What you'll find here:

  • Important information to help you prepare for a smooth year-end 2023.
  • Timely topics, upcoming tax law changes, and important dates to plan for tax year 2024.

Preparing for Year-end 2023

  • IRS Electronic Filing Threshold Changes

    IRS Electronic Filing Threshold Changes

    IRS Electronic Filing Threshold Changes 

    Starting January 1, 2024, if your business files 10 or more informational returns, you must file electronically. The IRS has decreased their electronic filing threshold to a total of 10 returns across all information returns. This is a change from previous years when the threshold was 250 or more returns per informational return type. Refer to the IRS  e-file for businesses regulations for more details about this change.

    This IRS e-file threshold change impacts several returns that Paychex files on your behalf, including 2023 W-2s, 1099s, and 1094-C/1095-Cs (Affordable Care Act). Paychex will make every attempt to electronically file the returns we prepare on your behalf based on your service agreement.

    Additional Information

    Note: If you don’t have accounts set up with the agencies, you will need to follow the registration instructions on the SSA and IRS sites.

    The new regulation may include forms that Paychex does not file on your behalf: Make sure you or you providers are electronically filing these forms.

    For a partial list of affected return go here for additional information.

  • Important Dates

    Important Dates

    Year-End reporting deadline

    The deadline for reporting Year-End information to your service representative is Friday, December 29, 2023 at 4:00 p.m. local time. We recommend following this deadline whenever possible to ensure all you your 2023 information is reported and you can ask questions to your service representative if needed.

    You can still enter information for fourth quarter and year-end 2023 in Paychex Flex® until Sunday, December 31, 2023, 4:00 p.m. on local time.


    Holiday closings – November 2023 to January 2024

    Holiday closings – November 2023 to January 2024

    Banks and local Paychex offices will be closed on the following holidays:

    • Thanksgiving – Thursday, November 23, 2023
    • Christmas – Monday, December 25, 2023
    • New Year’s – Monday, January 1, 2024

    Banks will be closed; Paychex will be open on:

    • Martin Luther King, Jr – Monday, January 15, 2024

    Make sure you keep these dates in mind when planning payroll and bonus checks around the holidays.

    For all 2024 holiday closings download the 2024 Paychex Payroll Calendar.


    W-2 online dates

    Employee Forms W-2 and Employer Forms W-2 reference copies will be available in Paychex Flex on Tuesday, January 2, 2024.

    Forms 1099-NEC will also be available in Paychex Flex on Tuesday, January 2, 2024.


    Fourth quarter outstanding tax liability collections – January 22, 2024

    Taxpay® clients with additional taxes due for fourth quarter 2023 will have the funds collected from their bank accounts on Monday, January 22, 2024. January 20 is a Saturday.


    Affordable Care Act (ACA) tax reporting

    For tax year 2023, the ACA reporting deadlines are:

    • Furnish employees with Forms 1095-C by Friday, March 1, 2024.
    • File copies of Forms 1094-C and 1095-C with the IRS if filing on paper by Wednesday, February 28, 2024.
    • File copies of Forms 1094-C and 1095-C with the IRS if filing electronically by Monday, April 1, 2024.
  • Year-End Checklist

    Year-End Checklist

    Be sure to download the Year-End Checklist to help you close out the year. 

     

  • Report Fringe Benefits

    Report Fringe Benefits

    General information

    Any taxable cash or non-cash benefit you give to your employees, including the value of personal use of company cars or any other taxable cash or non-cash benefit, must be included on their Forms W-2.

    Report these benefits before your last payroll for the year. Reporting taxable benefits with wages allows the appropriate withholding taxes to be deducted from employees’ checks. If these amounts are processed without wages, you may be required to pay the employee's portion of Social Security and Medicare taxes.

    Reporting Deadline

    The deadline for reporting fringe benefits to your service representative is Friday, December 29, 2023, at 4:00 p.m. local time. We recommend following this deadline whenever possible to ensure all you your 2023 fringe benefits are reported and you can ask questions to your service representative if needed.

    You can still enter fringe benefits in Paychex Flex® until 4:00 p.m. on Sunday, December 31, 2023.

