Year-end payroll checklist for tax year 2026
Run final payroll, verify employee W-4s + addresses, reconcile YTD totals, file Q4 941, prepare W-2s by January 31, prepare 1099s by January 31, deposit any final tax withholdings, and archive payroll records for the required retention period (4 years federal, longer in some states).
Key dates at a glance
| Deadline | Date | Notes |
|---|---|---|
| Final 2026 payroll run | December 31, 2026 | Reconcile YTD totals against accounting system. |
| W-2s to employees + SSA | January 31, 2027 | Both employee copies AND SSA filing. |
| 1099-NEC to recipients + IRS | January 31, 2027 | Single deadline for both. |
| Form 941 Q4 + Form 940 | January 31, 2027 | Federal quarterly + annual federal unemployment. |
| 1099-MISC IRS (paper) | February 28, 2027 | Paper filers only. |
| 1099-MISC IRS (electronic) | March 31, 2027 | Most modern filers. |
The full picture
December: run your final payroll for the tax year and confirm all year-to-date totals reconcile against your accounting system. Common mismatches: bonuses not added to YTD wages, gross-up errors on fringe benefits, missing pretax 401(k) reductions. Catching errors in December is much cheaper than amending W-2s in February.
Early January: verify every employee's W-4 is current, address is current (for mailing W-2s and complying with state notice requirements), and SSN matches what the SSA has on file (the SSA's Business Services Online has a free Social Security Number Verification Service). Issue W-2s to employees by January 31. File W-2s with the SSA — paper filers by January 31, electronic filers by January 31 as well (SSA deadline is earlier than the IRS 1099 deadline).
January 31 is also the deadline for issuing 1099-NEC AND filing 1099-NEC with the IRS, plus issuing the recipient copy of any 1099-MISC. Most small employers find it easier to generate W-2s and 1099s in the same window since the data sources (payroll system + AP system) are both already open for year-end review.
Through Q1: file Form 941 for Q4 2026 (due January 31), Form 940 for unemployment tax (due January 31), and any state-specific year-end reconciliations. Archive payroll records — federal recordkeeping rules require 4 years for income tax records and 3 years for FLSA wage-hour records; some states (California, New York) require longer. Don't shred old records mid-audit.
Frequently asked questions
When should I start year-end payroll prep?
Mid-December at the latest. Verifying W-4s, employee addresses, and YTD totals in December gives you a buffer to fix errors before W-2 production deadlines hit on January 31.
Do I need to file W-2s with both the SSA and the IRS?
W-2s are filed with the Social Security Administration (which forwards data to the IRS). 1099s are filed directly with the IRS. Both have January 31 deadlines for recipient copies; the SSA W-2 filing deadline is January 31 for both paper and electronic.
How long do I need to keep payroll records?
4 years for federal income tax records, 3 years for FLSA wage-hour records. Several states require longer — California requires 4 years, New York 6 years for some wage records. Keep the longer of the applicable federal vs state requirement.