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Human Capital Management Leaders: The Year-end Checklist to Help You Prepare

Sikich

Oct 5 2021

3 min read

The end of the year is just a few short months away. While planning for year-end should be part of your annual process, if you have not started, it is not too late.

The most efficient method to ensure all year-end tasks get addressed is to create a year-end checklist that details your processes, compliance requirements and everything in between. As with any checklist, this is a living document that can be updated and used year-over-year to track routine annual tasks, such as ensuring employees haven’t had more than the IRS maximum allowed 401(k) contribution deducted from their paychecks or that the state in which an employee works matches the state tax withheld from their paycheck. It should also contain a timeline for year-end employee communications, like reminders to check employee federal and state withholding and when you will request consent from employees to receive their Form W-2 electronically.

The year-end checklist is a catch-all for transactions that only happen once a year, typically at year-end, as well as a reminder of future deadlines.

Recent changes impacting your year-end checklist

The CARES Act permitted you to defer payment of your share of Social Security tax (see IRS Notice 2020-65) and withholding and payment of your employee’s Social Security taxes on certain wages paid in calendar year 2020. Employers must now pay back your portion of the deferred taxes. The deadline for the first 50% of the amount deferred of the employer portion of Social Security is due December 31, 2021, and the second 50% is due the subsequent December.

Any employee who elected to defer their social security during 2020 must repay, via payroll deductions and remit by the employer, 100% of the amount deferred by December 31, 2021. The task line item on your checklist should include ensuring the entire amount due is withheld by the final 2021 paycheck.

Utilizing the year-end checklist

By adding tasks with future due dates, you will have a better chance of remembering unique, one-off situations like those of 2020 and 2021.

Another use for your year-end checklist is to track new annual limits as they are published by the IRS and state agencies. Including them on the list as the limits get released will provide one place to validate that your payroll system is up-to-date prior to running the first payroll of the new year.

Even though there are routine tasks that should be on every company’s year-end checklist, each organization has its own unique processing structure and transaction types, and one year-end checklist does not fit all.

If you would like help developing a year-end checklist, please reach out to our human capital management experts to get started.

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About the Author

Sikich

Sikich is a global company specializing in technology-enabled professional services. With more than 1,900 employees, Sikich draws on a diverse portfolio of technology solutions to deliver transformative digital strategies and is comprised of one of the largest CPA firms in the United States. From corporations and not-for-profits to state and local governments and federal agencies, Sikich clients utilize a broad spectrum of services* and products to help them improve performance and achieve long-term, strategic goals. *Securities offered through Sikich Corporate Finance LLC, member FINRA/SIPC. Investment advisory services offered through Sikich Financial, an SEC Registered Investment Advisor. 