Defining Year-End Processing

This chapter provides an overview of year-end processing and discusses how to:

• Define tax forms.

• Define tax form print parameters.

• Define tax reporting parameters.

• Define the W-2 reporting company.

• Update pension plan and third-party sick pay flags.

• Generate the Pre-Load Error report.

• Load Wage and Tax Statement data.

• Generate the Post-Load Error report.

• Review and correct Wage and Tax Statement data.

• Run the Year-End Data Audit report.

• Run the State Tax Totals report.

• Print Wage and Tax Statements.

• Generate the W-3/W-3SS Transmittal Totals report.

• Generate the W-3PR Transmittal Totals report.

• Process corrected Wage and Tax Statements.

• Prepare and create MMREF-1 and MMREF-2 files.

Understanding Year-End Processing

This section discusses:

• Year-end processing functionality.

• Eligibility for Wage and Tax Statement.

• Year-end setup and processing steps.

Year-End Processing Functionality

Global Payroll for United States enables employers to complete all required year-end processing tasks:

• Process and print the Wage and Tax Statement.

• Prepare and create magnetic media output for the Wage and Tax Statement (MMREF-1).

• Process and print the Corrected Wage and Tax Statement.

• Prepare and create magnetic media output for the Corrected Wage and Tax Statement (MMREF-2).

Note. The magnetic media output is often referred to as the MMREF (Magnetic Media Reporting and Electronic Filing).

Year-End Forms

Global Payroll for United States enables organizations to set up and generate the following year-end forms:

Wage and Tax Statement Filing

Employers must file a year-end Wage and Tax Statement with the Social Security Administration for wages paid to each employee from whom:

• Income, social security, or Medicare taxes were withheld.

• Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4 (employee’s Withholding Allowance Certificate).

Steps Required to Set Up and Process Wage and Tax Statements

The following steps are required to set up and process Wage and Tax Statements:

1. Define tax forms.

   Define what boxes are contained in the Wage and Tax Statement (W-2, W-2PR, W-2AS, and so on), what each box represents, and the data source for each box. For example, in the W-2, Box 01 is for wages, tips and other compensation, and the data source is the Federal Wage Accumulator (FWT GRS TOT YTD).

2. Define tax form print parameters.

   Define the Form ID of each Wage and Tax Statement (laser form, impact printer form, pressure seal laser form, and so on), the layout style, margins, box print positions, and print text.

3. Define tax reporting parameters.

   Define the general parameters of the process run: the calendar year, transmitter ID, form ID, and so on.

4. Define the W-2 company.

   Define company information used to generate the W-2 report: W-2 reporting company, company name, address, and terminating business indicator.

5. Update retirement plan and third-party sick pay flags.

6. Generate Pre-Load Error report.

   This pre data-load report identifies probable errors in the Wage and Tax Statement.

7. Load Wage and Tax Statement data.

   This process loads Wage and Tax Statement form information into tables so that it can be corrected and the Wage and Tax Statement printed from the corrected information.

   Note. There are various sources for the data loaded into this table, including the Reporting Company table (GPUS_YE_CO_EIN), W-2 Company table (GPUS_YE_CO_TBL), and employee accumulators.

8. Generate Post-Load Error report.

   This report allows for correction of the loaded W-2 data. The report can be run for selected employees, all employees, selected reporting companies, or all reporting companies, and includes various sort options.

9. Review and correct Wage and Tax Statement data.

   Review and correct data using an online component.

10. Run Year-End Data Audit report.

    Use this report to audit the corrected Wage and Tax Statement data.

11. Run State Tax Totals report.

    Use this report to audit state tax totals. It shows:

    • The grand total per company with all states combined.

    • The grand total of all companies by state.

    • The grand total of all states for all companies.

12. Print Wage and Tax Statement.

13. Generate the W-3/W-3SS Transmittal Totals report.

    Use this report to help prepare the W-3 and W-3SS forms.

14. Generate the W-3PR Transmittal Totals report.

    Use this report to help prepare the W-3PR form.

15. Process Corrected Wage and Tax Statement.

    This step consists of three components:

    1. Prepare W-2c/W-2cPR data.

    2. Audit W-2c/W-2cPR data and generate form W-3c/W-3cPR transmittal totals.

    3. Print W-2c/W-2cPR forms.

Further details of each step are discussed below.

Magnetic W-2 and W2c Filing

Employers filing 250 or more W-2s or corrected W-2s must define them on magnetic media or electronically unless granted a waiver from the IRS.

Global Payroll for United States enables you to generate the following files in MMREF format:

Note. Employers filing on magnetic media don’t have to file a transmittal of Wage and Tax Statement.