    How to enter fringe benefits in Paychex Flex


    Group term life benefits

    The value of group-term life insurance in excess of $50,000.00 that is included in total wages is FICA taxable, even if the insurance was provided through a cafeteria plan. As an employer, you are liable for employee FICA if you decide not to withhold it from employees’ pay. If you need to report group-term life insurance information for a terminated or retired individual, please contact your service representative to discuss your options.

    What to Report: Report the value of group-term life insurance in excess of $50,000.00 before your last payroll for this year. The value is based on an IRS-published table that assigns a value for each $1,000.00 of excess coverage per month based on the employee’s age. If you do not know how to determine the value of the coverage, please contact your tax advisor.


    Personal use of company equipment (i.e., use of a company car)

    The value of the personal use of an employer-provided vehicle, sometimes referred to as personal use of a company car (PUCC), is considered taxable and is subject to federal, state, and local taxes. 

    What to Report: Report: Report the value of the personal use of a company-provided vehicle. If you do not know how to determine the value of this benefit, please contact your tax advisor.


    Employer contributions to retirement plans

    The contributions that employers make to retirement plans are taxable in some states. Please consult your plan administrator for further taxability information.

    What to Report: If you are not already reporting these contributions with your payroll, please report them before your final payroll of the year. Paychex needs this information to ensure Box 13 of Form W-2 is correctly marked and reported to the IRS and SSA.


    Deferred compensation plans

    In general, amounts deferred to Section 457 plans and non-qualified deferred compensation plans with a substantial risk of forfeiture become taxable for FICA and FUTA when the employee becomes vested (the employee’s substantial risk of forfeiture lapses). This is not necessarily in the same year that the wages were earned.

    What to Report: When an employee becomes vested, provide your service representative with the following information:

    • the date the employee became vested
    • the amount of employee and employer current year contributions before vested date
    • the total amount of employee and employer contributions for prior years
    • the amount of employee FICA you collected on the employee and employer contributions

    When vested employees receive distributions, please report the following information:

    • the distribution amounts
    • whether this is a partial or full distribution
    • the amount of federal tax withheld on the distributions
    • the amount of employee FICA you collected on the employee and employer contributions

    Health Flexible Spending Accounts (FSA)

    Contributions to a medical FSA are made pretax and are used to pay eligible out-of-pocket health and dental costs such as co-payments, deductibles, eye care expenses, contact lenses and solutions, braces, prescription drugs, certain over-the-counter items, and hospital care. Salary reduction contributions to a health FSA are limited to $ 3,050 for 2023; 2024 limits have not been announced.

    What to Report: You can set up a health FSA for employees through payroll. Now is the time to help your employees sign up for an FSA for next year. If you want to set up an FSA, contact your service representative.


    Dependent Care Flexible Spending Account (FSA)

    A dependent care flexible spending account is a pre-tax benefit account used to pay for the various child and adult care programs that allow a caregiver to work. Employers are required to report the total amount of dependent care benefits paid or incurred for the employee on Form W-2, Box 10 (Dependent Care Benefits). Employers are also required to report the total amount of dependent care benefits paid or incurred for the employee, including any amount in excess of the $5,000.00 exclusion.

    What to Report: If you provided dependent care services to employees under an employer-sponsored program before your last payroll for the year, please report the benefits paid or furnished.


    Health and accident insurance premiums paid by an S Corporation

    When an S corporation pays health and accident insurance premiums on behalf of two percent shareholder/employees, the IRS rules specify two tax treatments:

    1. Non-discriminatory plan: If the premiums are paid under a plan for employees and dependents in general, or for a class of employees and dependents, the following will occur:

    • The premiums are exempt for FICA and FUTA tax.
    • The premiums are included in the shareholder/employee's federal gross income.
    • The premiums are reported on Form W-2 in Box 1 (Wages, Tips, Other Comp.).

    2. Discriminatory plan: If the premiums are not paid under a specific plan for employees and dependents, the following will occur:

    • The premiums are treated like normal compensation and, as such, are subject to FICA and FUTA.
    • The premiums are included in the shareholder/employee’s gross income.
    • The premiums are reported on Form W-2 in the following boxes:
      • Box 1, Wages, Tips, Other Comp.
      • Box 3, Social Security Wage
      • Box 5, Medicare Wages and Tips

    Educational assistance program

    Section 127 of the Internal Revenue Code (IRC) allows employers to offer their employees:

    • Non-job related undergraduate and graduate courses are exempt up to $5,250.
    • All job-related education assistance reimbursements are exempt from withholding and employer taxes if they qualify as a working condition fringe benefit.

