Xero has announced another significant step towards full payroll compliance for is US client base. It is delivering support for draft previews of W-2 and 944 forms using live data. Historically companies have had to wait until January when the forms are available to view, confirm and file. The problem was that with the filing date set at January 31st this left very little time for administrators to comprehensively check. It is now possible for them to do this work before the end of the calendar year during what can be a quieter period.
Administrators are able to download and check the key fields such as Federal EIN, State ID, name, address and wage information. They are not able to file the preview forms however. The forms are a draft form and therefore not valid for filing. More details on the new feature are available here.
Where is payroll available.
Xero now supports payroll in 36 states. Electronic filing is available in just nine however. There are plans to extend the electronic filing and payment to other states in due course. It will be interesting to see if the list is extended before the end of the tax year and in time for annual filing. The states where electronic filing is available are: California, Florida, Illinois, New Jersey, New York, Pennsylvania, Texas, Utah and Virginia.
What does this mean
Xero is trying to increase its presence in the US under its new leadership. Last week it announced that Xero HQ apps are now generally available in the Americas. This enables partners to gain visibility to their clients information and to receive proactive alerts about issues they need to be aware of. In the last year Xero’s market share in North America grew by 43%. That growth needs to continue for it to make an impact in a market dominated by Intuit Quickbooks. That share is not all cloud-based, so there is a proportion that Xero will hope to take. With Xero HQ and increased payroll capabilities it will have a better chance.
As Keri Gohman, President, Xero Americas approaches her first year in charge it will be interesting to see what her plans are for the company in 2018.
