Ernst & Young LLP’s 2019 payroll year-end checklist

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ContentsErnst & Young LLP’s sample 2019 payroll year-end checklist .............. 2

Table 1: 2020 federal holidays .............. 11

Filing electronically for tax year 2019 ... 12

Table 2: Federal electronic filing due dates for 2019 .............................. 15

Table 3: Special wage payments — sample list ........................................... 16

Table 4: State Form W-2 filing method requirements ........................... 17

Table 5: State unemployment insurance filing method requirements .................. 23

Year-end employment tax reporting compliance ........................... 28

State Form W-2 filing due dates for 2019 ............................................. 32

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Ernst & Young LLP’s 2019 payroll year-end checklist

It is time to consider all the tasks necessary to successfully close 2019 and open 2020.

What’s includedErnst & Young LLP’s sample 2019 payroll year end checklist

Table 1: 2020 federal holidays

Filing electronically for tax year 2019

Table 2: Federal electronic filing due dates for 2019

Table 3: Special wage payments from A to Z — sample list

Table 4: State Form W-2 filing method requirements

Table 5: State unemployment insurance filing method requirements

State Form W-2 filing due dates for 2019

From tax filing to taxability, there is so much to consider when closing the year and starting anew and with federal, state and local rules constantly changing, preparing a year-end payroll checklist is no simple task. To get you started, we have compiled a sample checklist of items to consider for 2019 and 2020, and state charts to guide you through the Form W-2 and electronic filing requirements that apply.

More resources for year-end complianceCheck out our other special reports to assist you with your year-end compliance activities.

Why some payroll adjustments can’t wait until year-end

Fringe benefits reporting: Frequently asked questions for 2019

Federal reporting for fringe benefits chart: tax year 2019

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Ernst & Young LLP’s 2019 payroll year-end checklistWe have created a sample checklist of the top 30 payroll and employment tax activities for year-end 2019. Columns are included for inserting your own deadlines and the date you completed the tasks. Keep in mind that this is not a comprehensive list. Each business is unique in its payroll processes. Make a careful inventory of your own requirements and augment this checklist as necessary.

Top 30 payroll year-end tasks for 2019 Suggested deadline Your deadline Completed?1 Order Forms W-2 for 2019. If purchasing Forms W-2 from a supplier,

order and inspect the incoming stock. For software packages used in preparing Forms W-2, request the dated approval notice that the software provider obtained from the Social Security Administration (SSA).

November 15, 2019

2 Form W-4 verification. Ask that employees review their name, address, Social Security Number and Form W-4 and confirm that their federal, state and local income tax withholding elections are correct for 2019. This is also a good time to let employees that the federal Form W-4 is extensively revised for 2020. For a summary of the 2020 Form W-4 changes, see our alert.

December 1, 2019

3 2019 Forms W-4 claiming exemption. Run a report of all employees claiming exemption from federal income tax withholding on Form W-4. If no 2020 Form W-4 is filed, withhold based on the last Form W-4 the employee provided where exemption from withholding was not claimed. If there is no prior Form W-4 where exemption was not claimed, withhold at single with no adjustments beginning on February 17, 2020. (Many employers send notifications to employees when they are required to file a new Form W-4. Such notices should be sent to employees no later than January 31, 2020.) Check state and local Form W-4 requirements and repeat the same steps for state and local income taxing authorities where applicable.

For more about the federal and state Form W-4 requirements, read our special report.

January 31, 2020; February 17, 2020

4 Payroll system tax configuration review. Verify taxability configuration tables for all jurisdictions for 2019 and 2020.

• Paid family leave benefits. In recent years, many states have enacted laws requiring that employers provide paid family leave insurance to pay for time off to care for an employee’s family members. Federal law has not kept pace with this changing state landscape, leaving the issue of how to tax and report these benefits unclear. Employers will want to confirm their federal taxation and reporting of these benefits. To assist you, read our special report on paid family leave insurance here.

November 2019– January 2020

Ernst & Young LLP’s 2019 payroll year-end checklistContinued

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Top 30 payroll year-end tasks for 2019 Suggested deadline Your deadline Completed?• Wellness benefits. Confirm that you are giving the proper tax

treatment to benefits provided under wellness plans. For our analysis of recent IRS guidance, go here.

• Third-party sick pay. Your insurance provider is required to send you an annual statement of payments made and taxes withheld from disability pay in 2019 no later than January 15, 2020. You are likely required to file Forms W-2 with the SSA and provide copies to employees.

For more information on third-party sick pay, read our special report here.

• Marriage equality. All states now recognize same-gender marriages as a result of the U.S. Supreme Court decision on June 26, 2015. (Obergefell v. US, No. 14‑556, June 26, 2015.) Confirm that you are properly taxing benefits you provide for employees who have a same-gender domestic partner, civil union partner or a registered domestic partner.

Read about the taxability of same-gender spouse and partner benefits here.

• Moving expenses. Under the Tax Cuts and Jobs Act (TCJA), reimbursements for moving expenses made to employees or paid directly to third parties on and after January 1, 2018, and through December 31, 2025, are included in wages subject to federal income tax (FIT), federal income tax withholding (FITW), Social Security/Medicare (FICA) and federal unemployment insurance (FUTA). An exception to this provision applies to members of the Armed Forces on active duty moving pursuant to a military order and incident to a permanent change of station. (TCJA §11048.)

In IR-2018-190 and Notice 2018-75, the IRS announced that moving expenses incurred prior to 2018 but reimbursed or paid in 2018 are excluded from wages subject to FIT, FITW, FICA and FUTA if they were excluded from taxable wages prior to the changes made under the TCJA. This rule also applies to payments made to a third party in 2018 for moving services provided prior to 2018.

The IRS says for employees to qualify for this exclusion from taxable wages in 2018, they must not have deducted the expenses on their 2017 federal personal income tax return.

January 15, 2020

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Top 30 payroll year-end tasks for 2019 Suggested deadline Your deadline Completed?• Moving expenses. Continued

For moving expenses incurred prior to January 1, 2018, IRC §132(g) allows an exclusion from wages for FIT, FITW, FICA and FUTA purposes under IRC §132(a)(6) for moving expenses reimbursed or paid directly by the employer to the extent those moving expenses were deductible under IRC §217. Under IRC §217, the exclusion applies to the cost of moving household goods and personal effects from the former residence to the new residence, the first 30 days of storage for a domestic move, and lodging and mileage expenses incurred during the period of travel from the former residence to the new place of residence. Special rules applied to foreign moves. Nontaxable moving expense reimbursements paid directly to employees were reported on Form W-2 in box 12, code P; however, civilian employers do not use box 12, code P for reimbursements paid on and after January 1, 2018. (See IRS Publication 521; Form 3903; IRS frequently asked questions.)

• Other fringe benefits. Note that a few states are not “coupled” with the federal Internal Revenue Code for specific fringe benefits. For instance, some states did not adopt the change in the tax treatment of moving expense reimbursements that took effect January 1, 2018, and some states do not mirror the IRS monthly tax-free limit for transit benefits of $265 per month in 2019.

• For state details on the state treatment of fringe benefits for income tax and unemployment insurance, ask us about our TaxAbility™ research library.

See more about our TaxAbility™ payroll tax configuration analytics here.

5 Accounts payable review. Review accounts payable and general ledger records for unreported taxable items. See Table 3 for a sample list of compensatory items that might have been paid through accounts payable.

November–December 31, 2019

6 General ledger reconciliation and review. Perform general ledger reconciliations before releasing 2019 annual information statements and returns. See Table 3 for a sample list of compensatory items that might be found in a general ledger review.

November–December 2019

7 Payroll bank reconciliation. Perform payroll bank reconciliations through December 31, 2019, including identifying outstanding checks for 2019. Ask for an early cut-off statement if necessary.

November–December 2019

Ernst & Young LLP’s 2019 payroll year-end checklistContinued

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Top 30 payroll year-end tasks for 2019 Suggested deadline Your deadline Completed?8 Gross-up and tax advances. Perform all necessary gross-up

calculations and impute all taxable amounts for 2019. Make tax advances when necessary (and when allowed by law) to remedy any withholding shortages resulting from imputed income. Remember that tax advances for 2019 must be repaid by employees no later than April 1, 2020.

Alert! In 2017, the IRS modified the instructions in Form 941 X to clarify that prior-year adjustments to federal income tax withholding and the Additional Medicare Tax are not allowed merely because these taxes were paid by the employer in connection with a gross-up. Businesses will need to carefully review their 2019 gross-up calculations prior to December 31, 2019, to avoid federal income tax and Additional Medicare Tax overpayments they cannot recover after the close of the year.

Read more about implications of gross-up errors detected after the close of the calendar year here.

December 31, 2019; April 1, 2020

9 Check your timing for posting taxable fringes to the payroll system. To prevent late-deposit penalties and other adverse consequences, review the items on your year-end adjustment list to determine if they should have been posted to taxable wages on a periodic or other more frequent basis. Identify ways to mitigate exposures and adjust your procedures for the future accordingly.

Read more about the timing for recognizing fringe benefits as paid for tax payment purposes in our special report.

December 31, 2019

10 2019 Form W-2 distribution. Determine what method will be used to distribute employee copies of the 2019 Forms W-2. If special mailing rates will be used, be certain to file all necessary documents with the U.S. Postal Service. (See T.D. 9114, 69 FR 7567 for information on providing Forms W‑2 to employees electronically.)

December 31, 2019

11 Incentive Stock Option (ISO) and Employee Stock Purchase Plan (ESPP) reporting. The exercise of an ISO in 2019 is required to be reported on Form 3921 and the transfer of shares under an ESPP in 2018 on Form 3922. Both forms are furnished to the employee by January 31, 2020, and filed with the IRS by February 28, 2020 (March 31, 2020, if filed electronically).

January 31, 2020– March 31, 2020

12 Electronic filing requirements. Check federal, state and local electronic tax filing requirements for 2019 and 2020. Register or make an application to remit taxes and returns electronically if the threshold for 2020 is met. (See Table 2 for the IRS application deadlines, if applicable.) Also, check federal, state and local electronic tax payment requirements for 2020 and file any required applications to meet electronic filing and payment requirements in 2020. See Table 4 and Table 5 for the current state electronic filing requirements for income and unemployment insurance tax.

November–December 2019

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Top 30 payroll year-end tasks for 2019 Suggested deadline Your deadline Completed?13 Third-party employment tax service provider verification. Work with

your third-party employment tax provider to confirm that returns and information statements will be filed for all applicable jurisdictions and that the third party has reporting agent approval when necessary to file on your behalf.