    What to Report: If you have not already reported these reimbursements with your payroll, please report them before your final payroll for the year.


    Qualified equity grants

    IRC Sec. 83(i) has been added due to the Tax Cuts and Jobs Act, allowing qualified employers to offer an option to qualified employees to defer income from Qualified Equity Grants.

    Qualified employers who offer Restricted Stock Units (RSUs) now have the options to allow their employees to elect to defer federal income tax.

    Typically, these plans would be administered by a third-party company, which will issue the payments to the employee and withhold the applicable taxes. Those taxes would be forwarded to the employer and collected by Paychex when we process the entries.

    What to Report: 

    There are three stages where these amounts need to be reported:

    1. Qualified Equity Grant deferred under IRC Sec. 83(i) for current calendar year

    • FIT exempt
    • FICA taxable
    • FUTA taxable

    2. Aggregate Deferrals under IRC Sec 83(i) elections (you must provide these aggregate amounts)

    • FIT exempt
    • FICA exempt
    • FUTA exempt
    • Form W-2 box 12 = Code HH

    3. Taxable income from Qualified Equity Grants under IRC Sec. 83(i)

    • FIT taxable (at supplemental rate, currently 37%) must be reported to Paychex
    • FICA exempt
    • FUTA exempt
    • Form W-2 box 12 = Code GG

     

  • Year-End Reporting and Delivery

    Year-End Reporting and Delivery

    Year-End Reporting After the Deadline

    If any adjustments are needed after the year-end reporting deadline of December 31, 2023, please let your Service Representative know immediately. We can reprocess the tax returns, including employee Forms W-2 after the deadline; however, there will be an additional charge and a processing delay.


    Supplemental Wages Over $1 Million

    Special rules apply if total supplemental wages paid to any employee exceed $1 million during the calendar year. The excess amount is subject to withholding at 37% for 2023, regardless of any other withholding rules and the employee’s Form W-4. If the supplemental wages you paid to an employee during the calendar year are less than or equal to $1 million, follow the regular withholding rules for supplemental wages.


    Processing Bonus Checks

    Many clients process bonus checks during the last quarter of the year. You can process bonus checks with your regular payroll, or process a separate payroll if you need a different check date or separate Payroll Journal report. You can also specify how you would like the bonus checks taxed and what adjustments/deductions you want withheld.

    Note: If Paychex is your 401(k) recordkeeper, you must withhold 401(k) contributions on these checks according to the plan document.

    Paychex Flex - Bonus Checks

    How to manage bonuses in Paychex Flex®


    Report Payroll Checks You Issued or Reversed

    Report these items to your service representative on or before your final payroll of the quarter so that we can accurately calculate your fourth quarter/annual returns and W-2s. Report:

    • Payroll checks you manually wrote in-house and have not reported.
    • Payroll checks issued by Paychex that you reversed (voided) and have not reported.

    If any adjustments are needed after Friday, December 31, 2023, at 4:00 p.m., let your service representative know immediately. We can reprocess the tax returns, including W-2s, after the deadline. However, there will be an additional charge and a processing delay.


    Paychex Flex Clients Entering Information 

    You can process payroll with a check date of December 31, 2023, and the information will be included on your year-end reports, including Forms W-2. However, you won’t be able to contact your payroll service representative on Saturday, December 30 or Sunday December 31.


    Payroll Reporting and Delivery During the Holidays

    It’s that time of the year again — the height of peak shipping season! Winter weather conditions , as well as increases in online shopping are just some of the factors that could delay your payroll package.

    Paychex takes great pride in minimizing the impact that shipping delays could have on your business. We’ve provided projections of increased volume to our delivery partners and added pickups to help things run more smoothly. You should be receiving an email notification to let you know when your payroll package is on its way.

