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California: Employers Must Electronically Submit Employment Tax Returns, Wage Reports, and Payroll Tax Deposits

Aug 25, 2016

HR360, Inc.
August 18, 2016

Requirements Begin January 1, 2017 for Certain Employers

A California law requires employers to electronically submit employment tax returns, wage reports, and payroll tax deposits to the state Employment Development Department (EDD). Highlights of the law, known as the "E-File and E-Pay Mandate," are presented below.

General Employer Coverage, Effective Dates, and Waiver
Beginning January 1, 2017, employers with 10 or more employees are required to electronically submit tax returns, wage reports, and payroll tax deposits. All remaining employers will be required to electronically submit this information beginning January 1, 2018.

Note: Any employer required under existing law to electronically submit wage reports and/or electronic funds transfer to the EDD prior to January 1, 2017 will remain subject to those requirements (in addition to the E-File and E-Pay Mandate).

The EDD is currently accepting waiver requests from employers. Employers may request a waiver from the mandate due to lack of automation, severe economic hardship, current exemption from the federal government, or other good cause.

Employer Coverage for 2017
The EDD has stated that it will begin notifying employers about the E-File and E-Pay Mandate in 2016. An employer will be required to electronically file and pay beginning January 1, 2017 if:

  • The employer reported 10 or more employees in any quarter of 2016.
  • The employer reported 9 employees in 2016 and hires one additional employee in 2017.
  • The employer reported 10 employees in 2016 and has fewer than 10 in 2017.

Required Forms
The following forms must be submitted electronically under the E-File and E-Pay Mandate:

  • Quarterly Contribution Return and Report of Wages (DE 9)
  • Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C)
  • Employer of Household Worker(s) Quarterly Report of Wages and Withholdings (DE 3BHW)
  • Employer of Household Worker(s) Annual Payroll Tax Return (DE 3HW)
  • Quarterly Contribution Return (DE 3D)
  • Payroll Tax Deposit (DE 88)

Note: The E-File and E-Pay Mandate does not apply to employment tax returns, wage reports, or payroll tax deposits submitted for periods prior to the mandate's effective date.

Additional Information
Employers are encouraged to use e-Services for Business to comply with the E-File and E-Pay Mandate; however, other options are available. Click here for more information and resources for employers, including a fact sheet and FAQs.

To review other laws specific to California, visit the State Laws section, click on California, and choose your topic of interest from the left-hand navigation menu.

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