Disclaimer: This information is provided for educational purposes only and does not constitute legal, tax, or accounting advice. Always consult with your CPA, tax professional, or legal counsel before making tax filing decisions. Avionté disclaims all liability for actions taken based on this content.
Happy New Year! Let's start 2026 strong by reviewing what changed in 2025 that affects your year-end compliance processes. Whether you're preparing W-2s, 1095-Cs, or managing state-specific requirements, here's what's different this year.
ACA Compliance Changes
PBRA (Paperwork Burden Reduction Act) - December 2024 This is the biggest ACA change in years:
✅ What Changed: No longer required to automatically mail 1095-Cs to all employees
✅ New Option: Post website notice and provide forms upon request
✅ What Didn't Change:
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IRS filing still required by March 31st
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Electronic consent still required for digital delivery
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State requirements still apply (CA, DC, MA, NJ, RI)
Implementation Requirements:
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Notice must be posted by March 3, 2026
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Must deliver forms within 30 days of request OR by January 31, 2026 (whichever is later)
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Keep notice posted through October 15, 2026
Other ACA Updates:
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SSN relief for self-insured plans covering dependents
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90-day response period for penalty letters (up from 30 days)
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6-year statute of limitations for penalty assessments
W-2 and Payroll Tax Changes
2025 Tax Year Rates
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Social Security wage base: $176,100
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Standard mileage rate: 70¢/mile
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Federal unemployment (FUTA) wage base: $7,000
State Minimum Wage Increases for 2025: Multiple states increased minimum wage on January 1, 2025, affecting your 2025 payroll (though not your 2024 W-2s). Key states for staffing:
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California: Varies by locality, some reaching $18.67/hour
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New York: $16.50/hour in NYC and surrounding counties
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Washington: $16.66/hour
State Compliance Updates
Paid Leave Expansions: Several states expanded paid family and medical leave requirements:
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Maine: Started employee/employer contributions that will display on Form W-2
- Delaware: Started employee/employer contributions that will display on Form W-2
- Washington: Increased benefit amounts for 2025
Unemployment Insurance Changes: Many states adjusted UI wage bases and tax rates for 2025. Review your state-specific rates in Admin Tools.
Technology and Feature Updates
New Avionté Features for Year-End:
Electronic Consent Management (Released Fall 2024)
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New Talent Search filters for W-2, 1095-C, and 1099 consent status
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Three status options: Yes, No, No Response
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Batch send consent requests directly from search results
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This is huge for PBRA compliance - easily identify who needs paper 1095-Cs
Enhanced ACA Reporting:
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Improved sync error detection
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Better validation reports
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Streamlined Part II override process
Staffing Industry-Specific Considerations
Worker Classification Scrutiny: The DOL and IRS increased focus on worker classification in 2024-2025. Ensure your 1099 vs. W-2 classifications are defensible:
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Document why contractors are classified as such
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Review state-specific independent contractor tests
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Consider the DOL's economic reality test
Joint Employment Concerns: With increased client co-employment risk, ensure you're:
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Properly reporting wages under your EIN
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Not misclassifying temporary workers as client employees
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Maintaining clear contractual relationships
Compliance Checklist for 2026
Immediate Actions:
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Review PBRA implementation options for 1095-C distribution
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Update website with ACA notice if using PBRA relief
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Send electronic consent requests using new Talent Search feature
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Verify 2025 wage bases and rates in your tax configuration
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Run Employee Sync Error reports for both W-2 and ACA
Ongoing Monitoring:
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Track state minimum wage changes affecting 2026 payroll
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Monitor new state paid leave program requirements
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Review worker classification standards quarterly
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Validate UI rates as states release 2026 rate notices
Quarter 1 Priorities:
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File W-2s by February 2nd
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Distribute 1095-Cs by March 2nd (or post PBRA notice)
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File 1095-Cs to IRS by March 31st
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Complete any state-specific filings
Resources to Bookmark
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State Labor Department Links - verify your specific state/s
What's on Your Radar?
Are you implementing PBRA relief or continuing automatic distribution? What state-specific changes are affecting your operations? Let's share strategies for navigating these compliance updates.
Remember: Compliance isn't just about avoiding penalties - it's about building systems that work efficiently year-round. The changes above should inform your process improvements for 2026 and beyond.
Questions about any of these updates? Post them below!
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