    Even with these safeguards in place, some circumstances remain beyond our control. But that doesn’t mean you can’t take advantage of suggestions and special options to foster timely payroll delivery, such as:

    • Processing your payroll a day earlier.
      By calling in or transmitting your payroll a day earlier, you minimize the risk of weather-related or other delays. Just let your service representative know so we can adjust your reporting date.
    • Allowing time to accommodate year-end bonuses and adjustments.
      If you’re intending to pay year-end bonuses, make sure you plan accordingly so you can rest assured that you’ll receive them in time to hand out.
    • Calling in or transmitting your payroll before you go on vacation. 
      We can hold the package until you get back; just let your service representative know you’d like future delivery. Or, if you happen to be migrating somewhere different for the winter, you can temporarily change your payroll delivery address.
    • Encouraging direct deposit.
      Encourage your employees to use direct deposit to make sure they get paid as expected. You won’t have to wait for checks to be delivered — and you can get employees home in time to enjoy their holiday and ahead of any impending winter storm!

      We cannot guarantee timely U.S. Postal Service delivery during the holiday season. We can deliver your payroll by courier for a nominal charge; if you want to temporarily change your delivery method, contact your service representative.

    Paychex Flex –Temporarily Change Payroll Delivery Address


    Report Third-Party Sick Pay

    Third-party companies are required to furnish employers with a sick pay statement of any disability insurance benefits paid to employees during the year. This is commonly referred to as third-party sick pay. The statement must show the following information about each employee who was paid sick pay:

    • Employee name, employee SSN
    • Sick pay paid to the employee
    • Any federal income tax withheld
    • Any employee social security tax withheld
    • Any employee Medicare tax withheld

    If you are notified about this information after reporting the last payroll of the year, contact your service representative as soon as possible.

    Reporting Deadline

    The deadline for reporting third-party sick pay to your service representative is Friday, December 29, 2023, at 4:00 p.m. local time. We recommend following this deadline whenever possible to ensure all you your 2023 third-party sick pay are reported and you can ask questions to your service representative if needed.

    You can still enter third-party sick pay in Paychex Flex® until 4:00 p.m. on Sunday, December 31, 2023.

    If you haven’t received the disability statements from the insurance company that handles your disability claims, contact your agent and request that they send them to you as soon as possible. You should provide this information to Paychex as soon as you receive it to prevent additional fees if we need to recreate or amend your tax returns.

    If you haven't already, please notify your insurance company that Paychex will include third-party sick pay on the Forms W-2 that we prepare for you. Since third-party sick pay may affect quarter-end and year-end returns, including W-2s, return processing will be delayed if you report sick pay after December 31, 2023. You can expect to receive your returns and W-2s no later than Wednesday, January 31, 2024.

    Paychex Flex – Entering Third-Party Sick Pay

    To learn how to enter this information, got to record a third-party disability payment for a worker.

     


    Earnings Records and Quarter-to-Date/Year-to-Date Reports

    Employee earnings records

    You can access Employee Earnings Records for each employee at your convenience using a customized date range in Paychex Flex. This report provides a wealth of information, including:

    • Individual employee wage rate and salary history
    • Employment verification to help employees substantiate earnings with in a period of time for mortgages and loans
    • Details about adjustments and amount information to reconcile deductions such as health insurance or retirement plan contributions
    • Wage information for completing workers’ compensation, disability, and unemployment claims

    Quarterly Report: This report is primarily used to substantiate the wage and tax information reported on your quarterly tax returns.

    Year-to-Date Report: This report provides a single source for employee/independent contractors' year-to-date wages, withholding taxes, deductions, and net pay.

    Paychex Flex – Access Quarter-to-Date, Year-to-Date Reports, and Employee Earnings Records

    You can find many payroll, quarterly, and tax reports under Quick Reports, including: 

    • Payroll Reports
    • Employee Earnings Records

    Year-to-Date Report Tax Reports

    • Quarterly Report
    • Tax Returns*

    *Does not apply to Paychex Flex PEO

    Go to find and run Quick Reports. For reports you access often, you can create and manage report sets.


    ACA Reporting

    • There has been no repeal and replacement of the Affordable Care Act (ACA). If you’re an applicable large employer (ALE)* employer, there are still coverage guidelines to meet to avoid potential assessment. 
    • ALEs must file the associated information returns accurately and in a timely manner to avoid significant penalties.
    • ALE employers should be mindful that the IRS has been enforcing information reporting requirements by issuing proposed penalty notices for late filing, paper filing returns over 250, and incorrect Taxpayer Identification Numbers.

