BONUS PAYROLLS
If you are paying bonuses, please notify us by Dec. 15, 2023. Keep in mind that you have many options to consider when running bonus payrolls:
- IRS and state withholding guidelines are applicable to supplemental wages
- Blocking direct deposit
- Blocking deductions
- Grossing up bonus amounts so the net pay is exactly the amount the employee should receive
FRINGE BENEFITS ADJUSTMENTS
TAXABLE FRINGE BENEFITS
You may also need to enter taxable fringe benefits in isolved as imputed income for proper W-2 reporting.
- Employers must calculate imputed income for the cost of group term life insurance over $50,000 and report it in W-2 Box 12, code C
- Personal use of company cars must be reported as taxable imputed income in W-2 Boxes 1, 3, and 5. Insperity will also include the amount in Box 14 with code PUCC for informational purposes
- Gift cards, gym memberships paid by the employer, and other perks may be taxable. If they are, they need to be entered as imputed income in isolved so they can be taxed and included on employee W-2s
- Earnings from the exercise of nonstatutory stock options above the fair market value must be reported as taxable income in W-2 Boxes 1, 3, and 5 and reported in Box 12, code V
- Qualified stock equity grants for options or restricted stock units (RSUs) under an 83(i) election must be reported on the W-2 in Box 12. Amounts included in income must be reported with code GG and deferred amounts must be reported with code HH
NON-TAXABLE FRINGE BENEFITS
If you’re using Benefit Administration in isolved, non-taxable fringe benefits like health insurance, health savings accounts (HSAs), flexible spending accounts (FSAs), health reimbursement accounts (HRAs), commuter benefits and group term life insurance are automatically tracked and reported properly on your employees’ W-2s.
If you’re not using Benefit Administration in isolved, you still need to report benefit costs for employees so they can be included on your employee’s W-2s.
- The Affordable Care Act (ACA) requires employers to report the cost of employer-provided health care coverage in W-2 Box 12, code DD for employers filing 250 or more W-2 forms.
- Imputed income for the cost of domestic partner health insurance coverage must also be included in the total reported in W-2 Box 12, code DD
- If employees pay with pretax dollars for specified illness or supplemental insurance, those premiums must also be included in the total reported in W-2 Box 12, code DD. For a full list of Box 12, code DD reporting requirements, refer to the IRS guide.
- Employers must report dependent care assistance through an FSA or DCAP in W-2 Box 10
- Employee and employer contributions to Health Savings Accounts (HSAs) must be combined and reported in W-2 Box 12, code W
- Employers must report Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) or Individual Coverage Health Reimbursement Arrangement (ICHRA) contributions in W-2 Box 12, code FF
- Contributions to Archer Medical Savings Accounts (MSAs) must be reported in W-2 Box 12, code R
- Payments of health insurance premiums on behalf of 2% or more shareholders of S-Corporations are reported on the W-2 in Box 14, code 2%HI for informational purposes
Beyond benefits, other types of non-taxable fringe benefits must also be reported on your employee’s W-2s.
- Employer-provided adoption benefits under a qualified adoption assistance program must be reported in W-2 Box 12, code T
- Clergy housing allowances are reported in W-2 Box 14, code HOUSING for informational purposes
Refer to IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits for a full list of fringe benefits and W-2 reporting requirements. Contact your Payroll Specialist for assistance entering the information properly in isolved for accurate year-end forms. It is your responsibility to preview your W-2s and verify the amounts are correctly reflected for fringe benefits. Review W-2s prior to Dec.16 2022 and contact your payroll specialist for any changes that need to be made.
MANUAL AND VOID CHECKS
Important: No payrolls with a 2024 check date should be processed before you have completed the processing of all 2023 manual and void checks.
THIRD-PARTY SICK PAY
Important: Determine if you have third-party sick pay information that must be reported for 2023. This needs to be completed before you run a 2024 payroll. Notify us by Dec. 15, 2023, if you will not receive the necessary information in time. Please contact your provider and request the information in advance of our year-end adjustment cut-off dates to avoid a delay in W-2 printing.
The last day to report adjustments is Dec. 15, 2023. Any adjustments made after that date may result in a corrected W-2 (or W-2c). Please be aware adjustments or corrections will incur an additional fee and delay in processing.
Updated 09/2023