Read our special report about the elements of oversight for third-party payroll service provider arrangements and complete the governance scorecard.

December 31, 2019

14 Form W-2, box 13 pension plan indicator. Coordinate with your benefits administrator to determine when Form W-2, box 13, “Pension Plan,” should be checked for each Form W-2 recipient. See page 30 of the 2019 General Instructions for Forms W-2 and W-3.

January 15, 2020

15 Form W-2 reporting of employer-provided group health benefits. Employers that filed 250 or more Forms W-2 in 2018 are required to report the aggregate cost of employer-provided group health benefits on the 2019 Form W-2, box 12, code DD. Verify that the necessary information for each employee is available for Form W-2 reporting purposes.

For further details, see the IRS website.

January 15, 2020

16 Check the rules governing employer reimbursements for employee-purchased health insurance. Under the Affordable Care Act (ACA) and effective in 2014, employers are subject to substantial penalties if they reimburse employees under certain situations for their purchase of individual health insurance policies.

Read more about the payroll tax and ACA requirements here.

December 2019

17 Review your independent contractors the same way a governmental auditor would. States are increasingly focused on whether employers have properly classified their workers as independent contractors, frequently asserting that they should be treated as employees.

For more information about the standards that apply, read our special report here.

December 31, 2019

18 Information reporting for US nonresident alien employees. If you paid wages to US nonresident alien employees in 2019 and they claimed an exemption from federal income tax withholding under a treaty, you will be required to comply with the Form 1042-S reporting requirements. Keep in mind that Form W-2 reporting may also be required for Social Security/Medicare earnings and any state/local taxes that may apply. Both the recipient and IRS copies of Form 1042 are due by March 16, 2020.

For more information, see the IRS website.

March 16, 2020

Ernst & Young LLP’s 2019 payroll year-end checklistContinued

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Top 30 payroll year-end tasks for 2019 Suggested deadline Your deadline Completed?19 2019–20 employee notices. Run the reports necessary to comply with

all federal and state employee notification requirements and consider others that may be helpful.

Mandatory

• The special accounting rule/no federal income tax withholding on personal-use auto — employee notices should be provided by January 31, 2020, if the special accounting rule was used in 2019 or if you will elect not to withhold federal income tax from the value of personal use of company cars in 2020.

January 31, 2020 (unless otherwise noted)

Read more about special timing rules in our special report.

• Charitable contributions — you are required to provide employees with a report of the annual total of charitable contributions paid through payroll deduction. Consider using Form W-2, box 14, for this purpose.

• Earned Income Tax Credit (EITC) — for federal purposes, Form W-2, Copy B, includes the notice that employers are required to provide to employees concerning their eligibility for the Earned Income Tax Credit. Some states and localities require a separate notification (other than Form W-2, Copy B) and may also impose a different annual deadline for making it available to employees.

Read more about the IRS EITC Awareness Day here.

Have questions about state EITC notice requirements? Send us your questions here.

Suggested

• Expiring Form W-4 — notify employees who claimed exemption from federal income tax withholding in 2019 that they are required to furnish you with a 2020 Form W-4 by February 17, 2020. Verify state rules concerning withholding allowance certificates claiming exemption and include state expiring information on the same employee notice.

• COBRA premium assistance — former employees who received COBRA premium assistance payments in 2019 are required to report this information on their federal personal income tax return (Form 1040). Therefore, although it is not a requirement, giving them an annual summary of their total COBRA liability, the amount they paid and the portion representing the subsidy (65% of the liability) will reduce the number of inquiries you are likely to receive from these individuals as they prepare their 2018 federal tax returns. Remember, you report COBRA premium assistance credits on Form 941-X, not Form 941.

January 31, 2020

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Top 30 payroll year-end tasks for 2019 Suggested deadline Your deadline Completed?2019–20 employee notices. Continued

• 2020 withholding tax changes — notify employees of any change in the amount of tax they will pay in 2020 for Social Security, Medicare or federal, state and local income tax withholding.

• Additional Medicare Tax reminder — employees with wages in excess of $200,000 in 2019 should be reminded of their requirement to file with the IRS Form 8959, Additional Medicare Tax.

• Multi-state employees — for employees who worked in more than one state, consider providing a detail of the taxable wages that were paid within each work state. This is particularly relevant for employees working in New York because employers are required to report federal taxable wages (Form W-2, box 1) as state taxable wages (Form W-2, box 16).

For more information on multi-state payroll tax compliance, check out our free resources at ey.com/US/getonboard.

20 Federal unemployment insurance (FUTA) fourth-quarter deposit adjustment. If you had employees working in the Virgin Islands, you are subject to a FUTA credit reduction in 2019, and you are subject to a higher FUTA rate in this jurisdiction. The additional FUTA tax owed is computed using the 2019 Form 940, and the additional tax payment is due by January 31, 2020.

For more information on FUTA tax, read our special report here.

January 31, 2020

21 2019 tax payment reconciliation. Prepare all fourth-quarter tax reconciliation(s) prior to making the final tax payment(s) to jurisdictions for the quarter or year. (See page 29 for more information about year-end reconciliation procedures.)

Various

22 Testing Form W-2 files before filing them. The SSA will return Form W-2 files containing certain errors. For this reason, it is important that employers use SSA’s AccuWage before filing their returns. Employers using a third-party provider to handle Form W-2 files should require that the third-party provider give them a copy of the AccuWage acceptance report.

Some states and localities require test files for first-time electronic filers. Be certain to comply with these requirements and consider submitting test files even if not required to do so.

January 15, 2020

23 2020 payroll processing schedule. Prepare the 2020 payroll processing and tax return filing schedule. For a list of federal holidays, see Table 1.

December 2019

Ernst & Young LLP’s 2019 payroll year-end checklistContinued

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Top 30 payroll year-end tasks for 2019 Suggested deadline Your deadline Completed?24 Review 2020 employer withholding tax guides. Review IRS Circular E,

Publication 15, Employer’s Tax Guide and Publication 15-T, Federal Income Tax Withholding Methods, for 2020 and any similar state and local employer tax guides and withholding tables to determine taxability and reporting changes for 2020. Make all taxability, reporting and withholding rate changes for 2020 (including the 2020 exemption amounts for IRS tax levies in Publication 1494).

Significant federal withholding changes for 2020. Keep in mind that significant changes are made to the federal income tax withholding instructions for 2020 to accommodate the new Form W-4 and early testing will be important.

Test before your first live payroll in 2020.

December 26, 2019

25 2020 tax rate and wage base updates. Input 2020 Social Security, state unemployment, state disability and other similar taxable wage base and tax rate information.

If using a third-party provider, test the third party’s system requirements before the first live payroll in 2020.

State unemployment insurance (SUI) tax rates should be verified within the protest period. Since many states issue their 2020 rates in November and December, this is an important year-end item.

Read more about the SUI rate review and protest process in our special report here.

It is also important to verify in March 2020 that the correct SUI rate and wage base are reflected on the first-quarter 2020 quarterly SUI returns (generally due by April 30, 2020).

Don’t forget that for 2019 and 2020, the amount of FUTA you pay to the Virgin Islands will be higher than the minimum amount because the territory continues to have an outstanding federal unemployment insurance loan balance.

For the 2019 employment tax rates and limits, see our annual report (to be updated in December) here.

December 31, 2019; March 31, 2020

26 Additional payroll period in 2019 or 2020. If you had an additional payroll period in 2019 or will have one in 2020 (i.e., 27 rather than 26, or 53 rather than 52), you may need to adjust your federal, state and local income tax withholding calculations. You will also need to determine how employee payroll deductions might change for the additional payroll period.

For more information on the additional payroll period, see our special report here.

December 2019

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Top 30 payroll year-end tasks for 2019 Suggested deadline Your deadline Completed?27 2020 payroll deductions. Input 2020 payroll deduction information

pursuant to benefit open enrollment data or other deductions that are subject to annual revision.

Stop all payroll deductions that were authorized only through 2019.

Test to confirm that 2020 payroll deductions are accurately updated.

Prior to first payroll run for 2020

28 Purge 2019 expired records. Purge the active employee master file of all employees terminated in 2019.

December 31, 2019

29 Duplicate and returned Forms W-2. Instruct the mailroom on where to send returned Forms W-2 for tax year 2019. Verify that all employee requests for duplicate 2019 Forms W-2 are timely provided.

January 3, 2020; April 15, 2020 (federal due date for 2019 Forms 1040)

30 Wage repayments that cross tax years. Often an employee’s repayment of an advance or overpayment will cross tax years. For instance, some employment contracts may require the repayment of a sign-on bonus or relocation reimbursement if the employee resigns before the end of the multiyear contract period. The employer may also make an agreement with employees that wage advances and overpayments can be repaid over a period that reaches into subsequent years.

When wage repayments occur in subsequent years, the claim of right doctrine applies. Under this doctrine, when a repayment is made, the adjustment to wages applies in the year of the original payment. For instance, if a salary advance paid in 2019 is repaid in 2020, the adjustment to wages applies to 2019 and not to 2020. Further, under the claim of right doctrine, a taxpayer’s right to a federal income tax credit for the wage repayment may be restricted based on the facts and circumstances.

When deducting a wage advance or overpayment from wages that is subject to the claim of right doctrine, it must be taken on an after-tax basis.

To avoid the complexities connected with the claim of right doctrine, employers should review all outstanding wage repayments and seek to collect on these amounts, where possible, before the close of 2019.

Read our special report about managing wage repayments.

November 30, 2019

Ernst & Young LLP’s 2019 payroll year-end checklistContinued

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Table 1 — 2020 federal holidays When planning your 2020 payroll processing and employment tax schedule, refer to the list of federal holidays below.

New Year’s Day Wednesday, January 1, 2020

Martin Luther King Jr. Day Monday, January 20, 2020

Presidents’ Day* Monday, February 17, 2020

Emancipation Day** Thursday, April 16, 2020

Memorial Day Monday, May 25, 2020

Independence Day Friday, July 3, 2020

Labor Day Monday, September 7, 2020

Columbus Day Monday, October 12, 2020

Veterans Day Wednesday, November 11, 2020

Thanksgiving Day Thursday, November 26, 2020

Christmas Day Friday, December 25, 2020

Note: Holidays that fall on Saturday are observed the previous Friday, and those that fall on Sunday are observed the following Monday. (See 5 U.S.C. 6103(b).)

* Also known as Washington’s Birthday. ** See TD 9507.

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Filing electronically for tax year 2019 For a schedule of key federal filing due dates for tax year 2019, see Table 2.

