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Healthcare Practices: Year-End Payroll Checklist (2026)
Year-end payroll for healthcare practices is W-2s and any 1099-NEC to employees and contractors by January 31, the fourth-quarter 941 and annual 940, and the healthcare practice items that decide which boxes are right: IRS About Form 941. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Healthcare practice items that shape the W-2 and 1099s
Employers report federal income tax withheld plus both the employee and employer shares of Social Security and Medicare tax on Form 941 each quarter. Employers that reported more than $50,000 of employment taxes in the lookback period, or accumulated $100,000 or more in liability on any day, are semiweekly depositors and must attach Schedule B.
An employer that averaged at least 50 full-time employees, counting full-time equivalents, in the prior calendar year is an applicable large employer and must offer affordable minimum essential coverage to full-time employees and their dependents or face an employer shared responsibility payment. A full-time employee is one with at least 30 hours of service a week or 130 hours a month; the base payments are $2,000 and $3,000 per employee per year, indexed, and were $2,970 and $4,460 for 2024.
Sign-on bonuses paid to recruit nurses and other staff are wages subject to Social Security, Medicare and FUTA taxes and income tax withholding. Bonuses paid separately from regular wages are supplemental wages withheld at a flat 22 percent, or 37 percent once an employee's supplemental wages exceed $1 million in the calendar year.
The January calendar
W-2s and W-3 to the SSA and copies to employees by January 31; 1099-NEC for each contractor paid $2,000 or more in the year, the threshold for tax years after 2025, by the same date; Form 940 and the fourth-quarter 941 by January 31 as well, with a 10-day extension where all deposits were on time. Ten or more information returns of any kind, counted together, must be filed electronically. For healthcare practices the reconciliation that matters is that the pay codes for shift differentials, on-call pay and credentialing-based pay tiers landed in the right W-2 boxes for every employee.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- Employers report federal income tax withheld plus both the employee and employer shares of Social Security and Medicare tax on Form 941 each quarter. Employers that reported more than $50,000 of employment taxes in the lookback period, or accumulated $100,000 or more in liability on any day, are semiweekly depositors and must attach Schedule B. [IRS About Form 941]
- An employer that averaged at least 50 full-time employees, counting full-time equivalents, in the prior calendar year is an applicable large employer and must offer affordable minimum essential coverage to full-time employees and their dependents or face an employer shared responsibility payment. A full-time employee is one with at least 30 hours of service a week or 130 hours a month; the base payments are $2,000 and $3,000 per employee per year, indexed, and were $2,970 and $4,460 for 2024. [IRS Employer Shared Responsibility Provisions]
- Sign-on bonuses paid to recruit nurses and other staff are wages subject to Social Security, Medicare and FUTA taxes and income tax withholding. Bonuses paid separately from regular wages are supplemental wages withheld at a flat 22 percent, or 37 percent once an employee's supplemental wages exceed $1 million in the calendar year. [IRS Publication 15 (2026)]
Read the full guide to how to handle year-end payroll and W-2s, and the rest of the healthcare practice payroll library.
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Frequently Asked Questions
Year-end for healthcare practices: IRS About Form 941
Employers report federal income tax withheld plus both the employee and employer shares of Social Security and Medicare tax on Form 941 each quarter. Employers that reported more than $50,000 of employment taxes in the lookback period, or accumulated $100,000 or more in liability on any day, are semiweekly depositors and must attach Schedule B.
Year-end for healthcare practices: IRS Employer Shared Responsibility Provisions
An employer that averaged at least 50 full-time employees, counting full-time equivalents, in the prior calendar year is an applicable large employer and must offer affordable minimum essential coverage to full-time employees and their dependents or face an employer shared responsibility payment. A full-time employee is one with at least 30 hours of service a week or 130 hours a month; the base payments are $2,000 and $3,000 per employee per year, indexed, and were $2,970 and $4,460 for 2024.
When are W-2s and 1099s due for a healthcare practice?
January 31 for both, to the recipient and to the SSA or IRS. The 1099-NEC threshold is $2,000 for tax years after 2025, and 10 or more information returns of any type must be e-filed.
What does managed payroll cost for a healthcare practice?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Shift differentials, on-call pay and credentialing-based pay tiers are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Healthcare Practices. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: IRS: Understanding Employment Taxes
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