The calendar year-end, regardless of when a company’s fiscal year ends, is always significant for payroll. If your company processes payroll using Dynamics GP, the actual Tax Table updates for both US and Canadian payroll must happen after the last payroll for 2021 has been processed and before the first payroll for 2022 needs to be processed. That is the only commonality between the year-end steps for Canadian and US Payroll.
Canadian Payroll
The following is an overview of the Year-end tax update installation and process for the Canadian Payroll module.
Upon completing the final payroll for 2021, the Year End Tax Update must be installed. This file not only updates the CPP, EI and basic exemptions for 2022, it is bundled with the latest release of Dynamics GP. Once the update has been installed, you will be on the latest build of GP.
The tax update installation takes place on the database (SQL) server and is then applied to all workstation or server installs of GP.
Once the database and workstations have been updated, the payroll administrator will log into GP and complete the Year End File Reset, found in the Payroll Routines menu. This copies all employee 2021 payroll data to history, updates each employee’s 2022 basic exemption and then resets employee year-to-date amounts to zero for 2022. This step can take some time to complete. T4s can be generated anytime after this has taken place.
1. Copy Files to History
2. Reset Employee Master
3. Ok when done
For more details and assistance with the process, please contact Rimrock Corporation.
US Payroll
Below is an overview of the Year End for the US Payroll module. With the US Payroll module, the tax table update must happen before the first payroll in 2022, but it is optional to run the U.S. Year End Update. The Year End Update for US payroll will be released mid-November 2021. It can be installed any time prior to the end of 2021. It will contain the following updates as well as include the October 2021 GP release enhancements and fixes.
Payables 1099-NEC (3-part form), 1099-MISC, 1099-DIV form changes
Payables 1096 form changes
Fixed Assets - luxury auto depreciation changes
Payroll 1099-R form changes
If you need any one of the above four updates, or want to benefit from the October 2021 GP release, then you should plan to have the November Year End service pack installed.
The Year End Update install takes place on the database (SQL) server and is then applied to all workstation or server installs of GP.
Following the final pay run for 2021, complete all payroll month-end, period-end, or quarter-end procedures. Once completed, then create the Year-end Wage file, then the payroll tax updates can be updated.
*** A backup of your database is recommended prior to performing this step.
To create the Year-end Wage file, go to HR & Payroll – Routines – Payroll – Year-End Closing
Once that has happened, you can print the Year-End Wage Report. It is just below the Year-End Closing in the menu noted above.
Microsoft has an excellent checklist for payroll administrators to follow. Please read through the options for either “Printing 2021 statements before processing 2022 pay runs” and “Processing 2022 pay runs before printing 2021 statements.”
To update the payroll tax tables:
Go to Microsoft Dynamics GP – Maintenance – Check for Tax updates
You will be prompted for your Microsoft authorization information in the next window. If the tax table does not download automatically, you can choose the Manual option.
If you have any questions regarding the Dynamics GP payroll year end process for either Canada or the US, please contact Rimrock Corporation and we will be happy to help.