YEAR END INFORMATION

Updated December 4, 2006

Year End Changes

Innovative Computing Corporation has reviewed the latest changes to the W2, 1099-INT and 1099-MISC forms used by our customers. While there have been no form changes for the 1099-MISC form, the layout of the W-2 and 1099-INT forms have been changed. Changes have also been made to the Mag. Media elements related to the W-2, 1099-INT and 1099-MISC forms. Innovative will continue to support the 2-up version for 1099's and W-2's for dot matrix and laser printers. We will also now support 4-up W-2 forms for laser printers for those who file electronically with the US government.

Innovative has also completed internal software changes related to the 2006 year end changes and has included in the update a software change related to federal tax updates from Alltax.

Greater detail on what is new for Year End 2006 is available in the Year End section of Innovative's Customer Resources Site.

Updating Your Software

All customers using Innovative IES®, Innovative Access® or Innovative Access Plus® for payroll taxes or settlements will require a 2006 Year End update. Customers also using Alltax will require the IES Year End update, and the Alltax update available at the Alltax update Web Site. Innovative will complete the appropriate Year End updates for all Innovative Access and Innovative Access Plus customers.

On December 1, 2006 Innovative began performing Year End updates. Innovative will continue contacting customers to schedule Year End updates on a first come, first served basis as requests are received.

All Customers, including Host and Internet-Based (Innovative Access or Innovative Access Plus), should schedule this update. If you have not yet requested your Year End update, please use our Customer Resources Site or call Project Management at 615-986-1900.

Additional Information

Customers can obtain the following Year End 2006 information on our Customer Resources Site:

• What's New Guide for Year End 2006
• PTF Guide for Year End 2006
• Updated User's Guide
• Transfer Instructions
• Transfer Files — Required for Internet-Based Innovative Access® and Innovative Access Plus® Customers
• Updated Frequently Asked Questions
• Year End Processing Checklist
• Sample Forms

If you do not have one already, you will need to request a password for the Customer Resources Site via our Customer Resources Site Registration Form.

The Year End update does not include individual state requests. For assistance with these requests, contact Innovative's Project Management Team or call 615-986-1900.

For any additional questions, please contact Innovative's Software Support Department or call 800-238-3895.

Note: Beginning with year end processing for 2006, all W-2 forms will need to be submitted electronically. We highly recommend that your company utilize the options to file electronically for all 1099 forms as well. All filing requirements can be reviewed on the Social Security Administration's Web site and the IRS Web site.

Special Note Regarding Fuel Codes and the Year End Update

In addition to Year End updates, Innovative is also in the process of updating IES, Innovative Access and Innovative Access Plus FlexFuel® Modules for Ultra Low Sulfur Diesel vendor fuel codes. In order to streamline these updates, Innovative has chosen to include the default fuel code data for all FlexFuel customers on R8 or later versions of IES, Innovative Access or Innovative Access Plus during the Year End updates. This update will be completed for all customers requesting the Year End update.

Please note the following:

• Customers on previous versions of IES will need to request the fuel code update separately via the Update Request Form.
• Customers not planning to receive the Year End update, but still requiring the fuel code update will need to request the fuel code update via the Update Request Form.
• Comdata has made recent changes that require an additional update included in the Fuel Code and Year End update. Comdata fuel customers should request this update via the via the Update Request Form.