Dynamics SL Partners: Year-End Updates Discontinued for Payroll and Accounts Payable

Earlier this year, on January 9, 2024, Microsoft Dynamics SL 2018 moved from mainstream support to extended support, which will continue until July 11, 2028. With this shift, it’s crucial for your clients to understand the implications of this change and how to prepare accordingly. Extended Support, unlike mainstream support, provides only limited assistance and no new feature updates, which will affect clients who rely on Dynamics SL for key functionalities like Payroll and Accounts Payable.

Understanding the Differences in Support

As Dynamics SL 2018 is now in Extended Support, clients need to be aware of several key differences:

• Paid Support Options: Extended Support offers paid support options, but non-security-related assistance, such as design changes or new features, is no longer available.
• Security Updates: Security patches continue to be provided at no extra cost. Microsoft emphasizes the importance of installing these updates and the latest product releases to maintain optimal security.
• End of Non-Security Updates: In December 2023, the final round of mainstream updates was delivered, including the last non-security enhancements. Since January 2024, Dynamics SL users must manage without non-security updates and prepare to install the latest Service Pack to maintain eligibility for support.

These changes mean that, while clients can still purchase new users or modules for Dynamics SL during the extended support period, the lack of feature updates may affect operational continuity, especially for clients using Payroll and AP. This is the first year that SL will not receive year-end updates, requiring manual adjustments and additional considerations.

With this shift, it’s crucial for your clients to understand the implications of this change and how to prepare accordingly. Extended Support, unlike mainstream support, provides only limited assistance and no new feature updates, which will affect clients who rely on Dynamics SL for key functionalities like Payroll and Accounts Payable.

Payroll Implications and Manual Adjustments

For Dynamics SL clients using Payroll, key updates will no longer be automatically provided:

• Social Security Wage Base Increase: The 2024 wage base has been increased to $168,600 (up from $160,200 in 2023), affecting the Social Security tax calculation. Without automatic updates, customers must manually adjust these figures in Dynamics SL.
• Electronic Filing for Forms W-2: New regulations for 2024 now require employers to file W-2s electronically if they issue 10 or more in a calendar year. Dynamics SL clients will need to verify compatibility with the new IRS IRIS format. While the older FIRE format may still work, manual preparation may be necessary if IRS requirements change.
• Quarterly Tax Updates Discontinued: Federal and state tax rates, which Microsoft previously updated quarterly, are no longer available. Clients will need to source federal and state tax rate adjustments themselves and enter them manually.

Accounts Payable Changes for 1099 Forms

Dynamics SL users generating 1099s will need to be aware of several new IRS requirements that could impact their reporting:

• New Reporting Thresholds: For 1099-K, earnings of $600 or more via platforms like PayPal or Venmo must be reported. Although Dynamics SL does not support 1099-K, other changes do affect SL users:
  • 1099-MISC and 1099-NEC: The threshold is now $1,000 (up from $600), impacting SL clients who may need to generate updated reports.
  • Direct Sales: The reporting threshold for direct sales payments has dropped from $5,000 to $1,000, which may require report adjustments.

Customers must make manual adjustments to reflect standard deduction and income tax bracket updates as these updates will not be available within Dynamics SL.

Anticipated Support Requests and Partner Guidance

As the absence of these year-end updates becomes apparent, partners can anticipate an influx of support inquiries from SL users. Previously, clients on SL 2018 could have these updates installed with support assistance. Without Microsoft-provided updates this year, partners should consider proactively informing clients about this change and guiding them on how to make necessary adjustments manually.

Next Steps for Dynamics SL Partners

For partners supporting Dynamics SL users, preparing your clients for the changes outlined above is essential. Here’s what to consider:

1. Communication: Inform clients about the changes in payroll and AP requirements, specifically around manual adjustments.
2. Guidance on IRS Changes: Support clients in understanding and implementing the new wage base and electronic filing requirements.
3. Alternatives: For clients heavily reliant on Dynamics SL payroll, it may be a strategic time to discuss transitioning to solutions that provide updated, supported payroll and AP functionalities, like migrating to Dynamics 365 Business Central.

By taking these steps, Stratos Cloud Alliance partners can help clients navigate the year-end season smoothly, despite the absence of updates for Dynamics SL.

Final Thoughts

This year’s shift underscores the ongoing need for partners to stay connected with clients still on legacy Dynamics SL. Preparing clients for the lack of automated updates is crucial to maintaining service continuity and supporting smooth year-end filings.

If you’re interested in learning more about your Business Central acceleration opportunities and helping clients migrate to supported versions, reach out to Stratos Cloud Alliance at insider@velosio.com or fill out a New Partner Application here.