Businesses with 250 or more Form W-2, W-2c or IRS information returns or statements (e.g., Forms 1094, 1095, 1099, 1042-S, 8027) must file these forms electronically with the SSA or IRS.

Remember that a penalty applies when a business files returns on paper that are required to be filed electronically.

Specifications for preparing Forms W-2 electronically for tax year 2019 are found in the SSA’s Publication 42-007, Specifications for Filing Forms W-2 Electronically (EFW2).

For returns or statements filed with the IRS, specifications for electronic filing are available in IRS Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W‑2G.

First-time electronic filers with the SSAFiling electronically with the SSA is easy. Applications are not required. Instead, users register with the SSA by following the instructions within the Business Services Online (BSO) section here. Note that electronic Forms W-2 also may be verified using AccuWage before they are submitted.

AccuWage 2019 is available through the SSA’s website.

SSA password maintenanceThe SSA suggests that users avoid the year-end rush by checking their access and updating their passwords now in preparation for the 2019 Form W-2 filing season.

Information is available here.

First-time electronic filers with the IRS• The IRS requires applications for first-time filers. Unlike the

SSA, the IRS Information Reporting Branch (IRB) requires that before submitting the first electronic file, you request authorization to file electronically by submitting Form 4419, Application for Filing Information Returns Electronically (FIRE). (This requirement applies even if you have 250 or more returns and are required to file electronically.) You are not allowed to begin filing electronically until the IRS has approved your application.

Be aware that one Form 4419 may be filed for approval to electronically file Forms 1097, 1098, 1099, 3921, 3922, 5498 and W-2G, but additional Forms 4419 must be filed for Form 1042 S, Foreign Person’s U.S. Source Income Subject to Withholding; Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips; and Form 8955 SSA, Annual Registration Statement Identifying Separated Participants and Deferred Vested Benefits. For example, if you are filing Forms 1099, 1042 S and 8027 for the first time this year, you will need to obtain authorization to file them electronically by submitting three Forms 4419 to the IRS, one for each category of information return.

Form 4419 may be submitted anytime during the year; however, it must be submitted to the IRS at least 45 days before the due date of the return(s) for current-year processing. This allows the IRS the time necessary to process and respond to applications.

As of October 1, 2019, Form 4419 is mandated to be electronically filed when requesting an original Transmitter Control Code (TCC). Submit an online Fill-in Form 4419 located within the FIRE System at https://fire.irs.gov/.

Submit a paper Form 4419 (Rev. 9-2019) when you have an existing TCC to:

• Revise current TCC information

• Request an additional TCC for a form type listed on Form 4419 Block 8

Information about the FIRE system is available here.

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• Sending test files to the IRS. Filers are not required to submit a test file unless they wish to participate in the Combined Federal State Filing program; however, the submission of a test file is encouraged for all new electronic filers to test hardware and software. Test files for tax year 2019 should not be submitted to the IRS sooner than November 4, 2019. The FIRE Test System is available from November 4, 2019, through December 6, 2019 (6 p.m. ET), and January 2, 2020, through a date to be determined.

Keep in mind when planning your year-end schedule that the IRS FIRE system will be down from 6 p.m. ET December 6, 2019, through January 1, 2020, for annual updates.

For more information, see IRS Publication 1220.

Getting extensions on the SSA and IRS filing deadlineIf you will not be able to meet the filing deadline for sending your 2019 forms to the IRS or SSA (for example, a fire or other disaster), a 30-day extension can be obtained by filing Form 8809, Application for Extension of Time to File Information Returns, with the IRS (not the SSA). There is no longer an automatic 30-day extension for filing Forms W-2 or Form 1099-MISC reporting nonemployee compensation. Instead, only one 30-day extension for filing Form W-2 will be granted by the IRS and only if it can be shown that extenuating circumstances of the nature shown below are preventing you from filing by the January 31 due date.

In TD 9838, the IRS states the following reasons it will accept in approving the non-automatic 30-day extension:

• The business suffered a catastrophic event in a Federally Declared Disaster Area that made the business unable to resume operations or made necessary records unavailable.

• The business suffered a fire, casualty or natural disaster that affected the operation of the business.

• The death, serious illness or unavoidable absence of the individual responsible for filing the information returns affected the operation of the business.

• The information return is being filed for the first year the business was established.

• The filer did not receive timely data on a third-party payee statement. This third-party payee statement might be a Schedule K-1, Partner’s Share of Current Year Income, Deductions, Credits and Other Items, Form 1042 S, or the statement of sick pay required under IRS Reg. §31.6051-3(a)(1).

Additionally, the extension will be granted even if the filer receives the third-party payee statement by the statutory furnishing deadline, provided that the filer did not receive the statement in time to prepare an accurate information return.

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The Form 8809 must be signed by the filer/transmitter or a person who is duly authorized to sign a return.

For other forms, one automatic 30-day extension is granted by filing Form 8809, and no signature is required. An additional second extension is allowed only if specifically granted by the IRS and only if you can show that extenuating circumstances are preventing you from filing by the first extended due date. The second extension request must be signed by the filer/transmitter or a person who is duly authorized to sign a return.

For the extension request to be granted, it must be postmarked, transmitted or completed online by the due date of the return.

If you are requesting an extension to file several types of forms, you may use one Form 8809, but you must file it by the earliest form due date. For instance, if you are filing a Form 8809 for a return due on March 15 and for another return due on March 31, the Form 8809 is due on March 15.

Note that extension requests for tax year 2019 returns should not be submitted prior to January 1, 2020.

Form 8809 may be used for the following forms and can be filed electronically here.

• W-2

• W-2G

• 1042-S

• 1094-C

• 1095-C

• 1095-B

• 1097

• 1098

• 1099

• 1099-QA

• 3921

• 3922

• 5498

• 5498-ESA

• 5498-QA

• 5498-SA

• 8027

Note that Form 8809 cannot be used to request an extension on the time to give employees or payees copies of their information returns (e.g., Form W-2, Form 1099). Instead, a letter of request must be submitted to the IRS. Extensions on the time to provide recipient copies are rare.

For more information, see IRS Publication 1220.

Obtaining a waiver from filing electronically with SSA or IRSIf for any reason you will not be able to submit your Forms W-2 to the SSA or information returns to the IRS electronically for tax year 2019 and you are required to do so, a one-year waiver may be granted for hardship cases. A waiver cannot be requested for more than one year at a time.

A onetime waiver from the electronic filing requirement can be obtained by filing Form 8508, Request for Waiver From Filing Information Returns Electronically, with the IRS (not the SSA).

By obtaining a waiver from the IRS, you will not be subject to penalties for failing to meet the electronic filing requirements.

The IRS encourages businesses to file Form 8508 at least 45 days before the due date of the electronic filing. The IRS does not process waiver requests until January 1 of the calendar year the returns are due.

Besides Form W-2, Form 8508 is used to request waivers from filing the following returns electronically: 1042-S, 1094-C/1095-C, 1095 B, 1097-BTC, 1098, 1098 C, 1098 E, 1098-T, 1099-A, 1099 B, 1099-C, 1099-CAP, 1099-DIV, 1099 G, 1099 INT, 1099-K, 1099-LTC, 1099-MISC, 1099-OID, 1099-PATR, 1099-Q, 1099 R, 1099-S, 1099-SA, 3921, 3922, 5498, 5498-ESA, 5498-SA, 8027, W-2AS, W-2G, W-2GU, W-2PR and W-2VI.

All requests for a waiver should be sent to the following address:

Internal Revenue Service Attn: Extension of Time Coordinator 240 Murall Drive Mail Stop 4360 Kearneysville, WV 25430

By fax: +1 877 477 0572 (304 579 4105, international)

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Table 2 — Federal electronic filing due dates for 2019

Form Electronic system used for reporting*

Electronic filing due date and deadline to request first 30-day extension (Form 8809)*

Deadline to submit application to file electronically with IRS (Form 4419)

Deadline to submit request for waiver from filing electronically (Form 8508)*

Form 1042-S IRS FIRE March 16, 2020 January 31, 2020 March 16, 2020

Forms 1094-C, 1095-C, 1095-B, 1097, 1098, 1099, 3921, 3922 and W-2G

IRS FIRE March 31, 2020 February 15, 2020 March 31, 2020

Form 1099-MISC, box 7 amount for nonemployee compensation (NEC)

IRS FIRE January 31, 2020 December 17, 2019 January 31, 2020

Form 8027 IRS FIRE March 31, 2020 February 15, 2020 March 31, 2020

Forms 5498, 5498 SA and 5498 ESA

IRS FIRE May 31, 2020 April 16, 2020 May 31, 2020

Form W-2 SSA BSO January 31, 2020 N/A January 31, 2020

* The SSA will begin accepting 2019 electronic Form W-2 file uploads on December 9, 2019.

States are making greater use of the internet and other electronic reporting options, with some having changed their Form W-2 and unemployment reporting requirements for 2019. See the state surveys in Table 4 and Table 5.

16 | Ernst & Young LLP’s 2019 payroll year-end checklist 17November 2019 |

Table 3 — Special wage payments: sample listThe chart below is a sample list of reportable earnings that depend on data inputs outside of the payroll processing system. Creating a list of such special wage payments, including the persons or third parties responsible for providing the data, is an important element of the payroll year-end checklist. We have indicated in a column below where third parties are frequently relied on to provide information necessary to meet tax and reporting requirements.

W-2 reportable item Employer Third party401(k) — W-2 box 13 indicator

Adoption assistance

Athletic club memberships

Award — length of service

Award — recognition

Award — safety

Business expense — non-accountable

Club memberships

Credit card — non-accountable

Deferred compensation — distributions

Deferred compensation — earnings

Dependent care facility

Dependent care flexible spending

Dining hall — executive

Disability pay — CA

Disability pay — HI

Disability pay — NJ

Disability pay — NY

Disability pay — private fund

Disability pay — PR

Disability pay — state offset

Discounts — merchandise

Discounts — services

Educational assistance

Expatriate totalization

Expatriate taxes

Expatriate wage update

W-2 reportable item Employer Third partyGift cards

Gifts — noncash

Gross-up — federal tax

Gross-up — local nonresident tax

Gross-up — state nonresident tax

Insurance — annuity

Jury duty — offset

Living expenses

Loans — forgiven

Loans — interest income

Medical debit card

Noncash award

Parking

Relocation — domestic

Relocation — foreign

Paid family leave benefits from private insurance fund or self-insured plan

Scholarships

Settlement awards

State disability offset

Stock — W-2 box 12 indicators

Stock — ESPP

Stock — ISO

Stock — nonqualified

Stock — restricted

Transit benefits

Workers’ compensation offset

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State electronic filing of Forms W-2 and unemployment insurance returns

The following charts reflect our state survey results as of November 2019.

