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    Year-End Guide 2022

    We’re here to help you prepare for year-end
    Year-End Webinar On-Demand

    Holiday Delivery Times

    With weather conditions and the holiday season, clients are already experiencing delivery delays, and UPS and FedEx are not providing delivery guarantees. Please consider changing your shipping to an expedited method or submitting your payroll early to avoid delays. Contact your representative to discuss what options are best for you.

    We also have Paycard options in lieu of issuing paper checks for employees. Email your Client Service Representative (CSR) or HCM Service Representative (HCM) at mypayroll@paynw.com if interested in learning more.

    Electronic W-2 / 1099 / 1095-C Delivery

    For employers who have chosen to enable Electronic Consent, employees may choose to receive their W-2s / 1099s / 1095-Cs electronically, in lieu of a paper copy by December 30th. To offer this feature to your employees, have them follow these easy self-service steps within the PayNW portal.

    Employees who provide Electronic Consent may view and print their documents directly with Self Service, just as they would their pay statement today. PayNW will print and mail W-2s / 1099s / 1095-Cs for you to distribute to employees who do not provide electronic consent. 

    PayNW Holiday Season Schedule

    We will be closed on December 26th and January 2nd to spend time with our families.

    PayNW will be closed to observe all Federal Holidays in 2023.
    • NEW YEAR’S DAY, JANUARY 2ND
    • MARTIN LUTHER KING DAY, JANUARY 16TH
    • PRESIDENT’S DAY, FEBRUARY 20TH
    • MEMORIAL DAY, MAY 29TH
    • JUNETEENTH, JUNE 19TH
    • INDEPENDENCE DAY, JULY 4TH
    • LABOR DAY, SEPTEMBER 4TH
    • INDIGENOUS PEOPLES’ DAY, OCTOBER 9TH
    • VETERANS DAY, NOVEMBER 10TH
    • THANKSGIVING DAY, NOVEMBER 23RD
    • CHRISTMAS DAY, DECEMBER 25TH

    Payroll Adjustments and Special Items

    The deadline for reporting fourth quarter and year-end payroll related information and/or an adjustment is Friday, December 30, 2022. If adjustments are required after the deadline, we can reprocess your tax returns for an additional fee.

    Reminder of Standard Payroll Processing Schedule

    As a reminder, the standard payroll processing schedule is to submit payroll to us by 1:00PM PT, at least 2 business banking days prior to your check date. Payrolls submitted later are subject to rush processing fees. Please reach out to your CSR or HCM Service Representative with questions.

    Note: Cannabis-related Business (CRB) clients require 3 business banking days prior to check date.

    Please do the following before your final payroll of the year:

    Report Third-Party Sick Pay (Disability Payments)

    By law, insurance companies have until Tuesday, January 17, 2023 to inform you of any disability benefits paid to your employees during 2022.

    If you were notified of benefits paid throughout the year, please contact your CSR / HCM Service Representative no later than Friday, December 30, 2022.

    If you are notified about this type of payment after reporting your last payroll of the year, contact your CSR / HCM Service Representative as soon as possible.

    In addition, if you have not already done so, please inform your insurance company that we will include third-party sick pay on W-2 Forms that we prepare for you.

    2022 FUTA Credit Reduction for California, COnnecticut, Illinois, and New York:

    The FUTA tax credit for these states will be reduced to 5.1 percent from 5.4 percent for the 2022 tax year; 2) each employer will incur an additional cost of $21 per employee for 2022

     

    For employers that paid wages in these states in 2022, you will see an additional collection for this tax.

    Review and update all employee-related information for accuracy including:

    Employee Social Security numbers and addresses

    Employee Name should be formatted to match their Social Security card

    Tip: Use the system Social Security Verification tool on the hire screen or employee profile to avoid amendments for incorrect SSNs. (Fee Applies)

    Report any remaining 2022 payroll-related information and/or adjustments including:

    In-house checks

    Voided checks

    Fringe benefits (S-Corp Insurance for owners, Personal Use of Company Car, Group Term Life in excess of $50K, etc.)

