Reminder: Law Requires Electronic Filing/Payment of Payroll Taxes

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The California Chamber of Commerce is reminding employers with 10 or more employees that they are required to electronically submit employment tax returns, wage reports, and payroll tax deposits to the Employment Development Department (EDD).

The requirement began January 1, 2017 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

AB 1245 (Cooley; D-Rancho Cordova, Statutes of 2015) requires electronic reporting for unemployment insurance (UI) 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. The EDD encourages employers to enroll in e-Services for Business to meet the requirement.

For more information about the mandate, visit: www.edd.ca.gov/EfileMandate.

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.

Waiver

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).

• 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 to: Employment Development Department, Document and Information Management Center, P.O. Box 989779, West Sacramento, CA 95798-9779; or 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

The e-file and e-pay mandate does not apply to employment tax returns, wage reports or payroll tax deposits submitted for periods before the effective date of the mandate. To avoid penalties, enroll in e-Services for Business.

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