Electronic Funds Transfer (EFT)
Electronic Funds Transfer (EFT) is an electronic method for making payments. Funds are transferred from your bank account to the State’s bank account. Your payment information is transmitted to the Employment Development Department (EDD), eliminating the need to send a paper check and payment document.
Effective July 1, 2016 the Employment Development Department’s (EDD) depository bank for the Electronic Funds Transfer (EFT) program will change to Union Bank with a new State Data Collector, First Data Government Solutions. The change will impact both Automated Clearing House (ACH) credit and ACH debit filers for Payroll Tax Deposit (DE 88) payments as stated below.
ACH Credit Filers
ACH credit payments with a settlement date of July 5, 2016, or later must contain the EDD’s new bank account number and routing transit number. This information will be provided in the Important Notification (DE 28C) which will be mailed to existing ACH credit filers.
To avoid any returned payment transactions and possible late payment penalty and interest, you must provide your bank with the EDD’s new bank account information. You will need to give sufficient notice, to ensure timely settlement of your ACH credit payments, during the conversion period.
Important: If you are using a bank program to make your payments to EDD, check with your bank to ensure that they are using your valid eight-digit EDD employer payroll tax account number to submit your payments and NOT your Federal Employer Identification Number.
ACH Debit Filers
Although the overall process for making ACH debit payments will remain the same, be sure to make a note of the following:
- State Data Collector’s Website: There will be a new look to the State Data Collector’s website. Registered users using the current vendor’s system are required to create a new profile on the new vendor system (www.govone.com/PAYCAL) with their EDD employer payroll tax account number and current security code on or after July 1, 2016.
Note: If you pay by phone, your payment process remains the same. Continue to use 800-554-7500 to pay.
- One-Time Payment through First Data: If you are not registered in the Statewide EFT program or need to make an online payment right away, you may submit your electronic payment through First Data’s website by using the One-Time Payment option. To submit your payment, visit www.govone.com/PAYCAL.
- Warehousing Payments: Warehousing your ACH debit payment with a settlement date of July 5, 2016, or after will not be allowed. Once the transition to Union Bank is made, you may warehouse your payments as usual.
- Fedwire Payments: Fedwire payments are also impacted by the bank change. Contact the e-Pay Unit at 916-654-9130 before initiating the Fedwire request to ensure the banking information is correct.
Important: You must have a valid EDD employer payroll tax account number before registering for the ACH debit method. You may register online for a payroll tax account number by using e-Services for Business.For more information on this change, visit Bank Change for Electronic Funds Transfer Filers or contact our Taxpayer Assistance Center at 888-745-3886.
Each year your account is reviewed to determine if you meet the requirement for mandatory EFT filing. If the average (per payment) deposit for State Disability Insurance (SDI) and Personal Income Tax (PIT) is $20,000 or more for the prior State Fiscal Year (July 1 through June 30), you are required to make all SDI and PIT deposits by EFT during the next calendar year, regardless of the dollar amount. Mandatory EFT filers are notified of their status by October 31, prior to the year of mandatory EFT participation. Mandatory EFT participants are subject to a 15 percent (10 percent for periods prior to 3rd quarter 2014) noncompliance penalty if an SDI/PIT deposit is made by any other means (e.g., check, cash, credit card, etc.). The Unemployment Insurance (UI) and Employment Training Tax (ETT) payments are not subject to the noncompliance penalty. Note: If you meet the requirement for mandatory EFT filing of your payroll taxes with the EDD, you are also mandated to remit all child support wage withholding payments by EFT to the Department of Child Support Services’ State Disbursement Unit.
If you do not meet the mandatory EFT requirement, we encourage you to file by EFT on a voluntary basis as it is a secure, efficient and cost-effective method to make your payments.
There are two Automated Clearing House (ACH) payment methods, ACH Debit and ACH Credit:
ACH Debit Method: The ACH Debit method transfers funds directly to EDD by authorizing the State of California to electronically debit your bank account. There is no cost to use the ACH Debit method. Payments may be scheduled in advance (warehoused) up to 90 days. Payment transactions must be completed before 3:00 p.m. Pacific Time for the funds to settle on the next business day.
There are two ACH Debit programs:
- EDD ELECTRONIC FUNDS TRANSFER (EFT) PROGRAM
- There is no enrollment for the EDD EFT Program. But you must enroll in e-Services for Business on the EDD website to use this program. The bank information is entered online. This program is for Payroll Tax Deposit (DE 88) and other payments such as statement, account balance and payment arrangements.
- STATE DATA COLLECTOR PROGRAM – VENDOR (Third Party)
- Employers must be enrolled in the Statewide EFT Program. This program is for Payroll Tax Deposit (DE 88) only.
- To enroll in the Statewide EFT Program, employers must submit an Electronic Funds Transfer Authorization Agreement (DE 26) with a pre-printed voided check or a completed Bank Specification Sheet attached. The DE 26 provides the bank information for the employer account from which debit entries will be made.
- Fax your EFT enrollment to 916-654-7441 or mail to the address below:
Employment Development Department
Electronic Funds Unit, MIC 15-A
P.O. Box 826880
Sacramento, CA 94280-0001
The following are the ACH Debit reporting options available for making a DE 88 deposit through the State’s data collector, Metavante:
- Web Payer — Employers who are currently enrolled in the Statewide EFT program can report payments online by going directly to the payment website of State’s data collector, Metavante.
- Bulk Filer Solution — Payroll agents or payroll services who initiate EFT DE 88 payments on behalf of multiple taxpayers can go to Metavante’s Bulk Filer Solution. In order to use this Web interface, agents must register with Metavante and create their own unique Bulk Filer ID to be used when sending their payment transactions. Each of their clients must be registered as an employer with EDD, be assigned an employer account number and enrolled in the EFT ACH Debit Program before a payment will be accepted. For more Bulk Filer information, refer to the Electronic Funds Transfer Bulk Filer Setup Guide (DE 154).
- Phone: Employers who are currently enrolled in Statewide EFT program can call 1-800-554-7500 to make their DE 88 deposits by phone.
The State’s data collector, Metavante, is not under the control of EDD, and EDD is not responsible for the contents or links contained in their website. The EDD recommends that you review Metavante’s security and confidentiality statements.
ACH Credit Method: The ACH Credit method allows you to transfer funds by instructing your bank to debit your bank account and transfer those funds to the State’s bank account. You need to provide your bank with an Information for Your Bank (DE 532). The DE 532 provides your bank with instructions on how to transmit your DE 88 payment transactions to EDD in the approved NACHA record format.
The timeliness of your EFT payment is determined by the settlement date (the date funds are credited to the State’s bank account).
- Next Business Day deposits — must settle in the State’s bank account on or before the third business day following the payroll date.
- Semi-Weekly, Monthly, and Quarterly deposits — must settle in the State’s bank account on or before the next business day following the due date
ACH Debit payments that are completed before 3 p.m., Pacific Time, can settle the next business day. For ACH Credit payments, check with your bank to ensure a timely settlement date. If the last timely settlement date falls on a Saturday, Sunday, or legal holiday, this settlement date is extended to the next business day. Refer to the Legal Holidays page for a schedule of the current tax year or call the EDD’s Taxpayer Assistance Center at 1-855-866-2657.
If you have questions about EFT, visit the FAQ - Electronic Funds Transfer or call the EFT Helpline at 916-654-9130. The Electronic Funds Transfer Program Information Guide (DE 27) also provides detailed information on the EDD EFT Program.