California employers are now required to electronically submit employment tax returns, wage reports, and payroll tax deposits to the Employment Development Department (EDD). This e-file and e-pay mandate is being phased in as follows:
- Effective January 1, 2017, employers with 10 or more employees are required to electronically file and pay.
- Effective January 1, 2018, all remaining employers are required to electronically file and pay.
The requirement to electronically file and pay commences as soon as an employer reports 10 or more employees or otherwise begins with the employer’s 2018 payroll, whichever comes first.
If an employer representative/payroll agent files these returns, wage reports, or submits these payments, it remains the employer’s responsibility to notify them of the employer’s mandatory e-file and e-pay status.
If the employer cannot file and pay electronically, an E-file and E-pay Mandate Waiver Request Form must be completed and submitted to the EDD by mail or fax. If the employer does not have an approved waiver, the employer may be subject to penalties. These are $50.00/tax return; $20.00/wage report wage item; and fifteen percent (15%) of the amount due for any payments. These penalties are in addition to any other penalties permitted by law.
The EDD will no longer mail payment coupon booklets, tax returns, and wage reports automatically without an approved waiver.
If you have any questions about compliance, contact your legal counsel. The penalties can be significant and are avoidable.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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