IRS Reporting for Year-End Pay Periods

by T. S.

What is the IRS rule for a payroll that ends in one year and is paid in the following year? How does the IRS want you to report this for year end purposes?

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Pay Date Takes Precedence
by: Best Business Payroll

The IRS tries to make it simple by only considering the check date, not days worked.

So if the check date is in 2010 then all the earnings are considered taxable in 2010 even if all the hours worked were in the last days of 2009. For example, if you worked 40 hours during December of 2009, but the date on the check for that 40 hours was January 1st or later, the IRS would recognize the entire 40 hours as being taxable in 2010.

Similarly, for quarter breaks, all that matters is in which quarter the check date falls, not in which quarter work was done.

The IRS looks at every check date in a given year and combines them for year-end reporting purposes; it does not matter in which year the work was done, only in which year the pay date falls.

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