Note: Much of this information was obtained by Ernst & Young LLP during informal telephone, website or email surveys with state governmental agencies. Although surveys are useful in determining how government departments currently treat an issue, answers and positions derived from such surveys are not binding upon the state, cannot be cited as precedent, and may change over time and hence cannot be relied upon. Note also that many of the applicable state taxing authorities had not issued their Form W-2 electronic/magnetic media specifications for calendar year 2019 at the time of this update.

Table 4 — State Form W-2 filing method requirements*For the full chart of state requirements, see the 2019-2020 edition of the Payroll Practitioner’s Compliance Handbook published by Thomson Reuters/RIA. For ordering information, call +1 800 950 1216.

(Note that changes since November 2018 are highlighted in yellow.)

State State Code FIPS(1)

Mandated for paperless filing Delivery method required for paperless filers

Filing deadline(7)

Alabama (AL) 01 25 or more (8)** Electronic 1/31**

Alaska (AK) 02 N/A N/A N/A

Arizona (AZ) 04 250 or more (8)** Magnetic media 1/31

Arkansas (AR) 05 250 or more (8) Magnetic media and electronic 1/31**

California (CA) 06 ** N/A N/A

Colorado (CO) 08 If Fed requires (8)** Electronic 1/31

Connecticut (CT) 09 All employers (8)** Electronic 1/31**

Delaware (DE) 10 If Fed requires (8) Electronic 1/31

District of Columbia (DC) 11 25 or more (8) Electronic 1/31

Florida (FL) 12 N/A N/A N/A

Georgia (GA) 13 250 or more (8)** Electronic 1/31

Hawaii (HI) 15 All employers** Electronic 2/28**

Idaho (ID) 16 50 or more, or if Fed requires (8) Electronic 1/31**

Illinois (IL) 17 All employers (8)** Electronic 1/31**

Indiana (IN)** 18 25 or more (8) ** Electronic 1/31**

Iowa (IA) 19 All employers** Electronic 2/15

Kansas (KS) 20 51 or more (8) Electronic** 1/31

Kentucky (KY) 21 26 or more (8) Magnetic media and electronic 1/31

Louisiana (LA) 22 50 or more (8) Electronic 1/31

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State State Code FIPS(1)

Mandated for paperless filing Delivery method required for paperless filers

Filing deadline(7)

Maine (ME) 23 250 or more (8)** Electronic 1/31**

Maryland (MD) 24 25 or more (8)** Magnetic media and electronic 1/31

Massachusetts (MA) 25 50 or more (8) Electronic 1/31

Michigan (MI) 26 250 or more (8) Magnetic media and electronic 1/31**

Minnesota (MN) 27 10 or more (6) (8) Electronic 1/31

Mississippi (MS) 28 25 or more Electronic 1/31**

Missouri (MO) 29 250 or more (8) Magnetic media and electronic** 1/31**

Montana (MT) 30 Optional (8) Electronic 1/31

Nebraska (NE) 31 50 or more (8) Electronic 1/31

Nevada (NV) 32 N/A N/A N/A

New Hampshire (NH) 33 N/A N/A N/A

New Jersey (NJ) 34 Optional (8) Electronic 2/28

New Mexico (NM) 35 25 or more (8)** Electronic** 1/31**

New York (NY) 36 ** N/A N/A

North Carolina (NC) 37 All employers (8)** Electronic** 1/31**

North Dakota (ND) ** 38 10 or more (8) Magnetic media and electronic 1/31**

Ohio (OH) 39 250 or more (8)** Magnetic media (11)** 1/31**

Oklahoma (OK) 40 All employers** Electronic 1/31**

Oregon (OR) 41 All employers (8) Electronic 1/31

Pennsylvania (PA) 42 10 or more (8) Electronic 1/31

Puerto Rico (PR) 43 All employers (8) Electronic 1/31

Rhode Island (RI) 44 25 or more, and if Fed requires (8)** Magnetic media and electronic 1/31

South Carolina (SC) 45 250 or more, and if Fed requires (8) Magnetic media and electronic** 1/31

South Dakota (SD) 46 N/A N/A N/A

Tennessee (TN) 47 N/A N/A N/A

Texas (TX) 48 N/A N/A N/A

Utah (UT) 49 All employers (8)** Electronic 1/31

Vermont (VT) 50 25 or more ** Electronic 1/31

Virginia (VA) 51 All employers (8)** Electronic 1/31**

Virgin Islands (VI) 52 100 or more (8) Magnetic media 1/31

Washington (WA) 53 N/A N/A N/A

West Virginia (WV) 54 25 or more (8)** Electronic 1/31

Wisconsin (WI) 55 10 or more** (8) Electronic 1/31

Wyoming (WY) 56 NA N/A N/A

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Forms W-2 reference chart

* Refers to number of Forms W-2

** See state notes below.

*** Mag or magnetic media refers to submission by diskette, tape cartridge, CD-ROM, DVD and flash drive. CD, DVD and flash drive are also known as optical media.

**** Electronic filing refers to internet filing or electronic transmissions such as file transfer protocol (FTP) and file upload.

(1) Some software vendors use unique codes rather than the “FIPS-5-2” (e.g., Dun and Bradstreet (MSA)). Refer to SSA Publication No. ICN (EF-W2).

(2) This option is being phased out by the state.

(3) Reporting by magnetic media or electronically may be mandatory for certain employers in the future.

(4) The codes shown refer to the SSA EF-W2 specifications. Note, however, that the SSA EF-W2 format adds the letter “R” to the front of each code. For example, the code “S” actually shows as code “RS” under the EF-W2 format. Effective for calendar year 2008, the SSA added code “RV” State Total to the specifications.

(5) USB flash drive allowed.

(6) The threshold for mandatory magnetic media or electronic filing may be reduced in the future.

(7) If 2/28 is shown, the deadline may be extended to 2/29 for leap years (i.e., tax year 2015, due February 29, 2016).

(8) Specifications are available on the state’s web site.

(9) Email attachment allowed.

(10) DVD allowed.

(11) Electronic or internet reporting may be allowed in the future.

Forms W-2 state notes

Alabama. Payroll service providers must file electronically, regardless of the number of employers or employees reported. Regulations were revised to provide that employers and withholding agents required to file the monthly or quarterly payments and returns electronically (those making withholding tax payments of $750 or more) are also required to file Forms W-2 electronically. This is in addition to the requirement that employers filing 25 or more Forms W-2 must file them electronically.

Arizona. Payroll service companies filing Forms W-2 and the reconciliation return on behalf of clients must file all returns electronically.

Arkansas. While the filing deadline for Forms W-2/1099 is now January 31, the deadline for submission of the annual reconciliation remains February 28.

California. Forms W-2 are not filed with the state; instead the Form DE-9C is used to report individual personal income tax wages and withholding on a quarterly basis. Effective January 1, 2018, all California employers are required to submit quarterly payroll tax returns and pay the associated payroll taxes electronically over the California Employment Development Department website. Penalties apply to employers with less than 250 employees that fail to file and pay electronically after January 1, 2019. Employers are allowed to apply for a one-year hardship waiver from the requirement to file and pay electronically. (AB 1245, signed by the governor on August 17, 2015.)

Colorado. Effective January 1, 2020, Colorado HB 1256 gives the Colorado Department of Revenue the power to mandate that employers electronically file withholding returns, including Forms W-2, and electronically pay withholding taxes. Currently, employers with 250 or more employees must file Forms W-2 electronically by January 31. Employers that withhold more than $50,000 of withholding tax annually must file all withholding payments by Electronic Funds Transfer (EFT). The Department is directed to promulgate regulations to provide for the mandatory electronic filing of tax forms and payment of taxes, staggering the thresholds for the electronic filing requirement over a minimum three-year period, beginning with the largest taxpayers and allowing for additional time for small taxpayers to comply. As of the date of this update, regulations have not been promulgated to provide for these changes. The Department’s website and employer guide still provide current thresholds.

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Connecticut. All employers must file all withholding returns, including Form W-2 and the annual reconciliation, electronically. Employers that have requested a waiver of the requirement to file electronically must file on CD. The Connecticut Department of Revenue Services announced that it suspended the electronic filing mandate for filing Form CT-W3, 2018 Connecticut Annual Reconciliation of Withholding, for employers that issued 24 or fewer W-2s. As a result, paper Forms CT-W3 and W-2 could be filed by employers with 24 or fewer employees for tax year 2018. It was unknown at the time of this update whether the same will apply for calendar year 2019.

Georgia. Employers filing 250 or more W-2s or those required to electronically pay their Georgia withholding must file Form G-1003 and related Forms W-2 electronically. Effective for calendar years beginning after December 18, 2015, employers must file the annual withholding reconciliation return (Form G-1003) and Forms W-2 (and 1099s where Georgia income tax was withheld) by January 31.

Hawaii. According to a senior representative of the Hawaii Department of Taxation, there are currently no plans to change the Form W-2 deadline to January 31 to match federal. Effective with taxable periods beginning January 1, 2020, employers are required to file withholding tax returns, including the annual reconciliation and Forms W-2, electronically if their annual withholding tax liability exceeds $40,000. A 2% penalty may be imposed if the return is not filed electronically unless the failure is due to reasonable cause and not due to neglect (Department of Taxation Announcement 2019‑11, 9‑13‑2019).

Idaho. The law provides a five-business-day window after the January 31 due date for an employer to correct errors in the electronic file received timely by the Tax Commission.

Illinois. Effective for calendar year 2017, all employers are required to file W-2 information electronically with the Illinois Department of Revenue by January 31.

Indiana. Indiana state and county withholding information is filed on the same transmission. Employers and those acting on behalf of employers (e.g., payroll service companies) submitting 25 or more Forms W-2 are required to file both the W-2s and annual reconciliation electronically by January 31. (HB 1472, Public Law 242; telephone conversation, withholding tax customer service.)

Iowa. Through calendar year 2015, Iowa did not require Forms W-2 to be filed with the VSP Annual Reconciliation. Beginning in 2017 for calendar years 2016 and 2017, due in 2017 and 2018, employers with 50 or more employees are required to submit Forms W-2 electronically with Form VSP (employers with fewer than 50 employees were not required to file Forms W-2 for calendar years 2016-2017). Effective with calendar year 2018, due in 2019, all employers are required to file Forms W-2 electronically with Form VSP. A written request for waiver of the requirement to file electronically may be requested until calendar year 2019, due in 2020 for cases of hardship. For calendar year 2018, the reporting deadline was extended to February 28, 2019, due to filing difficulties. A rule change has now set the due date to February 15 for the calendar year 2019 and beyond.

