Year-end tax filing

/hcm/payroll/year-end is the HR-admin surface for generating, sealing, and transmitting year-end tax forms — W-2 + W-3 (US wage), 1099-NEC + 1096 (contractors), 1095-C (ACA coverage), T4 + T4A (Canada), RL-1 (Quebec). The run follows a strict four-step pattern with 4-eyes SoD on the seal, step-up-protected transmission, and an AI reasonableness narrative that catches the typical errors before they reach the IRS.

TL;DR — In January, run Year-end → New run. The engine generates forms + transmits files in supported formats: EFW2 (SSA), FIRE (IRS), CRA Internet File Transfer. A different HR admin seals; a third (or first again) transmits with step-up. Corrections (W-2c / 1099-COR) flow through the same pattern.

Before you start

• All pay runs for the tax year must be closed before generation. A reopened pay run blocks the seal.
• Employees who haven't given § 31.6051-1(j) electronic-delivery consent receive paper copies; the surface lists them.
• For ACA 1095-C generation, the workspace must be an ALE (50+ FTE on average for the prior year). If your workspace isn't, the 1095-C step is skipped.
• The AI reasonableness narrative runs as a check on the generated set — it flags YTD anomalies, missing W-4 changes, reciprocity mismatches. Reviewer signs off before the seal step.

The four-step pattern

1. 1

   1. Initiate the run

   Pick the tax year + the jurisdictions to include. Audit log records HCM_YEAREND_RUN_INITIATED.

2. 2

   2. Generate forms

   The engine produces every form for every employee + contractor +-applicable plan. Per-form audit codes (one per employee-form) flow through HCM_YEAREND_FORM_GENERATED.

3. 3

   3. Reasonableness review

   The AI generates a narrative covering YTD totals, deduction consistency, multi-state allocation, year-over-year change summary. HR admin reviews + signs off. Audit log records HCM_YEAREND_RUN_REASONABLENESS_REVIEW.

4. 4

   4a. Seal (different HR admin than initiator)

   The seal locks the run against further changes; corrections after this point use the W-2c / 1099-COR / T4-amended path. HCM_YEAREND_RUN_SEALED recorded.

5. 5

   4b. Transmit (step-up + 4-eyes)

   Step-up-protected; phishing-resistant proof required. Forms flow to SSA via EFW2, IRS via FIRE, CRA via Internet File Transfer. HCM_YEAREND_RUN_TRANSMITTED at critical severity.

Supported forms

AI reasonableness narrative

The narrative is a read-side check on the generated forms. The AI never authors filings; it summarizes anomalies for human review.

Corrections (W-2c / 1099-COR / T4-amended)

If an error is discovered after the seal, the correction path:

1. 1

   Open the sealed run

   Click + Issue correction.

2. 2

   Pick the form + the box to correct

   The system shows the prior-filed amount + accepts the corrected amount.

3. 3

   Sign rationale

   Free-text. Stored against the correction record.

4. 4

   Generate the corrected form

   Audit log records HCM_YEAREND_CORRECTION_ISSUED.

5. 5

   Transmit the correction

   Same step-up + 4-eyes pattern as the original. The correction file format differs (W-2c instead of W-2; same SSA EFW2 with correction marker).

Per-employee detail

Every employee with year-end forms in the run sees:

• A view-only copy of the form on /hcm/me/tax-forms (after seal).
• An electronic-delivery copy if they have § 31.6051-1(j) consent.
• A mailed paper copy if not.

See Pay stubs & tax forms for the employee side.

Every field, explained

Audit codes

For SIEM ingestion + compliance review, this surface emits:

See Reference → Audit codes for the canonical description of each. HCM_YEAREND_RUN_TRANSMITTED is the critical-severity row — forms go to SSA / IRS / CRA.

Common gotchas

• "Generate ran with errors but the run advanced anyway." The engine generates everything it can; per-form errors surface in the run report. Resolve each before sealing.
• "Initiator can't seal." 4-eyes SoD. A different HR admin seals. The UI hides the seal button for the initiator.
• "Transmit step-up keeps failing." Phishing-resistant requirement; ensure you have a passkey or hardware key enrolled (TOTP won't satisfy YEAREND_TAX_TRANSMIT).
• "Corrected W-2 confused the employee." Workspace policy decides whether the original W-2 stays visible on /hcm/me/tax-forms. Most workspaces keep both visible; the newer takes precedence for filing purposes.
• "State filings show different numbers than federal." A common reciprocity-routing artefact; the federal W-2 sums to the workspace total, but state boxes reflect only the work-state allocation. Confirms multi-state routing is working.

Troubleshooting