For small employers, the hardest payroll work of the year is not December’s last paycheck. It is the stack of year-end filings that follows in January. For 2026 wages, January 31, 2027 falls on a Sunday, so most of those filings move to Monday, February 1, 2027. That sounds like extra time, but holidays and the first payroll of the new year eat most of it.
The good news: almost every January problem can be caught in November and December. Here is a practical checklist for Maryland employers, from sole owners with one employee to growing teams.
The key dates for 2026 payroll
- February 1, 2027: Forms W-2 to employees, and Forms W-2 and W-3 to the Social Security Administration.
- February 1, 2027: Form 941 for the fourth quarter of 2026 (or Form 944 for annual filers).
- February 1, 2027: Form 940, the annual federal unemployment (FUTA) return. If all FUTA deposits were made on time, the IRS allows until February 10.
- End of January 2027: Maryland’s annual employer withholding reconciliation (Form MW508) with state copies of W-2s, plus your fourth-quarter Maryland unemployment insurance report. Confirm the exact due dates with the Comptroller and the Maryland Department of Labor, since weekend rules apply to them as well.
- February 1, 2027: Forms 1099-NEC for contractors, now required only at $2,000 or more for 2026 payments. See our post on the new 1099 threshold.
1. Verify employee names, addresses and Social Security numbers
A W-2 with a misspelled name or wrong Social Security number is the most common reason the SSA rejects or mismatches wage reports. Ask every employee to confirm their legal name and mailing address in November, and compare names and SSNs to their Social Security cards or the SSA’s free Social Security Number Verification Service. Update anyone who married, divorced or moved this year.
2. Collect updated Forms W-4 and MW507
Employees who had a life change in 2026, such as a new child, a second job or a spouse who started working, should review their federal Form W-4 and Maryland Form MW507 before the first 2027 paycheck. Remind employees who claimed exemption from withholding for 2026 that the exemption expires and must be renewed by mid-February to continue.
3. Report tips and overtime in the new W-2 boxes
2026 is the first year employers must separately report qualified tips and qualified overtime pay on Form W-2 so employees can claim the new federal deductions. Make sure your payroll system is tracking these amounts now, not in January. Our earlier article on the new W-2 tip and overtime reporting walks through the setup. Remember that Maryland does not allow these deductions on the state return, so they stay in Maryland wages.
4. Add taxable fringe benefits before the last payroll
Some benefits are taxable wages even though no cash changes hands. They have to be on the W-2, and it is far easier to run them through the final payroll of the year than to correct a W-2 later. Common examples:
- Personal use of a company vehicle
- Group-term life insurance coverage over $50,000
- Health insurance premiums paid for more-than-2% S corporation shareholders
- Gift cards and cash gifts to employees, including holiday gifts
- Non-accountable expense allowances
5. Watch the Social Security wage base
Social Security tax stops once an employee’s wages reach the annual wage base, which is $184,500 for 2026. Medicare tax has no cap, and an additional 0.9% Medicare tax must be withheld on an employee’s wages over $200,000. If you have a high earner, check that your payroll software stopped Social Security withholding at the right point.
6. Reconcile payroll to your books and tax deposits
Before you file anything, total the year in three places and make sure they agree:
- Your payroll register for all of 2026
- The four quarterly Forms 941 (or your Form 944)
- Your federal and Maryland tax deposits, as shown in EFTPS and your bank statements
Differences usually come from a manual check that never reached the payroll system, a voided paycheck, or a deposit made late or for the wrong period. Fix them now, while it is still a correction and not a notice.
7. Confirm how you will file
If your business files 10 or more information returns in total, including W-2s and 1099s combined, you generally must file them electronically. Decide now whether your payroll provider files W-2s for you, or whether you will use the SSA’s Business Services Online. Register or renew those logins in December, not on January 29.
8. Check your FUTA credit
Most employers pay an effective federal unemployment rate of 0.6% on the first $7,000 of each employee’s wages, after the credit for state unemployment taxes. That credit depends on paying your Maryland unemployment insurance on time. The Department of Labor also publishes a list of “credit reduction” states each November; check it so your Form 940 reflects the right rate.
9. Plan for 2027 before the first paycheck
- Update pay rates for raises and any minimum wage changes that apply to your employees.
- Load your new Maryland unemployment insurance contribution rate when the state sends it.
- Review benefit deductions and retirement plan limits for the new year.
- Set calendar reminders for 2027 quarterly filings and deposit dates.
How HAMTOCK Consulting can help
Year-end payroll is detail work, and a small mistake on a W-2 can mean amended forms, unhappy employees and penalty notices. HAMTOCK Consulting helps Maryland employers run payroll accurately all year and handles the January filings, so you can focus on your business.
- Payroll services, including W-2s, Forms 941 and 940, and Maryland withholding and unemployment filings
- Accounting and bookkeeping to keep payroll and your books reconciled
- Tax planning for owners, including S corporation reasonable salary reviews
Book a consultation today. Call 240-432-2749 or email contact@hamtock.com. We reply to consultation requests within one business day.
This article is for general information only and is not tax, payroll or legal advice. Deadlines, rates and rules can change, and your situation may differ. Please talk with a qualified professional before acting on it.