Kansas. Employers that are unable to file Forms W-2 electronically using the Department of Revenue’s online web application may file on CD-ROM with prior approval from the Department. The annual reconciliation, Form KW-3, must be filed electronically.

Maine. Employers of 250 or more employees must file Forms W-2 and the annual reconciliation (Form W-3ME) electronically with Maine Revenue Services (MRS). Employers of fewer than 250 employees should report the amount of Maine withholding for each employee or payee on either Form 941ME, Schedule 2 or Form 941/C1-ME, Schedule 2/C1 for each quarter. If this is done, small employers are required to file only Form W-3ME (no need to include or attach Forms W-2). However, if an employer did not report the amount of Maine withholding for each employee or payee on its quarterly return for each quarter, the employer must submit Forms W-2 with its Form W-3ME. Beginning with calendar year 2017, Forms W-2 filed electronically are due by January 31, 2018. The annual reconciliation, Form W-3ME, must be filed electronically by February 28 (the deadline will not change to match Form W-2 deadline).

Maryland. Despite 2017 legislation (SB 304/Chapter 379) removing the threshold from the law, instructions for calendar year 2018 continue to provide for a 25-form threshold for the requirement to file electronically or magnetically. As of this update, regulations have not been updated to remove the threshold. According to a Department representative, there are no plans currently to change the threshold from 25 or more employees.

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Michigan. Legislation (HB 5091) enacted in 2018 changed the Form W-2 due date to January 31, effective with the calendar year 2018 Forms W-2 due by January 31, 2019. The annual reconciliation (Form 5081) due date remains February 28. Employers with 250 or more employees must file Forms W-2 and Form 5081 electronically (magnetic media is no longer allowed for these employers). Employers with fewer than 250 employers may file on magnetic media or paper.

Minnesota. Effective with returns filed after December 31, 2017, Minnesota law eliminates the requirement that employers submit an annual withholding tax reconciliation because the Department is able to electronically identify discrepancies in withholding accounts without the need for a separate return.

Mississippi. An employer is required to file electronically if any of the following conditions apply: (1) the employer is required to file wage statements, W-2Gs or information returns via electronic media with the federal government, regardless of the total number of Mississippi statements; (2) the employer is filing 25 or more W-2s; (3) the taxpayer has 25 or more 1099s to be submitted; (4) the employer used a single payroll service provider for the entire calendar year; or (5) an employee leasing company provided personnel to any business within Mississippi.

Missouri. Effective January 1, 2018, legislation (HB 1582) changes the due date for large employers to file Forms W-2 with the Missouri Department of Revenue to January 31. As a result, employers filing 250 or more Forms W-2 must file by January 31. Employers with 250 or more employers are required to file Forms W-2 electronically. Employers of fewer than 250 employees may file electronically or on paper, CD or flash drive by February 28.

New Jersey. The official 2019 Form W-2 specifications booklet had not been released as of this update. A Division of Treasury representative told us that the division is considering a change in the Form W-2 submission deadline to the statutory deadline of February 15, matching the date state Forms W-2 must be provided to employees.

New Mexico. Effective for calendar year 2019, due in 2020, 2018 legislation (HB 276, Ch. 59) requires all employers to file Forms W-2 with the New Mexico Department of Taxation & Revenue Department by January 31. Employers filing 25 or more Forms W-2 are required to file electronically. Through calendar year 2018, employers that filed a wage and contribution report, Form ES903, to the New Mexico Workforce Solutions Department, or New Mexico Form TRD-31109, Employer’s Quarterly Wage, Withholding and Workers’ Compensation Fee Report to the Taxation and Revenue Department were not required to submit federal Forms W-2, W-2G or 1099-R forms.

New York. New York wage and tax information is sent quarterly. Employers do not submit Forms W-2 to the state. Effective beginning first quarter 2019, in order to help reduce fraudulent tax refund claims, employers are required to report the state/local income tax withholding details (wages and amount withheld) by individual employee on a quarterly basis just as SUI wage detail is reported. The fourth quarter is no longer a cumulative total for the year. The fourth quarter amounts are only applicable to the amounts paid and withheld in the fourth quarter. Through calendar year 2018, year-to-date fields on both WT-4-B and WT-4-A were completed for the fourth quarter only. All employers must file Form NYS-45, NYS-45-ATT and NYS-1 electronically over the New York Department of Taxation and Finance electronic reporting system. The associated taxes must also be paid electronically. See Publication 69 for more information.

North Carolina. Legislation (HB 117) enacted on September 30, 2015, requires employers to electronically file Forms W-2 with the Department of Revenue by January 31, beginning with calendar year 2015. For calendar years 2015-2019, the Department of Revenue automatically waived the requirement for employers to file Forms W-2, 1099 and state NC-3 electronically. However, the filing due date remains January 31.

North Dakota. Payroll service providers must file electronically or by email attachment, regardless of the number of employers or employees reported. The Form W-2 filing deadline is January 31, starting with the calendar year 2016 filing, due in 2017, because state law requires that North Dakota deadlines match federal deadlines. HB 1112 reduces the threshold for mandatory electronic filing of Forms W-2 with the North Dakota State Tax Commission from 250 or more forms to 10 or more forms, effective with tax year 2019, due January 31, 2020.

Ohio. Effective January 1, 2015, Ohio employers are required to file all withholding tax returns except Forms W-2 electronically. Proposed regulation changes would require all Ohio employers to file Forms W-2 electronically; however, the change has not yet been promulgated. Currently, Ohio will accept state and Ohio School District W-2s on one CD. Since calendar year 2009, only employers of 250 or more employees are required to file Forms W-2 on a CD. Employers with fewer than 250 employees may choose to voluntarily file Forms W-2 by CD. If Form W-2 information is not submitted on CD, the department will request Forms W-2 periodically when conducting compliance programs. According to a Department representative, new for calendar year 2019 Forms W-2 electronic filing will be an option, but not yet a requirement, for filing.

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Oklahoma. Legislation enacted in 2018 (HB 3156) changes the filing deadline to January 31, effective with calendar year 2018 Forms W-2, filed by January 31, 2019. Legislation enacted in 2016 (HB 2775) requires that employers electronically file an annual withholding tax reconciliation return and corresponding Forms W-2. Employers are not allowed to file Forms W-2 information by paper or magnetic media (employers without computer accessibility may file five or fewer Forms W-2 by mail). Paper forms or magnetic media that are received may be shredded and considered not filed. Prior to calendar year 2016, Oklahoma employers were not required to submit Forms W-2 or an annual reconciliation return to the OTC.

Oregon. Forms W-2 are filed electronically only; paper W-2s or other forms of media are not accepted. Effective for calendar year 2019, the Oregon Department of Revenue requires the new statewide transit tax wages and withholding to be reported in Box 14 of the W-2.

Rhode Island. In addition to the requirement that employers required to electronically file Forms W-2 to the SSA and having 25 or more employees in the state file electronically, a revision to personal income tax regulations requires employers that apply for or receive one or more state tax credits to electronically file Forms W-2 with the state.

South Carolina. Effective for tax year 2016, employers required to file Forms W-2 electronically with the SSA must file Forms W-2 electronically with the South Carolina Department of Revenue over the Department’s website by January 31 (HB 4328). Employers filing less than 250 Forms W-2 may file on CD or paper by January 31.

Utah. Effective January 1, 2016, all employers must file Form TC-941R, Utah Annual Withholding Reconciliation, and corresponding Forms W-2 (and 1099 with Utah taxes withheld) electronically by January 31. Failure to do so may result in significant penalties and a delay in income tax refunds to employees until after March 1. (SB 250, signed by the governor on March 30, 2015.) Starting with the 2018 tax year, employers do not file a separate annual reconciliation return; instead, the reconciliation is combined with the fourth-quarter return (quarterly filers) or annual return (annual filers).

Vermont. Payroll service providers must file electronically, regardless of the number of employers or employees reported.

Virginia. All withholding tax returns, including Forms W-2, must be filed electronically. W-2s are due by January 31. Paper returns are not allowed.

West Virginia. 2018 SB 338 changes the deadline for filing Forms W-2/1099 and the annual withholding tax reconciliation from February 28 to January 31, matching the federal Form W-2 deadline. This change was effective with calendar year 2018, with returns due by January 31, 2019. The legislation also changes the threshold at which employers must file Forms W-2/1099 electronically from 50 or more to 25 or more forms. In addition, any employer that uses a payroll service is required to file electronically. An employer that is required to file electronically but does not do so may be subject to a $25-per-employee penalty unless the employer shows that the failure was due to a technical inability to comply (filing by CD-ROM was allowed for 2018 as a transitional year). All employers, including those that file the Forms W-2 electronically with the West Virginia State Tax Department, must also file Form WV/IT-103, Annual Reconciliation of West Virginia Income Tax Withheld. Failure to submit Form WV/IT-103 each year may result in the denial of Letters of Good Standing and prevent potential refund requests from being processed.

Wisconsin. Businesses or individuals making payments that must be reported on federal Forms W2, 1099R or 1099MISC must also submit these forms to the Department regardless of whether Wisconsin tax has been withheld. The 2017-2019 biannual budget bill changed the threshold at which an employer must file FormsW-2/1099 electronically with the Wisconsin Department of Revenue from 50 or more forms to 10 or more forms. A 30-day extension period is available from the Department. The Department may not issue a refund to an employed individual before March 1 unless both the individual and the individual’s employer have filed all required returns and forms with the department. Beginning January 1, 2019, employers filing quarterly, monthly or semi-monthly cannot submit an annual reconciliation of Wisconsin tax withheld (Form WT-7) until all withholding deposit reports (Form WT-6) have been filed.

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Table 5 — State unemployment insurance filing method requirements*(Changes since November 2018 are highlighted in yellow)

For the full chart of state requirements, see the 2019–2020 edition of the Payroll Practitioner’s Compliance Handbook published by Thomson Reuters/RIA. For ordering information, call +1 800 950 1216.

