Beginning of January 1, 2017, the E-pay and E-file California mandate will be in effect requiring all employers with 10 or more employees to file payroll reports and pay payroll taxes electronically over the Employment Development Department (EDD) website. In addition, all California employers, regardless of staff size, must comply with this law as of January 1, 2018. Any employers already required to file electronically under the current law will remain subject to the e-file and e-pay mandate. In order to get started, register for an EDD account at e-Services for Business.
Benefits of California’s E-payment and E-filing Requirement
- Increased data accuracy
- Increased data protection through data encryption
- Decreased processing time
- Reduced mail and paper costs
- Eliminates issues with lost mail
Benefits of Using e-Services for Business for Payroll
- Register for a state employer identification number
- File returns and reports
- Make deposits and payments
- View payment history
- Manage payroll accounts safely 24/7
- View and update account information including responsible parties and other major changes
- Close or re-open your employer payroll tax account
- Subscribe to the State Information Data Exchange System (SIDES) to respond to state Unemployment Insurance information requests
Filing a Waiver Request and Non-Compliance Penalties
Employers who are unable to file or pay electronically may qualify for a waiver. To request a waiver, complete and submit a request using form DE 1245W. The form may be submitted either by fax at 916-255-1181 or by US mail to:
Employment Development Department
Document and Information Management Center
PO Box 989779
West Sacramento, CA 95798-9779
A response will be sent by mail determining whether or not the request was approved. Alternatively, one can also apply by contacting the Taxpayer Assistance Center at 1-888-745-3886 or visiting an Employment Tax Office.
An approved waiver is valid for one year after which the employer must begin to file and pay electronically or submit another waiver request in order to avoid penalties for non-compliance. The penalties are as follows:
Type |
Forms |
Penalty |
|---|---|---|
| Tax Returns |
|
$50 per return |
| Wage Reports |
|
$20 per wage item |
| Payments |
|
15% of amount due |
Alternative Electronic Fling and Payment Options
There are alternative filing and payment methods which also satisfy the e-file and e-pay mandate, however, these options are not as user-friendly and usually require more data entry. Another downfall is that employer records would not be consolidated under one program. The following links provide more information:
- Federal/State Employment Taxes (FSET) Bulk Transmissions and
- Electronic Funds Transfer (EFT)
For those who are our payroll clients, we handle all of these payment and filing requirements for you. If you are currently responsible for this task yourself, it’s important to be aware of the new requirements and comply with the deadlines to avoid penalties.
Regardless of how streamlined the system has become, there are federal employer requirements to meet as well as labor laws with which to keep up-to-date. Consequently, many employers don’t have time to keep up with the changing payroll requirements. For more answers and quotes for payroll setup and processing, contact us at 310-534-5577 or [email protected]. We look forward to providing the peace of mind you need in order to focus on the success of your business.
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