Summary

Use this checklist to close the payroll calendar year and start the new one. It puts the year-end payroll processes in order and links to the step-by-step topic for each one.

The checklist covers:

• The last payroll of the year and the first payroll of the new year.
• Accrual caps and rollovers.
• Tax table and wage maximum updates.
• W-2s, 1099-Rs, and Affordable Care Act (ACA) forms.

Cirrus assigns payroll checks to a calendar year by the Batch Month and Batch Year of the Computer Checks batch, not by the check date. W-2s, quarterly reports, and the YTD amounts on check stubs all follow the batch month and year. Set them correctly on the last payroll of December and the first payroll of January. Make each batch's year match the year of its check date.

New for tax year 2026

• Select IRIS as the Export Type when you export 1099-Rs. The IRS FIRE system no longer accepts files.
• W-2s for 2026 include new reporting for qualified overtime compensation. It goes in Box 12 with code TT. A new utility will calculate it from the pay codes you map as qualified overtime, and the W-2s Generate step will fill in Box 12 code TT. This feature is in development. Springbrook expects to release it in December.

Step by Step

1     Prepare for year-end in November.

• Confirm that you have these credentials:
  • A Social Security Administration Business Services Online (BSO) User ID, to upload the W-2 file.
  • An IRS IRIS Transmitter Control Code (TCC), to file 1099-Rs. FIRE TCCs don't work in IRIS, and a new IRIS TCC can take up to 45 business days.
• Order 1099-R forms.
• Order W-2 forms only if you want perforations and the W-2 explanation printed on the back. Cirrus prints the full required W-2 form on blank paper.
• Order W-2 and 1099-R forms from The SOLV Group, Springbrook's approved forms vendor: thesolvgroup.com or 1-800-388-3650. The Springbrook Paper Tax Site goes straight to Springbrook's forms.
• Ask employees to review their addresses. W-2s use the address on the employee record.
• To verify employee names and SSNs before you generate W-2s, run the Export SSNVS utility (PR> Utilities> Export SSNVS). This is an optional step.
• Extend the pay schedule into the new year (PR> Maintenance> Pay Schedule).

2     Run the last payroll of the year.

• On the last Computer Checks batch of December, set the Batch Month to 12 and the Batch Year to the current year.
  • Make the Batch Year match the year of the check date. YTD totals and W-2s follow the batch year, and the IRS counts wages in the year you pay them. If this payroll's check date falls in January, it belongs to the new year, so use Batch Month 01 and the new year (Step 5).
  • If a committed batch has the wrong Batch Year, contact Springbrook Support. Support can correct it with the Update Batch Number tool, which changes the batch year but not the check date.
  • The Journal Entry Date (PR> Computer Checks> Calculate Payroll) decides the fiscal period and year that the payroll expense posts to. These can differ.
• Commit all payroll, manual check, and void check batches for the year before you generate W-2s.

3     Review accrual caps and rollovers that reset on December 31.

• Accruals can reset on the calendar year, the fiscal year, or each employee's anniversary date. Skip this step if your accruals don't reset on December 31.
• Open each accrual code that caps or rolls over hours at year-end (PR> Maintenance> Accrual).
  • The Annual Cap Date or Specified Cap Date decides when the cap applies.
  • Cirrus applies the annual cap automatically in the first payroll whose pay period includes the cap date, during the Timecard step.
  • The Capped Hours Action decides what happens to hours over the cap: erase them, transfer them to another accrual, pay them out with a pay code, or roll the cap amount and erase the rest.
  • The Rollover Accrual Code and Rollover Pay Code fields set where rolled hours go.
• Check the accrual cap toggles on the Accruals tab (PR> Utilities> Setup> Accruals tab), such as Do not cap rolled hours and Do not cap additional hours.
• Print the YTD Accrual Register report (PR> Reports> YTD Accrual Register) before and after the cap date to confirm the results.

4     Update tax tables and wage maximums for the new year.

• Apply the federal tax table update before the first payroll of January (PR> Utilities> Federal Tax Table Update).
• Springbrook doesn't update state, regional, or other tax tables. Update them when those agencies release new rates (PR> Maintenance> Tax Table).
• Update deduction and benefit limits that change each year, such as retirement plan maximums.
• Add a new revision to the FICA and FICAR deduction/benefit codes for the new year (PR> Maintenance> Deduction/Benefit). Enter the new Annual Max (withholding maximum) and Salary Max (wage maximum) so Cirrus doesn't over-withhold for employees or the employer.
• California agencies: add a new revision to your SDI deduction code with the new rate (PR> Maintenance> Deduction/Benefit). For 2027, the rate is 1.4%, with no wage cap.