Steps Required to Prepare and Create Magnetic Media Output

The following steps are required to prepare and create magnetic media output files:

1. Define MMREF reporting parameters.

2. Create the MMREF-1 file.

3. Run the MMREF-1 Federal Audit report

4. Create the state MMREF-1 file.

5. Run the MMREF State Audit report.

6. Create the MMREF-2 file.

7. Run the MMREF-2 Federal Audit report.

Further details of these steps are discussed below.

Defining Tax Forms

This section provides an overview of tax forms and discusses how to define year-end forms:

Understanding Tax Form Definition

Tax form definition identifies the valid boxes for the tax forms and the description for the boxes to be printed during the tax form print process.

Note. PeopleSoft delivers and maintains definitions for the following forms: W-2, W-2AS, W-2GU, W-2PR, W-2VI, W-2c, W-2cAS, W-2cGU, W-2cPR, W-2cVI.

Page Used to Define Tax Forms

Defining Tax Form Print Parameters

This section provides an overview of tax form print parameters, and lists the pages used to define print parameters.

Understanding Tax Form Print Parameters

Tax form print parameters define the Form ID of each Wage and Tax Statement (laser form, impact printer form, pressure seal laser form), the layout style, margins, box print positions, print text, and so forth.

Note. PeopleSoft delivers sample tax form print parameters for the W-2s. You can modify and update the sample parameters, or create new ones.

Pages Used to Define Tax Form Print Parameters

Defining Tax Reporting Parameters

This section provides an overview of tax reporting parameters, and lists the page used to define tax reporting parameters.

Understanding Tax Reporting Parameters

Tax reporting parameters define the general parameters of the process run for each tax form: the calendar year, preprinted format, number of employees to print per page, sort options for the reports, and so on.

The available sort options are:

• Department

• Mail Drop

• Pay Group

• State

• Zip Code

• None

Page Used to Define Tax Reporting Parameters

Defining the W-2 Company

To define the W-2 company, use the Year End Reporting Company USA (GPUS_YE_CO_TBL) component.

This section provides an overview of the W-2 company and lists the page used to define companies for the Wage and Tax Statement.

Note. You should define the W-2 reporting company when you set up taxes at the beginning of the year. Do not wait to do this until the end of the year.

Understanding the W-2 Company Definition

The W-2 company is the company that reports year-end data. Any correction in company address or additional details such as business termination date should be specified as part of the W-2 company definition. This information is the source of employer data printed on W-2s and is included in transmitter (RA) records and employer (RE) records in electronic or magnetic media files reporting.

Page Used to Define the W-2 Reporting Company

See Also

Setting Up Taxes

Updating Retirement Plan and Third-Party Sick Pay Flags

If your organization provides retirement plans or third-party sick pay to employees, you must update the retirement and sick pay attributes of the Year End Indicators element group.

To do this, access the YE_LOAD list set for Global Payroll for United States in the Define List Set component (GP_ELN_SET), and update the Year End Indicators element group on the Element Group Attributes page. Select the Retirement Plan check box for the accumulator 401K EE_YTDA if your organization provides a retirement plan, and the 3rd Party Sick Pay check box for the accumulator SICK PAID_YTDA if your organization offers 3rd party sick pay.

When you load Wage and Tax Statement data, the system uses this information to update employees' federal tax data.

See Also

Managing Applications and List Sets

Pages Used to Update Pension Plan and Third-Party Sick Pay Flags

Generating the Pre-Load Error Report

This section provides an overview of the Pre-Load Error report and lists the page used to generate the report.

Understanding the Pre-Load Error Report

This report lists employees who have negative amounts (except EIC) and also checks for a variety of other error conditions including:

• Missing federal tax data records.

• Missing social security numbers.

• Invalid social security numbers.

  Note. Social security numbers should be numeric, should not be 111111111 or 123456789 or 333333333, and should not begin with 000.

• Negative amounts for accumulators, except EIC amounts, set up in the Element List Names (ELN) for W-2s.

• Positive EIC amounts (Box 09) set up in the Element List Names (ELN) for W-2s.

• Missing EINs.

• Invalid EINs.

  Note. EINs should not begin with 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 69, 70, 78, 79, or 89.

The input parameter for this run control page is Calendar Year.

Page Used to Generate the Pre-Load Error Report

Loading Wage and Tax Statement Data

This section provides an overview of the Load Wage and Tax Statement process, and lists the page used to load the data.

Understanding Wage and Tax Statement Data Loading

This process loads year-end data into tables so that it can be corrected and the Wage and Tax Statement printed using the amended information. The sources of this data include federal tax data, the reporting table, the W-2 company table, employee accumulators, and writable arrays.

