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Welcome to the 2014 Year-End Client Guide
Since year-end is fast approaching, BDB has created a comprehensive guide to assist you through the 2014 year-end process. Please review this handbook carefully as it will assist you in
processing accurate payroll data. If you have any questions or require further clarification, please contact your customer service representative. A few minutes spent asking the right questions can save hours of aggravation correcting errors caused by inaccurate data input.
Allow BDB’s team of payroll experts to guide you through a seamless transition into 2015 by helping you prepare for all your year-end payroll needs.
Please refer to our 2014 year-end due date schedule to ensure timely payroll reporting for all adjustments and special payrolls. Use the tools in this guide to avoid penalties for missing critical deadlines. Also, please review the 2014 W-2 reporting requirements and submit applicable data to BDB.
BDB will begin processing your year-end forms and W-2s after your last payroll in 2014. If you would like to hold your year open for further review or additional adjustments, please let us know before your last payroll is processed. The deadline for submitting 2014 adjustments is January 7, 2015.
Tax Service Clients: Please be advised that any 2014 adjustments submitted after December 29, 2014, may be subject to late tax deposits. BDB will therefore require an Absolution Agreement to be signed.
To ensure accurate reporting, please confirm the following: • Verify your tax IDs
• Verify employee social security numbers • Submit 2014 W-2 adjustments promptly
As always, your client support specialist will be available to assist you with all of your payroll and end needs. Please be aware that BDB may experience heavier than usual volume during year-end. Timely planning can help prevent the last minute rush.
Thank you in advance for your attention to this process. It is a pleasure working together to make your 2014 year-end a success. As always, we appreciate your ongoing trust and patronage. We look forward to continuing our valued business relationship in 2015.
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Table of Content
Welcome to the 2014 Year-End Client Guide ... 2
Table of Content ... 3
Year-End Schedule ... 5
Critical Dates and Important Deadlines ... 5
Data Verification ... 7
W-2 Verification Report ... 7
Federal/State Filing Status ... 8
Year-End Delivery ... 9
Funding Requirements ... 10
FUTA Credit Reduction ... 10
Tax Service ... 11
Direct Deposit ... 11
Third Party Sick Pay ... 12
Special Reporting on W-2 ... 13
Box 7 Tips Reporting ... 13
Box 8 Allocated Tips Reporting ... 13
Box 10 Dependent Care Reporting ... 13
Box 12 Reporting ... 13
Box 13 Special Employee Status ... 13
Box 14 Reporting ... 14
1099-MISC, 1099-R and Form 945 ... 15
1099 Services ... 15
1099/1096 Filings ... 15
945 Filings ... 15
Amendments and Adjustments ... 16
Correcting Social Security Numbers on Form W-2 ... 16
2015 Tax Updates ... 17
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New York SUI Wage Base Limit ... 18
New York E-File Mandate ... 18
Minimum Wage Increases ... 19
Automated Minimum Wage Adjustments ... 20
2015 Bank Holidays ... 21
BDB Solutions ... 22
ACA Compliance ... 22
Automated New Hire Reporting ... 22
Electronic Garnishment Payments ... 22
Employee Self Service (ESS) ... 22
HR Support ... 22
Labor Law Posters ... 23
Paperless Solutions ... 23
Paperless Checks ... 23
Online Reports ... 23
Employee Self Service ... 23
Direct Deposit ... 23
EZfee ... 23
E-reports ... 23
Pay Rate Notices ... 24
PTO Tracking ... 24
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Year-End Schedule
The processing deadline for payrolls with Federal liabilities of $100,000 or more is 3:00 PM,
December 24 with a check date of 12/31/2014 for normal Tax Debit procedures. Clients who wish to wire funds may process payroll until December 29 with a check date of 12/31/2014. Any payroll with a total tax liability of $250,000 or greater always requires a wire transfer.
The processing deadline for payrolls with Federal tax liabilities of less than $100,000 (and total tax liability under $250,000) is December 29. Any 2014 payrolls processed thereafter may be subject to additional processing fees and late tax deposits.
Critical Dates and Important Deadlines
Date Information and Tasks Wednesday,
12/24/2014
Last day for Tax Service clients funding via ACH Debit to submit payroll with check date 12/31/2014 and federal tax liability of $100,000.00 or greater.
Thursday, 12/25/2014 Banking holiday; BDB will be closed.
Monday, 12/29/2014 Last day for Tax Service clients to submit payrolls requiring wire transfers for tax liabilities $100,000 or greater.
Monday, 12/29/2014
Last day to submit final payroll for 2014 without incurring any tax penalties for late tax deposits.
