Microsoft Dynamics GP Year-End Update 2021: U.S. Payroll

Please review the following information to ensure that your Payroll Year-End goes smoothly:

The 2021 Year-End Update is always scheduled to be released mid to late November. We release this update in November to ensure you have plenty of time to install prior to year-end. In Support, we are often asked if it is OK to install the 2021 Year-End Update even though 2021 payrolls are not completely processed. The answer to that is YES YOU CAN! We release the update early so you have plenty of time to install it!!

This update is all inclusive of prior updates Microsoft Dynamics GP.  This means it will include 18.2, 18.3, and 18.4. 

Important Note: There is no year-end update for Microsoft Dynamics GP 2016 and/or prior versions of GP. Mainstream support for Microsoft Dynamics GP 2016 ended in July 2021. Here is a link to the Microsoft Dynamics GP Lifecycle: https://docs.microsoft.com/en-us/dynamics-gp/terms/lifecycle

The 2022 Round 1 Tax Update (tax table update) is targeted to be available mid-December 2021.
*Do not install this tax table update until ALL pay runs for the 2021 year are completed.

The 2022 Round 2 Tax Update will be available mid-January 2022.

Are you having problems installing the new Tax Tables? We've got you covered! Here's a link to Terry's awesome blog that talks about common errors, and options when it comes to installing Tax Tables:

Tips to install the U.S. Payroll Tax Update - Microsoft Dynamics GP Community

Please review all documentation in detail so you are well prepared for the year-end close, specifically around what has changed for this year.

Important Note: Once you install this update, you may notice the Payroll 'In Addition to Salary' checkbox is missing in the Payroll Transaction Entry window.  Download & set security to this improved window as a workaround.

Another Important to Note - this was applicable last year and is still applicable this year:

With the release of last year's 2020 year-end update you can now enter labels for Box 14 on all pay code pay types to report COVID/FFCRA (Families First Coronavirus Response Act) pay.

Prior to this update only the Business Expense Pay code Pay type allowed you to key in a W-2 label.

Employers are expected to separately report Qualified Sick Leave Wages and Qualified Family Leave Wages paid under the Families First Coronavirus Response Act[(FFCRA) on 2020 Forms W-2, Box 14, or on a separate statement.

In the screen shot below COVID is an example label, but should not be used as your label.  This is available for ALL pay types not just Salary.

Once you install the update, go to the Setup of your COVID pay codes and properly put the Box 14 label on each code.  When prompted to roll down to all employees choose YES. Here's an example of what this looks like in the Employee Maintenance window once the change has been rolled down:

When you create the year end wage file it will report correctly on the W-2.  If you do not install the year end update, you could edit each employees W-2 manually to enter this amount in Box 14:

Example of printed W-2:

When should the Year End Close process (not install) be done?

The Payroll Year End Close process should be done after all pay runs have been completed in the current year.

Are there any changes I should know about related to the Year End Update for Payroll?

There are NO W-2, W-3 or W-4 form changes! YEAH!

There are NO EFW2 electronic changes.

Questions about ACA? See Terry's blog (link will be here when published)

What does the Year End Close process do?

Creates the Year End Wage file with annual wage information used to generate W2s, W3s, 1099's, EFW2's (aka Magnetic Media), 1095-Cs, and 1094-Cs for the year being closed.

What steps should I take to close the year? (See KB Article 850663 for detailed instructions on each step listed below):

**First and foremost, make a restorable backup of the company database so you can restore should you run into a problem. 

1. Complete all pay runs for the current year. 
2. Complete all month-end, period-end, or quarter-end procedures for the current year. 
3. Make a backup of the original file.
4. Install the Year-End Update if it has not already been installed (we release early to give you plenty of time so install early if you can!!). 
5. Create the Year-End Wage file. 
6. Make a backup of the new file. 
7. Verify W-2 and 1099-R statement information. 
8. (Optional) Print the W-2 statements and the W-3 Transmittal form. 
9. (Optional) Print the 1099-R forms and the 1096 Transmittal form. 
10. (Optional) Create the W-2 Electronic file. 
11. (Optional) Archive inactive employee Human Resources information. 
12. Set up fiscal periods for 2022 (if they haven't been set up yet). 
13. (Optional) Close fiscal periods for the payroll series for 2021. 
14. Install the payroll tax update (2022 Round 1 Tax Update) for 2022. 

Resources:

• Year-end closing procedures for the Payroll module in Microsoft Dynamics GP are found in KB 850663.
• Year End Update detailed documentation
• W-2 Wage and Tax Statement Data Source
• W2 Form
• Tax Forms – 800-432-1281
• IRS Forms and Publications
• EFW2 Instructions
• W3 Instructions
• W3 Form
• Accuwage
• Payroll Documentation

Here are the 2021 Year-End Update pages which will provide you with documentation and installation instructions you’ll need for a successful year-end:

2021 U.S. Payroll Year-End Update Download Pages:

Microsoft Dynamics GP  

Here are the pages on which you can access the latest (and previous) Tax Updates:

Microsoft Dynamics GP

Year-End Close Resources:

Be sure to refer to the 2021 Year-End Blog Schedule to review current and upcoming blog posts and other helpful resource links related to Year-End Closing for Dynamics GP.

I hope this is helpful and that you have a successful Year-End!!  If you have any feedback or suggestions, please let us know. 

Have a wonderful Year-End!!!