Year-End in Self-Determination: W-2s, 1099s and Getting Ready for Next Year

There are two year-ends in the Self-Determination Program (SDP), and they usually do not land on the same day. The tax year ends December 31 and produces W-2s and 1099s. The budget year ends whenever your Individual Program Plan (IPP) and spending plan say it does. Here is what to do before each.

Two different years

The tax year is the calendar year. Employers report the year's wages by January 31, and your caregiver's wages under SDP are no different.

The budget year is different. Your individual budget and spending plan are attached to your IPP, and the plan year runs on the IPP's dates, not necessarily January to December. A family whose plan took effect in April has a budget year that runs April to March. Check your spending plan for the dates, or ask your service coordinator.

December is about tax forms. The month before your plan ends is about money left, authorizations and the next plan.

What arrives in January

• Caregivers get a W-2. It shows the year's wages and withholding. Sentinel Four issues W-2s for the caregivers on our payroll by January 31. A caregiver who moved should give the case manager the new address before the end of December.
• Vendors get a 1099-NEC where required. A vendor paid from the budget as a business or individual, not as an caregiver, gets one by January 31 where the rules require it. The name and taxpayer number come from the W-9 collected at onboarding.
• Families do not prepare tax forms for the caregiver. Sentinel Four handles the tax filings under both hiring models, as payroll agent under Sole Employer.

What to check before December

This is the list for the month before your plan year ends.

• Remaining budget by category. Open the portal and look at each category: allocated, spent in the last 30 days, remaining. A category running short needs a conversation now, not in the last week. What an SDP budget can and cannot pay for lists what a balance can go toward.
• Authorizations that expire. Regional center authorizations have end dates, and nothing can be paid after that date until a new one is in place. New authorizations should be in place the week before the new period starts; ask your service coordinator to confirm the renewal dates.
• The IPP and budget meeting. For an existing participant, the next year's budget is set by the IPP team from purchase-of-service spending in the most recent 12 months. Get the meeting on the calendar before the plan ends. If needs, circumstances or resources have changed, that meeting is where to raise a budget change.
• The new spending plan. A signed and approved spending plan must reach Sentinel Four by the 10th of the month before it takes effect. A plan year that starts January 1 needs the plan in by December 10. Your regional center may set its own deadline on top of that. Individual budget vs spending plan explains what the plan has to contain.

Wage changes for the new year

Wages often change at the new year, from a raise or a minimum-wage increase. The rate on file has to change before the first pay period at the new rate, and the spending plan has to cover the new all-in cost, including employer burden, for the whole plan year. Employer burden explained has the arithmetic.

Two things to do:

1. Tell your case manager the new rate and its effective date in advance, so the wage notice is updated and payroll runs at the right rate from the first period.
2. Check that the caregiver line, at the new rate plus burden times the hours, still fits the plan. If not, a plan change or a budget adjustment is needed, and both take time. DDS lists minimum-wage increases among the reasons a budget can be adjusted, as of July 2025. Check the current rate with your regional center.

One-time purchases and next year's budget

A large one-time purchase in the current year, like a ramp, can be excluded from the next year's budget calculation. A purchase you have been putting off may fit in a category with money left, and you want the IPP team to treat it as one-time when they set next year's number. One-time purchases and next year's budget goes through how that works.

How Sentinel Four handles this

At the tax year-end we close payroll for the year, issue W-2s to every caregiver on our payroll and 1099-NECs to vendors where required, both by January 31. Caregivers are set up in ADP, so the year's wages and withholding are already there; the December job is making sure names and addresses are right.

At the plan year-end, your dedicated case manager reviews the remaining balances with you, flags authorizations that are about to expire, and maps the new spending plan to service codes once it is signed and approved. Payroll and purchases under the new plan cannot start until the signed plan and matching authorizations are both in place. The portal shows the remaining balance by category all year. Common mistakes new SDP families make lists the year-end ones we see most.