    Deferred Comp

     

    Important Tax Updates and Agency Notices for 2023

    UI and L&I Rate Change Notices

    State Unemployment and Washington Labor and Industries (L&I) will mail 2023 rate change notices starting this month directly to your business. Some agencies will notify you to obtain it online if they are only available electronically. Please forward them to your CSR / HCM Service Representative. We need the rate(s) to properly calculate your tax and returns correctly in 2023.

    Washington Paid Family Leave

    Employment Security will mail status notices detailing if you are eligible to pay the employer share of the premiums in 2023. The letters will have a subject of Annual Business Size Calculation. Please forward them to your CSR / HCM Service Representative. We need the letters to properly calculate your taxes and returns correctly in 2023.

    State IDs and Social Security Numbers (SSNs)

    With many states reducing staff during COVID-19, paper return processing has slowed down or temporarily halted. As a result, it is more important than ever to make sure you’ve reported the following information for your business so PayNW can electronically file your returns:

    • All state and local agency IDs

      Important: PayNW will not collect, pay, or file for agencies with missing ID numbers

    • All employee SSNs – many states will not accept quarterly state unemployment insurance (SUI) statements without SSNs

    New Payroll Taxes in 2023

    Oregon Paid Family Leave

    The state of Oregon has implemented a Paid Family Leave Program. On January 1, 2023, employees and employers will begin paying into the new program. On September 3, 2023, employees can start applying for benefits.

    Washington Long-Term Care

    On July 1st 2023, the state of Washington will implement the Long-Term Care Tax. Washington workers will pay up to $0.58 per $100 of earnings. Every employee contributes – employers do not.

    Colorado Paid Family Leave

    Effective January 2023, Colorado has adopted a paid family leave program. Employers are responsible for sending contributions to FAMLI. For 2023 and 2024, the contribution rate is 0.9% of each employee’s wages, up to the Social Security wage base (currently estimated to be $155,100 in 2023, which would be a max contribution of $1,395.90). If you have nine or fewer employees, then your employees pay half the contribution amount and you pay nothing. If you have 10 or more employees, then you pay 50% and your employees pay 50% of the contribution.

    Important PayNW Policy Changes for 2023

    PAYROLL-RELATED POLICY CHANGES

    Alterations to company policies that will affect 2023 payrolls should be submitted 3 weeks prior to payroll processing. This will give our team time to set up and test the changes.

     


    Changes may include but not limited to:

    • Pay Frequencies
    • Time off / accrual policies
    • 401(k) plan changes

    Benefit Renewals

    We request you send us your benefits information a minimum of 30 days prior to your open enrollment start date. This allows us to complete the configuration changes timely. Late submissions may incur additional fees.

    IMPORTANT

    For clients subscribed to EverythingBenefits Carrier Connection, late submissions of Open Enrollment dates and changes may incur increased fees. 

    EverythingBenefits cannot guarantee timely execution for late submissions.

    For clients subscribed to our ACA Manager Service

    ACA Year End Processing

    ACA Guides: Refer to the ACA Manager Admin Guide and ACA Ongoing Maintenance documents to assist you with ACA tasks. 

    Key Dates

    November/December

    • Now - December 31, 2022: Continue to review ACA reports and verify the accuracy of all data. Resolve any Compliance Alerts or incorrect data. Forms 1095-C will be generated for employees who have calculated an ACA Status of FT for any month in the calendar year. The data in this report will populate onto Forms 1095-C.
      • NOTE: ACA data is auto calculated on the 1st of each month through the end of the last month. ACA data should be reviewed at the beginning of each month, every month. December 2022 data will be reviewed at the beginning of January 2023.