State State code FIPS (1) Threshold for Delivery method for paperless reporting**

Alabama (AL) 01 All employers * Electronic

Alaska (AK) 02 If 50 or more * Electronic

Arizona (AZ) 04 Optional Electronic 3

Arkansas (AR) 05 If 250 or more Magnetic media/electronic

California (CA) 06 All employers* Electronic

Colorado (CO) 08 All employers* Electronic

Connecticut (CT) 09 All employers Electronic

Delaware (DE) 10 Optional Magnetic media/electronic

District of Columbia (DC) 11 If 5 or more* Electronic

Florida (FL) 12 If 10 or more Electronic

Georgia (GA) 13 If 100 or more Magnetic media/electronic

Hawaii (HI) 15 All employers 2,7* Electronic

Idaho (ID) 16 All employers Electronic

Illinois (IL) 17 If 25 or more* Electronic

Indiana (IN) 18 All employers* Electronic

Iowa (IA) 19 All employers Electronic

Kansas (KS) 20 If 50 or more Electronic

Kentucky (KY) 21 All employers* Electronic

Louisiana (LA) 22 All employers * Electronic

Maine (ME) 23 All employers* Electronic

Maryland (MD) 24 All employers* Electronic

Massachusetts (MA) 25 All employers 19 Electronic

Michigan (MI) 26 All employers Electronic

Minnesota (MN) 27 All employers Electronic

Mississippi (MS) 28 All employers* Electronic

Missouri (MO) 29 If 50 or more 2,9,12,19* Magnetic media/electronic

Montana (MT) 30 If 20 or more* Electronic

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State State code FIPS (1) Threshold for Delivery method for paperless reporting**

Nebraska (NE) 31 If annual payroll exceeds $100,000 in either of previous two years (19)

Electronic

Nevada (NV) 32 All employers* Electronic

New Hampshire (NH) 33 If 50 or more Magnetic media/electronic

New Jersey (NJ)* 34 All employers Electronic

New Mexico (NM) 35 All employers Electronic

New York (NY)* 36 All employers * Electronic

North Carolina (NC) 37 If 10 or more 12,19 Electronic

North Dakota (ND) 38 All employers* Magnetic media/electronic

Ohio (OH) 39 All employers* Electronic

Oklahoma (OK) 40 All employers* Electronic

Oregon (OR)* 41 Optional Electronic

Pennsylvania (PA) 42 All employers Electronic

Puerto Rico 72 All employers Electronic

Rhode Island (RI) 44 If 25 or more * Magnetic media/electronic

South Carolina (SC) 45 If 100 or more Electronic

South Dakota (SD) 46 Optional Magnetic media/electronic

Tennessee (TN) 47 All employers* Magnetic media/electronic

Texas (TX) 48 All employers Electronic

Utah (UT) 49 All employers 7,19 Electronic

Vermont (VT) 50 All employers Electronic

Virginia (VA) 51 If 100 or more Electronic

Washington (WA) 53 All employers* Electronic

West Virginia (WV) 54 All employers* Magnetic media/electronic

Wisconsin (WI) 55 If 25 or more* Electronic

Wyoming (WY) 56 Optional* Magnetic media/electronic

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Unemployment insurance reference chart

* See state notes below. ** Magnetic media refers to submission by diskette, tape cartridge,

CD-ROM, DVD and flash drive. CD, DVD and flash drive are also known as optical media.

Electronic filing refers to internet filing or electronic transmissions such as file transfer protocol (FTP) and file upload.

(1) Some software vendors use unique state codes rather than the “FIPS 5-2” (e.g., Dun and Bradstreet (MSA)). Reference SSA Publication No. ICN (EFW2).

(2) A test file is required or strongly encouraged prior to the first actual filing.

(3) State plans to eliminate paper reporting altogether in the future.

(4) The threshold may be reduced in the future.

(5) Email submission allowed.

(6) The National Association of State Workforce Agencies (NASWA) (formerly the Interstate Conference of Employment Security Agencies (ICESA)) publishes a standard format based on the SSA format and intended to ease the reporting of employers in multiple states.

(7) An application or electronic registration to begin reporting magnetically/electronically is required prior to the first actual filing.

(8) State PC software is available.

(9) A transmittal must accompany the magnetic media.

(10) For payroll service companies and agents, the application to begin reporting by magnetic media or electronically must include a list of client employers.

(11) DVD also allowed.

(12) Both the contribution and wage reports may or must be filed by magnetic media or electronically.

(13) Combined payroll tax form is used.

(14) USB flash drive also allowed.

(15) The state plans to phase this option out.

(16) Payroll service companies that file quarterly tax reports on behalf of 100 or more employers during any calendar quarter must file magnetically or electronically.

(17) The state plans to make magnetic media or electronic reporting mandatory in the future.

(18) Payroll services must submit a list of clients.

(19) Format specifications are available through the internet.

(20) Electronic and/or internet reporting may be allowed in the future.

Unemployment insurance state notes

Alabama. Employers of fewer than five employees may file over the telephone.

Alaska. Agents filing on behalf of employers must file electronically, regardless of the number of employees. Electronic filing is required under Alaska regulations (Administrative Code 8 AAC 85.020(d)) if (1) a wage schedule lists 50 or more employees in a quarter; (2) a combination of wage schedules lists a cumulative total of 50 or more employees; or (3) $1,000,000 or more in taxable wages are reported in the current or preceding calendar year.

California. Effective January 1, 2018, all California employers are required to submit quarterly payroll tax returns and pay the associated payroll taxes electronically over the California Employment Development Department website. Penalties apply to employers that fail to file and pay electronically after January 1, 2019. Employers could apply for a one-year hardship waiver from the requirement to file and pay electronically. (AB 1245, signed by the governor on August 17, 2015.)

Colorado. Effective third quarter 2018, employers are required to file the quarterly UI wage detail report, Form UITR-1a, electronically over the Department of Labor & Employment electronic reporting system, My UI Employer. Employers are allowed to request a one-time waiver of the electronic filing requirement; however, per a Department representative, employers will be given several quarters to begin compliance. The electronic filing requirement does not impact the filing of the Form UITR-1, Premium Report, which still may be filed on paper.

District of Columbia. Employers of five or more employees are administratively required to report electronically over the District’s electronic reporting system. Employers must report the number of hours an employee worked as part of the quarterly wage report. According to a senior Department representative, until legislation is passed to update DC Code § 51-104(b)(2) to reduce the threshold from 250 or more employees to 5 or more employees, the District is unable to penalize employers of less than 250 employees for failure to report electronically or supply the number of hours.

26 | Ernst & Young LLP’s 2019 payroll year-end checklist 27November 2019 |

Hawaii. Effective January 1, 2020, all employers must file UI returns and pay UI taxes electronically.

Illinois. Effective July 1, 2014, employers with 25 or more employers are required to submit the employer wage report (Form UI-40) electronically on a monthly basis at the end of the month following the reporting period, in addition to being required to file the quarterly contribution and wage report electronically. Effective September 2017, the IDES TaxNet system was discontinued. Instead, employers report SUI and SITW taxes over the Illinois Department of Revenue’s MyTaxIllinois system. Employers wishing to file on paper need to download the form from the IDES website, as the IDES is no longer mailing pre-printed quarterly reports to small businesses. The IDES’ zero wage tele-filing system was also discontinued.

Indiana. Beginning first quarter 2019, a redesigned online reporting system was released, and all employers are required to file electronically and additional fields (start date, ZIP code of physical worksite location, whether part-time or full-time, standard occupational code) are added to wage reporting. The Department of Workforce Development will not accept paper filings unless the employer has requested and been granted an electronic reporting waiver.

Kentucky. The Kentucky Office of Employment & Training plans to phase out the mailing of paper Form UI-3, Employer’s Quarterly Unemployment Wage and Tax Report, and payment coupons in order to advance an electronic reporting and payment submission process for all filers. Currently, employers with fewer than 10 employees can file on paper. An agency representative confirmed that in the future, all employers will be required to file and pay electronically. Go to https://kewes.ky.gov/Contact/Notice.aspx for more information.

Louisiana. Effective January 1, 2016, employers are required to supply information on two additional data elements when electronically filing the quarterly unemployment wage report — the employee’s hourly rate of pay and the employee’s occupational code or job title.

Maine. Beginning January 1, 2019, electronic filing of unemployment tax returns is done by using the Maine Department of Labor electronic filing system, ReEmployME, located at www.maine.gov/reemployme. Unemployment contributions can be paid in the ReEmployME application once returns have been uploaded successfully. Electronic unemployment tax reporting is no longer done through the Maine Revenue Services (MRS) MEETRS website; however, paper Forms ME UC-1 are still processed by the MRS.

Maryland. Effective first quarter 2016 (returns due April 30, 2016), all Maryland employers are required to file the Form DLLR/DUI 15, Unemployment Insurance Quarterly Contribution and Employment Report, electronically. The Maryland Department of Labor, Licensing and Regulation will no longer mail paper returns to employers and magnetic media/email submission is no longer allowed. Previously, employers of 100 or more employees were required to file electronically or by magnetic media.

Massachusetts. An employer reporting 50 or more employees in any quarter on the wage detail report must pay UI contributions electronically. Payroll service companies are required to pay UI contributions electronically regardless of the number of clients or employees reported.

Mississippi. Effective January 1, 2019, all employers are required to file contribution and wage reports electronically. Go to https://www.mdes.ms.gov/employers/unemployment-tax/reporting-and-filing/new-tax-filing-requirement/ for more details.

Missouri. Legislation enacted in 2019 (SB 90) and effective August 28, 2019, requires that employers with 50 or more employees file quarterly returns electronically or on CD (threshold decreased from 250 or more employees). Affected employers may show good cause and be allowed to file on paper.

Montana. Effective first quarter 2019, revised regulations require employers of 20 or more employees (and all payroll service companies) to file quarterly wage reports electronically. Payroll service companies are required to pay UI contributions electronically regardless of the number of clients or employees reported.

Nebraska. The Nebraska Department of Labor regulations now allow positive-balanced non-delinquent employers, upon approved application, to file SUI contribution returns and pay the associated taxes on an annual basis, rather than quarterly. Employers must still file wage detail reports on a quarterly basis. Employers desiring to file and pay SUI contributions annually must apply by February 15 of the year for which the election is made. This change is effective for calendar year 2020. The legislation also increases the taxable wage base for maximum-rated employers to $24,000. (220 Neb. Admin. Code §001(B))

Nevada. If the quarterly tax due is $10,000 or more, the payment is required to be made electronically. This also applies to authorized agents and submitters who file for multiple employers. If the total aggregate amount of contributions is $10,000 or more, Nevada law requires the payment to be made electronically by either ACH Credit or ACH Debit. Effective July 1, 2018, all employers are required to file contribution and wage reports electronically.

