Law Requires Electronic Filing/Payment of Payroll Taxes
The California Chamber of Commerce is reminding employers with nine or fewer employees that they will be required to electronically submit employment tax returns, wage reports and payroll tax deposits to the Employment Development Department (EDD) beginning January 1, 2018.
This requirement was already in place for employers with 10 or more employees. All remaining employers are required to begin reporting and paying electronically with their 2018 payroll or as soon as they report having 10 or more employees, whichever happens first.
Unemployment Insurance and Electronic Reporting
AB 1245 (Cooley; D-Rancho Cordova, Statutes of 2015) requires electronic reporting for unemployment insurance reports submitted to the EDD. It also requires employers to remit contributions for unemployment insurance taxes by electronic funds transfer.
Any employer required under existing law to electronically submit wage reports and/or electronic funds transfer to the EDD remains subject to those requirements. For more information, visit FAQs – E-file and E-pay Mandate for Employers.
The EDD encourages employers to enroll in e-Services for Business to meet the requirement.
For more information about the e-file and e-pay mandate, please visit: www.edd.ca.gov/EfileMandate.
Benefits of Electronic Filing and Payments
- Increases data accuracy.
- Protects data through encryption, which is safer and more secure than paper forms.
- Reduces paper and mailing costs.
- Eliminates lost mail.
- Faster processing of returns and payments.
File and Pay Electronically with e-Services for Business
Employers can use e-Services for Business to comply with the e-file and e-pay mandate. e-Services for Business is a fast, easy, and secure way to manage employer payroll tax accounts online. With e-Services for Business, employers can:
- Register for an employer payroll tax account number.
- File employment tax returns and wage reports.
- Make payroll tax deposits and pay other liabilities.
- View and update account information.
- And more!
This mandate contains a waiver provision for employers who are unable to electronically submit employment tax returns, wage reports, and payroll tax deposits.
To request a waiver, employers must complete and submit the E-file and E-pay Mandate Waiver Request (DE 1245W).
Here are the ways to obtain a DE 1245W:
- Download the DE 1245W from the EDD website.
- Contact the Taxpayer Assistance Center at 888-745-3886.
- Visit the nearest Employment Tax Office.
Waiver requests can be submitted by mail or fax:
Employment Development Department
Document and Information Management Center
P.O. Box 989779
West Sacramento, CA 95798-9779
Fax: (916) 255-1181
Employers will be notified by mail if their waiver is approved or denied. An approved waiver will be valid for one year. Upon the expiration of the approval period, an employer must start to electronically file and pay, or submit a new waiver request to avoid a noncompliance penalty.
Penalties for Not Complying with the E-file and E-pay Mandate
Penalties will be incurred for noncompliance with this mandate. To avoid the penalties, enroll in e-Services for Business.