How to End 2015 with a Bang: Your Year-End Checklist

The end of the year is approaching, which means finalizing deadlines and preparing for the hectic holiday season. Thanksgiving, Christmas, and New Years are all right around the corner, but before we reach 2016 it’s important to cover all the bases and reflect on this year.

The end of the year is a perfect time to finalize ACA compliance and confirm year-end payroll deadlines, including federal and state tax deposit deadlines. Since there are a million tasks to keep track of at year-end, we’ve provided a year-end checklist to ensure that 2015 ends with a bang!

ACA Compliance

• Know your controlled groups: If your company is commonly owned with other entities and/or owners, you need to determine if your company is part of a controlled group.
• Define your common law employees: Do you have enough control over your employees to be their common law employer even if they come from a staffing agency or Professional Employer Organization?
• What’s your applicable large employer status?: Do you have 50 or more full-time equivalent employees? If so, you are an ALE for 2016.
• Determine who’s full-time: The Employer Mandate dictates two ways to determine who’s a full-time employee for insurance benefits. An employee must work 30 hours of service per week or 130 hours per month to be determined full-time.
• Identify who’s part time and who’s variable hour: Part-time employees work less than 30 hours of service per week or less than 130 hours per month. Variable hour employees are employees with fluctuating schedules and can be classified as ongoing variable hour or new variable hour employees.
• Track hours of service for your employees: Have an efficient timekeeping system in place that properly tracks and records hours of service worked by your employees.
• Check your plans: Employers are required to offer minimum value coverage on an affordable basis to their full-time employees. Confirm that your plans meet these requirements.
• Prepare for non-discrimination testing: Employers must refrain from discriminating in favor of highly compensated employees with regards to health benefits.
• Grandfathered plans: Grandfathered notices are still required if there has been no changes to your plan since 2010.
• DOL Audits: Be prepared for the Department of Labor to audit the status of your ACA compliance. Begin forming a step-by-step process to ensure you’re aware of the additional requirements placed on employee benefits.

Human Resources

• Move current year terminated personnel files to storage.
• Remind employees to file an amended W-4 if there has been a change in their filing status, exemptions, etc.
• Verify home address for all employees.
• Reconcile all vacation/sick and/or Paid Time off balances for year-end payout or carryover if applicable.

Benefits

• Compile census information for retirement plan testing (highly compensated).
• Review list of which employees have life insurance over $50,000 to report taxable income for Taxable group term life insurance.
• Verify Flexible Spending Account balances to confirm that employees will have total amount deducted by end of calendar year.
• Verify current employee and accurate dependent coverage.
• Distribute new health/dental insurance cards.

Payroll

• Verify that reported taxes from Form W-3 equal tax deposits (total of Forms 941).
• Check for excess contributions to qualified plans, including 401(k), 403(b) and SIMPLE plans, especially for highly-compensated employees.
• Ensure that terminated employees have zero balances for loans, garnishments, vacation, and sick time.
• Schedule any special bonus payrolls.
• Confirm that for the new year the schedule of pay dates, period ending dates and quarter closing dates, are as intended and do not fall on holidays or weekends
• Reconcile manual checks to annual totals.
• Send reminder to employees to verify social security number and address on pay stubs.
• Capture all information (ex: personal use of company car, relocation, bonuses, etc.).
• Check third party sick pay (short or long term disability) postings to make sure you have captured all information required.
• Create a list of outstanding checks to insure you comply with your State Escheat Laws (unclaimed property).
• Confirm year-end payroll deadlines and federal and state deposit deadlines, and review the holiday processing schedule.
• Check the IRS website to ensure you have the most recent Forms 941, 940, 944, and 945.
• Verify the employer’s new state unemployment insurance tax rate and taxable wage limit for each state where the employer has workers.
• Verify new state disability insurance rate and taxable wage limit, where applicable.
• Test reasonableness of Social Security tax withholding (multiply total wages less excess wages by 6.2%).
• Compare payroll register totals to Form W-3 totals.
• Compare Forms W-2 to State and local report totals.
• Compare total wages reported for each tax; reconcile any differences.

Although the end of the year is a great time to reflect on past successes, it’s the perfect time to plan for an even brighter future. This checklist will allow you to be more prepared for year end, and allow more time to focus on future goals. As you think abut the New Year, contact us for all of our hiring, HR and payroll needs.

Here’s to a successful 2016!

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