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Quarter End Letter - Q2 2026

***Action Required: Q2 2026 Quarter-End Review – Deadline June 30, 2026***

Hello Payroll Vault Owners & Team,

As we approach the end of Q2 2026, please review the following items with your team to ensure all clients are properly configured for quarterly tax filing and compliance processing.

1. Blackout Period
June 30, 2026, is the last day to make changes. The blackout period begins July 1, 2026, when the tax team will begin quarterly processing.

2. Review the Expected Tax Return Checklist
Navigate to: Production Utilities > Service Bureau Reports > Expected Tax Return Checklist > Filter for Q2 2026. This report lists clients alphabetically by state, form, and client. The legal status will indicate whether the client is active or in conversion. If a client does not appear on this report, Q2 2026 filings will not be created or filed. Verify that the Legal Service History Date is correct for the client.

3. Missing Tax IDs
On the Expected Tax Return Checklist, the EIN column will identify any missing tax IDs. Missing tax IDs will result in a $100 fee per month after 90 days. Once the tax ID is obtained, it must be entered in the Tax Maintenance screen with correct effective dates. Returns cannot be filed without a valid tax ID. If a tax ID is received while the tax team is already processing quarterly returns, that return will move to the end of the processing queue. If assistance is needed locating a state registration, please refer to the state guide posted in Teams > Training > Payroll Vault Buzz (posted 08/28/2025) or engage with Middesk. After entering the tax ID in iSolved, notify the tax team by submitting a HubSpot ticket.

4. Liabilities
Any liabilities that need to be opened for the quarter should be opened in iSolved and the funds impounded from the client to the tax bank account (Georgia Banking).

Reference: Knowledge Base article – Opening Tax Liabilities

5. Unemployment Rates for 2026
Ensure all unemployment rates have been updated for 2026. Clients receive a notice each year with their updated rate. They may also verify their rate through their state unemployment insurance portal.

6. Review the Interim Reconciliation (Error) Report
Navigate to: Tax Filing Management > Tax Utilities > Interim Reconciliation. After the final payroll of the quarter, any remaining errors will appear in: Tax Filing Management > Tax Quarter End > Quarter End Dashboard. All errors must be corrected prior to June 30, 2026. If assistance is needed resolving errors, please submit an OPS ticket.

7. Review Payroll Reports Each Payroll
The following reports should be reviewed each payroll:

    • Exceptions
    • Payroll Summary
    • Payroll Register
    • New Employee and Change Audit

8. Invalid Social Security Numbers

A valid Social Security number must:

    • Contain exactly 9 digits (XXX-XX-XXXX)
    • Not begin with 000, 666, or any number in the 900–999 range
    • Not contain 00 in the middle two digits
    • Not contain 0000 as the last four digits
    • An ITIN is not a Social Security number and, you should not use an ITIN in place of an SSN for a W‑2 employee

Source: https://secure.ssa.gov/poms.nsf/lnx/0110201035

9. Process the Final Payroll of the Quarter
The final payroll of the quarter must be processed in order for the quarter to close properly and for tax forms to be generated. If a client skips their final payroll and had no payroll activity during the last month of the quarter, a zero payroll should be processed to close the quarter. All on-hold payrolls must also be processed as a zero payroll. As a best practice, a zero payroll should be run on the last day of the month if the client does not process payroll during that month.

10. On-Hold Payrolls
If a payroll is currently in On-Hold status, it must be temporarily changed to Active in order to process the zero payroll required to close the quarter. After the zero payroll has been processed, the payroll may be returned to On-Hold status if appropriate.

11. Power of Attorney (POA)

As a reminder, submitting Power of Attorney (POA) forms to the appropriate agencies is a required part of the client onboarding process and is the responsibility of each franchise office. When onboarding a new client, both the Federal Form 8655 and any applicable state POAs must be signed by the client. To generate these forms, navigate to Client Management > Taxes > Company POA Package in iSolved. The forms are built into iSolved per agency guidelines and, once produced, include submission instructions as a second page where applicable. If no instructions are present, the accepted filing method is typically noted at the top or bottom of the form itself. Please note that submitting a POA is separate from granting TPA access. A POA gives our tax team permission to speak with the agency on behalf of the client, while TPA access allows us to file and pay taxes on their behalf. Both are necessary and serve different purposes.

Reference: Knowledge Base article - Submitting POA Forms

12. Third Party Administrator (TPA) Access

The client will need to grant Third Party Administrator (TPA) access to Payroll Vault for each state and local agency where they have an active payroll tax account. Granting TPA access allows the tax team to file and pay taxes on behalf of the client. Without it, the tax team is unable to file and pay on time, which may result in penalties and interest. As with POA, granting TPA access for each applicable agency is the responsibility of the client and should be completed as part of the onboarding process. For guidance on granting TPA access, refer to the Knowledge Base. Articles are available by state.

IMPORTANT NOTE:

All errors must be corrected prior to the blackout period. Any missing tax IDs must be applied for and entered in iSolved. If a client is not liable for the quarter, the effective date for that tax must be corrected within the Tax Maintenance screen. Franchises are responsible for notifying the tax team via a HubSpot ticket once a tax ID has been entered in iSolved. Clients who are not ready at the time of quarterly processing will be moved to the end of the processing queue. The tax team will begin processing with clients that are in balance, have valid tax IDs, and are ready to file. For guidance on granting TPA access, refer to the Knowledge Base. Articles are available by state.

Please let us know if you have any questions. We appreciate your assistance as we close out the quarter.

Thank you, 
Payroll Vault Tax Team