    * In general, ALEs are employers who average 50 or more full-time employees, including full-time equivalent employees, in the previous year.

    The 2023 deadlines for ACA tax reporting are:

    • Furnish employees with Forms 1095-C by Friday, March 1, 2024.
    • File copies of Forms 1094-C and 1095-C with the IRS if filing on paper by Wednesday, February 28, 2024.
    • File copies of Forms 1094-C and 1095-C with the IRS if filing electronically by Monday, April 1, 2024.

    Outstanding Tax Liability Information

    Note: This section does not apply to Paychex Flex PEO clients. You will receive an email with the additional amount due at the end of the quarter that we’ll collect within four pay periods from the notice.

    Paychex provides Taxpay® clients with an Outstanding Tax Liabilities (OTL) Report in tax packages, which: 

    • Includes list of the dates that Paychex will remit your quarterly taxes to the appropriate tax agencies.
    • Indicates whether additional taxes will be credited to or debited from your bank account.

    The OTL Report contains two sections:

    1. Outstanding Tax Liabilities for quarter-end: Provides advance notification of any collections Paychex will make from your account. The tax amounts shown will be debited from your bank account on Monday, January 22, 2024, as January 20 is a Saturday. Tax rate changes or FUTA credit reductions are the most common reasons we may need to adjust your account. Please ensure that sufficient funds are available in your account so Paychex can remit your tax payment on time.
    2. Tax Deposits made by Paychex for you: Lists any tax amounts that were previously collected by Paychex throughout the quarter and the date Paychex will remit them to the corresponding tax agency.

    TEFRA Tip Allocations

    Federal Form 8027/8027T for restaurant clients and large food and beverage establishments may be subject the Tax Equity and Fiscal Responsibility Act (TEFRA) and are required to report gross receipts and tips to the IRS on an annual basis on Form 8027 (Employer’s Annual Information Return of Tip Income and Allocated Tips).

    If you use the Paychex TEFRA service, report information for Form 8027 filing, including gross receipts, tipped employee hours, and information for tip allocations. The service includes:

    • Calculation of any necessary tip allocation in accordance with the IRS formula.
    • Preparation of tip calculation reports showing employee hours or gross receipts, declared tips, and shortfalls.
    • Reference file copies of Forms 8027 and 8027-T, to report tip allocations. You will be responsible for filing these forms and also following the electronic filing requirements if they are applicable.
    • Reporting tip allocations on employee Forms W-2

    For establishments that allocate tips using a good-faith agreement, Paychex cannot calculate tip allocations. However, if you provide the necessary information at year-end, Paychex will print tip allocation amounts on Forms W-2 and prepare Forms 8027.

    Paychex Flex PEO

    Paychex cannot provide the TEFRA service for Paychex Flex PEO clients as we would need to report aggregate amounts for all employers. We’re happy assist you by providing you with information that may be required. Please contact your HR Professional or service representative for assistance. 

  • W-2/1099 Reporting and Delivery

    W-2/1099 Reporting and Delivery

    General 1099 Information

    Paychex Flex PEO

    This section does not apply to Paychex Flex PEO clients, as 1099 forms cannot be processed on the Paychex Flex PEO service.

    Filing Forms 1099/1096 Electronically

    Paychex will electronically file payer federal Forms 1099 and 1096 for all clients. You will still receive paper copies of your payer reference copy and payee Forms 1099 to distribute to your payees. We will include a Form 1096 facsimile in your January 2024 tax package. We will not be able to file Forms 1099 electronically if:

    • We do not have a valid EIN for your company, or
    • You have fewer than 10 employees, and you leave our service before December 31, 2023.

    For detailed instructions about 1099 reporting from the IRS, visit General Instructions for Certain Information Returns


    W-2 Delivery Options

    • Online W-2 Delivery: Your employees’ 2023 W-2s are available online through Paychex Flex.  
      • Some of your employees may have consented to receive their W-2s online only. For these, you don't need to do anything - no paper copies are required!   
      • For employees who did not consent to online-only delivery, we'll mail their W-2s to the address we have on file. If they’re undeliverable, you'll need to provide paper copies per IRS Requirements.
    • Direct-to-Employee W-2 Delivery 
      • For employees that have not consented to receive their W-2s online only, we will mail their W-2s directly to them via United States Postal Service® (USPS®) in January 2024.
      • We will be using the mailing address on file in Paychex Flex as the delivery address, so please be sure those addresses are valid and not missing any information (i.e., suite or apartment number).
      • Follow these instructions to update employee addresses in Paychex Flex. Any undeliverable W-2s will be returned to you at your W-2 delivery address for distribution.  