Loaded data is stored in three records:

• Employee Record

  This record stores the company ID, calendar year of the W-2, the Employee ID (EmplID), Tax Form ID, and process flag. The system sets the process flag to Complete when data is loaded.

• Data Record

  This record is a child of the Employee Record. It stores address details, Social Security numbers, and state information. This record is keyed by sequence number.

  When there is only one state, there will be only one row per employee for the tax year.

• Amounts Record

  This record is a child of the Data Record and contains the box, state, and amount information. All federal amounts are stored with a sequence value of 1. If there is more than one state, the first state amounts are stored with a sequence value of 1, and other states are stored with their own sequence numbers.

The run control page for this process provides the ability to specify the calender year for which the load needs to be run and the scope of processing: All Reporting Companies, Selected Reporting Companies, and All or Selected Employees.

Page Used to Load Wage and Tax Statement Data

Generating the Post-Load Error Report

This section provides an overview of the Post-Load Error report, and lists the pages used to set up and generate the report.

Understanding the Post-Load Error Report

This report checks for the same errors as the Pre-Load Error report, as well as the following, additional, error conditions:

• Box 11 non-qualified plans are greater than Box 1 wages.

• Incomplete employer or employee address.

• Invalid social security number for spouse (Form W-2PR only).

• Social security wages and tips are greater than the annual maximum social security wage base.

• Social security tax withheld does not equal the lower of 6.2% of social security wages and tips or the annual maximum social security tax.

• Medicare wages and tips are not equal to or greater than social security wages.

• Medicare tax withheld is not equal to 1.

• Advance EIC payment is greater than the annual maximum.

• Non-employees with taxable gross and/or tax withheld.

• U.S. federal withholding tax balance for a Puerto Rico or U.S. territory employees.

• Puerto Rico tax balance for an employee in a company with a tax type not equal to W-2PR.

• Advance EIC payment amounts for a Puerto Rico or American Samoa employees.

Note. On the run control page for the Post-Load Error report, you can choose to void forms containing one or more of the errors listed here. Forms for non-employees or payees with negative amounts are voided automatically.

Prerequisites

Before running the Post-Load Error report, update the variables used to identify the different error conditions.

The variables that need to be defined are:

To specify the values of these variables, access the YE_POSTLOAD list set for Global Payroll for United States in the Define List Set component (GP_ELN_SET), and select the Element Group Details link for Year End Variables. The Element Group Attributes page appears, where you can update the variables in the Variable Type field.

See Also

Managing Applications and List Sets

Pages Used to Set Up and Generate the Post-Load Error Report

Reviewing and Correcting Wage and Tax Statement Data

This section provides an overview of correcting Wage and Tax Statement data, and lists the pages used to correct tax data.

Understanding Tax Data Review and Correction

Global Payroll for United States enables you to correct data for the Wage and Tax Statement on the Details by Company and Details by FEIN pages.

Note. The information on these pages is what is reported on the W-2 form.

You can correct:

• Employee names.

• Addresses.

• W-2 Box-13 information including the statutory employee check box.

Box details other than employee name, address, and Box-13 information can be reviewed but not corrected on these pages. To correct other information, make the required adjustments, rerun the payroll process, and then rerun the data load process for the Wage and Tax Statement.

Note. If a W-2c exists for the W-2 being viewed, a hyperlink appears on the Details by Reporting Company page to give access to the W-2c component.

Note. If more than one company has the same EIN, a hyperlink appears on the Details by Federal EIN page that takes you to a list of companies sharing the EIN.

Pages Used to Review and Correct Wage and Tax Statement Data

Running the Year-End Data Audit Report

This section provides an overview of the Year-End Data Audit report, and lists the page used to generate the audit.

Understanding the Year-End Data Audit Report

The Year-End Data Audit report creates a list of the amounts to be reported on employee W-2 forms. The data for this report comes from the year-end data records loaded by the load program and corrected using the W-2 online form.

When you run the report, you can:

• Sort by department, mail drop, pay group, state, zip code, or select no sort option.

• Within a specific sort option, you can order the results by employee ID (EmplID), employee last name, or social security number.

  Note. The default is employee last name.

• In addition, you can run the report for all reporting companies, selected reporting companies, or for selected employees only.

Page Used to Run the Year-End Data Audit Report

Running the State Tax Totals Report

This section provides an overview of the State Tax Totals report, and lists the page used to generate the report.

Understanding the State Tax Totals Report

This report is useful in reconciling W-2 state tax data. It lists:

• The state tax grand total per company with all states combined.

• The grand total of all companies by state.

• The grand total of all states for all companies.

In addition, depending on the options selected on the Year End State Totals USA page, the report provides the following details by company and state:

Page Used to Run the State Tax Totals Report

Printing Wage and Tax Statements

This section provides an overview of Wage and Tax Statement printing, and lists the page used to print Wage and Tax Statements.

