Dynamics GP 2025 Year-End Update: What Changed and What Didn’t

If you look after a Dynamics GP system, December probably brings the same question every year: what will Microsoft’s year-end release ask of us this time? Some years bring new tax forms, revised payroll rules and long testing sessions. The 2025 release is different. It is a quiet one.

Quiet, however, does not mean optional. This release still carries a handful of corrections, a practical improvement for anyone tracking company vehicles, and a reminder of what Microsoft expects from GP customers who want to remain supported.

Below, we break it all down in plain language: what is new, what has stayed exactly as it was, and what your finance team should do before closing the books.

One more thing worth keeping in mind as you read. Microsoft Dynamics GP (Great Plains) now has a fixed retirement date. Microsoft will stop delivering product, tax and regulatory updates after December 31, 2029, and security patches will end on April 30, 2031. The software will still open and run after those dates, but nobody at Microsoft will be maintaining it. Our guide to Dynamics GP end of support explains those dates in more detail.

Dynamics GP 2025 Year-End Update

Think of this release as routine servicing rather than a major overhaul. For the 2025 reporting year, the IRS made no changes to the forms GP produces, and Congress passed nothing that required Microsoft to rework payroll logic for this year.

For finance teams, that brings three practical benefits:

1. Shorter testing – With no new form layouts, there is far less to check.
2. Lower risk – Fewer code changes mean fewer chances of something unexpected.
3. More time for the close itself – Your team can focus on reconciling and reporting instead of learning new rules.

Let us look at both sides of the release.

What Is Not Changing in 2025

If your team uses any of the following, you can expect them to behave the same way they did last year:

You may have read about the One Big Beautiful Bill Act (OBBB) and its new treatment of tips and overtime. Those rules are real, but the IRS has chosen a phased approach that begins with the 2026 tax year. For the forms you file about 2025, nothing related to OBBB applies, so GP did not need any changes for it.

The practical takeaway: you do not need to rebuild any payroll reports for this close. But keep the 2026 year-end on your radar, because that is when the new rules are expected to reach your forms.

What Is Included in This Update

So what does the release actually contain? Four things:

• New vehicle depreciation limits in Fixed Assets for assets your business started using in 2025
• Two corrections in payroll reporting, both carried over from last year’s release
• Coverage for every GP release from 18.5 up to 18.8
• Everything from GP 18.8, for anyone who has not yet installed it

Here is a detail that saves time: Microsoft builds each release on top of the previous ones. If your team missed an earlier patch this year, installing the year-end release brings you up to date in one step.

Why this matters for support: Under Microsoft’s Modern Lifecycle Policy, a GP system only stays in support if it receives at least one update per year. For most businesses, the year-end release is the natural way to meet that rule.

Schedule Your Year-End Update

Do not leave the installation until the last week of December. Our GP consultants can apply the release, test it against your own data and confirm everything works before your close begins. Book time with the Nevas Technologies team.

Fixed Assets Update: Luxury Auto Depreciation Rules

This is the part of the release with the most practical value.

A quick background. When a business buys a passenger car, the IRS caps how much depreciation it can claim each year. These caps, known as “luxury auto” limits, apply to far more vehicles than the name suggests, and they are adjusted every year for inflation. If GP holds the wrong figures, your depreciation books, financial statements and tax return will not line up.

The old problem. For years, the only way to get new limits into GP was to wait for Microsoft’s annual release and install it. That often meant patching your system at the worst possible time, right in the middle of year-end.

The new approach. GP 18.8 added a separate table, called Luxury Auto Depreciation, where the limits for each year are stored. The 2025 release fills in the figures for vehicles placed in service this year. More importantly, your own team can now open this table and maintain the figures themselves.

What this means in daily work:

• You are no longer dependent on a full release just to change one set of numbers.
• Corrections can be made without taking the system offline.
• Depreciation results for vehicles become easier to check and explain to auditors.
• Each year-end becomes a little more predictable.

What we suggest: Before the final depreciation run of the year, open the new table and compare the 2025 limits with the figures your tax adviser is using. Then run depreciation on a single 2025 vehicle as a test. If the numbers agree, you can process the rest with confidence.

U.S. Payroll Updates

On the regulatory side, there is nothing new for U.S. Payroll this year. Form layouts, electronic filing and W-2 rules are all exactly as they were.

What the release does contain is a pair of corrections that matter to specific businesses.

