Your Year-End Ag Payroll and Tax Checklist

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Year-end payroll is your chance to close the year cleanly and start the next one strong. With tax filings, W-2s and 1099s, benefit reporting, and state compliance all coming together, a quick review now helps everything run smoothly and avoids extra work later.

For agricultural employers, payroll often comes with added complexity. If you’re managing payroll and taxes for a farm, labor contractor, or agribusiness with seasonal, hourly, or multi-state workers, you’re dealing with ag payroll, which makes this year-end review especially important.

We’ve put together this checklist to help you review key ag payroll and tax items before filing so you can close out the year with confidence.

1. Review year-to-date (YTD) earnings, deductions, and withholding

Start your year-end review by confirming that all employee wage and tax data in your payroll system is accurate.

For each worker, review:

• Year-to-date earnings, including regular wages, bonuses, and taxable fringe benefits

• Year-to-date deductions and proper tax treatment

  • If you offer a Section 125 plan, some health insurance deductions may be pre-tax, while others may still be post-tax

  • Review 401(k) and Roth 401(k) elections to ensure employee contributions match the correct deferral type in your payroll platform

If you issued manual checks or voids outside your payroll platform, make sure your payroll provider has recorded them. Off-platform payments must still be entered so wages and taxes appear correctly on employees’ W-2s.

2. Add fringe benefits and third-party sick pay (3PSP)

Many fringe benefits are finalized late in the year, making Q4 a common source of payroll errors.

As you review:

• Some fringe benefits must be processed with wages to cover associated tax liability, while others can be added without wages

• If you have terminated employees with taxable fringe benefits, you will typically need to gross up wages to cover employer and employee taxes

• Best practice is to add all fringe benefits on your last or second-to-last payroll in December

If you have workers receiving short-term or long-term disability payments through an insurance carrier or the state:

• Flag these workers with your payroll provider as early as possible

• Insurance companies have until January 15 to issue annual statements, but you can often request this information sooner

• Depending on who issues the payments, disability income may need to be entered into your payroll system for accurate tax calculations and W-2 reporting

3. Check benefits and required W-2 reporting codes

The IRS requires certain items to be reported in Box 12 and Box 14 of Form W-2, with additional optional disclosures allowed in Box 14.

Before W-2s are issued:

• Review IRS guidance for required and optional reporting codes

• Confirm which items apply to your organization

• Let your payroll provider know if you want custom Box 14 items included so reporting can be configured in advance

While there were no structural W-2 form changes for 2025, many employers are choosing to report qualified overtime compensation in Box 14 for additional transparency.

4. Verify employer tax identification numbers

Incorrect or missing tax IDs are one of the most common reasons payroll filings fail.

To avoid delays:

• Review your previously filed 2025 tax returns to confirm tax account IDs match agency records

• Identify any tax types with missing IDs or listed as “Applied For”

  • Most states no longer accept “Applied For” filings

  • Missing IDs often prevent returns from being filed altogether

5. Confirm third-party filing access (TPA and POA)

Most states require you to authorize your payroll provider to file returns and submit payments on your behalf. This authorization is typically granted through third-party administrator (TPA) access or power of attorney (POA).

Make sure you:

• Confirm with your payroll provider that all required TPA and POA access is in place

• Complete any state-required paper forms or online authorizations

• Maintain online access to your tax accounts so you can respond to agency notices, grant or update access, and review historical payroll tax filings

It is not too late to establish access, but timing is critical as year-end deadlines approach.

6. Confirm employee W-2 and 1099 delivery preferences

The IRS allows electronic delivery of W-2s and 1099s, but only under specific conditions.

As you prepare for distribution:

• Employees must opt in to electronic delivery and may revoke consent at any time

• Electronic delivery must be secure, as emailing tax forms is not IRS compliant

• Employees who do not opt in must receive a paper form that is furnished or postmarked by January 31

Confirming delivery preferences now helps prevent confusion, delays, and returned mail in January.

7. Resolve blocked or failed payroll tax filings

Sometimes payroll tax filings fail due to issues that are not immediately visible.

Common causes include:

• Returns already filed

• Invalid or missing tax IDs

• Missing TPA or POA access

• Invalid or missing Social Security numbers

Ask your payroll provider:

• Whether all prior filings were successful

• If any current quarter or annual filings are expected to fail and why

Even if earlier quarters filed successfully, new issues such as invalid SSNs or ITINs can cause state unemployment insurance returns to reject at year end.

Why this list matters at year end

Completing these steps before year end helps you:

• Deliver accurate W-2s and 1099s

• File payroll taxes on time and without errors

• Reduce amendments and compliance risk

• Avoid last minute surprises during January deadlines

Simplify your year-end payroll with Seso

If reviewing this checklist surfaced questions or uncovered loose ends, you’re not alone. Year-end is when payroll details come together, and having the right system in place can make all the difference.

Seso Payroll is built for agricultural employers who need accuracy, compliance, and confidence at every stage of the payroll process. From managing complex deductions and fringe benefits to filing taxes accurately and on time, Seso helps you close the year cleanly and start the next one strong.

Learn more about our ag payroll solution and how we can help simplify your year-end process.