    Additional Notes on W-2 Delivery

    • It is important the correct employee mailing addresses are in Paychex Flex as this is the source Paychex uses to mail the forms. If the employee has an active National Change of Address (NCOA) on file with the USPS®, their W2 may be mailed to the address on file with the NCOA.
    • You can invite your employees to log in to Paychex Flex and update their addresses. If your employees do not have Paychex Flex accounts, they can sign up here.
    • Employer W-2 reference copies are available only in Paychex Flex.
    • Paychex will be truncating employee Social Security Numbers (SSNs) on the employee copies of Form W-2. The first five digits of social security numbers on the employee copies of Form W-2 will be masked. The purpose of this is to protect employee information on paper copies of the Form W-2. Clients and employees will be able to access versions of Form W-2 that display the employee’s full social security number in Paychex Flex. This change has been made based on IRS guidance that allows the use of truncated social security numbers on Forms W-2 furnished to employees.

    If you have additional questions regarding Form W-2 delivery, please refer to our W-2 FAQs or you can also contact your Service Representative.


    Report Retirement Plan on W-2, Box 13

    The IRS requires that Retirement Plan, in Box 13, be checked if an employee is an “active participant” for any part of the year.

    • If you report your retirement plan through payroll, we’ll properly report this information. No action is required. 
    • If you don’t report your retirement plan through payroll, you need to report defined contribution plans and benefit plans to Paychex. If you’re not sure if you need to report this information, contact your retirement plan administration.

    Paychex Flex – Checking Retirement Coding for Form W-2 Box 13

    To get this information from Paychex Flex, go to Live Reports on your Dashboard > Employee Listings > Employee Demographic Data. To add ”Eligible for retirement plan” to the Employee Demographic Data, go to Customize Live Report data. For more information about Live Reports, go to Discover Live Reports.
     


    Report Other Amounts on W-2, Box 14

    The IRS allows employers to use Form W-2, Box 14 (Other), to report certain adjustments to an employee’s pay (i.e., charitable contributions). These can be set up to print in Box 14. Use the following guidelines when choosing a title for the adjustment:

    • Note that only the first five letters of the adjustment (earning or deduction) will print in Box 14.
    • Be descriptive. For example, “Misc” may not clearly substantiate a charitable contribution.
    • Remember: Your Service Representative can change your adjustment title before processing your Forms W-2.

    Employee Names, Addresses, and SSNs

    Report employee information changes by the assigned due date. Ensure you have the necessary federal and state withholding forms when reporting new employees. Verify employee names and SSNs.

    An SSN/name mismatch affects the employee’s social security wage benefits. Wages reported on Form W-2 with a mismatch error will not be credited to that employee’s earnings statement. Instead, the wages will be housed in a “suspense file” until corrected. If the error is not corrected, the wages will never be credited to the employee.

    Note: The Internal Revenue Service (IRS) may charge employers a penalty of up to $310.00 for each return or Form W-2 that has a missing or incorrect SSN or federal identification number. We cannot file your federal Forms W-2 electronically if a substantial percentage of the SSNs are missing and you have more than 10 employees. For security purposes, all but the last four digits of the SSN are masked in any transaction.

    Paychex Flex – Employee Names, Addresses, and Social Security Numbers

    If you want to see all employee names, addresses, and SSNs, you can go to Employee Listings > Employee Address Report to review the information at one time. You can update employee addresses or ask your employees to change their addresses.


    Electronic Filing – State W-2s

    Paychex will electronically file state Forms W-2- for clients who use our Taxpay® service through December 31, 2023.

    Paychex will electronically file state Forms W-2 for all clients who have employees in the states on this list, regardless of whether you use Taxpay.