Correction 1: The 941 report now reads properly.
After GP 18.8 was released, some customers noticed that the quarterly 941 Preparation Report was showing the right numbers but missing parts of its text. The figures were fine, but the report was harder to review. That display problem is now resolved.

Correction 2: W-2s for Medicaid waiver income.
Some workers, often home care staff looking after family members, receive Medicaid waiver payments that are excluded from taxable wages. When that was their only income, GP had trouble producing a correct W-2. The release now handles this case: the form shows Code II in Box 12 and a zero in Box 1, which is what the IRS expects.

Does this affect you? Ask your payroll team three questions:

1. Did anyone struggle to read the 941 report during 2025?
2. Do we pay any employees through a Medicaid waiver program?
3. Did any W-2s need manual correction last year?

If any answer is yes, make sure the release is installed before you print W-2s, and review those specific forms closely.

Looking further ahead: This year is calm, but 2026 is unlikely to be. The OBBB rules are expected to change payroll reporting from the 2026 tax year, so keeping GP current through the coming year will make that transition much easier.

Prepare for Year-End Close

Closing the year in GP is not a single button. It is a sequence of steps across several modules, and each one feeds the next. Close them in the wrong order, and figures can end up in the wrong year or fail to carry forward.

Here is the approach we use with our own clients.

Step 1: Get Ready

• Apply the 2025 release first, ideally testing it in a copy of your company.
• Make sure every batch for the year is posted. An unposted batch is one of the most common causes of year-end problems.
• Ask all users to sign out of GP before each module is closed.
• Back up your company databases and the system database. Then back up again before each module.

Step 2: Close the Modules in Sequence

1. Inventory goes first, once all stock movements for the year are posted.
2. Receivables and Payables come next. Print and file 1099s from Payables before running its calendar-year close.
3. Fixed Assets follows. Depreciate every asset up to the last day of the year, then run its year-end routine. This must happen before the General Ledger is closed.
4. Payroll is closed after the final pay run of 2025 and before the first pay run of 2026. Print W-2s and the W-3 at this stage.
5. General Ledger is always last, once every other module is finished.

Step 3: Check Your Work

• Compare each subledger with its control account in the General Ledger.
• Check that opening balances for 2026 look correct.
• Store your backups somewhere safe, in case you ever need to go back.

Why be so careful? Because year-end mistakes rarely show up immediately. They tend to appear months later, during an audit or a tax filing, when they take far longer to fix. A careful close today saves a lot of trouble next spring.

The right sequence can vary slightly depending on your fiscal year and the modules you use, so if you are unsure, check your plan with an experienced GP consultant before you begin.

Next Steps

Here is a simple plan for the weeks ahead:

1. Install the 2025 release now, not in late December, so there is time to test.
2. Open the Luxury Auto Depreciation table and confirm the 2025 limits.
3. Check payroll output, especially the 941 report and any W-2s involving Medicaid waiver income.
4. Plan your close module by module, with a backup at every step.
5. Raise questions early, before your team is under year-end pressure.

It is also worth taking a step back. Releases like this one show where GP is today: it receives corrections and small improvements, but no major new features. Counting from now, only a handful of year-end releases remain before Microsoft’s 2029 cut-off.

That makes now a sensible time to think about what comes next. Many GP customers are moving to Microsoft Dynamics 365 Business Central, where regulatory changes arrive as part of regular cloud updates, without separate installation projects each December.

Nevas Technologies supports GP customers in two ways:

• Today: applying releases, resolving issues and supporting your year-end close
• Tomorrow: planning and delivering your move through our Dynamics GP to Business Central migration service, on a timeline that suits your business

Need help with this year-end or with your longer-term plans? Get in touch with Nevas Technologies and we will help you with both.

Frequently Asked Questions

Do I need to install the Dynamics GP 2025 year-end update if nothing major changed?
Yes. It contains payroll corrections and new depreciation limits, and installing at least one release each year is required to keep your GP system supported.

Which GP versions does the 2025 year-end update support?
Releases 18.5 through 18.8. Anything older must be upgraded first before this release can be applied.

Are there any OBBB changes in the 2025 update?
No. The IRS will introduce OBBB-related changes starting with the 2026 tax year, so your 2025 forms are not affected.

What is the most important change in the 2025 update?
The new Luxury Auto Depreciation table in Fixed Assets. It lets your team maintain vehicle depreciation limits inside GP, without waiting for a full release.

How many more year-end updates will Dynamics GP receive?
Microsoft will keep delivering tax and regulatory updates until December 31, 2029, which covers payroll for the 2029 tax year. No further year-end releases are planned after that.