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Marketing & PR Agencies: Year-End Payroll Checklist (2026)
Year-end payroll for marketing agencies is W-2s and any 1099-NEC to employees and contractors by January 31, the fourth-quarter 941 and annual 940, and the marketing agency items that decide which boxes are right: IRS Independent contractor (self-employed) or employee?. BEG: $25 per employee per month in your existing platform or $45 on isolved, live in 3 to 5 days.
Marketing agency items that shape the W-2 and 1099s
The IRS decides employee versus contractor status under common law rules grouped into three categories: behavioral control, financial control and the type of relationship. There is no set number of factors and no single factor decides, and a remote worker is an employee if the business has the right to control what will be done and how. Form SS-8 can be filed for an IRS determination.
For tax years beginning after 2025, Form 1099-NEC is required for each non-employee paid at least $2,000 in the year for services, up from $600, and the amount may be adjusted for inflation starting in calendar year 2027. Backup withholding applies at the same threshold.
State unemployment tax for a remote employee who performs all work from home in another state is owed to that state under the localization of work rules adopted in every state's UI law. In DOL's example, a New York employer's employee who moved to Florida and telecommuted full time became reportable to Florida from the date the telecommuting began.
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 marketing agencies the reconciliation that matters is that the pay codes for 1099 vs W-2 freelancer classification, project-based bonuses and multi-state remote teams 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.
- The IRS decides employee versus contractor status under common law rules grouped into three categories: behavioral control, financial control and the type of relationship. There is no set number of factors and no single factor decides, and a remote worker is an employee if the business has the right to control what will be done and how. Form SS-8 can be filed for an IRS determination. [IRS Independent contractor (self-employed) or employee?]
- For tax years beginning after 2025, Form 1099-NEC is required for each non-employee paid at least $2,000 in the year for services, up from $600, and the amount may be adjusted for inflation starting in calendar year 2027. Backup withholding applies at the same threshold. [IRS Instructions for Forms 1099-MISC and 1099-NEC (2026)]
- State unemployment tax for a remote employee who performs all work from home in another state is owed to that state under the localization of work rules adopted in every state's UI law. In DOL's example, a New York employer's employee who moved to Florida and telecommuted full time became reportable to Florida from the date the telecommuting began. [DOL ETA UIPL 20-04, Attachment I]
Read the full guide to how to handle year-end payroll and W-2s, and the rest of the marketing agency payroll library.
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Frequently Asked Questions
Year-end for marketing agencies: IRS Independent contractor (self-employed) or employee?
The IRS decides employee versus contractor status under common law rules grouped into three categories: behavioral control, financial control and the type of relationship. There is no set number of factors and no single factor decides, and a remote worker is an employee if the business has the right to control what will be done and how. Form SS-8 can be filed for an IRS determination.
Year-end for marketing agencies: IRS Instructions for Forms 1099-MISC and 1099-NEC (2026)
For tax years beginning after 2025, Form 1099-NEC is required for each non-employee paid at least $2,000 in the year for services, up from $600, and the amount may be adjusted for inflation starting in calendar year 2027. Backup withholding applies at the same threshold.
When are W-2s and 1099s due for a marketing agency?
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 marketing agency?
$25 per employee per month inside your existing platform or $45 on BEG's isolved HCM, all-inclusive, with a $500 monthly minimum. 1099 vs W-2 freelancer classification, project-based bonuses and multi-state remote teams 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 Marketing & PR Agencies. BEG manages payroll at $25-$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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