KB -Year-end closing procedures for Microsoft Dynamics GP Payroll

• Verify that you have installed the latest 2020 tax update

Download the latest tax table update and installation instructions for 2020 to ensure your FICA Wage Limit is correct.  To access the U.S. Payroll Tax Update pages, click on the US Taxes link for your version within the Microsoft Dynamics GP Directory page or click on the link below:
 

U.S. Payroll Tax Update for Microsoft Dynamics GP 
https://mbs.microsoft.com/customersource/northamerica/GP/downloads/tax-regulatory-updates/TUGP2018

U.S. Payroll Tax Update for Microsoft Dynamics GP 2016
https://mbs.microsoft.com/customersource/northamerica/GP/downloads/tax-regulatory-updates/TUGP2016

Note:  To check your tax table update date, click on Microsoft Dynamics GP, point to Tools, point to Setup, point to System, and click on Payroll Tax. The Last Tax Update should be 12/20/2019 (Round 1 for 2020) or later.

• Complete all pay runs for the current year

(Optional:) Complete all monthly and quarterly payroll month-end, period-end, or quarter-end procedures for the current year

For more information about period-end procedures for payroll for Microsoft Dynamics GP 2013, use this link to obtain the printable manual for 'U.S. Payroll': http://technet.microsoft.com/en-us/library/jj673202(v=gp.30).aspx

• Make a backup of the original file

Create a backup, and then put this backup into safe, permanent storage. By creating a backup, you make sure that you have a permanent record of the company's financial position at the end of the year. You can restore the backup to quickly recover data if a power fluctuation or other problem occurs during the year-end closing procedure.

To create a backup in Microsoft Dynamics GP, follow these steps:

1. In Microsoft Dynamics GP, point to Maintenance on the Microsoft Dynamics GP menu, and then click Backup.
   Note The Back Up Company window opens.

2. In the Company Name list, click your company name.

3. Change the path of the backup file if it is required, and then click OK.
   
   Note We recommend that you name this backup '2020 Pre Year-End Update' to differentiate it from your other backups.
   

• Install the 2020 year-end update

To install the payroll year-end update, you must follow the steps in the Microsoft Dynamics GP U.S. 2020 Year-end document. The install must be performed on each computer that has Microsoft Dynamics GP installed. When the update is released, install the update and download the 2020 Year End document from one of the following locations:

U.S. Payroll Year End Update for Microsoft Dynamics GP 
https://mbs.microsoft.com/customersource/northamerica/GP/downloads/tax-regulatory-updates/usgpye2018

U.S. Payroll Year End Update for Microsoft Dynamics GP 2016
https://mbs.microsoft.com/customersource/northamerica/GP/downloads/tax-regulatory-updates/usgpye2016


Note: Download the US20YE.pdf and W-2DataSourceGP.pdf documents in the links above for details of what is included in the Year End Update, checklists to follow, FAQ, year-end procedures, electronic W2s, reporting and more. 

Note:  There will not be a year-end update available for Microsoft Dynamics GP 2015 and prior versions. 

• Create the year-end file

To create the year-end file, follow these steps:

1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamic GP menu, point to Routines, point to Payroll, and then click Year-End Closing.

2. In the Year field, type 2020, and then click Process.

Note When you process the 2020 Year End Wage file, make sure you have a '2020' tax update in place, so the correct FICA limit used. You can install the payroll tax update for 2021 any time after the year-end wage file for 2020 has been created, and before you process a new payrun for 2021.

• Make a backup of the new file

Create a backup, and then put this backup into safe, permanent storage. By creating a backup, you make sure that you have a permanent record of the company's financial position at the end of the year. You can restore the backup to quickly recover data if a power fluctuation or other problem occurs during the year-end closing procedure.

To create a backup in Microsoft Dynamics GP, follow these steps:

1. In Microsoft Dynamics GP, point to Maintenance on the Microsoft Dynamics GP menu, and then click Backup.

2. In the Company Name list, click your company name.

3. Change the path of the backup file if it is required, and then click OK.
   Note We recommend that you name this backup 2017 Post Year-End File to differentiate it from your other backups.