    Cost of Coverage Under Employer-Sponsored Health Plan

    The IRS requires that employers who issued 250 or more Forms W-2 in the previous year report the cost of coverage under an employer-sponsored group health plan on their employees’ Forms W-2. For Paychex to report these amounts on your Forms W-2 for 2023, you must provide them to your Service Representative before the year-end reporting deadline.

    NoteAll Vermont employers who issue Forms W-2 are required to report the cost of coverage under an employer-sponsored group health plan on their employees’ Forms W-2.

  • FUTA Credit Reductions for 2023

    FUTA Credit Reductions for 2023

    The U.S. Department of Labor released the list of FUTA credit reduction states/territories for 2023. The standard FUTA rate is 6.0% on the first $7,000.00 of wages. Employers in most states will receive a credit of 5.4% against the rate, resulting in net tax rate of 0.6%.

    Some states/territories had loans with the Federal Unemployment Trust Fund that were still outstanding. Employers in these states will have their FUTA credit amounts reduced for 2023 as a way to recover these funds.

    Important: The FUTA credit reduction is retroactive to first quarter 2023. Employers in these states may have much larger fourth quarter FUTA payments than expected.

    The following states have FUTA credit reductions in 2023: 

    • California
    • New York
    • Virgin Islands

    For more details on these FUTA credit reductions, click here.

  • 2023 Earned Income Tax Credits (EITC)

    2023 Earned Income Tax Credits (EITC)

    An Earned Income Tax Credit (EITC) is for working people who have low to moderate-income. This tax credit may provide more money for these employees by reducing the tax they owe. In some cases, they will receive a refund.

    Employees can go to the IRS site for information on federal EITC qualifications.

    The following states and local jurisdictions require employers to notify their employees that they may be eligible for EITC. 

    • California - awaiting state update
    • Colorado
    • Delaware
    • Illinois
    • Louisiana
    • Maine 
    • Maryland
    • New Jersey
    • Oregon
    • Texas
    • Virginia 

    Philadelphia, PA

    • Philadelphia EITC - awaiting local update
    • Philadelphia Income-Based Tax Refund - awaiting local update

    Click Earned Income Tax Requirements for more information.

  • Identification Numbers

    Identification Numbers

    Verify that your assigned identification (ID) numbers appear correctly on all returns. If any of the following information is incorrect, contact your Service Representative immediately:

    • If an ID is missing, please print it in any applicable original return(s). In addition, please forward the ID number to your payroll contact.
    • If your return shows "APPLIED FOR" but you have been assigned an ID number, white out "APPLIED FOR," and enter your ID number in any applicable original return(s). In addition, please forward the ID number to your payroll contact.

    Paychex Flex® – Update Missing Tax IDs
    If you want to update missing federal, state, or local tax IDs in Paychex Flex, go to Learn how to update a missing tax ID or use these instructions.

  • Federal Tax Reminders - EFTPS, 941 Return, and FLSA

    Federal Tax Reminders - EFTPS, 941 Return, and FLSA

    Electronic Federal Tax Payment Service (EFTPS)

    All employers should be making payments electronically on the EFTPS websiteThe only exception to this rule is that taxpayers who file Form 941 can send a check with the return if their liability is $2,500.00 or less for the quarter. Similarly, if the taxpayer is a Form 944 filer, they can remit taxes due with the return if their liability is $2,500.00 or less annually.

    The IRS requires us to notify our Taxpay clients that although Paychex is designated as the Reporting Agent on Form 8655 (Reporting Agent Authorization), this does not relieve you from liability if tax payments and/or returns are not remitted by the due date. The IRS recommends that clients enroll in and use EFTPS to ascertain whether an agent has made all required deposits on time. Most state agencies provide ways for you to verify tax payments as well; contact your state agency for this information. Please be assured that Paychex makes every effort to remit your tax payments and returns on time. If any issues do arise, we work with you and the agency to resolve the situation.


    Form 941 - Employer's Quarterly Tax Return

    On the 941 return:

    • Line 1, Number of Employees, must be completed for each quarter.
    • If you do not have to file a Form 941 for one or more quarters in 2023, check the Seasonal Employer box on page 3, Line 18 and tell your service representative.

    Taxpay clients: 

    You will receive a reference copy of the return in your quarterly tax package that you should keep for your records. You may have an explanation for adjustment on lines 7 and 8 and/or Schedule B, if required.

