may affect you in the coming weeks. Be sure to mark your calendar (and turn on the notification) to avoid late fees and penalties.

Jan. 5

• Year-End 2024 is CLOSED. Final date for Forms W-2/1099 adjustments.
• Commits after 5:00 p.m. ET will not be included in the year-end and quarterly totals sent to Day-force Tax Services. Amendments and Form W-2cs will be required
• Adjustments are subject to penalties and interest
• Last day to opt-in or opt-out of the year-end affiliate interface with Turbo Tax and H&R Block
• Dayforce sends Forms W-2/1099 to the print queue
• Dayforce sends Forms W-2/1099 to Dayforce Tax Services/D2Xchange for filing preparation
• 2024 adjustments should NOT be made between 5:00 p.m. and midnight ET
• Puerto Rico W-2s will be shipped in a separate package (after receipt of the confirmation number from the Hacienda)

Jan. 6

• Deadline to request changes to your Quarterly Tax Edit by Jan. 6 at 3:00 p.m. PT. Late requests may not be processed in time for your tax agency filings
• Additional 2024 adjustments can be committed (Forms W-2c/amendments)
• Form W-2c functionality becomes available in Dayforce

Jan. 16

• If you subscribe to our ACA Services, you MUST mark 1095-C/1094Cs as ‘locked and ready to send’ by 11:00 p.m. local time

Jan. 17

• Dayforce sends Forms 1095-C to the print queue. ‘Form 1095-C services’, found in the QE Packet, has more details.

Jan. 20

• W-2cs can be committed and printed. 

Are you responsible for processing year-end payroll or ACA forms using Dayforce? A successful year-end begins with the proper preparation. Get started for the first time, or complete a recommended refresher course, by following the steps below:

Training at Dayforce Learning Portal:

Dayforce’s year-end training site provides a centralized location for courses in the Dayforce Training Portal. Users can enroll in learning tracks that recommend courses based on experience. It also provides a list of available courses (offered by country) to reference for personalized training needs.

Log into the Dayforce Training Portal to register for instructor-led training (ILT) sessions or to review videos:

Payroll recordings:  

• Auditing Your Payroll for Quarter-End and Year-End Success 2024
• Processing Year-End Tasks for Payroll — 2024

Affordable Care Act (ACA):  

• Processing Year-End Requirements for PPACA (ITL virtual session)
• Processing Year-End Requirements for PPACA  2024  
• Processing Year-End Requirements for PPACA — Refresher 2024  
• Processing Year-End Corrections for PPACA 2024 (video will be released in January)
  Note: Dayforce 2024 correction functionality will not be available until the original filing has completed (typically in May)  

Dayforce Knowledge Base

Want to find more year-end topics to read beyond our training classes? Whether you need to create an off-cycle pay run, gain a better understanding of W-2 boxes, or learn how to preview and print employee tax forms, our Knowledge Base on the Dayforce Customer Community should be your first stop. Be sure to look under Year End > US Year End for great articles to help you close out the year.

On-Demand Customer Success Enablement recordings:

• Preparing for a Successful Quarter-End/Year-End USA
• Preparing for a Successful ACA

Year-end training trial accounts

Temporary year-end trial accounts are available to customers without Live Membership accounts.

Email questions to [email protected]. 

Note: Trial accounts include access to only year-end recorded videos.

Deceased employees’ Forms 1099M are automatically filed on your behalf. Whether the employee beneficiaries were paid during the year in which the employee died or in the following year, these wages must be reported to the IRS on Form 1099M.

The 1099 Management Report displays data that will print on Form 1099. After March, the reports generate automatically with each pay run. The report can also be manually generated at any time from the Year End module (after running Generated Preview Data).

Path: Year End > USA Year End > Overview > Reports > 1099 Management Report

Important: Dayforce will print and file all Form 1099-MISC that are displayed in the Year-End tab in the Dayforce system. 

See the KB article, “Paying a Deceased Employee (US)”

If the employer made the payment after the year of the employee’s death, the wages would not be subject to Social Security and Medicare taxes and would not be shown on Form W-2. By default, 1099-MISC are filed by our partner D2xchange on behalf of our customers (unless the customer has opted out of this service).

Information about final payments to deceased employees can be found here.

Does your company allow employee entitlement hours, such as paid time off (PTO) or sick pay, to carry over to the next year? Do they lose unused hours or are these hours paid out? Do you have a maximum number of entitlement hours? Be sure to review entitlements setup for year-end – especially if this is your first Dayforce year-end, or if there have been issues in the past.

Search the Knowledge Base on the Dayforce Customer Community for the Dayforce Implementation Guide, or “DIG”, (make sure you have correct release). Search for “Balance Carry Over Rule” and “Entitlement Rules and Qualifiers.”

Finally, make sure employees have easy access to their entitlement policy, or send out a friendly reminder, so there are no unpleasant surprises in the new year. 

YE form delivery packages

There are two delivery options available for printed year-end tax forms (Forms W-2/1099 and 1095-C): ship them all to your site location for distribution or mail them directly to each employee (U.S. addresses only). Review the Year End Delivery Package Report (under Year End > Reports) to confirm tax form delivery details.

