How To Process A Test Payroll Year End Close

Scott Witteveen

Consultant

V

_{Technologies LLC}

Payroll Year End Processing

Payroll

Year

End

Processing

•

Dynamics

Support

Tech

Knowledge

articles

that

you

may

want

to

download

from

CustomerSource

and

review

850663 – Year‐End Closing procedures 

856808 – How to process a “test” Payroll Year‐End Close

(This article also explains how to recreate the YE wage file) 872100 – Description of error messages on Payroll Validation report

1. Verify the version of Microsoft Dynamics GP 2. Complete all pay runs for the current year

3. Complete all monthly and quarterly period‐end procedures 4. Make a backup of the original file

5. Install the Year‐End update 6. Create the Year‐End file 7. Make a backup of the new file

8. Verify the W‐2 and 1099‐R statement information 9. Print W‐2 statements and W‐3 Transmittal form 10. Print 1099‐R forms and 1096 Transmittal form 11. Create a W‐2 Electronic file

12. Archive inactive employee Human Resources information 13. Set up fiscal periods for 2015

14. Close fiscal periods for the payroll series for 2014 15. Install the payroll tax update for 2015

Payroll

Year

End

Processing

Scott’s

recommended

steps

•

Verify

the

version

of

Microsoft

Dynamics

GP

Dynamics GP versions  2010 and 2013 are presently supported for 

the YE updates .  

Prior versions of Dynamics GP are not supported for YE updates 

which may effect your ability to print W‐2’s on the required form and 

create the Electronic file.

Timing

Now – you may want to update to a currently supported version 

before 12/31

Payroll

Year

End

Processing

•

Complete

all

pay

runs

for

the

current

year

If you have taxable benefits or need to adjust taxable wages in a 

regular payroll run, make sure you include those in or before the 

•

Install

the

Year

‐

End

(YE)

Update

Before installing any update or service pack make sure you have a 

backup of your Dynamics and Companies databases. The YE Update usually updates the W‐2 and W‐3 forms and 

Electronic Filing layout, but there can be other updates included in 

the YE Update. 

The YE  update needs to be installed on the server and all 

workstations.

Timing

The YE Update will be released in late November.

Payroll

Year

End

Processing

•

2014

Year

 ‐

End

Update

includes:

1.

No

W

‐

2 Form

changes

2.

EFW2

changes

(Electronic

Filing)

3.

Product

Quality

Fixes

around

Payroll

Year

‐

End

4. W

‐

3

Form

changes

5.

1099

Interest

 ‐

form

and

application

changes

6.

1099

‐

R

distribution

code

changes

7.

Fixed

Asset

Luxury

Auto

Depreciation

changes

•

Create

the

Year

‐

End

Wage

file

This routine reads the payroll tables and calculates the W‐2 data 

based on the pay codes, deductions and taxable benefits setting at 

the time of the pay run 

If you need to delete or recreate the YE wage file reference 

TechKnowledge 856808

Timing

After the last pay run for the year

Payroll

Year

End

Processing

•

Verify

the

W

‐

2

Information

Print the following Period‐End Payroll reports for the calendar year: Pay Code Summary, Deduction Summary and Benefit Summary • Gross wages, less Federal TSA deductions, plus taxable benefits 

should equal the Federal taxable wages.

• Gross wages, less FICA TSA deductions, plus taxable benefits 

should equal the Social Security wages.

• Reconcile the difference between Social Security and Medicare 

wages.

• Michigan taxable wages should equal the Federal Taxable wages.

Timing

•

Print

the

W

‐

2

statements

and

W

‐

3

transmittal

Use 4‐up forms for employees (Form 5205)

Payroll

Year

End

Processing

•

Print

quarter

end

payroll

reports

If any adjustments where made to the W‐2 file use the W‐3 

•

Create

a

W

‐

2

Electronic

file

Register with the Social Security (SS) Administration.  You will need a 

PIN number to create the electronic file in GP. 

http://www.ssa.gov/bso/bsowelcome.htm

Upload the file to the SS website and submit electronically Timing

After the data is verified, but before the filing deadline

Payroll

Year

End

Processing

•

Close

the

Payroll

series

fiscal

periods

for

2014

When the payroll series fiscal periods are closed a warning message 

will be returned when entering a date in the closed period Timing

•

Set

up

the

fiscal

periods

for

2015

2015 will need to be set up before any processing and posting can 

occur for 2015.

Timing

Now – If you setup the 2015 fiscal period now, close November and 

December 2015 so that no one posts to those periods in error.

Payroll

Year

End

Processing

•

Install

the

Round

1

payroll

tax

update

for

2015

The payroll tax update updates the withholding tables for any tax 

changes for 2015

The 2015 payroll tax update is installed once

Use the automated update by going to Microsoft Dynamics GP – Maintenance – U.S. Payroll Updates – Check for Tax Updates (sa user 

or equivalent) 

Timing Before processing the first payroll of 2015

FICA Social Security Limit $118,500

What

is

included

in

Round

1

payroll

tax

update

for

2015

Affordable

Care

Act

Dynamics

GP

is

adding

ACA

reporting

capability

to

the

HR

module

in

the

Payroll

Year

End

update

.

If

you

are

presently

only

using

the

payroll

module

and

are

on

GP2013

you

may

want

to

activate

the

HR

module.

1094

‐

C

– this

is a

summary

the

employer

fills

out

of

all

the employees

that

received

the

1095

‐

C. A

1094

‐

C

should

accompany

any

1095

‐

C

‘s

to

IRS. It

is

a

transmittal

of

Employer

Provided

Health

Insurance

Offer

and

Coverage

Information

Return

1095

‐

C

– this

goes

to

the

employee

from

the

employer

(like

a

W2)

Employer

Provided

Health

Insurance

Offer

and

Coverage

Payroll

Year

End

Processing