Ernst & Young LLP’s 2019 payroll year-end checklistContinued

26 | Ernst & Young LLP’s 2019 payroll year-end checklist 27November 2019 |

New York. Employers must report if dependent health benefits are available to employees. The reporting requirement applies only at the employer level and is not reported for each individual employee on the wage report. A check box is included on Form NYS-45 for this purpose (Assembly Bill No. A08952, Chapter 182 of the Laws of 2010). All employers must file Form NYS-45, NYS-45-ATT and NYS-1 electronically over the New York Department of Taxation and Finance electronic reporting system. The associated taxes must also be paid electronically.

North Dakota. HB 1296 requires all North Dakota employers to file SUI returns and pay all SUI contributions electronically, effective with the filing of the first-quarter 2018 return.

Ohio. Effective first quarter 2018, a rule change mandates that the quarterly contribution and wage report be filed electronically.

Oklahoma. Effective January 1, 2017, the Oklahoma Employment Security Commission announced that it will enforce the requirement that employers file electronically over the agency’s website. Any report submitted by paper after January 1, 2017, will be returned unprocessed to the employer (unless the employer was granted a waiver from filing electronically). The employer will be required to electronically refile the return. Late-filing penalties will be assessed if the employer fails to file the report electronically within the allotted timeframe to avoid such penalties.

Oregon. Effective first quarter 2016, employers are required to report in new Column 6 of Form 132, Unemployment Insurance Employee Detail Report, the income tax withheld from each employee for tax fraud prevention purposes.

Puerto Rico. Effective second quarter 2019 (delayed from the first quarter), all employers must file quarterly SUI tax returns electronically.

Rhode Island. Payroll service providers that provide payroll services to 20 or more clients are required to file Quarterly Tax and Wage Reports (DET-TX-17) for their clients electronically.

Tennessee. Effective January 1, 2019, all Tennessee employers must file their quarterly SUI contribution and wage report electronically, a decrease from the former threshold of 10. Employers for whom the electronic filing requirement creates a hardship may submit an affidavit showing that a hardship exists and may be allowed to continue to report on paper. The affidavit must be submitted on an annual basis. According to a Department of Labor and Workforce Development representative, employers also continue to have the option to report on CD or DVD (2018 HB 1825 (Chapter 642).

Utah. Effective July 1, 2019, all Utah employers are required to file quarterly SUI returns electronically. Paper forms filed after this date will be returned.

Washington. All employers are required to file electronically. Paper or magnetic media filing is not allowed ($25 penalty can be assessed). However, according to the UI agency’s website and an email response to inquiry, the agency will administratively not penalize an employer for filing paper returns but will strongly urge the employer to convert to electronic reporting.

West Virginia. Effective first quarter 2016, paper returns are no longer automatically mailed to employers. Employers are strongly encouraged to file electronically or on CD. Employers wishing to continue to file on paper must request a waiver from electronic reporting.

Wisconsin. Agents who prepare reports on behalf of employers must file their contribution and wage reports electronically.

28 | Ernst & Young LLP’s 2019 payroll year-end checklist 29November 2019 |

Year-end employment tax reporting compliance Particularly for the multi-state employer, preparing for annual employment tax reporting is a multi-step process that includes the following:

1. Create a list of jurisdictions requiring returns and information statements (e.g., Forms W-2, 1099, 1042-S)Whether employment taxes are processed in-house or by a third-party provider, a list should be created of the jurisdictions and the returns and information statements that each requires. In our experience reviewing employment tax processes, neglecting to report to all jurisdictions (including those outside the US, where applicable) is one of the most common errors that multi-jurisdictional employers make. To make your list of taxing jurisdictions as accurate and comprehensive as possible, a report from the employee master file should be created of both the work and resident states and localities that have been established for each employee. If work state and locality information is also carried in the timekeeping system (i.e., employees typically work in multiple jurisdictions within a single payroll period), a similar report should be run from this source. If you are uncertain of a jurisdiction’s withholding, employment tax and reporting requirements, check with the state and local taxing authorities, your employer’s accounting firm or other qualified employment tax consultant.

2. Verify the form and format of returns and information statementsEach jurisdiction imposes different reporting requirements. Some jurisdictions, for instance, require that Forms W-2, annual state income tax reconciliations or state unemployment insurance returns be filed magnetically or electronically if the employees or forms exceed a certain number. Under the federal requirements, for instance, Forms W-2 (Forms W-2c) over 249 in the calendar year must be filed electronically. (State rules vary. See Table 4 and Table 5 for our 2019 survey of state electronic Form W-2 and state unemployment insurance filing requirements.)

If the employer is relying on a third party to file its employment tax returns and information statements for the first time, care must be taken that all the necessary steps have been completed to establish the third party as a reporting agent. For example, you and the third party must have obtained a User ID and PIN where required, as well as any other information necessary to meet the reporting requirements and you must have confirmed that file submissions were posted accurately. (Note that employers using a third-party provider can obtain a User ID and PIN to verify Form W-2 transmissions through the SSA’s BSO. Go here for more information.)

Filing format and record layout specifications may also change from year to year and should be reviewed carefully before processing year-end returns and information statements.

Reference these publications for tax year 2019:

• IRS Publication 1220, Specifications for Filing Form 1097, 1098, 1099, 3921, 3922, 5498, and W2‑G Electronically here

• SSA Publication 42-007 (EFW2) here

• IRS Publication 1187, Specifications for Filing Form 1042‑S, Foreign Person’s U.S. Source Income Subject to Withholding, Electronically here

• IRS Publication 1239, Specifications for Filing Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, Electronically here

• For guidelines on electronic filing of Affordable Care Act information returns, refer to Publication 5165, Guide for Electronically Filing Affordable Care Act (ACA) Information Returns for Software Developers and Transmitters

Ernst & Young LLP’s 2019 payroll year-end checklistContinued

28 | Ernst & Young LLP’s 2019 payroll year-end checklist 29November 2019 |

3. Verify that all laser-printed forms were approved by the SSAIf you plan to use laser-printed Forms W-2/W-2c from a third-party source (e.g., software or service provider), ask the supplier for a copy of its dated approval notice from the SSA. For more information, see:

IRS Publication 1141, General Rules and Specifications for Substitute Forms W‑2 and W‑3 (Rev. Proc. 2017-42) here.

4.TestmagneticmediaandelectronicfilesParticularly when a jurisdiction’s form or format for reporting has changed, it is prudent to perform tests validating that your files match the jurisdiction’s reporting requirements. Discovering errors while printing or filing the actual returns and information statements not only creates delays in filing but also can expose you to penalties and other additional costs. For Form W-2 reporting purposes, the SSA makes software available that allows you to edit Form W-2 files before they are submitted electronically.

AccuWage 2019 is available through the SSA’s website here.

5. Verify taxability complianceTaxability compliance can be verified by printing reports from the payroll system’s tax configuration tables. These configuration tables carry the information necessary for including and excluding various wage payments and fringe benefits from taxable wages and the tax computation. Verifying that amounts are reported on the appropriate lines or boxes of returns or statements and that the correct codes are used, where applicable, is a vital element of year end compliance testing.

Sample configuration tables are shown on the following page.

30 | Ernst & Young LLP’s 2019 payroll year-end checklist 31November 2019 |

2019 sample federal employment tax configuration table — pay codes

Benefit Federal income tax (Form W-2, box 1)

Social Security wages (Form W-2, box 3)

Medicare wages (Form W-2, box 5)

Form W-2, box 12 Federal unemployment insurance taxable (FUTA, Form 940)

Business expense accountable plan

No No No N/A No

Dependent care assistance

Yes — excess over $5,000

Yes — excess over $5,000

Yes — excess over $5,000

N/A, but report in box 10

Yes — excess over $5,000

Educational assistance, job-related

No No No N/A No

Educational assistance, non-job-related

Yes — excess over $5,250

Yes — excess over $5,250

Yes — excess over $5,250

N/A Yes — excess over $5,250

2019 sample federal employment tax configuration table — deduction codes

Benefit Federal income tax (Form W-2, box 1)

Social Security wages (Form W-2, box 3)

Medicare wages (Form W-2, box 5)

Form W-2, box 12 Federal unemployment insurance taxable (FUTA, Form 940)

Section 125, Dependent care assistance pretax

Reduce up to $5,000

Reduce up to $5,000

Reduce up to $5,000

N/A, but report in box 10

Reduce up to $5,000

Section 125, Health insurance premium pretax

Reduce 100% Reduce 100% Reduce 100% Considered in arriving at amount in code DD

Reduce 100%

401(k) pretax contribution

Reduce up to $19,000

No change No change Code D No change

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Ernst & Young LLP’s 2019 payroll year-end checklistContinued

30 | Ernst & Young LLP’s 2019 payroll year-end checklist 31November 2019 |

6. ReconciliationWhether your payroll is processed in-house or by a third-party provider, reconciliation is vital to accuracy and internal control. Keep in mind that reconciling does not necessarily mean that there are no differences or adjustments but rather that differences and adjustments have a reasonable explanation and are well-documented.

There are four primary types of year-end reconciliation:

• Wage and tax

The wage and tax reconciliation should include a logical and chronological reconciliation of federal, state and local wage and tax information:

• Chronological. The purpose of a chronological reconciliation is to verify that wage and tax information has properly accumulated from each payroll period to the quarter and, finally, to the annual totals.

• Logical. The purpose of the logical reconciliation is to compare the wage and tax information of different jurisdictions to confirm that any differences in amounts are logically explained by variations in the tax rules. For instance, employers that provide taxable excess group-term life insurance coverage should have a difference between FICA and federal unemployment covered wages (taxable group-term life is excluded from federal unemployment insurance wages but is included in FICA wages). A similar reconciliation should be performed that compares federal wages with the taxable wages reported to each state and local taxing jurisdiction.

• Bank statement

A bank reconciliation is vital to verifying that checks, including voids and stop payments, were properly posted to the payroll system throughout the year and that outstanding checks are investigated and properly dealt with (keeping in mind the unclaimed-property rules of the applicable state) prior to preparing the 2018 returns and information statements. Failure to perform a bank reconciliation prior to filing employment tax returns and issuing information statements exposes an employer to the risk of reporting incorrect wages and paying or withholding an incorrect amount of tax. These errors can result in time-consuming corrections to Forms W-2 and

other information returns and statements, creating a potential for interest and penalty assessments.

• Accounts payable and third-party payments

The payroll system is not the only door through which wages and fringe benefits enter. All too frequently, expense reports and other business expenses, such as payments made on behalf of employees for educational or relocation expenses, are initially entered into the accounts payable system. Absent an automated interface between accounts payable and payroll, which is rare in today’s technological environment, a recurring analysis should be made of accounts payable transactions to pinpoint items potentially reportable or subject to employment tax.