Package tracking

Printed tax forms will be shipped using the package set up under: 
Payroll Setup > Report Output > Delivery Package.

1. Will tax forms be sent to your office for distribution? If so, package tracking numbers can be found under Year End > Package Tracking.
2. Individual tracking is not available for tax forms Dayforce mails directly to your employees.

All W-2/1099 tax forms will be shipped by January 31.

Review the Year End Delivery Package Report (under Year End > Reports) to confirm tax form delivery details.

Note: Territory Form W-2s cannot be mailed directly to employees’ addresses from our facility. They will instead be shipped to the address provided in the tax form delivery package set up.

Mailing options

U.S. Form W-2 (not including Territory Form W-2) can be mailed directly to each employee’s payroll mailing address. In the United States, these items are delivered via the United States Postal Service.

Dayforce allows you to configure the address that prints outside the tax statement to be different than primary residence address. This is done using the display on People > Personal > Contact Information > Addresses > Tax Statement indicator.

These options apply to all tax forms:

Electronic tax forms

Did you know that employees in self-service roles can opt out of receiving a physical tax form? These employees can then view and print a secure electronic copy. Your employees will have fewer people handling tax forms with their Social Security numbers and other private information. Plus, there is less hassle and expense for you! Employees must receive a physical copy of their tax form unless the opt-out process is completed. Once the employee consents, they will receive electronic forms for all future years (unless they revoke their consent). 

For instructions, check out the Knowledge Article on the Dayforce Customer Community called, “Allowing Employees to Opt Out of Printed Tax Forms (US).” 

Form W-2: Employer-Sponsored Healthcare

Do you have Employer-Sponsored Healthcare to record on Forms W-2 but don’t use Dayforce for benefits? The Knowledge Article, “Employer Healthcare Imports” has instructions for importing data into Dayforce. Access the Knowledge Base in the Dayforce Customer Community.

Form W-2: Retirement Plan Reporting in box 13

Take a few minutes to review this important information about Form W-2 box 13. See this article from the IRS for more details about retirement plans.

The three indicators within Box 13 specify: 

• Statutory Employee – Marked for employees when their wages:
  • are not subject to Federal Income Tax withholding (box 2 will be zero or empty),
  • are subject to Social Security and Medicare Tax Withholdings (boxes 3 through 6 will not be empty). 
• Retirement Plan – Marked if the employee has a pension plan, a 401(k) plan, 403(b) plan, SEP-IRA, or SIMPLE-IRA. This helps calculate how much the employee can contribute to a traditional IRA.
• Third-Party Sick Pay – Marked when employees received sick pay under your company’s third-party insurance policy and not directly from your company as part of a regular paycheck. Sick pay is not included in box 1 wages, although it is usually subject to Social Security and Medicare taxes.

If your company offers a qualified retirement plan, an X must print in the W-2 Retirement Plan box 13 for each participant covered by a retirement plan through employee or employer contributions at any time during the plan year. You can set the retirement plan indicator at the legal entity level to address most of your employee population. You can override this value at the employee-level in Dayforce under People > Payroll > Tax Definitions > Quarterly/Annual Reporting Parameters > Retirement Plan Eligible.

Does your company have a deferred compensation plan? Are most employees eligible from their date of hire?

• If yes, then Legal Entity Retirement Indicator should be marked Yes. This includes employees that are eligible for the Deferred Compensation Plan but are not participating.
• If no, leave the Legal Entity Retirement Indicator blank. Dayforce will mark the W-2 box 13 for all employees that have a YTD Deferred Compensation greater than $0.00.

Note: If there are employees that differ from the setting at the legal entity level, the Retirement Plan Indicator at the employee-level should be changed.

Use this chart to make sure that each employee’s Retirement Plan box is checked correctly. To ensure the correct employee set-up, always verify using the W-2 Management Report. 

Note: The Quarterly/Annual Reporting Parameters tab at the Legal Entity Level and the employee-level are role-specific. This feature must be turned on at the role-level to see the tab. 

This change is relevant to your business if you are subject to Federal Unemployment Tax Act (FUTA) taxes and have employees who work in California, New York, or the U.S. Virgin Islands.

Employers are required to fund the federal government’s unemployment account through Federal Unemployment Tax Act (FUTA) taxes by filing an annual Form 940. When employers pay state unemployment taxes, however, they are given a credit towards FUTA taxes.

Sometimes the states take out loans against these federal funds to pay unemployment benefits. If the states do not repay these loans by Nov. 10 on the second year after the loan was made, the federal government reduces the credit employers were given towards their FUTA taxes. This is referred to as a ‘credit reduction’.

These states did not repay their federal loans. If you are subject to FUTA taxes and you have employees in these states, you must pay extra FUTA taxes. The additional FUTA liability, if any, will be due with Q4 2024 Form 940 filed in January 2025.

Below is the link to the United States Department of Labor of final rate increases to the FUTA Credit Reduction.  

https://oui.doleta.gov/unemploy/futa_credit.asp

SURI registration

You must register with Sistema Unificado de Rentas Internas (SURI) and choose Dayforce as the approved third-party representative.