For Tax Service clients: Clients who submit a payroll after 12/29/2014 with a 2014 check date and a positive tax liability will be required to sign an Absolution Agreement.
Thursday, 01/01/2015 Banking holiday; BDB will be closed. Wednesday,
01/07/2015
Last day adjustments can be recorded for year 2014. Any adjustment payroll submitted after 01/07/2015 will incur standard reprocessing and necessary amendments fees.
Friday, 01/09/2015 BDB will start shipping Quarterly/Year-End forms including W-2s Friday, 01/23/2015 BDB will start uploading Quarterly/Year-End forms including W-2s to Web and Employee Self Service. Monday 2/02/2015 Deadline for distributing W-2s and 1099s to your employees.
Friday, 02/20/2015 Deadline for correcting employee information on Form W-2
Please note that any payroll submitted in year 2014 with a year 2015 check date will be recorded in 2015 and reflected on the 2015 W-2.
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Important for 2014
All employers who filed at least 250 W-2s for the tax year 2013 are required to report the cost of coverage under an employer–sponsored group health plan on the 2014 W-2s. This amount will be reported in Box 12 Code DD of Form W-2.
This reporting is for informational purposes only and does not mean the coverage is taxable. For a complete chart on what is required to be reported and what should not be reported in Box 12 Code DD, please visit: http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage
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Data Verification
All data verification should be done before your last payroll in 2014 in order to ensure accurate W-2 processing. Please note that tax agencies may impose a penalty for each W-2 that has a missing or incorrect Social Security number.
If you are a 501(c) or government entity, please inform your client support specialist to ensure correct W-3 reporting.
To ensure accurate W-2 reporting, please verify the following: • Employees’ names, addresses and social security numbers.
• Year-to-date and quarter-to-date totals. Please make sure that any manual/prepaid checks issued to employees during the year are recorded by your last payroll.
• Dates of year-end payrolls and special payroll runs.
• Employees are coded as Statutory or Pension (Retirement Plan) as required for Box 13 W-2 reporting.
W-2 Verification Report
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Federal/State Filing Status
There are two options a user can select when blocking an employee's withholding tax: 1. Blocked - Wages are taxable and reported to agencies but no tax is withheld. 2. Exempt - Wages are not taxable and are not reported to agencies.
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Year-End Delivery
BDB will start shipping Quarterly/Year-End Forms including W-2s on 01/09/2015. For clients with Online Reporting and Employee Self Service, data will be uploaded to these sites as of
01/23/2015.
Quarterly/Year-End reports Include: • Quarterly Recap Analysis • Employee Earnings Records • Federal Quarterly Tax Forms • State Quarterly Tax Forms • W-2 Listing
• W-2s • W-3 • Form 940
BDB is now offering the option of Paperless W-2s. You can reprint your employee’s W-2 at any time using a PDF attachment. No need to worry about lost paper W-2s anymore. If you have not informed your client support specialist to activate this preferred option, please consider doing so as soon as possible. BDB also supports the option of having additional copies of your Quarterly/Year-End reports sent using different delivery options for each copy. The delivery options are as follows:
1. Send via e-mail
2. Print on paper and e-mail
3. Upload to Online Reporting (you must activate this service)
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Funding Requirements
FUTA Credit Reduction
On November 10, the US Department of Labor released the final list of 2014 FUTA credit reduction states. The following states will be subject to credit reduction:
State: Credit reduction: Total FUTA rate: Additional tax per employee
*
Total tax per employee
*
California 1.2% 1.8% $84 $126 Connecticut 1.7% 2.3% $119 $161 Indiana 1.5% 2.1% $105 $147 Kentucky 1.2% 1.8% $84 $126 New York 1.2% 1.8% $84 $126 North Carolina 1.2% 1.8% $84 $126 Ohio 1.2% 1.8% $84 $126 Virgin Islands 1.2% 1.8% $84 $126*
For employees earning at least $7,000If you have employees in a credit reduction state, you will owe additional FUTA (940) taxes at the end of the fourth quarter, 2014. If you are a tax service client, you will be debited for the applicable percentage of your FUTA taxable payroll. BDB will notify you of the exact amount of the additional debit in January, 2015. For more information about credit reduction, please visit
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Tax Service
Your regular funding methods will apply for payrolls with tax liabilities less than $100,000.00. For liabilities of $100,000.00 or more see chart below:
Tax Service Type:
Total Tax: Fund Transfer: Submit By: Payroll to be dated: Tax Service Client Up to $250,000.00 ACH Debit 12/24/2014 12/31/2014 Tax Service Client Up to $250,000.00 Wire Transfer 12/29/2014 12/31/2014 Tax Service Client Above $250,000.00 Wire Transfer Only 12/29/2014 12/31/2014 Non Tax Service
Any Amount N/A 12/31/2014 12/31/2014
If you regularly have tax liabilities greater than $100,000.00 and your Year-End/Bonus payroll falls in the same liability range, your regular funding methods will apply. Please contact your client support specialist if you have any questions.
