As we near the end of 2025, it is crucial to address several important aspects to prevent any disruptions in Sage Intacct Construction Payroll procedures.
This article provides insights into essential details related to calendar year 2025 reporting and what steps you need to keep in mind as you prepare for calendar year 2026.
Additional updates may be added to this article in December/January to ensure you are equipped to support end-of-year needs.
Question #1: How do I provide employee premium pay amounts to the employee on their W2 so they can include the amount in their end-of-year tax filing?
End users will need to indicate via a payroll adjustment import the total amount of overtime premium wages for the employee in 2025.
Please create an other compensation record associated with tax type code 3339. It is this record that you’ll need/want to utilize in the payroll adjustment import process.
Within the payroll adjustment import file:
- The ‘Import Payroll Adjustments’ tab should include $0 values for net pay/gross pay and zero hours.
- The ‘Import Amount Based Pay Modifiers’ tab should include a record for the employee associated with the new other compensation record and the total amount of overtime premium to be included on the W2.
The amount associated with this tax type will then be displayed on the employee W2 in box 14 for 2025 and then box 12 for 2026.
The box number (14 vs 12) will be controlled by Aatrix as they will automatically change the placement in their software to point tax type code 3339 to box 12 in 2026 (no user intervention will be needed).
Users can utilize the Reporting extract in payroll to calculate and provide this amount to the employee via box 14 on the W2 if they choose to do so.
Question #2: What configuration or processing can/should I complete in December?
Update System Pay Modifiers
For any system pay modifiers defined with default amounts, you can add a new effective date with the revised information using the information in the System Pay Modifiers Import file.
- Values
- You can also manually enter this information in the System Pay Modifiers window; please utilize the System Pay Modifiers article for guidance and information on this process.
Update System Tax Rates
It is essential that you or your partner upload the updated tax rates for 2026. Utilize this article to access the 2026 tax rates that you can utilize to import the revised 2026 rates for federal, state, and some local taxes (Indiana), along with detailed instructions on importing the file.
NOTE: The states listed below either had rate updates in 2026 (thus far) that will require the import of updated records or the states have issued new specifications without any changes.
The following states released changes that are included in the import files:
- Arkansas
- California
- Colorado
- Georgia
- Hawaii
- Idaho
- Indiana
- Iowa
- Kentucky
- Maine
- Maryland
- Missouri
- Montana
- Nebraska
- New Mexico
- New York
- Ohio
- Oklahoma
- Rhode Island
- South Carolina
- Utah
- Virginia
Additional State-Specific Taxes:
- Colorado Occupational Privilege Tax
- Indiana Local Taxes
- New York City
- Oregon Workers’ Benefit Fund
- PA-LST and PA-PSD Codes
- West Virginia City Service Fee
- Yonkers City
Federal:
- FICA, MEDI, and FUTA rates
- Federal Income Tax
State Unemployment Limits have also been added. You will need to consult with your own documentation on any rate updates and to double check the limit is correct.
Pennsylvania Political Subdivision Codes (PA-PSD) are also included.
Update Employee System Pay Modifiers
Your open enrollment period may require updates to your current, employee benefit rates. For any records that require rate changes, utilize the Employee Pay Modifier Import file (with updated effective dates and rates).
NOTE: Only updates at the employee master level are required.
For any system pay modifiers that will change as of 2026, you can utilize your existing pay modifiers and adjust only the rates by specifying a new effective date (such as 01/01/2026) and entering the updated rates. This action will automatically apply the new rates to your payroll starting in the New Year, ensuring seamless processing and timely payments to your employees.
Update Pay Groups With New Pay Periods
You’ll need to create Pay Periods for 2026 for your pay groups in the Pay Groups window. Utilize the Pay Groups – Add/Update article for additional information on creating new pay groups and/or updating existing pay groups.
Validate System Pay Modifier Aatrix Reporting Numbers
For W2 reporting purposes, you can include the totals for a given system pay modifier on the W2; typically this will indicate which box and with which code the amount should print/display.
