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Administrator Guide
Last Updated: 2024-12-13
Setup Considerations: Year-End Tax Reporting (USA)

Setup Considerations: Year-End Tax Reporting (USA)

You can use this topic to help make decisions when planning your configuration and use of USA year-end tax reporting. It explains:
  • Why to set it up.
  • How it fits into the rest of Workday.
  • Downstream impacts and cross-product interactions.
  • Security requirements and business process configurations.
  • Questions and limitations to consider before implementation.
Refer to detailed task instructions for full configuration details.

What It Is

Workday enables you to create and submit year-end data to tax-filing service providers or government agencies using a series of reports, tasks, and integrations. Workday supports these USA year-end tax forms:
  • W-2
  • W-2PR
  • W-2GU
  • W-2VI

Business Benefits

Workday USA year-end tax reporting makes it easier to comply with year-end payroll requirements by:
  • Maintaining payroll data in 1 system.
  • Validating year-end data against government guidelines.
  • Streamlining the creation of W-2 year-end tax forms by providing a business process.
  • Streamlining the creation of W-2C, W-2PR, W-2GU, and W-2VI tax forms with tasks.
  • Enabling you to audit W-2, W-2C, W-2PR, W-2GU, and W-2VI data using reports.
  • Producing electronic copies of year-end tax forms for employees to access in employee self-service (ESS).
  • Enabling you to submit year-end tax data to ADP, MasterTax, or Ceridian.
  • Enabling you to create a custom integration to submit tax data to providers other than ADP, MasterTax, or Ceridian.

Use Cases

  • Preview year-end tax forms before the year-end process.
  • Audit year-end data to identify and address company and employee discrepancies.
  • Give employees the ability to opt out of a paper copy of their year-end tax forms.
  • Correct year-end tax data within Workday.

Questions to Consider

Questions
Considerations
Which year-end forms apply to your organization?
Map and test each year-end form that you intend to use for that tax year. Test the integration systems.
Which year-end adjustments will you be processing outside of regular payroll?
Gather the relevant information and enter the adjustments as a manual payment. Example: Third-party sick pay.
What data would you like to use to balance year-end form data?
Plan to create custom reports if required.
Have you verified that all pay components have the correct pay component groups configured?
Pay component groups control how Workday reports some amounts on year-end slips. Pay component groups can also control taxable wages on year-end forms.
Have you changed pay component groups after completing payroll?
You can create manual payments if you need to adjust balances.
Do you have tax adjustments to make?
Use manual payments for adjustments where you need a specific result on the W-2 for withholding. Example: Overpayment to a pretax deduction that has met its limit.
Use on-demand payments for adjustments where you don't need a specific result on the W-2 for withholding. Example: Check reversals.
Do you want employees to be able to opt out of paper copies of their year-end forms?
You can setup options for year-end form printing for employees who want to change their printing elections.
Will you print and mail W-2 year-end forms, or use a tax-filing service provider?
If you're going to print and mail year-end forms, order the forms and envelopes based on estimated W-2 counts. Workday recommends that you:
  • Order the
    4UPPERFI05
    Greatland
     form.
  • Provide sufficient time and quantity for testing and reprints.
How will you report tax filing data to government agencies?
If you’re using ADP, MasterTax, or Ceridian tax-filing service providers:
  • Review the tax-filing service provider specifications. If your provider has differences from Workday, contact Support.
  • Set up the integration systems.
  • Map relevant pay components to tax-filing categories for integrations using the
    Maintain Payroll Tax Configuration
     task.
  • Create test integration files to your tax-filing service provider in preparation for year-end.
If you're not using those tax-filing service providers, plan for resources to determine how you'll report your tax filing data to government agencies.
Do you want to hide the control number from employees?
You might want to hide control numbers from employees in some cases. Example: A tax-filing service provider will be assigning control numbers for year-end forms.
Do you want to include third-party sick pay in W-2 forms?
You can edit company federal tax reporting to indicate that a third party will provide the W-2 for sick pay.
How will you report year-end data to the Social Security Agency (SSA)?
To report year-end data directly to the Social Security Agency, create a custom integration.

Recommendations

In preparation of the year-end process, Workday recommends that you:
  • Run the W-2 and U.S. territory preview and audit reports for year-end tax forms each quarter.
  • Create test integration files of year-end data each quarter.

Requirements

In order to produce accurate year-end reporting, you must maintain your tax and payroll data throughout the year.
At the beginning of the tax year:
  • Set up fiscal years to support the entire tax year.
  • Set up the period schedule for payroll and absence. Validate payment dates for the upcoming year against bank holidays.
  • Build out FLSA calendars.
  • Verify that new ledger year and periods are in open status.
  • Update or add employee and employer tax rates. Example: State Unemployment Insurance rate.
  • Review the
    Expiring Exempt Tax Elections
     report to communicate them to impacted workers.
  • Access the
    Add Workers US Tax Election for Expiring Exempt
    report to create new default tax elections for workers.
As necessary, throughout the tax year:
  • Review government reporting requirements for the current tax year.
  • Run year-end preview and audit reports.
  • Update federal, state, and local tax setup for your company.
  • Update workers' alternate and processing work locations.
Near the end of the tax year:
  • Ensure that you mapped pay components accurately, as this drives W-2 tax reporting in Workday. Use the
    View W-2 Box Configuration
     and
    View US Territory Year End Form Box Configuration
     reports.
  • Complete all payrolls for the reporting year, including all off-cycles and manual adjustments.
  • Verify the company addresses, tax IDs, and company name.
  • Review earnings and deductions with annual limits.
  • Test W-2 form data and printing before year-end.
  • Test the ADP, Ceridian, and MasterTax integrations.