5     Run the first payroll of the new year.

• Set the Batch Month to 01 and the Batch Year to the new year.
• Cirrus resets YTD totals automatically when you create the first payroll batch with the new batch year. There's no separate year-end close step.
• Review the first check stubs. YTD amounts restart with the new batch year.

6     Balance wages before you generate W-2s.

• Print the Quarterly Wage report (PR> Reports> Quarterly Wage) for the fourth quarter.
  • Include employees who earned no wages in the fourth quarter but earned wages earlier in the year.
• Print the Deduction Register report (PR> Reports> Deduction Register) for the year's check dates. Exclude uncommitted and void checks.
• Compare the totals with your four quarterly 941 filings (PR> Reports> 941).

7     Process W-2s (PR> W-2s).

• Create a new W-2s batch, then complete the Generate step.
  • Enter the W-2 Year and select Check Date in the Date to Use field. Springbrook recommends Check Date. Each payroll's batch year and check date should be the same year (Step 2).
  • Update the FICA Max field. It changes every year. Enter the Social Security wage base for the W-2 year.
  • California agencies: enter an amount higher than any employee's SDI wages for the year in the SDI Max field, such as 9,999,999.99. California has no SDI wage cap, and Cirrus reports SDI wages on the W-2 only up to this amount. The field keeps the amount you entered last year.
  • Map deductions and benefits to W-2 boxes in the Box Number and Code columns.
  • Box 12 holds four codes (12a–12d) for each employee. If an employee has more than four Box 12 codes or more than two Box 19 entries, Cirrus prints a second W-2 page for that employee.
• Review the Exceptions step for employees left off the W-2s.
• Load Box 12, 14, or 19 values from a spreadsheet with the Import W-2 Updates utility (PR> Utilities> Import W-2 Updates). This is an optional step. The import returns the batch to the Edit step.
• Print the Proof List and compare it to your Step 6 totals before you print.
• Print W-2s on the W2s step. Select the copies in the Print field, then click PDF.
  • Employee Copies (Copy B, Copy 2, Copy C) go to employees.
  • Extra Copies (two more Copy 2s and another Copy C) are for employees who lose a W-2 or need more Copy 2s for city or local taxes.
  • State Copies (Copy 1) go to your state or locality if it asks for paper copies.
  • Employer Copies (Copy D) are for your records.
  • Cirrus prints the full form on blank paper. If you print on perforated forms, print one page from the PDF first to check alignment.
• Create the export file, test it with AccuWage Online in BSO, and upload it to the SSA through BSO.
• To reprint W-2s, reprint the print job from the Jobs Viewer.
• Commit the W-2s batch after you submit to the SSA.
  • After you commit, file W-2 corrections (Form W-2c) with the SSA through Business Services Online (BSO). Cirrus doesn't create W-2c files.
    • Use W-2 Adjustments (PR> W-2 Adjustments) to fix committed W-2s in Cirrus, such as the data employees see in Employee Self Service. If you committed the W-2s batch but haven't filed with the SSA yet, you can upload the W-2 Adjustments export file through BSO instead. It's a full W-2 file, not a W-2c.

8     Process 1099-Rs (PR> 1099-Rs).

• 1099-Rs is a single batch process, meaning you can process only one batch at a time.
• In the Generate step, confirm the Calendar Year. It defaults to the previous year.
• Edit, print the Proof List, and print the 1099-Rs.
• In the Export step, select IRIS as the Export Type and enter your IRIS TCC in the TCC field.
  • The Export Type keeps the type you selected last time, so select IRIS each year.
  • The IRIS export creates a .csv file for the IRIS Taxpayer Portal.
• Clear the 1099-Rs batch when you finish.

9     Process Affordable Care Act forms (PR> Affordable Care Act). This step applies to Applicable Large Employers.

• ACA forms aren't due to the IRS until March 31 when you file electronically, so you don't need to finish them in January. The IRS requires e-filing for 10 or more information returns in total.
• Import employee, dependent, and coverage files, or run the Generate step. Skip Generate if you import. The Generate step is available only to existing Cloud clients.
• Complete the employee details in the Edit Employees step and the employer details in the Edit Employer step. Most batches need some manual updates.
• Print the Proof List, then print the 1095-C (or 1095-B) forms.
• Export the 1094/1095 files for the IRS.
• Springbrook recommends leaving the batch uncommitted. Committing doesn't send anything to the IRS, and an open batch is easier to use for corrections.

10     File and archive.

• Confirm that the SSA accepted the W-2 file and the IRS accepted the 1099-R and ACA files.
• Save the proof lists and export files with your year-end records.