Year-End Guide 2021

We’re here to help you prepare for year-end

Holiday Delivery Times

UPS and FedEx experience delivery delays during the holiday season and are not providing delivery guarantees. Please consider submitting your payroll early to avoid delays.

We also have Paycard options in lieu of issuing paper checks for employees. Email your Client Service Representative (CSR) at mypayroll@paynorthwest.com if interested in learning more.

Electronic W2/1099/1095C Delivery

For employers who have chosen to enable Electronic Consent, employees may choose to receive their W2s/1099s/1095Cs electronically, in lieu of a paper copy. To offer this feature to your employees, have them follow these easy steps within their Self Service.

Employees who provide Electronic Consent may view and print their documents directly from their Self Service, just as they would their pay statement today. PayNorthwest will print and mail W2s/1099s/1095Cs for you to distribute to employees who do not provide electronic consent. 

 

PayNorthwest Holiday Season Schedule

We will be closed on December 24th and December 31st to spend time with our families.

Payroll Adjustments and Special Items

The deadline for reporting fourth quarter and year-end payroll related information and/or an adjustment is Thursday, December 30, 2021. If adjustments are required after the deadline, we can reprocess your tax returns for an additional fee.

Reminder of Standard Payroll Processing Schedule

As a reminder, the standard payroll processing schedule is to submit payroll to us by 1:00 pm, 2 business banking days prior to your check date. Payrolls submitted later are subject to rush processing fees. Please reach out to your CSR with questions.

Please do the following before your final payroll of the year:

Report Third-Party Sick Pay (Disability Payments)

By law, insurance companies have until Monday, January 17, 2022 to inform you of any disability benefits paid to your employee’s during 2021.

If you were notified of benefits paid throughout the year, please contact your CSR no later than Thursday, December 30, 2021.

If you are notified about this type of payment after reporting your last payroll of the year, contact your CSR as soon as possible.

In addition, if you have not already done so, please inform your insurance company that we will include third-party sick pay on Forms W2 that we prepare for you.

Review and update all employee-related information for accuracy including:

Employee Social Security numbers and addresses

Employee Name should be formatted to match their Social Security card

Tip: Use the system Social Security Verification tool on the hire screen or employee profile to avoid amendments for incorrect SSNs. (Fee Applies)

Report any remaining 2021 payroll-related information and/or adjustments including:

In-house checks

Voided checks

Fringe benefits (S-Corp Insurance for owners, Personal Use of Company Car, Group Term Life in excess of $50K, etc.)

Deferred Comp

 

 


Important Tax Updates and Agency Notices for 2022

UI and L&I Rate Change Notices

State Unemployment and Washington Labor and Industries (L&I) will mail 2022 rate change notices starting this month directly to your business. Some agencies will notify you to obtain it online if they are only available electronically. Please forward them to your CSR. We need the rate(s) to properly calculate your tax and returns correctly in 2022.

Washington Paid Family Leave

Employment Security will mail status notices detailing if you are eligible to pay the employer share of the premiums in 2022. The letters will have a subject of Annual Business Size Calculation. Please forward them to your CSR. We need the letters to properly calculate your taxes and returns correctly in 2022.

Paid Leave: Premium rate will increase in 2022

For the first time since Paid Family and Medical Leave launched, the premium rate will increase. This change goes into effect with Quarter 1 of 2022. The split of the employer and employee share of the premium rates will also change in the new year.

Starting Jan. 1, 2022, the premium rate will be 0.6%.

The new premium rate of 0.6% takes effect on Jan. 1, 2022. But for now, the current rate of 0.4% is in effect until Dec. 31, 2021.

Employers will pay 26.78% of the total premium and employees will pay about 73.22%.

For clients with WA PFL, PayNorthwest will update the rates based on your current tax calculation settings.  For clients with alternate tax calculations, we will contact you by November 19, 2021 to confirm your 2022 calculations. Please reach out to your CSR if you have any questions.

State IDs and Social Security Numbers (SSNs)

With many states reducing staff during COVID-19, paper return processing has slowed down or temporarily halted. As a result, it is more important than ever to make sure you’ve reported the following information for your business so PayNorthwest can electronically file your returns:

  • All state and local agency IDs

    Important: PayNorthwest will not collect, pay, or file for agencies with missing ID numbers

  • All employee SSNs – many states will not accept quarterly state unemployment insurance (SUI) statements without SSNs

New 2022 Washington LongTerm Care Tax

Starting January 1, 2022 Washington employers must collect and remit employee Long Term Care premiums in the amount of 0.58% of employee’s gross wages with no wage cap.  Employees can apply for a one time exemption if they have their own qualifying long term care coverage.

