As 2019 is quickly coming to an end, we encourage you to review the questions below so that your year-end tax returns, W-2’s and 1095-C’s (for those clients subject to the Affordable Care Act) are accurate. If any changes are required please make updates in our online payroll solution, provide them to your Client Support Specialist or submit a support ticket by clicking here by no later than December 17, 2019.

Year-End Checklist

  • Do you wish to have the employees W-2’s delivered to a different address than we have on file?
  • Have all manual and/or voided checks been processed?
  • Will you be processing a separate bonus or other off-cycle payrolls in December?
  • Do you plan on making any changes to your pay periods or checks dates in 2020?
  • Do you need to update any employee information?

Please Note: Reports will be provided the first week of December to assist you with verifying the accuracy of data needed to successfully complete your year-end filings

Fringe Benefits

Will you be reporting any Fringe Benefits? If so, which of the following will you report?

  • Personal use of a company vehicle
  • Group-Term life insurance in excess of $50,000
  • Non-qualified moving expense reimbursements
  • Cost of Health Insurance provided to a 2% or greater owner of an S-Corp
  • You issued more than 250 W-2’s in 2018 and must report the total premium cost of employer sponsored group health
  • Third-party sick pay

For more information on fringe benefits please visit: https://www.irs.gov/forms-pubs/about-publication-15-b


Additional Reporting

  • Is your company an Applicable Large Employer for purposes of the Affordable Care Act and would like Payality to prepare form 1095-C/1094-C?
  • Will you process independent contractor payments in 2019 and would you Payality to prepare form 1099M?

Important Dates

Thursday Thanksgiving Day (Nov 28) – Payality Closed

Friday – Day after Thanksgiving (Nov 29) – Payality Closed

Tuesday Christmas Eve (Dec 24) – Payality Closed at 2 PM

Wednesday Christmas Day (Dec 25) – Payality Closed

Monday (Dec 30) by Noon – Last day to submit payrolls to be included in 4th quarter and 2019 wages

Tuesday (Dec 31) – Deadline for corrections to be made for ACA 1095C-s , W2s and 1099’s

Wednesday New Year’s Day (Jan 1, 2020) – Payality Closed

Friday (Jan 3) by Noon – Final date for backdated 2019 payrolls. Please Note: Anything reported after this deadline will require amendments and may result in penalties and/or interest that will be the clients sole responsibility. Additional charges for the amended returns will apply and amended returns/W-2c’s will begin being addressed in February 2020.

Wednesday (Jan 8) – 4th Quarter and 2019 Annual returns will be uploaded to the documents portal. W-2’s will be posted to the employee portal.

Jan (20 – 24) – Paper copies of W-2’s will be sent to client for distribution to employees


Friday (Jan 31) -Most Quarterly and Annual Returns filings are due and W-2’s and 1099’s (and ACA 1095 c’s although like all previous years will likely be delayed) are due to employees/contractors.


2020 MINIMUM WAGE INCREASES

2020 California Minimum Wage

26 or More Employees – $13.00/hour

25 or Fewer Employees – $12.00/hour

Please note some cities/counties may have higher minimum wage requirements (3 largest listed below)

Los Angeles (effective July 1, 2020)

26 or more employees $15.00/hour(up from $14.25)

25 or fewer employees $14.25/hour(up from $13.25)

San Francisco (Effective July 1, 2020)

All Size Employers $15.59/hour + CPI(not yet determined) up from $15.59/hour

San Diego (effective January 1, 2020)

All Size Employers $13/hour (up from $12.00)

Click Here for a list of Cities with minimum wage increases above the state minimum wage requirement

Click Here for other State Minimum Wage increases for 2020

What’s New in 2020?

2020 W-4 Form

Significant changes have been made to the W-4 for 2020. The final version has still not been released (Click here to view a draft). You may also get familiar with the new form by (Clicking Here) to complete a sample W-4 online. The IRS expects to release a final version of the form by the end of November. In anticipation of the changes, Payality is working diligently to finalize the programming needed to manage tax withholding’s for both current employees who do not wish to complete a new W-4 for 2020 (it is not mandatory that they change their existing tax status and allowances) and for existing employees and those hired after January 1, 2020 who complete the new W-4. (Click Here) to view frequently asked questions regarding the 2020 W-4. Once the final version is released and Payality completes the required programming, we will provide instructions and hold live webinars. Stay tuned!

California State Disability Insurance rate remains at 1% with an increase in the wage base to $122,909 (up from $118,371 in 2019)

Social Security Wage Base has increased to $137,700 (up from $132,900 in 2019)

401k Contribution Limit – $19,500 plus $6,500 make-up for those 50 or older

IRA Contribution Limit – $6,000 plus $1000 make-up for those 50 or older

Independent Contractor Versus Employee? AB 5 passed in October 2019 imposed sweeping guidelines and established that a worker is presumed to be an employee rather than an independent contractor unless the hiring entity can establish the following conditions are satisfied: The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. The person performs work that is outside the usual course of the hiring entity’s business. The person is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.

Sexual Harassment Prevention Training:SB 1343 (later amended to extend deadline) requires all California employers with five or more employees to provide two hours of sexual harassment training to supervisory staff and one hour of such training to non-supervisory staff within six months of hire or promotion into a supervisory role, and every two years after that by no later than January 1, 2021.

CalSavers and Retirement Plan Requirements: State law requires that California employers, who don’t already offer an employer-sponsored retirement plan and who have five or more employees, either sponsor a retirement plan or participate in CalSavers. The three-year phased roll-out will include staggered deadlines for registration based on employer size.

More than 100 employees – June 30, 2020

More than 50 employees – June 30, 2021

More than 5 Employees – June 30, 2022

Visit (CalSavers) For More Information

Per IRS Revenue Procedure 2012-32, we’d like to remind you that authorizing Payality Inc. to file your returns and make your federal tax deposits does not relieve you of the obligation of ensuring that the returns and deposits are filed timely.  Our promise to you is that we will file your returns and deposit your tax liability by every applicable due date. However, please remember that it is ultimately your responsibility to verify the accuracy of the returns and deposits we submit on your behalf. The IRS recommends that you enroll in and use EFTPS to ascertain whether we, as your Reporting Agent authorized on Form 8655, have made all deposits timely and accurately. If at any time you find that data has been reported incorrectly or untimely, please contact your Client Support Specialist as soon as possible in order for us to make the necessary corrections