Processing W-2s is one of the most important and burdensome requirements businesses face every year. It is the time of year many payroll administrators dread for obvious reasons.
Making a mistake on an employee’s W-2 not only puts the business at risk of costly fines and penalties, but also creates a great deal of extra work to fix.
In addition to the liability issues when processing W-2s there is also the matter of effort needed to print forms, preparing them for mailing, and the costs incurred completing the whole process.
Complete W-2 eFiling services can eliminate most of the pain associated with processing W-2s in-house. In the past, these services were provided by payroll service providers and were often very expensive. The addition of complete eFile services to many payroll software solutions, has made this option very affordable, and offers significant efficiencies to small businesses.
What to look for in an eFile solution.
When determining whether a complete W-2 eFile solution is the right choice for your business, there are several features to look for.
- The solution should be native to your payroll solution and automatically convey your payroll data directly from your payroll entries. Manual entry of your payroll data opens the door to transcription errors and lost time trying to locate and fix errors.
- solution should include automated error checking that complies at minimum the standards set by Accuwage and eVerify.
- It should provide the ability to save a history file of each filing and the ability to print file copies if desired.
- It should include all filings required: Federal copies and State copies including the Federal W-3 and any state reconciliation forms required.
- It should automatically print and mail employee copies directly to your employees
- It should also host employee copies to a password-protected website so terminated employees who have change addresses can access their copy and print it as needed.
Additional features to look for.
Outside of the minimum requirements listed above there are several other features that provide benefits and efficiencies.
- It should provide the ability to schedule when your employee copies are mailed, when your Federal filings are made, when your State copies are filed, and the ability to make corrections at no charge up until the filings are made. Often times when the employees receive their W-2s they recognize a change that needs to be made. The ability to file a corrected Federal and State filing prior to their submission date will save the need for W-2 Cs or other additional forms.
- It should allow you to review all employee data in a spreadsheet format, which allows easy editing, and the simple entry of additional information required such as third party healthcare.
- It should include forms for all states that require W-2s and all US territories.
- You should be able to find testimonial evidence from customers who have used the solution with your native payroll solution.
- The solution should have at least 3 years of history in providing this solution to assure that the solution is a mature and well-tested product.
Finally, the service must be affordable. Typical in-house cost of processing W-2s is from $3.85 to $4.35 per employee. This cost includes processing time, forms, envelopes, and postage.
A fair price for a complete service solution should be below the lower limit of in-house costs.