For your convenience, PayNorthwest has added the tax to applicable employers in the state of Washington.  

Use PayNorthwest’s Washington Long Term Care Employee Exemption guide to accurately update exempt employees from the tax in the system.  If you need a place to store your employees’ documents, consider using document storage, so they can be uploaded directly into the system.

Please refer to the Washington Cares Fund Site for more details.

Important PayNorthwest Policy Changes for 2022

Payroll-related policy changes

Alterations to company policies that will affect 2022 payrolls should be submitted 3 weeks prior to payroll processing. This will give our team time to set up and test the changes.

 

 

 


Changes may include but not limited to:

  • Pay Frequencies
  • Insurance benefit rate changes
  • Time off accrual policies
  • 401(k) plan changes


For clients subscribed to our ACA Manager Service

ACA Year End Processing

Key Dates

  • October – December 17th: Please complete all items on the ACA Year End Checklist prior to December 17th.  Please reference the ACA Manager Admin Guide and ACA Ongoing Maintenance documents to assist you with completing this checklist. 
  • December 1st – 17th: Complete the readyConnect ACA Year End Required Acknowledgements
    Select readyConnect icon   (upper right) 
    Go to My Topics tab > ACA Year End Required Acknowledgments (Preview Below)
       

    Important: Failure to complete all checklist items and the required acknowledgment prior to December 17th, 2021 could result in processing delays and additional processing fees at a rate of $100.00 per hour with a one-hour minimum for ACA data corrections.
    Please contact mypayroll@paynorthwest.com if you have questions or need assistance. 

  • January: PayNorthwest will generate, print, and ship Forms 1095C for you to distribute to employees by the IRS deadline of January 31st.  This deadline has historically been extended.
  • February: PayNorthwest will generate Forms 1094C and IRS AIR / state specific file formats.
  • March: PayNorthwest will electronically transmit IRS AIR Files by IRS deadline of March 31st.  State specific files, if required, will be electronically transmitted by the deadline established by each state.


2022 Minimum Wage Increases

Effective January 1, 2022 the Washington state minimum wage rate will increase to $14.49 an hour.

Please note: Seattle, Tacoma, and the City of SeaTac have higher minimum wage rates for 2022. For employers in those areas, the local minimum wage rate will apply as long as it is higher than the state minimum. Please ensure you are using the correct wage rate for your employees.

It is your responsibility to ensure employee rates are updated. PayNorthwest will not intentionally change employee’s rate of pay without a request from the employer. Please contact your CSR for further questions or assistance.

Update on Employee Retention Credit (ERC)

With the signing of the Infrastructure Investment and Jobs Act, Employee Retention Credits are retroactively end dated as of September 30, 2021. We have helped employers receive credits totaling over $80 million, and more are still be calculated for the eligible period of March 2020 – September 2021. If you feel you may be eligible for credits, reach out to your CSR at mypayroll@paynorthwest.com to schedule a call to learn more.

NACHA Operating Rules Reminders 2021-22 

Each client authorizing PayNW to create and transmit ACH transactions is required to comply with the NACHA Operating Rules as stated within the ACH Services Addendum between PayNW and the client. The National Automated Clearing House Association (NACHA) is the rule making body governing the ACH network; therefore, all participants of the ACH network must comply with these Rules. 

NACHA rules specific to client originators include: 

  • Client agrees not to provide any payroll information or entries which violate the laws or regulations of the United States or of any state in which Client does business 
  • Client agrees to be in compliance with all NACHA operating rules and guidelines 
  • PayNW and its Originating Depository Financial Institution (ODFI) maintain the right to audit NACHA compliance and to terminate or suspend the ACH relationship for noncompliance with NACHA operating rules and guidelines 

Stay up-to-date with the most current NACHA Rules. The NACHA Rules are available online by setting up a user account. Visit the NACHA Rules Online by clicking here. 


Thank you for your business. From all of us at PayNorthwest, we wish you and your family a happy and safe holiday season!