Home > Blog > Dynamics GP Year End Guide for U.S. Organizations

Dynamics GP Year End Guide for U.S. Organizations

As the end of the year approaches, businesses using Microsoft Dynamics GP must begin preparing for critical payroll and tax-related tasks to ensure compliance with federal and state regulations.

Handling payroll year-end procedures accurately is essential for closing out the year successfully, filing employee tax forms, and starting the new year without issues. This guide covers the key steps involved in managing year-end payroll in Dynamics GP, along with essential considerations for 2025 and beyond.

1. Year-End Updates and Deadlines

For the 2023 payroll year, businesses must ensure they comply with electronic filing requirements for IRS forms such as W-2s and 1099s. The Taxpayer First Act mandates that businesses with 10 or more employees must file these forms electronically. Failing to adhere to this rule could lead to penalties.

To facilitate this process, Dynamics GP provides year-end updates to ensure compliance with the latest tax laws and filing requirements. These updates typically include federal, state, and local tax rate changes, as well as form changes. Therefore, installing the 2025 tax update is crucial before processing any payrolls in the new year.

Key tasks to complete before year-end include:

• Verifying all payroll data is correct and complete.
• Installing the Dynamics GP year-end update.
• Creating the year-end wage file before closing the year.
• Filing required forms electronically, especially W-2s and 1099s.

2. Installing the Year-End Update

The year-end update is essential to ensure your system is equipped with the latest tax information for 2024. You only need to install this update once, and it will apply to all companies within Dynamics GP. However, make sure the update is installed on each workstation used to process payroll.

Failing to install the update before running payroll for 2025 can lead to incorrect tax calculations, including withholding and FICA deductions. Therefore, it’s recommended to complete this installation as soon as possible after closing the 2024 payroll year.

3. Payroll Closing Procedures

To ensure a smooth year-end, follow Dynamics GP’s detailed checklist for closing payroll. Some of the critical steps include:

• Creating a Year-End Wage File: Before closing payroll for the year, create a wage file that captures all the year’s payroll data. This file will be used to print W-2s and other tax documents.
• Verifying Data: Ensure that all employee data, including Social Security numbers, addresses, and tax withholdings, is accurate. Inaccurate information can delay tax filings and result in penalties.
• Printing W-2s and 1099s: After closing the year, print W-2s and 1099s for distribution to employees and contractors. Dynamics GP provides options to print multiple copies of W-2s for each employee, ensuring compliance with federal and state requirements for distribution.
• Filing Electronically: For businesses required to file electronically, ensure that all forms are submitted through the correct channels, such as Aatrix or Greenshades, which integrate with Dynamics GP for streamlined tax filing.

4. Handling W-2 and 1099 Printing

Dynamics GP allows you to print W-2s and 1099s for employees in multiple ways, including using laser form sets and sheets. Ensure that all required copies are printed and aligned correctly. If you encounter issues with W-2 alignment, Dynamics GP offers options to adjust vertical and horizontal alignment for proper printing.

5. Common Payroll Issues and Solutions

During year-end processing, businesses might encounter several common payroll issues. Here’s how to address them:

• Incorrect Federal Withholding: If you notice discrepancies in federal tax withholdings, verify the employee’s pay codes, deduction setups, and tax maintenance settings in GP. This can help identify whether any additional withholdings or incorrect pay frequencies are causing errors.
• Doubling of Benefits and Deductions: If benefit or deduction amounts appear doubled on your W-2s, it’s likely due to duplicate entries in the system. Reviewing and correcting these entries is necessary before closing the year to avoid incorrect W-2 information.
• Blank 941 Forms: If your 941 forms appear blank after closing the year, ensure that the date settings in Dynamics GP match the correct year for the report you are printing.

6. Important Considerations for 2025

As businesses transition into 2025, staying on top of payroll updates and new requirements will be essential. Dynamics GP users should remain aware of key changes in tax laws and ensure that their system is updated accordingly.

For example, the electronic filing threshold for W-2s and 1099s is expected to decrease in future years, possibly to fewer than 10 employees. Businesses should be prepared for this shift and ensure they are using compliant filing methods through trusted providers such as Aatrix or Greenshades.

7. Final Year-End Checklist

Here’s a summarized checklist to help you stay on track:

1. Back up your data: Before making any changes, create a backup of your Dynamics GP data to avoid any potential loss of information.
2. Install year-end updates: Ensure you have the latest year-end updates installed to avoid payroll issues in the new year.
3. Verify employee information: Ensure that all employee details, including Social Security numbers and addresses, are correct in the system.
4. Create the year-end wage file: This step is critical before you can close out payroll for the year.
5. Close the payroll year: Once you’ve verified your data and installed updates, proceed with closing the payroll year in GP.
6. Print and file W-2s and 1099s: Follow the steps in Dynamics GP to print the necessary forms and submit them electronically as required.
7. Prepare for 2025: Install the 2025 tax updates to ensure accurate payroll calculations and avoid any penalties for non-compliance.

Closing out the payroll year using Dynamics GP requires careful attention to detail and adherence to federal and state tax regulations. By following the steps outlined in this guide, you can ensure a smooth year-end process, avoid common payroll issues, and remain compliant with tax filing requirements for 2025 and beyond.

Need Help with Your Year-End? Reach out to Stoneridge!

Dynamics GP provides the tools necessary to manage payroll year-end procedures efficiently, but it’s essential to stay proactive in updating your system and verifying your data to avoid errors.

Our experts can help set you up and take the pressure off you and your team during your year-end close period. Get in touch with us today to learn more.

Under the terms of this license, you are authorized to share and redistribute the content across various mediums, subject to adherence to the specified conditions: you must provide proper attribution to Stoneridge as the original creator in a manner that does not imply their endorsement of your use, the material is to be utilized solely for non-commercial purposes, and alterations, modifications, or derivative works based on the original material are strictly prohibited.

Responsibility rests with the licensee to ensure that their use of the material does not violate any other rights.