Payroll year-end checklist for 2026

2026 payroll year-end deadlines

State year-end filings, such as annual withholding reconciliations and copies of W-2s, have their own dates set by each state agency. Find yours on your state's page in the payroll tax hub.

December 2026: before the last payroll

1. Check every employee's legal name, Social Security number and mailing address. A wrong SSN or name means a corrected W-2 later. Ask former employees for current addresses now.
2. Add taxable extras to the last payroll. Bonuses, gift cards and other taxable fringe benefits belong in 2026 wages. Federal withholding on supplemental pay can use the flat 22% rate (37% above $1 million).
3. Check retirement and benefit limits. For 2026: 401(k) deferrals up to $24,500, catch-up $8,000 at age 50 and over, and $11,250 at ages 60 to 63; SIMPLE IRA $17,000; HSA $4,400 self-only or $8,750 family; health FSA $3,400.
4. Confirm Social Security stopped at $184,500 for anyone who earned more, and that Medicare did not stop.
5. Plan around the holidays. December 25, 2026 and January 1, 2027 both fall on Fridays, and banks are closed. Move the payday or fund direct deposit earlier, following your provider's cutoff.
6. Collect W-9s from every contractor you paid, so you have names and taxpayer ID numbers for the 1099-NEC.
7. Run a year-to-date payroll register after the last payroll and keep a copy before anything is changed for 2027.

Reconcile the year before you file

Most W-2 problems show up as numbers that do not match. Check these before the forms go out:

January 2027: file and furnish

• W-2s and W-3 by February 1, 2027, to employees and to the Social Security Administration. If you file 10 or more information returns in total (W-2s and 1099s together), you must file them electronically.
• Extensions are narrow. There is no automatic extension. A single 30-day extension to file with SSA on Form 8809 is granted only in extraordinary cases, and more time to furnish employee copies needs Form 15397 and is not automatic.
• 1099-NEC by February 1, 2027, to each contractor paid $2,000 or more for 2026 work (the threshold was $600 before 2026) and to the IRS.
• Form 940 and the Q4 Form 941 by February 1, 2027, or February 10 if your deposits were all on time.
• State filings. Send state copies of W-2s and the annual withholding reconciliation where your state requires them, and file the Q4 state unemployment wage report.
• Keep the records. Filed returns, W-2 copies and deposit confirmations, downloaded from your provider.

Mistakes that get caught here are covered in common payroll mistakes and fixes.

Set up payroll for 2027

Change these settings before your first 2027 payroll, or confirm your provider has:

• New SUTA rate notices arrive from state agencies around year-end. Enter the new rate before the first 2027 payroll. Most states had not published 2027 rates when we checked; see 2026 SUTA rates by state.
• Other January 1, 2027 minimum wages in our data: Rhode Island $17.00, Michigan $15.00, Virginia $13.75, Minnesota $11.87, Montana $11.20 and South Dakota $12.30. New York's rates do not change on January 1, 2027.
• Quarterly 941 dates for 2027: April 30, August 2 and November 1, 2027, then January 31, 2028.
• Pay calendar: one Friday biweekly cycle has 27 paydays in 2027. See the 2026 and 2027 pay calendars.
• 1099 threshold: the $2,000 figure may be adjusted for inflation starting in 2027.

Year-end fees your payroll provider may charge

Compare the full monthly bill, year-end fees included, in what payroll services cost.

Switching payroll providers at year-end

January 1 is the cleanest date to switch, because the new provider starts with no year-to-date wages to load and no partial quarter to file. Before you go:

• Agree in writing who files the Q4 2026 941, the 940 and the 2026 W-2s. Usually the old provider, since it holds the year's data.
• Download everything. Wave says you lose access to payroll data at the end of the month you cancel. QuickBooks keeps payroll data available until one year after you cancel. Patriot lets you keep viewing and downloading reports, 941s and W-2s after cancellation, and Gusto keeps limited read-only access.
• Give the new provider your state account numbers and new SUTA rates before its first 2027 payroll.

If you are choosing a provider for 2027, see the best payroll software or compare doing it yourself in in-house vs outsourced payroll.

Common year-end payroll mistakes

• Filing 1099-NECs at the old $600 threshold for 2026 payments instead of $2,000.
• Assuming January 31 is the deadline. For 2026 forms it is February 1, 2027, but treat that as the latest date, not the target.
• Not reconciling the 941s to the W-3 before filing, which turns one quarter's error into a W-2c for every employee.
• Leaving the old Social Security wage base in the system for 2027.
• Missing the holiday funding cutoff for the December 25 and January 1 paydays.
• Canceling a provider before the year-end forms are filed, then paying extra for final filings.

For the full-year view of deadlines, see the payroll compliance calendar and 2026 payroll tax rates and due dates.