Deciding Which Tax Year Setting is Best for Your Team – Everlance

Everlance offers two tax year settings to control how expense activity appears in your team’s quarterly and annual tax reports. Choosing the right option helps ensure your reports align with how your finance team tracks and recognizes taxable payments.

These settings are available for teams enrolled in FAVR or TAAP programs and can be configured by a program admin.

Quick Comparison

Option 1: December to November Tax Year (Default)

This is the most commonly used setting for Everlance programs.

How it works

Expenses are grouped by the payment deadline date
Reports reflect when expenses are expected to be paid, not when they occurred

Why teams choose this option

Your year-end tax report is ready in early December
Gives your team time to review and close out finances before the holidays

Key behavior

November is the final period of the tax year
Any report with a December payment deadline counts toward next year

Example: Monthly Pay Schedule

November 1–30 reports make up the final pay period of the current tax year. These reports have an approval deadline of December 5 and a payment deadline of December 15.
Once all November reports are approved (around December 5), the current year’s tax report is complete and ready for download.
On the tax report, this November activity appears as “December”, since it is based on the December payment deadline, and is included in Q4 totals for the current year.
December pay-period activity, on the other hand, appears as “January” on the tax report and is included in Q1 totals for the next tax year.

Note: If a FAVR or TAAP fixed payment is made within the current period (paid “in advance”), it is still grouped by the payment deadline month on the tax report.

Example: Non-Monthly Pay Schedules (Weekly, Biweekly, 1st &16th)

The weekly pay period covering November 16–22 is the final period for the current tax year. Its approval deadline is November 25, and its payment deadline is November 28 — the last payment deadline that still falls in November.
Once these reports are approved, the current year’s tax report (December to November) is complete.
On the tax report, this activity appears as “December” mileage and payment totals, since it’s based on the month following the November 28 payment deadline. These totals are included in Q4 for the current tax year.
The next pay period, November 23–29, has a December 5 payment deadline. This activity appears as “January” mileage and payment totals on the tax report and is included in Q1 of the next tax year.

Option 2: January to December Tax Year

This setting aligns the tax year with the standard calendar year.

How it works

Expenses are grouped by the pay period end date.
Reports reflect when expenses were incurred, not when they were paid

Why teams choose this option

Keeps reporting aligned with the calendar year (January–December).
Matches traditional accounting and financial reporting practices

Key Behavior

December is the final period of the tax year
Any report with a December pay period end date counts toward the current year
Your year-end tax report is not available until early January, once December reports are approved. This timing can be challenging if a year-end financial close is necessary.

Example: Monthly Pay Schedule

Reports from December 1–31 make up the final pay period of the current tax year. However, their approval and payment deadlines fall in January (typically January 5 and January 15).
Once all December reports are approved in early January, the current year’s tax report is complete and ready to download.
On the tax report, this activity appears as “December” (based on the pay period end date) and is included in Q4 for the current year.
Activity from January then starts the new tax year, appearing as “January” and rolling into Q1.

For this setting, FAVR and TAAP fixed payments are always grouped by the end date of the pay period. This means a payment for December 1–31 will show as a December payment on the tax report — even if it’s paid earlier or later.

*If you’re unsure which setting is right for your program, contact Everlance Support before making a change. Updating your tax year setting may affect how past reports appear.