Utilize the Aatrix Tax Type Codes article to identify the specific code that you need to associate with the system pay modifier. For example, you’ll want to utilize code 3309 to indicate non-taxable sick pay amounts on the W2.
Approve Current Year Payroll Adjustments
Any payroll adjustments that have been recorded within the current calendar year must be assigned an Approved status within the Checks window. To determine if and how to approve the pending adjustments, please refer to the Approve Checks article and the steps below:
- Open the Checks window,
- Select your pay group(s) with a 1/1/25-12/31/25 date range and click on the ‘View Checks’ button.
- Enter Adjustment into the filtering field to limit your search strictly to the payroll adjustments.
- Select any that are not yet approved and use the Actions drop-down menu (with the Approve option) to approve the pending adjustments.
Validate/Confirm Entity Reporting Account Numbers
For reporting purposes, you’ll need to assign the Aatrix reporting codes to the various tax identifiers within the Taxes – Add/Update window.
Utilize the Aatrix Tax Type Codes article to identify the specific code that you need to associate with the state and tax type. For example, you’ll want to utilize code 1041 to indicate state withholding for Wisconsin.
Review Year-To-Date Information
In preparation for W2 generation and in order to identify any potential adjustments that must be added to the database, you’ll want/need to review year-to-date data. This review can be performed utilizing the following options:
- CRW/ICRW Reporting Extracts
- Payroll Deduction Register: Utilize this report to analyze employee deduction totals.
- Payroll Earnings Register: Utilize this report to review gross wage components.
- Payroll Employee Tax Register: Utilize this report to review employee tax totals by tax identifier.
- Payroll Employer Tax Register: Utilize this report to review employer tax totals by tax identifier.
- Payroll Reporting Extract: Utilize the Reporting extract within the Payroll module to extract all payroll information (earnings, taxable wages, taxes, etc) for review within Excel, pivot table, and/or a separate reporting tool.
Import/Enter Year End Adjustments
As you approach the end of calendar 2025, you may have the need to post year-to-date earnings adjustments to correct/adjust transactions from earlier in 2025. When posting payroll adjustments, make sure to utilize a date between 1/1/25 and 12/31/25 to ensure the adjustments are included in year end reporting.
- Utilize the Payroll Adjustments Import feature to make the required modifications to your employees’ information. You can find a step-by-step guide on how to navigate this process using the information in the Payroll Adjustments article.
- NOTE It is highly recommended that payroll adjustments for 2025 are completed BEFORE your final payroll run of the year. This ensures that any self-adjusting taxes (FICA, MEDI, etc) calculate as expected for the calendar year.
Question #3: How do I adjust PTO Balances for expiring PTO or to set the lump sum amount for next year?
If you accrue/use PTO and have a company policy that limits the hours of carryover, then you will need to create an adjustment file. The payroll system does not automatically expire hours and will carry over any unused hours into the new year.
- Review the PTO Balance Report article for detailed instructions on how to see current balances.
- Create a PTO Adjustment Import file to increase or decrease the PTO balance
Question #4: Is there anything I need to do to close 2025 before I begin processing payroll in 2026?
There is no process required to close calendar year 2025 before you can begin processing calendar year 2026 other than the requirement that 2026 pay periods have been created for your pay groups.
Functionally, you can be processing payroll for 2026 while still making adjustments in 2025. The check (earnings) date will determine the reporting period for the check or adjustment process.
Question #5: How do I process payroll adjustments for and generate W2s for 2025 once I’ve started processing payroll for 2026?
Payroll Adjustments
If you notice additional payroll adjustments for 2025 are required once you’ve started processing payroll for 2026, you can still import payroll adjustments to affect 2025 earnings.
- Please follow the instructions listed above to import and approve your payroll adjustments.
- As mentioned, make sure to utilize a date between 1/1/25 and 12/31/25 to ensure the adjustments are included in year end reporting.
Generate W2s
- Utilize our existing Aatrix integration to generate W2s.
- Please follow the information in the Creating W2s article to generate and file W2s for your employees.
