Employers required to e-file and e-pay with EDD under new law

Beginning Jan. 1, 2017, employers with 10 or more employees will be required to register with the Employment Development Department's e-Services for Business and to file all wage reports and employment tax returns and pay all contributions for unemployment insurance premiums electronically. All employers will be required to register and file under this new law beginning Jan. 1, 2018.

Currently, employers are required to file a report of contributions, a quarterly return, a report of wages paid, and an annual reconciliation return to the director of employment development. Electronic funds transfer for contributions for unemployment insurance premiums satisfies the report of contributions filing requirements. As of January 2017, employers with 10 or more employees (and all employers in January 2018), will be required to do all reporting and payments electronically. Paper filings will no longer be accepted without a waiver.

Assembly Bill 1245 was signed by Gov. Jerry Brown in August 2015. The Bill is intended to increase accuracy and processing of returns and payments, protect employee/employer data through encryption and to reduce paper and mailing costs.

Employers who are unable to submit reports and remit contributions electronically should complete and submit an E-File and E-Pay Mandate Waiver Request (DE 1245W). For assistance in obtaining and submitting the waiver, employers can also contact the Taxpayer Assistance Center at 888.745.3886 or visit the nearest employment tax office to obtain a copy of the waiver.

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 was approved or denied and the waiver will remain valid for one year. Once the annual waiver expires, employers will be required to remit reports and contributions electronically, or apply for the waiver again to avoid noncompliance penalties.

Penalties of failure to pay and noncompliance with the mandate can include $50 per unpaid return, $20 per unpaid wage item and 15 percent of the payroll tax deposit due.

The EDD has assured a fast, easy and secure way to manage employer payroll tax accounts online. As of July 2016, the E-Services for Business system is active and employers and payroll agents are encouraged to register with EDD E-Services for Business and begin using the system before the mandate begins. Once registered, employers and agents will have 24-hour access, seven days a week to manage an employer payroll tax accounts.

For additional help with the new e-file and e-pay law, employers can refer to the EDD's FAQs, tip card and online tutorials.

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