    Non-Taxpay clients: 

    Your quarter-end tax package will include a file-ready Form 941.

    1. Verify your federal employer identification number (FEIN), name, and address.

    • If the FEIN is incorrect, contact your service representative immediately.
    • If your name and/or address are not correct, contact your service representative immediately. Cross out the incorrect information and clearly write in the correct information.

    2. Verify that the amount on line 13a equals your total deposits for the quarter.

    • If you have not deposited the amount shown on line 13a, contact your service representative before filing the return. You may be subject to an additional penalty for any overstatement of liability paid.

    3. If you paid a deposit of $100,000.00 or more during the quarter or are a semi-weekly filer, file the enclosed Schedule B with your Form 941.

    Note: If you believe you are a next-day or semiweekly depositor, but no Schedule B is enclosed, contact your Service Representative to confirm your federal deposit frequency.

    4. If line 14 shows a balance due:

    • Deposit the liability electronically.
    • Payments can be made with the return only in the following circumstances:
      • If you have less than $2,500.00 of tax liability during the quarter (line 12 on Form 941). If you are not confident that your liability will be less than $2,500 deposit under the appropriate rules so that you won't be subject to failure to deposit penalties, or
      • If you are a monthly depositor and make a payment based on the Accuracy of Deposits Rule. This payment can be $2,500.00 or more.

    See Publication 15 2023 (Circular E) Employer's Tax Guide  > section 11, Depositing Taxes, for details. 

    If you meet the requirements to make a payment with the return, enclose a check made payable to the United States Treasury with the return. Write your FEIN, "Form 941," and the tax period to which the payment applies on your check.

    5. Sign the return and mail it on or before October 2, 2023, (September 30 is a Saturday), or October 11, 2023, if all third quarter 2023 taxes were deposited in full and on time. Refer to Where to File Tax Returns for the correct address.


    Fair Labor Standards Act (FLSA) Reminder

    Commissions, certain bonuses, and other types of compensation may need to be accounted for when determining the overtime pay owed to an employee under the FLSA and state wage laws. To include commissions, bonuses or other types of compensation into your overtime calculation, advise your service representative. If you are uncertain whether to do so, consult your attorney or accountant.

Planning for 2024

  • 2024 Payroll Calendar

    2024 Payroll Calendar

    To help you plan payroll reporting around holiday and bank closings, download the 2024 Paychex Payroll Calendar.

  • 2024 Minimum Wage Rates - state and local

    2024 Minimum Wage Rates - state and local

    To assist you with planning, the following is a list of increased state  minimum wage rates, effective January 1, 2024:

    • Alaska
    • Arizona
    • California
    • Colorado
    • Connecticut
    • Delaware
    • Hawaii
    • Illinois
    • Maine
    • Maryland
    • Michigan
    • Minnesota
    • Missouri
    • Montana
    • Nebraska
    • New Jersey
    • New Mexico
    • New York
    • Ohio
    • Rhode Island
    • South Dakota
    • Vermont
    • Washington

    For more information access the 2024 Minimum Wage Changes document.

    Local minimum wage changes are also included.

  • 2024 Tax Bulletin

    2024 Tax Bulletin

    We've created this Tax Bulletin to give you important information for 2024, including wage base limits for social security and Medicare tax and reminders about Forms W-4. There is a separate bulletin with information for your employees.

Additional Resources

You may find this information helpful throughout the year.

2023 Payroll Calendar (Federal Banking Holidays)

To help you plan payroll reporting and processing in 2023 we have created the 2023 Payroll Calendar.

2023 SUI Wage Bases

The 2023 state unemployment insurance (SUI) wage bases is available now. 

Paychex Webinars

Whether you're trying to better manage cash flow, attract and retain employees, or improve productivity through HR technology, Paychex Webinars give you the information you need to make informed decisions.

Paychex Business Podcasts

Our business podcasts feature interviews with today’s top small business owners and experts in human resources. Learn about the current events and topics affecting businesses today, and receive guidance on how to navigate the challenges you may face.

Forms and Supplies

If you need supplies or important forms, such as Form I-9, visit the Paychex StoreWe have many products that you may need for your workplace.