    January/February

    • January 1, 2023 to January 6, 2023: Complete the “ACA Year End Checklist and Required Acknowledgement” .
      • The ACA Year End Acknowledgements checklist will be available in ReadyConnect. (assigned to users with Role of Company Admin)
        Select readyConnect icon  ReadyConnect icon (upper right) 
        Go to My Topics tab > ACA Year End Required Acknowledgments
       
      • Important: January 6, 2023 is the last day to complete any ACA data corrections.  Data corrections must be completed prior to submitting the “ACA Year End Checklist and Required Acknowledgement”.

        Late submissions and data corrections needed after 01/06/2023 will be subject to ACA Late Processing fees of $100.00 per hour (1 hour minimum) and may require amended returns.

    • January 7, 2023 to February 17, 2023: PayNW will generate Employee Forms 1095-C and Employer Forms 1094-C. For employees who have not given Electronic Consent for Form 1095-C, paper forms will be printed and shipped for employers to distribute to employees by the IRS deadline of March 2nd.

    March

    • March 2, 2023: Forms 1095-C due to employees.
    • March 31, 2023: PayNW will generate and electronically transmit IRS AIR files by the IRS deadline of March 31. State specific files, if required, will be electronically transmitted by the deadline established by each state.

    April

    • April 1, 2023: ACA amended returns processing resumes.

    IMPORTANT: “Renewal Benefits clients are encouraged to reach out to the Renewal benefits team with any questions regarding ACA filing requirements, benefit compliance issues, and for review of 2022 1094-C and/or 1095-Cs prior to finalizing. Reach out at benefits@renewal.is.”

    Changes to REporting Contractor Wages - FOrm 1099

    Effective with 2020 reporting, the IRS wants Non-Employee Compensation (Independent Contractors) reported on a separate form 1099-NEC instead of prior used form 1099-MISC. All processed compensation will be moved to the new 1099-NEC form on your behalf. The IRS now requires 1099-MISC to be used for other forms of compensation such as rent payments, prizes, attorney payments, etc. Should those alternative compensations apply to you, please reach out to your CSR/HCM for adjustments. Please refer to the updated IRS Instructions for 1099 for further details.

    2023 Minimum Wage Increases

    Effective January 1, 2023 the Washington state minimum wage rate will increase to $15.74 an hour.

    Please note: Seattle and the City of SeaTac have higher minimum wage rates for 2023. For employers in those areas, the local minimum wage rate will apply as long as it is higher than the state minimum. Please ensure you are using the correct wage rate for your employees.

    It is your responsibility to ensure employee rates are updated. PayNW will not intentionally change employee’s rate of pay without a request from the employer. Please contact your CSR/HCM for further questions or assistance.

    Update on Employee Retention Credit (ERC)

    With the signing of the Infrastructure Investment and Jobs Act, Employee Retention Credits are retroactively end dated as of September 30, 2021. We have helped employers receive credits totaling over $80 million, and more are still be calculated for the eligible period of March 2020 – September 2021. If you feel you may be eligible for credits, reach out to your CSR at mypayroll@paynorthwest.com to schedule a call to learn more.

    NACHA Operating Rules Reminders 2022-23 

    Each client authorizing PayNW to create and transmit ACH transactions is required to comply with the NACHA Operating Rules as stated within the ACH Services Addendum between PayNW and the client. The National Automated Clearing House Association (NACHA) is the rule making body governing the ACH network; therefore, all participants of the ACH network must comply with these Rules. 

    NACHA rules specific to client originators include: 

    • Client agrees not to provide any payroll information or entries which violate the laws or regulations of the United States or of any state in which Client does business 
    • Client agrees to be in compliance with all NACHA operating rules and guidelines 
    • PayNW and its Originating Depository Financial Institution (ODFI) maintain the right to audit NACHA compliance and to terminate or suspend the ACH relationship for noncompliance with NACHA operating rules and guidelines 

    Stay up-to-date with the most current NACHA Rules. The NACHA Rules are available online by setting up a user account. Visit the NACHA Rules Online by clicking here. 

    Thank you for your business. From all of us at PayNW, we wish you and your family a happy and safe holiday season!