Understanding the Wage and Tax Statement Print Process

The Wage and Tax Statement print process combines all of the data loaded for employees by reporting company and prints the W-2 for the calendar year specified in the W-2 parameters.

When you run this process for the W-2 report you can:

• Sort by department, mail drop, pay group, state, zip code, or none.

• Within a sort option, you can order the W-2 report by employee ID (EmplID), employee last name, or social security number.

  Note. The default is employee last name.

• Run the report for all reporting companies, selected reporting companies or selected employees.

• Reprint the report with a reprint description on the report.

• Identify the W-2 Form ID to use for printing.

• Specify how many pages filled with alignment characters should be printed prior to the first live form.

• Specify the number of employees to print per page.

  Note. The default value is 1.

  If you need to print employer copies (Copy D) of laser W-2s for future reference, you can include results for as many as 4 employees on a single page.

Page Used to Print Wage and Tax Statements

Generating W-3/W-3SS Transmittal Totals

This section provides an overview of the W-3/W-3SS Transmittal Totals report, and lists the page used to generate transmittal totals.

Understanding W-3/W-3SS Transmittal Totals

The W-3/W-3SS Transmittal Totals report summarizes the W-2s and gives the total taxable wage and tax amounts for reporting companies. It is designed to aid customers in completing the W-3 and W-3SS forms, and can be used to reconcile totals with the Year End Data Audit report (see Step 10).

Note. Employers are required to send Form W-3 (Transmittal Totals) along with Forms W-2 if submitting the W-2 in paper form. And employers are required to send Form W-3SS (Transmittal Totals) along with Forms W-2AS/W-2GU/W-2VI if submitting the W-2 in paper form.

Page Used to Generate the W-3/W-3SS Transmittal Totals Report

Generating W-3PR Transmittal Totals

This section provides an overview of W-3PR transmittal totals, and lists the page used to generate the totals.

Understanding W-3PR Transmittal Totals

The W-3PR Transmittal Totals report summarizes the W-2PRs and gives the total taxable wage and tax amounts for reporting companies. It is designed to aid customers in completing the W-3PR form, and can be used to reconcile totals with the Year-End Data Audit report.

Note. Employers are required to send Form W-3PR (Transmittal Totals) along with Form W-2PR if submitting the W-2PR in paper form.

Note. The W-3PR is the equivalent of the W-3, but is designed for Puerto Rico.

Page Used to Generate the W-3PR Transmittal Totals Report

Processing Corrected Wage and Tax Statements

This section provides an overview of corrected Wage and Tax Statement processing, and lists the pages used to process the corrected W-2.

Understanding Corrected Wage and Tax Statement Processing

This section discusses:

• Corrected W-2 forms.

• Steps for preparing W-2c and W-2cPR forms.

Corrected W-2 Forms

There are two Corrected Wage and Tax Statements used for reporting corrections to originally reported W-2s:

• Form W-2c: The purpose of this form is to correct errors on Forms W-2, W-2AS, W-2GU, and W-2VI filed with the Social Security Administration and to provide the corrected information to employees.

  Note. Because the data contained in each box of the W-2 varies by territory, Global Payroll provides tax form definitions for each territory: W-2c, W-2cAS, W-2cGU, and W-2cVI.

• W-2cPR: This form is the equivalent of the W-2c form, but is designed for Puerto Rico tax reporting.

Note. Employers required to file 250 or more W-2c forms during a calendar year must file them on magnetic media or electronically, unless granted a waiver by the IRS.

Steps for Preparing W-2c and W-2cPR Forms

To prepare the corrected forms:

1. Prepare the W-2c/W-2cPR data.

   For states and territories other than Puerto Rico, do this on the W-2c Data page. For Puerto Rico, do this on the W-2c Puerto Rico Data page.

2. Audit W-2c/W-2cPR data and generate Form W-3c/W-3cPR transmittal totals.

   Do this on the Audit Correction Data USA page.

3. Run the W-2c/W-2cPR print process.

   Do this on the Print Year End Correction Forms page.

Pages Used to Process Corrected Wage and Tax Statements

Preparing and Creating MMREF-1 and MMREF-2 Files

This section provides an overview of MMREF-1 and MMREF-2 files, and lists the pages used to prepare and create the files.

Understanding MMREF-1 and MMREF-2 Files

Global Payroll for United States enables you to generate state and federal W-2 and federal W-2c data files in MMREF format:

• To transmit W-2 data electronically, set up and generate the MMREF-1 file.

• To transmit corrected W-2 data , set up and generate the MMREF-2 file.

Pages Used to Prepare and Create MMREF-1 and MMREF-2 Files