• STEP 1: Verify that you have installed the latest 2021 tax update

Download the latest tax table update and installation instructions for 2021 to ensure your FICA Wage Limit is correct.  To access the U.S. Payroll Tax Update pages, click on the US Taxes link for your version within the Microsoft Dynamics GP Resource Directory page or click on the link below:

U.S. Payroll Tax Update for Microsoft Dynamics GP | Microsoft Docs

Note:  To check your tax table update date, click on Microsoft Dynamics GP >> Tools >> Setup >> System >> Payroll Tax.  The Last Tax Update should be at least 12/18/2020 (2021 Round 1 tax update) or later (if later tax updates were installed during the year).

• STEP 2: Complete all pay runs for the current year

• STEP 3: (Optional:) Complete all monthly and quarterly payroll month-end, period-end, or quarter-end procedures for the current year

For more information about period-end procedures for payroll for Microsoft Dynamics GP, use this link to obtain the printable manual for 'U.S. Payroll': http://technet.microsoft.com/en-us/library/jj673202(v=gp.30).aspx

• STEP 4: Make a backup of the original file

Create a backup, and then put this backup into safe, permanent storage. By creating a backup, you make sure that you have a permanent record of the company's financial position at the end of the year. You can restore the backup to quickly recover data if a power fluctuation or other problem occurs during the year-end closing procedure.

To create a backup in Microsoft Dynamics GP, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Maintenance >> Backup.
   Note The Back Up Company window opens.

2. In the Company Name list, click to select your company name.

3. Change the path of the backup file if it is required, and then click OK.
   
   Note We recommend that you name this backup '2021 Pre Year-End Update' to differentiate it from your other backups.

• STEP 5: Install the 2021 year-end update

To install the payroll year-end update, you must follow the steps in the Microsoft Dynamics GP U.S. 2021 Year-end document. The install must be performed on each computer that has Microsoft Dynamics GP installed. When the update is released, install the update and download the 2021 Year End document from the following location:

U.S. Year-End Update for Microsoft Dynamics GP | Microsoft Docs

Note: Review the US21YE and W-2 DataSource documents for details of what is included in the Year End Update, checklists to follow, FAQ, year-end procedures, electronic W2s, reporting and more. 

Note:  There will not be a year-end update available for Microsoft Dynamics GP 2016 and prior versions. 

• STEP 6: Create the year-end file

To create the year-end file, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamic GP >> Tools >> Routines >> Payroll >> Year-End Closing.

2. In the Year field, type 2021, and then click Process.

Note When you process the 2021 Year End Wage file, make sure you have a '2021' tax update in place, so the correct FICA limit used. You can install the payroll tax update for 2022 any time after the year-end wage file for 2021 has been created, and before you process a new payrun for 2022.

• STEP 7: Make a backup of the new file

Create a backup, and then put this backup into safe, permanent storage. By creating a backup, you make sure that you have a permanent record of the company's financial position at the end of the year. You can restore the backup to quickly recover data if a power fluctuation or other problem occurs during the year-end closing procedure.

To create a backup in Microsoft Dynamics GP, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Maintenance >> Backup.

2. In the Company Name list, click to select your company name.

3. Change the path of the backup file if it is required, and then click OK.
   Note We recommend that you name this backup '2021 Post Year-End' File to differentiate it from your other backups.

• STEP 8: Verify W-2 and 1099-R statement information
To view the W-2 information in Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools >> Routines >> Payroll >> Edit W-2s.

To view the 1099-R information in Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools Routines >> Payroll >> Edit 1099-Rs.

Note If you change the W-2 or the 1099-Rinformation, we recommend that you make another backup.

• STEP 9:  Print the W-2 statements and the W-3 Transmittal form
To print the W-2 statements, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools >> Routines >> Payroll >> Print W-2s.

2. In the Print W-2 Forms window, specify the following settings:

   • Print W-2s for: Normal Year-End

   • Print: W-2 Forms

3. Click Print.

Note You can print employee W-2 statements as many times as you have to.


To print the W-3 Transmittal Form, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools >> Routines >> Payroll >> Print W-3s.

2. In the Print W-2 Forms window, specify the following settings:

   • Print W-2s for: Normal Year-End

   • Print: W-3 Transmittal Form

3. Click Print.

Note You can print the W-3 Transmittal Form as many times as you have to.

• STEP 10: Print the 1099-R forms and the 1096 Transmittal form and ACA forms

To print the 1099 forms, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools >> Routines >> Payroll  >> Print 1099-Rs.

2. In the Print 1099-R Formswindow, click 1099-R Forms, and then click Print.

Note You can print employee1099-R forms as many times as you have to.
 

To print the 1096 Transmittal form, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools >> Routines >> Payroll >>Print 1099-Rs.

2. In the Print 1099-R Forms window, click 1096 Transmittal Form, and then click Print.

Note You can print the 1096 Transmittal form as many times as you have to.

To print the 1095-C (ACA) forms, follow these steps:

      1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools >> Routines >> Payroll >> Print W-2s.

      2. In the Print W-2 Forms window, click 1095-C, and then click Print.

To print the 1094-C Transmittal form, follow these steps:

      1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools >> Routines >> Payroll >> Print W-2s.

      2. In the Print W-2 Forms window, click 1094-C Transmittal, and then click Print.

• STEP 11: (Optional:) Create a W-2 Electronic File

To create a W-2 Electronic File, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools >> Routines >>Payroll >> W-2 Electronic File.

2. In the W-2 Electronic File window, click to select the check box that is next to each company that you want to include in your W-2 Electronic File.

3. In the User ID Number field, enter the user ID number (formerly called a PIN).

4. Click Submitter.  The Electronic Filer Submitter Information window opens. Enter the submission information.

5. Change the file destination information in the File Name field if it is required.

6. Click Create File or Save to store the information to create the file later.

• STEP 12: (Optional): Archive inactive employee Human Resources information
To archive inactive employee Human Resources information, click to select Microsoft Dynamics GP >> Tools >> Utilities >> Human Resources >> Archive Employee.

• STEP 13: Set up fiscal periods for 2022:
To set up fiscal periods for the next year, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools > Setup >> Company >> Fiscal Periods.

2. In the Year field, type 2022, and then click Calculate.
   Note (Optional) You may want to close all periods except period 1 to prevent users from posting to future periods.  This is a 'soft-close' and just prevents users from posting transactions to these dates/periods.

3. Click OK.

• STEP 14: (Optional:) Close fiscal periods for the payroll series for 2021
You can use the Fiscal Periods Setup window to lock down all fiscal periods that are still open for the year. By closing or locking down any fiscal periods, you prevent users from accidentally posting transactions to the wrong period or to the wrong year.

Before you close a fiscal period, verify that you have posted all transactions for the period and for the year for all modules. To later post a transaction to a fiscal period that you have closed, you must first reopen the period in the Fiscal Periods Setup window.

To lock down posting in a fiscal period, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Tools >> Setup >> Company >> Fiscal Periods.

2. Click to select the Payroll check box for each Period that you close.

• STEP 15: Install the payroll tax update for 2022.  
Note Do not install the payroll tax update for 2022 until the year-end file has been created for 2021. 

To install the payroll tax update for the new year, follow these steps:

1. In Microsoft Dynamics GP, click on Microsoft Dynamics GP >> Maintenance >>U.S. Payroll Updates >> Check for Tax Updates.

2. In the Tax Update Method window, click Automatic, and then click Next.

3. In the Authorization Number field, type your authorization number, and then click Log in.

4. Click Finish.