ADP Launches ‘Next-Generation Tax Engine’ to Aid Payroll

ADP launched its Next-Generation Tax Engine, which it calls “a foundational backbone of the company’s tax compliance products.” Ultimately, the company said, the systems is meant to minimize compliance risk and increase payroll efficiencies at businesses of all sizes.

The integrated, end-to-end system offers scalable real-time tax processing as well as a the ability to process a variety of taxes, including federal, state, region-specific local taxes and PEO-based. Built-in features highlight where errors might be in both high- and low-value transactions. The tax engine also offers customers more payment options.

The launch comes just as accountants, payroll processors and CFOs are taking deep breaths. Many CPAs in both large and small firms said they’ve been scrambling to understand the implications of 2017’s tax law even as they dealt with the results of the government shutdown, which severely impacted the IRS’s operations.

Because of new regulations regarding employment taxes, “employers are faced with increased uncertainty and new compliance risk,” said Pete Isberg, ADP’s vice president of government relations. The new tax engine enables ADP “to monitor and proactively manage increasing complexity, while providing a more streamlined tax filing experience for clients.”

ADP said it filed nearly 67 million W-2s in 2018, a 5 percent increase from the previous year.

(Always) Changing Payroll

Among the changes imposed by the tax bill—officially called the 2017 Tax Cuts and Jobs Act—are changes in income-tax brackets, elimination of penalties related to the Affordable Care Act’s individual mandate (in a way that keeps in place the paperwork burden on employers), deductions for employers offering paid FMLA leaves, and changes in the treatment of benefits such as commuting costs and moving reimbursements. In addition, the Social Security Administration adjusted the maximum earning level for Social Security tax.

And all that’s only for the U.S. Accounting Today notes that new payroll initiatives were launched in Australia, New Zealand and other parts of Asia. The region is seeing “a concerted effort … to move away from paper-based filing to submitting their payroll reports electronically, leading to widespread adoption of cloud-based payroll platforms.”

Of course, keeping payroll and tax systems up-to-date is a never-ending task and, if anything, many observers expect the pace of change to quicken. Among the looming issues solutions providers will soon face: more calls for chatbots and on-demand pay.

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