Direct Deposit
BDB needs at least 48 hours after processing your payroll to post timely credits to your employees’ bank accounts. Please be aware that banking holidays and weekends are not included in the 48 hours.
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Third Party Sick Pay
You are required to record taxable sick pay amounts paid to employees by state disability agencies or other third party providers.
Taxes withheld on these payments must be reported if your third party provider does not report it. Third party sick pay will be included on the employee’s Form W-2.
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Special Reporting on W-2
Box 7 Tips Reporting
Box 7 will contain the amount of tips you reported for the employee throughout the year. This amount is already included in Box 1.
Please contact your client support specialist if employee tips have not been reported as tip earnings throughout the year.
Box 8 Allocated Tips Reporting
If your employees are subject to tip allocation, this box will show the statutory allocation amount. Any amount shown here is not included in Box 1.
Please contact your client support specialist if you need to report allocated tips on Form W-2.
Box 10 Dependent Care Reporting
Please contact your client support specialist if you need to report dependent care benefits in Box 10 of Form W-2.
Box 12 Reporting
BDB will automatically enter the amounts you reported throughout the year with the appropriate codes in Box 12. Please contact your client support specialist if you have employees who did not contribute to a retirement plan through BDB but are active participants in a qualified plan as defined by the IRS.
Box 13 Special Employee Status
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1099-MISC, 1099-R and Form 945
1099 Services
Please notify your client support specialist if you would like BDB to prepare your 1099 forms. BDB will produce the following copies of Form 1099:
• Copy A — Federal copy • Copy B — Employee copy • Copy C — Employer copy • Copy 1 — Employer State copy • Copy 2 — Employee State copy
BDB will generate the forms based on the YTD figures and employee settings. Should you need to adjust the figures, you will need to submit a special 1099 payroll.
1099/1096 Filings
BDB will not file 1099-MISC, 1099-R and 1096 for your company. If you are required to file
electronically you will need to obtain a TCC (Transmitter Control Code). To obtain a TCC you must file Form 4419 with the IRS. Form 4419 is available on the IRS website
http://apps.irs.gov/app/picklist/list/formsPublications.html or by calling (800) TAX-FORM (800-829-3676).
945 Filings
Form 945 is an annual federal return for reconciling taxes withheld and deposited on non-payroll earnings (e.g., backup federal withholding and tax withheld on 1099-R and 1099-MISC income). BDB does not produce or file Form 945. You can obtain Form 945 from the IRS website
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Amendments and Adjustments
An amendment will need to be filed for any adjustments reported to BDB after 01/07/2015 for all forms/filings affected.
Correcting Social Security Numbers on Form W-2
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2015 Tax Updates
Social Security
The threshold for taxable Social Security wages will increase from $117,000 to $118,500. Both the employee and the employer tax rate for 2015 will remain at 6.2%.
Medicare
Both the employee and the employer tax rate for 2015 will remain at 1.45%. Employers are required to withhold an additional 0.9% in Medicare taxes on wages earned by employees in excess of $200,000 in a calendar year. Employers are not required to match this 2.35% employee rate but will continue to pay 1.45% in Medicare taxes on all subject wages earned by employees.
Pension and Transportation Limits
The 2015 limits on the exclusion for elective deferrals for 401(k), 403(b), and 457 plans will increase to $18,000. The catch-up contribution for those ages 50 and older will increase to $6,000.
The 2015 excludable amount for employer–provided “qualified transportation fringe benefits” will remain at $250 per month for qualified parking. The monthly limit for transit passes and van pooling will remain at $130 per month.
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New York SUI Wage Base Limit
As of January 1, 2015, the New York State Unemployment wage base will increase from $10,300 to $10,500. Employers pay unemployment insurance tax on each employee’s wages up to the wage base limit.
