– 2021 YEAR-END INFORMATION REPORTING MEMO –

DEADLINE REMINDERS

Filing Deadline Form Provide info to GDP by *
January 31, 2022 1099-NEC January 15, 2022
February 28, 2022 1099-MISC January 15, 2022
January 31, 2022 W-2 January 15, 2022
March 15, 2022 S Corp, Partnership & LLC tax returns February 15, 2022
April 18, 2022 C Corp, Trust & Individual tax returns March 15, 2022


*If you provide us your tax information after these dates your tax return will be extended. We will adhere to this policy to ensure the well-being of our staff and the quality of our services. Tax return engagement letters and document requests will be provided to you in January 2022.

FORM 1099 REPORTING

Forms 1099 are used to report certain amounts paid by a trade or business and rentals, including payments for rents and payments for services to independent contractors & consultants.

Payments over $600 for services paid to a non-corporate entity are reported on Form 1099-NEC which is due January 31, 2022.

Payments over $600 for rent paid to a non-corporate entity are reported on Form 1099-MISC which is due February 28, 2022.

A separate Form 1096 must be filed with each set of forms 1099-MISC and 1099-NEC being paper filed.

Payments to vendors by credit card are not required to be reported on 1099s.

Rental real estate activities need to file 1099s if the rental is considered a trade or business.

Also send a copy of the 1099 to the state if either 1) the payment was subject to state withholding or 2) the payment was made to a non-resident for services performed in the state.

Please call us if you need help in determining your filing requirements.

ELECTRONIC FILING OF FORMS W-2 AND 1099

IRS requires electronic filing if you file 250 or more information returns of any one type. Additional information is available in Pub. 1220.

Vermont requires electronic filing if total combined W-2s and 1099s being submitted exceed 25. The online filing system can be accessed at The Vermont Department of Taxes.

NORTH CAROLINA PERSONAL PROPERTY TAX RETURNS

Personal Property Tax Returns are due January 31, 2022. A return is required when a NC business owns or possesses personal property including machinery and equipment, office furniture, computers, supplies and leasehold improvements. If you have questions, or would like us to prepare the return, please contact our NC office, by January 15, 2022, at 704-558-6010.

PROGRAMS RELATED TO COVID-19 RELIEF

The filing of payroll Forms 941 may be impacted if you qualify for programs under the CARES Act and FFCR Act. These programs include the Employee Retention Credit, Payroll Tax Deferral, Paid Sick Leave Credit and Paid Family Leave Credit. If you need more information, please contact us or your payroll provider.

PERSONAL USE OF COMPANY VEHICLES

The personal use of a company owned vehicle is a taxable fringe benefit and must be reported on the employee’s Form W-2. For assistance in calculating these amounts, please contact us.

HEALTH INSURANCE FOR S-CORPORATION SHAREHOLDERS

Health insurance premiums and contributions to health savings accounts paid by an S Corporation for more than 2% shareholders must be included as wages on Form W-2 in boxes 1 and 16. These amounts are not subject to federal or state tax withholdings and Medicare and Social Security tax should not be withheld on these amounts. When appropriately reported on the W-2, the shareholder may be able to deduct these costs on their individual tax return.

VT W-2 REPORTING OF EMPLOYER-SPONSORED HEALTH COVERAGE

The VT Dept. of Taxes has mandated that all employers must include the cost of employer-sponsored healthcare on the employee Form W-2. Employers must report both the portion paid by the employer and the portion paid by the employee as a single line item in Box 12 on Form W-2 with code “DD”. This reporting is informational only with no tax implications.

WITHHOLDING REQUIREMENTS ON BONUSES

Bonuses and other supplemental payments to employees are wages and taxes must be withheld by the employer. Income tax may be withheld at a flat rate or at the employee’s normal rate if paid concurrently with regular wages. The flat rates are 22% federal, 6.6% Vermont and 5.35% for North Carolina. These payments are also subject to Social Security and Medicare withholdings. See section 7 of Publication 15 for more details.

GROUP TERM LIFE INSURANCE

Employer-provided group term life insurance coverage over $50,000 must be treated as taxable income and reported on the employee’s Form W-2.The taxable value is determined by using a table provided by the IRS. For assistance in calculating the value, please contact us.

AFFORDABLE CARE ACT REPORTING & PENALTIES

Employers with over 50 full time employee equivalents may have additional reporting requirements and could be subject to penalties if health insurance requirements are not met. If you might have this level of employees, please contact us to discuss.

OTHER REMINDERS

  • Have employees review their pay stubs to confirm that their name, address, social security number, and any other information is accurate.
  • Review your state payroll filing requirements. Generally, states require that taxes be withheld based on where the employee is performing services. If you have employees who have shifted to remote working from home and they live in a different state, a change may be needed to their state withholdings.
  • The current version of Form W-4 can be found at the IRS website. New employees and all change requests must be made on the current Form W-4. IRS withholdings tables can be found in IRS Pub 15-T. State withholding information can be found on the websites for the Vermont Department of Taxes and North Carolina Department of Revenue.
  • All participants in cafeteria plans must be employees. An “employee” for purposes of the cafeteria plan rules does not include a partner in a partnership, a member in an LLC, or a 2% or greater shareholder of an S-corporation (or their family members).
  • Form LRC-140 is a new Vermont Landlord Certificate for year 2021. Any landlord who rents one or more units must submit a Form LRC-140 for each property by January 31, 2022. Copies of the Landlord Certificates are no longer provided to the tenants. Find more information and file online at the Vermont Department of Taxes.
  • All VT employees must complete a Form HC-2, Declaration of Health Care Coverage every year. This form is not submitted to the VT Dept. of Taxes but must be retained in your business records for three years.
  • If your business has inventory, we will need the cost of inventory on hand at 12/31/21.
  • In order to claim any vehicle business deductions, a written mileage log must be maintained. Please document the odometer readings at 12/31/21 for all company vehicles and personal vehicles with business use.