• Verify W-2 and 1099-R statement information To view the W-2 information in Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll, and then click Edit W-2s.

To view the 1099-R information in Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll, and then click Edit 1099-Rs.

Note If you change the W-2 or the 1099-Rinformation, we recommend that you make another backup.

• Print the W-2 statements and the W-3 Transmittal form To print the W-2 statements, follow these steps:

1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll, and then click Print W-2s.

2. In the Print W-2 Forms window, specify the following settings:

   • Print W-2s for: Normal Year-End

   • Print: W-2 Forms

3. Click Print.

Note You can print employee W-2 statements as many times as you have to.

To print the W-3 Transmittal Form, follow these steps:

1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll, and then click Print W-3s.

2. In the Print W-2 Forms window, specify the following settings:

   • Print W-2s for: Normal Year-End

   • Print: W-3 Transmittal Form

3. Click Print.

Note You can print the W-3 Transmittal Form as many times as you have to.

• Print the 1099-R forms and the 1096 Transmittal form and ACA forms

To print the 1099 forms, follow these steps:

1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll  and then click Print 1099-Rs.

2. In the Print 1099-R Forms window, click 1099-R Forms, and then click Print.

Note You can print employee1099-R forms as many times as you have to.
 

To print the 1096 Transmittal form, follow these steps:

1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll, and then click Print 1099-Rs.

2. In the Print 1099-R Forms window, click 1096 Transmittal Form, and then click Print.

Note You can print the 1096 Transmittal form as many times as you have to.

To print the 1095-C (ACA) forms, follow these steps:

      1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll, and then click Print W-2s.

      2. In the Print W-2 Forms window, click 1095-C, and then click Print.

To print the 1094-C Transmittal form, follow these steps:

      1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll, and then click Print W-2s.

      2. In the Print W-2 Forms window, click 1094-C Transmittal, and then click Print.

• (Optional:) Create a W-2 Electronic File

To create a W-2 Electronic File, follow these steps:

1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll, and then click W-2 Electronic File.

2. In the W-2 Electronic File window, click to select the check box that is next to each company that you want to include in your W-2 Electronic File.

3. In the User ID Number field, enter the user ID number (formerly called a PIN).

4. Click Submitter. The Electronic Filer Submitter Information window opens. Enter the submission information.

5. Change the file destination information in the File Name field if it is required.

6. Click Create File or Save to store the information to create the file later.

• (Optional): Archive inactive employee Human Resources information To archive inactive employee Human Resources information in Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Utilities, point to Human Resources, and then click Archive Employee.

• Set up fiscal periods for 2021 To set up fiscal periods for the next year, follow these steps:

1. In Microsoft Dynamics GP, point to Setup on the Microsoft Dynamics GP menu, point to Company, and then click Fiscal Periods.

2. In the Year field, type 2021, and then click Calculate.
   Note You may want to close all periods except period 1 to prevent users from posting to future periods.

3. Click OK.

• (Optional:) Close fiscal periods for the payroll series for 2020 You can use the Fiscal Periods Setup window to close all fiscal periods that are still open for the year. By closing fiscal periods, you prevent users from accidentally posting transactions to the wrong period or to the wrong year.

Before you close a fiscal period, verify that you have posted all transactions for the period and for the year for all modules. To later post a transaction to a fiscal period that you have closed, you must first reopen the period in the Fiscal Periods Setup window.

To close a fiscal period, follow these steps:

1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Company, and then click Fiscal Periods.

2. Click to select the Payroll check box for each Period that you close.

• Install the payroll tax update for 2021 Note Do not install the payroll tax update for 2021 until the year-end file has been created for 2020. 

To install the payroll tax update for the new year, follow these steps:

1. In Microsoft Dynamics GP, point to Maintenance on the Microsoft Dynamics GP menu, point to U.S. Payroll Updates, and then click Check for Tax Updates.

2. In the Tax Update Method window, click Automatic, and then click Next.

3. In the Authorization Number field, type your authorization number, and then click Log in.

4. Click Finish.