Puerto Rico Forms W-2 (Forms W-2PR)

A confirmation number (unique to each FEIN) must be printed on all Puerto Rico Forms W-2 (499R-2/W-2PR) before distribution to employees. These numbers confirm that the employer forms have been electronically filed and confirmed by the Hacienda. This special process creates a significant delay in printing Forms W-2PR.

Dayforce handles this process on your behalf:

1. Once Forms W-2PR are created in January, a bulk file will be sent electronically to Puerto Rico
2. Puerto Rico immediately returns the file with a confirmation number for each FEIN. Rejections may take several days to resolve
3. Payroll Support enters the confirmation numbers into Dayforce
4. Forms W-2PR are printed and shipped
   Note: Forms W-2PR are printed separately from the rest of your Forms W-2. They are also shipped later than other Forms W-2 (while we wait for the confirmation number to be returned from the Puerto Rico Hacienda). Forms W-2PR cannot be mailed directly to employee addresses from our facility. They will therefore be shipped to the address provided in the delivery package setup.

Forms W-2PR will automatically be sent to the print queue when the confirmation number is received. They will ship to your company’s default business address as noted in Payroll Setup > Report Output > Delivery Packages no later than Jan. 31.

The forms will be printed on an 8.5”x11” non-sealed form. The approved Puerto Rico Form W-2 is not self-sealing. This is due to the need for printing on both sides of a self-sealing document. Until the Hacienda approves a new form, clients will need to fold, stuff, and distribute Form W-2PR.

Note:

• Dayforce cannot mail Forms W-2PR directly to employees.
• Puerto Rico Forms W-2 will display in Self-Service after the confirmation number has been entered and the Forms W-2 have been sent to Print.

The deadline for adjustments is approaching!

As provided in the QE Packet, the “Year-end-at-a-glance” outlines important deadlines regarding adjustments to 2024 Forms W-2.

Ensure that you are following best practices for year-end payroll auditing. This includes thoroughly reviewing QE Packet Payroll Configuration section.

Check your company executives’ Forms W-2

Each year, several clients contact us after the Form W-2 deadline having discovered their CEO’s tax information has an error. No one wants their boss to see their mistakes – especially a mistake that impacts a sensitive topic like compensation. While auditing your company’s Form W-2s this year-end, remember to look closely at the executive team.

Employees receiving multiple printed Forms W-2

Showing multiple Forms W-2 for an employee? Don’t panic - employees will receive multiple forms for these reasons:

• Employee has more than four items to display in box 12
• Employee has more than three items to display in box 14
• Employee has wages in more than one state
• Employee has wages in more than one local

Missing a few printed tax forms?

Remember that employees can opt out of receiving the printed tax forms. The deadline for them to opt-out for the 2024 year-end is January 5, 2025 at 5:00 p.m. ET. Employees must receive a physical copy of their tax form unless the opt out process is completed. Once the employee consents, they wil l receive electronic forms for all future years (unless they revoke their consent).

For instructions, check out the Knowledge Article on the Dayforce Customer Community called, “Allowing Employees to Opt Out of Printed Tax Forms (US).”

Note: Dayforce prints Forms W-2/1099 for all termed employees, even if they opted out of receiving a printed form.

Leading causes of W-2cs and reprints

Mistakes are meant for learning, not for repeating. These are some of the top Forms W-2 errors that we encounter every year:

1. YE Form Delivery Packages. There are two delivery options available for year-end tax forms (such as Forms W-2, 1099, and 1095-C): ship them all to your site location for distribution or mail them directly to each employee (U.S. only). A great Knowledge Article on the Dayforce Customer Community called, “Setting Up Tax Forms to Ship Directly to the Employee (US)” will walk you through the steps.
2. Employer costs of Healthcare. Even though this amount is not taxable, an error in box 12 code DD needs a Form W-2c. It may be easiest to import your adjustment records into Dayforce. Check out the Knowledge Article on the Dayforce Customer Community called “Employer Healthcare Imports.”
3. Retirement Plan Indicator. Mess up this checkbox and your employees may receive assessment notices from the IRS. Search for the Knowledge Article on the Dayforce Customer Community called “Road Map: All Boxes on W-2 (US).” You will learn more about:

• • When the Retirement Plan Indicator on box 13 is marked
  • How to set up the Retirement Plan Indicator for both the entire legal entity as well as at the employee level

Since on-demand pay (ODP) can be requested daily, the YE process in Dayforce has been adapted to accommodate ODP requests that occur after the final pay period of the year has been processed, up to the final calendar day of the year.

ODP is considered “earned pay” when requested, therefore it is accounted for in the year that it is requested.

• Dayforce will automatically create an off cycle pay run when employees make an ODP request after the last scheduled pay run of the year but prior to the last day of the year.
• Any system generated off-cycle pay run that is still open at 9:00 a.m. ET on the first day of the new year will auto commit. To support the year close out, funds for all ODP are collected when the off-cycle pay run is committed.
• Identify your current pay cycles for any pay groups that are Dayforce Wallet enabled. See the Knowledge Base article, “Dayforce Wallet Quarter End Processing (US)” in the Dayforce Customer Community.