Limitations

Workday doesn't support submitting year-end data directly to government agencies. Submit year-end data to tax-filing service providers using integrations, create a custom integration, or print year-end forms to submit them to government agencies.
Workday creates year-end data for all workers, not individual workers. To provide year-end data for an individual worker:
  1. Run the
    W-2 / US Territory Year End Form Preview
     report.
  2. Use the report to create the form manually using PDFs provided by the government.
For workers who have an international assignment position in the U.S., Workday doesn't support changing tax document printing elections through the ESS (employee self-service)
My Tax Documents
 task.

Tenant Setup

Workday uses electronic signature text for employees changing printing elections for year-end tax forms. You can configure electronic signature text options on the
Edit Tenant Setup - Payroll
 task.

Security

Domains
Considerations
Business Process Administration
 and
Manage: Business Process Definitions
 in the System functional area.
Enables you to set up the business process for W-2 year-end tax forms.
Management Dashboard: Payroll Year End
 in the USA Payroll functional area.
Enables you to use and configure the
Payroll Year End
 dashboard.
Integration Build
,
Integration Event
, and
Integration Debug
 in the Integration functional area.
Enables you to set up the integration systems to submit tax data to ADP, Ceridian, and MasterTax.
These domains in the USA Payroll functional area:
  • Process: Tax Filing/W-2s (Reports (USA)
  • Process: US Territory Year End Forms (Reports)
  • Reports: Pay Calculation Results for Worker (US Territory Year End Forms)
Users with access to these domains can:
  • Preview employee year-end data prior.
  • Calculate and extract wage data for a company.
  • Cancel extracted wage data.
  • Launch tax filing integrations to send year-end tax data to ADP, Ceridian, and MasterTax.
  • Give employees access to their year-end tax documents in Workday self-service.
  • Generate PDFs of the forms.
This access is for original, corrected, and amended forms.
Process: W-2 Bulk Print
 in the USA Payroll functional area.
Enables you to generate year-end tax form PDFs for a company.

Business Processes

You can use the
W-2 Year End Process (Default)
 business process to create W-2 year-end tax forms. You can access the business process from the
Payroll Year End
 dashboard.

Reporting

Reports or Dashboards
Considerations
Custom Reports
You can create custom reports from report data sources secured to these business objects:
  • Payroll Result
  • Tax Document Delivery
  • Worker
  • W-2
  • W-2C
  • W-2 All
  • W-2GU
  • W-2PR
  • W-2VI
Use the Social Security Number-Truncated report field to verify a worker on a report without disclosing their private information.
Payroll Compliance Dashboard
Review updates that Workday delivers to comply with government requirements.
Payroll Year End Dashboard
Use the dashboard to access these W-2 reports as worklets:
  • Payroll Year End Process
  • Last 5 Years (Forms/ Employees)
  • Estimated Form Types Needed (Forms/ Employees)
This feature doesn't support U.S. Territories, W-2C forms, and company relationships.
Tenant Analyzer
Profile
Verify that pay components are in the appropriate pay component group. You can use the
PCGs for Payroll Calculations
 report on the
Payroll
 profile group.
  • View Third Party Sick Pay Recap Form Data
  • Audit Negative Wage or Tax (by Worker)
  • Company W-2 Audit
  • View W-2 Errors
  • W-2 Preview
  • Company US Territory Year End Form Audit
  • View US Territory Year End Form Errors
  • US Territory Year End Form Preview
Use these reports to audit year-end data.
Tax Filing Quarterly Data by Company
Tax Filing Quarterly Data by Worker
You can use these reports to create these forms manually:
  • 941
  • 940
  • State and locals annual tax

Integrations

Integrations
Considerations
ADP Tax Filing Service - Quarterly
MasterTax Tax Filing Service - Quarterly
Ceridian Tax Filing Service - Annual
Launches a preconfigured tax filing integration to send year-end data from Workday Payroll to your tax-filing service provider.
TurboTax Integration
As of 2023-12-01, Intuit® no longer supports receiving W-2 forms into TurboTax® using this integration. Your employees can manually import or upload their W-2 tax form into TurboTax®. If you have questions, please contact your Workday representative.
Web Services
Considerations
Get EFW2 Year End Worker Filing Data
Get EFW2 Year End Employer Filing Data
Enables you to create integrations with the Social Security Administration (SSA) or other tax-filing service providers. When creating a Studio Integration, use both web services.
The
Get EFW2 Year End Worker Filing Data
 web service enables you to combine workers' earned state and local taxes by ID for companies with common paymaster relationships.
Get Tax Document Deliveries
Put Tax Document Delivery
Put W-2 W-2C Printing Election
Enables you to load year-end printing elections for workers.
Put Payroll Off-Cycle Payment
Enables you to load off-cycle payments for workers.
Get W-2PR Control Numbers (Web Service)
Put W-2PR Control Numbers (Web Service)
Enables you to load Puerto Rico Control Numbers to the W-2PR and W-2CPR forms.

Connections and Touchpoints

Ensure that you provide any required year-end worker data, including:
  • Contact information, such as home addresses, postal codes, and social security numbers.
  • Alternate and primary work location or position job location.
    Workday determines the work state of the employee from this information.
Workday offers a Touchpoints Kit with resources to help you understand configuration relationships across your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.