The unemployment wage base will continue to increase each year as follows:
2015 - $10,500 2021 - $11,800 2016 - $10,700 2022 - $12,000 2017 - $10,900 2023 - $12,300 2018 - $11,100 2024 - $12,500 2019 - $11,400 2025 - $12,800 2020 - $11,600 2026 - $13,000
New York E-File Mandate
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Minimum Wage Increases
The following 20 states have scheduled an hourly minimum wage increase for 2015:
Arizona minimum wage rate will increase from $7.90 to $8.05 effective January 1, 2015. Arkansas minimum wage will increase from $7.25 to $7.50 effective January 1, 2015. Connecticut minimum wage will increase from $8.70 to $9.15 effective January 1, 2015. Delaware minimum wage will increase from $7.75 to $8.25 effective June 1, 2015.
District of Columbia minimum wage will increase from $9.50 to $10.50 effective July 1, 2015. Florida minimum wage rate will increase from $7.93 to $8.05 effective January 1, 2015. Hawaii minimum wage will increase from $7.25 to $7.75 effective January 1, 2015. Maryland minimum wage will increase from $7.25 to $8.00 effective January 1, 2015. Massachusetts minimum wage will increase from $8.00 to $9.00 effective January 1, 2015. Missouri minimum wage will increase from $7.50 to $7.65 effective January 1, 2015.
Montana minimum wage will increase from $7.90 to $8.05 effective January 1, 2015. New Jersey minimum wage will increase from $8.25 to $8.38 effective January 1, 2015. New York minimum wage will increase from $8.00 to $8.75 effective December 31, 2014 and $9.00 effective December 31, 2015.
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Washington’s minimum wage will increase from $9.32 to $9.47 effective January 1, 2015. West Virginia minimum wage will increase from $7.25 to $8.00 effective January 1, 2015.
Automated Minimum Wage Adjustments
BDB offers Automated Minimum Wage Adjustment for all your employees in Connecticut, New Jersey and New York. You must submit a Minimum Wage Increase Consent Form to opt in to this service. To take advantage of the auto minimum wage increases please complete the form at
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2015 Bank Holidays
The following are banking holidays. BDB will send a reminder with instructions to arrange an alternate payroll schedule.
Thursday, January 1, New Year’s Day Monday, January 19, Martin L. King
Monday, February 16, Washington's Birthday Monday, May 25, Memorial Day
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BDB Solutions
Are you taking advantage of our full line of services and features? Look through the list of solutions to see how BDB can help streamline your business in 2015.
ACA Compliance
Are you up to date with Health Care Reform (also known as ACA) and how it may affect your business? BDB is an industry leader in ACA compliance. Our ACA experts keep you up to date on the latest developments so you don’t get caught out of compliance. Our specialized services and custom reports offer you solutions that meet all your ACA needs.
Automated New Hire Reporting
Sign up for automated electronic reporting of new hires with each payroll. No more faxing reports. We report each new hire electronically to the appropriate state, keeping you in compliance with reporting requirements.
Electronic Garnishment Payments
Are you tired of managing payment of your employee wage garnishments? Let us do the work. With our Electronic Garnishment Payment Service, BDB will automatically calculate, debit, and deposit all your employee garnishments with the appropriate agencies.
Employee Self Service (ESS)
Empower your employees with secure access to track and print personal payroll history, reports, or paystubs with BDB’s Employee Self Service. Save your time spent printing employee paystubs. With our ESS app, your employees can access their pay records at anytime, from any device.
HR Support
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Labor Law Posters
Are you in compliance with the Federal and state posting requirements? BDB can help. We will provide you with all current Federal and state posters that are required for your industry.
Paperless Solutions
If you’re leading a socially responsible company BDB has many solutions to help your business Go Green! Also consider the increased efficiency and time saving benefits that you’ll derive from the paperless options below.
Paperless Checks
Your checks are emailed and ready to print at your office as soon as you process payroll. Never again wait for delivery of your checks. FREE checks provided by BDB.
Online Reports
Access all your reports securely online, including payroll reports, quarterlies and Forms W-2
Employee Self Service
Empower your employees with mobile access to pay-stubs, W-2s, payroll profiles etc. Try 60 Days FREE when you upgrade to paperless checks.
Direct Deposit
Direct Deposit is by far the preferred payment option for most employees. With Direct Deposit you increase employee retention, reduce the chance of check fraud and reduce paper clutter.
EZfee
This FREE service automatically withdraws payroll fees from your bank account via direct debit after each payroll run.
E-reports
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all active employees by February 1st of each year. Let BDB do the work. For a minimal fee BDB can complete the notices for you and email them to you in PDF format, ready to be distributed to your employees.
PTO Tracking
Count on BDB to streamline your company’s compliance with state paid sick leave laws. Our customized payroll solutions will automatically track the accrual and use of sick leave for each employee. Sick leave accruals can appear on payroll reports and employee stubs for easy tracking.