An accounts payable reconciliation of this type includes, for example, a review of expense reports and petty cash or impressed funds; the identification of non-accountable business expense reimbursements and taxable payments made to individual employees or former employees, relocation providers, stockbrokers, life insurance companies, and airlines and travel agents; and an accounting of business and personal use of company vehicles, including cars and airplanes.

See Table 3 for sample list of benefits and other compensation that might be paid through accounts payable or by a third-party service provider.

• General ledger

A general ledger reconciliation is routinely necessary to help confirm that the employer’s financial statements accurately reflect the payroll transactions of the business. However, at year-end, the general ledger reconciliation is also vital to confirming that wages are reported correctly and that tax liabilities and payments are stated accurately. General ledger totals of wages, tax expenses and tax liabilities should correspond to the amounts reported to each of the taxing jurisdictions.

See Table 3 for a sample list of special wage payments and other compensation that might be paid through accounts payable or by a third-party service provider.

Learn more about TaxAbility™ here.

32 | Ernst & Young LLP’s 2019 payroll year-end checklist 33November 2019 |

State due dates for providing and filing Forms W-2

State Form W-2 due dates* — tax year 2019(Dates that differ from federal are shown in bold; changes from tax year 2018 are highlighted in yellow)

State/jurisdiction Employee copy due date

State filing due date

Alabama January 31 January 31

Arizona January 31 January 31

Arkansas** January 31 January 31

California** January 31 January 31

Colorado** January 31 January 31

Connecticut January 31 January 31

Delaware January 31 January 31

District of Columbia January 31 January 31

Georgia January 31 January 31

Hawaii** January 31 February 28

Idaho** January 31 January 31

Illinois** January 31 January 31

Indiana January 31 January 31

Iowa** February 15 February 15

Kansas January 31 January 31

Kentucky January 31 January 31

Louisiana January 31 January 31

Maine** January 31 January 31

Maryland January 31 January 31

Massachusetts January 31 January 31

Michigan January 31 January 31

Minnesota** January 31 January 31

State/jurisdiction Employee copy due date

State filing due date

Mississippi January 31 January 31

Missouri January 31 January 31

Montana** January 31 January 31

Nebraska January 31 January 31

New Jersey** February 15 February 28

New Mexico** January 31 January 31

New York** February 15 January 31

North Carolina January 31 January 31

North Dakota January 31 January 31

Ohio** January 31 January 31

Oklahoma** January 31 January 31

Oregon** January 31 January 31

Pennsylvania January 31 January 31

Puerto Rico January 31 January 31

Rhode Island January 31 January 31

South Carolina January 31 January 31

Utah** January 31 January 31

Vermont January 31 January 31

Virgin Islands January 31 January 31

Virginia January 31 January 31

West Virginia** February 15 January 31

Wisconsin** January 31 January 31

Based on Ernst & Young LLP survey results as of October 2019

* It varies from state to state whether the deadline is extended to the next business day when it falls on a Saturday, Sunday or holiday. Check with the state taxing authority for more information. There is no state income tax in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming. New Hampshire and Tennessee require income tax only from interest and dividends.

** See state notes on following pages.

Ernst & Young LLP’s 2019 payroll year-end checklistContinued

32 | Ernst & Young LLP’s 2019 payroll year-end checklist 33November 2019 |

Arkansas. While the filing deadline for Forms W-2/1099 is now January 31, the deadline for submission of the annual reconciliation remains February 28.

California. Forms W-2 are not filed with the state; instead the Form DE-9C is used to report individual personal income tax wages and withholding on a quarterly basis.

Colorado. For electronic filing, the annual reconciliation form is required if additional tax is due or if the employer is expecting a refund. Otherwise, by filing electronically, the employer is precluding itself from filing the annual reconciliation form. Paper filers must file the reconciliation form.

Hawaii. According to a senior representative of the Hawaii Department of Taxation, there are currently no plans to change the Form W-2 deadline to January 31 to match federal. Effective with taxable periods beginning January 1, 2020, employers are required to file withholding tax returns, including the annual reconciliation and Forms W-2, electronically if their annual withholding tax liability exceeds $40,000. A 2% penalty may be imposed if the return is not filed electronically unless the failure is due to reasonable cause and not due to neglect (Department of Taxation Announcement 2019-11, 9-13-2019).

Idaho. A five-business-day window after the January 31 due date is provided for an employer to correct errors in the electronic file received timely by the Tax Commission.

Illinois. All employers (and payroll service providers) must file Forms W-2 electronically by January 31.

Iowa. Effective with calendar year 2018, due in 2019, all employers are required to file Forms W-2 electronically with Form VSP. A written request for waiver of the requirement to file electronically may be requested until calendar year 2019, due in 2020 for cases of hardship. For calendar year 2018, the reporting deadline was extended to February 28, 2019, due to filing difficulties. A rule change has now set the due date to February 15 for the calendar year 2019 and beyond. Prior to calendar year 2016, Iowa did not require Forms W-2 to be filed with the VSP Annual Reconciliation.

Maine. Employers report withheld state income tax on the quarterly tax report. A separate reconciliation return (Form W-3ME) must be filed. Employers of 250 or more employees must file Forms W-2 and the annual reconciliation (Form W-3ME) electronically with Maine Revenue Services. For employers of fewer than 250 employees, Forms W-2 are not required unless the employer fails to report the W-2 information quarterly. The annual reconciliation, Form W-3ME, must be filed electronically by February 28 (the deadline will not change to match Form W-2 deadline).

Michigan. Legislation (HB 5091) enacted in 2018 changed the Form W-2 due date to January 31, effective with the calendar year 2018 Forms W-2 due by January 31, 2019. The annual reconciliation (Form 5081) due date remains February 28.

Minnesota. Effective with returns filed after December 31, 2017, Minnesota law eliminates the requirement that employers submit an annual withholding tax reconciliation because the Department is able to electronically identify discrepancies in withholding accounts without the need for a separate return.

Missouri. Effective January 1, 2018, legislation (HB 1582) changes the due date for employers filing 250 or more Forms W-2 with the Missouri Department of Revenue to January 31 and requires that these forms be filed electronically. The deadline for employers filing less than 250 Forms W-2, regardless of the filing method, remains February 28.

New Jersey. The statutory deadline to file is February 15, but administrative policy has in the past extended the deadline to the last day of February. The official 2019 Form W-2 specifications booklet had not been released as of this update. A Division of Treasury representative told us that the division is considering a change in Form W-2 submission deadline to the statutory February 15 deadline, matching the date state Forms W-2 must be provided to employees.

New Mexico. Effective for calendar year 2019, due in 2020, 2018 legislation (HB 276, Ch. 59) requires all employers to file Forms W-2 with the New Mexico Department of Taxation & Revenue Department by January 31. Employers filing 25 or more Forms W-2 are required to file electronically. Through calendar year 2018, employers that filed a wage and contribution report, Form ES903, to the New Mexico Workforce Solutions Department, or New Mexico Form TRD-31109, Employer’s Quarterly Wage, Withholding and Workers’ Compensation Fee Report, to the Taxation and Revenue Department did not need to submit federal Forms W-2, W-2G or 1099-R forms.

New York. New York wage and tax information is reported quarterly on Form NYS-45. Employers do not submit Forms W-2 to the state. Effective beginning first quarter 2019, in order to help reduce fraudulent tax refund claims employers are required to report the state/local income tax withholding details (wages and amount withheld) by individual employee on a quarterly basis just as SUI wage detail is reported.

34 | Ernst & Young LLP’s 2019 payroll year-end checklist 35November 2019 |

State due dates for providing and filing Forms W-2Continued

Ohio. Currently, only employers of 250 or more employees must file Forms W-2 magnetically. Smaller employers are not required to submit paper copies of Forms W-2 (state Form IT-2) to the Department of Taxation but must continue to maintain W-2 records for a period of four years. Effective January 1, 2015, Ohio employers are required to file all withholding tax returns except Forms W-2 electronically. Proposed regulation changes would require all Ohio employers to file Forms W-2 electronically; however, the change has not yet been promulgated.

Oklahoma. Legislation enacted in 2018 (HB 3156) changes the filing deadline to January 31, effective with calendar year 2018 Forms W-2, filed by January 31, 2019. Legislation enacted in 2016 (HB 2775) requires that employers electronically file an annual withholding tax reconciliation return and corresponding Forms W-2. Employers are not allowed to file Forms W-2 information by paper or magnetic media (employers without computer accessibility may file five or fewer Forms W-2 by mail). Paper forms or magnetic media that are received may be shredded and considered not filed. Prior to calendar year 2016, Oklahoma employers were not required to submit Forms W-2 or an annual reconciliation return to the OTC.

Oregon. Forms W-2 are filed electronically only; paper W-2s or other forms of media are not accepted. Effective for calendar year 2019, the Oregon Department of Revenue requires the new statewide transit tax wages and withholding to be reported in Box 14 of the W-2.

Utah. Starting with the 2018 tax year, employers do not file a separate annual reconciliation return; instead, the reconciliation is combined with the fourth quarter return (quarterly filers) or annual return (annual filers).

West Virginia. 2018 SB 338 changed the deadline for filing Forms W-2/1099 and the annual withholding tax reconciliation from February 28 to January 31, matching the federal Form W-2 deadline. The legislation also changes the threshold at which employers must file Forms W-2/1099 electronically from 50 or more to 25 or more forms. In addition, any employer that uses a payroll service is required to file electronically. An employer that is required to file electronically, but does not do so, may be subject to a $25-per-employee penalty unless the employer shows that the failure was due to a technical inability to comply. All employers, including those that file the Forms W-2 electronically with the West Virginia State Tax Department, must also file Form WV/IT-103, Annual Reconciliation of West Virginia Income Tax Withheld. Failure to submit Form WV/IT-103 each year may result in the denial of Letters of Good Standing and prevent potential refund requests from being processed. Beginning January 1, 2019, employers filing quarterly, monthly or semi-monthly cannot submit an annual reconciliation of Wisconsin tax withheld (Form WT-7) until all withholding deposit reports (Form WT-6) have been filed.

Wisconsin. Beginning January 1, 2019, employers filing quarterly, monthly or semi-monthly cannot submit an annual reconciliation of Wisconsin tax withheld (Form WT-7) until all withholding deposit reports (Form WT-6) have been filed.

34 | Ernst & Young LLP’s 2019 payroll year-end checklist 35November 2019 |

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