FAQs – Federal/State Employment Taxes (FSET) – Bulk Transmissions
This program is for large filers, bulk filers, or payroll agents. It is application-to-application transmission of data, completely automated, with no manual intervention. Transmitters can use the services of an approved vendor or they can program their own application.
This program was developed by the Internal Revenue Service (IRS), several states, and software vendors to establish a standardized format to electronically submit both federal and state employment tax information through the Internet. The program uses Extensible Markup Language (XML) and schemas (record layouts) that were developed for this purpose. The returns are transmitted to the EDD using Web services.
The complete background on the FSET program is contained in the Federal/State Employment Taxes (FSET) Implementation Guide (DE 545). The guide provides information, direction, and examples required for enrollment, testing, and implementation.
This program allows you to transmit your Quarterly Contribution Return and Report of Wages (DE 9), Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C), Payroll Tax Deposit (DE 88), Quarterly Contribution Return (DE 3D), Report of New Employee(s) (DE 34), and Report of Independent Contractor(s) (DE 542) application-to-application using Web services. Payroll service providers may submit Data Exchange and Enrollment files to retrieve their clients’ tax rates, verify their clients’ EDD employer payroll tax account numbers, check their clients’ EFT mandatory status, and notify the EDD when they acquire or no longer represent clients.
The FSET program is open to software developers, transmitters, and payroll service providers that act as reporting agents. It is also open to employers who want to develop their own software.
Individual business taxpayers who want to participate may choose to use the services of a participating payroll service provider or transmitter listed in the approved FSET providers.
The FSET program has the following benefits:
- Faster processing and response time.
- Secure Internet transmission.
- No mailing costs.
- Accurate reporting of information.
- Opportunity to correct errors.
- Available 24 hours a day except for maintenance periods.
The FSET program is available 24 hours a day except for the following maintenance periods:
- Every Sunday from 4:00 a.m. to 8:00 a.m., Pacific Time.
- Every third Sunday of each month from 4 a.m. to 10 p.m., Pacific Time.
Yes. The EDD FSET Gateway uses Simple Object Access Protocol (SOAP) transmissions over a Secure Socket Layer (SSL) connection using HTTPS protocol, which encrypts the data during transit. During the FSET registration process, a self-selected username and password are established. These credentials are passed and authenticated by the EDD with each transmission.
If your organization develops their own software, there is no cost to transmit your files to the EDD.
If you do not want to develop your own software, and you decide to use the services of a payroll service or transmitter, you will need to purchase software or services. Please refer to the list of approved FSET providers.
You can develop your client application in either JAVA or .NET. However, if you are coding in the JAX based WS2.x version of JAVA, you must utilize Base64 for transmitting attachments. This does not apply to newer versions of JAVA.
The FSET program was engineered to process large volumes of tax data from multiple files and can accommodate most transmitters. To maximize your processing efficiency, do not exceed 10,000 employer returns per transmission.
If you are already participating in the FSET program and you are using the services of a software provider, payroll service, or transmitter, please contact them directly.
If you are developing your own FSET application, please email your questions to email@example.com, or contact the EDD’s FSET help desk, Monday to Friday, 8 a.m. to 5 p.m., Pacific Time at 1-866-592-1651.
If you have questions about a previously submitted/posted Quarterly Contribution Return and Report of Wages (DE 9) or Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C), please contact the EDD’s Taxpayer Assistance Center at 1-888-745-3886.
The certification test package provides a two-step testing process that ensures your data and acknowledgements are sent and received properly using specified environments and Web methods. Testing also verifies the ability of your program to create and format valid returns.
The Federal/State Employment Taxes Implementation Guide (DE 545) provides examples of transmission streams showing all the required transmission headers. The EDD supports both SOAP 1.1 and 1.2 specifications.
The EDD staff will work with customers during the testing process to help resolve data and transmission issues.
Yes, filing with FSET fulfills these requirements.
- What is a Wage Plan Code on the Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C)?
The Wage Plan Code indicates the types of benefit coverage employees have for their Unemployment Insurance and Disability Insurance and is correlated with your employer payroll tax account number. This is a required element for each employee on the DE 9C.
S = Employee is covered under a State Plan for both Unemployment Insurance and Disability Insurance.
U = Employee is covered under a Department approved Voluntary Plan for Disability Insurance and the State Plan for Unemployment Insurance.
J = Employee is covered under the State Plan for Disability Insurance only (exempt from Unemployment Insurance).
L = Employee is covered under a Voluntary Plan for Disability Insurance only (exempt from Unemployment Insurance).
R = Employee is covered under the State Plan for Unemployment Insurance but is exempt from Disability Insurance. This applies only to Sole Stockholders who claim an exemption under Section 637.1 of the California Unemployment Insurance Code (CUIC); Third Party Sick Pay recipients who claim an exemption under Section 931.5 of the CUIC; and the employees claiming a Religious Exemption under Section 2909 of the CUIC. The employee must file an exemption certificate for the religious exemption.
A = Employee is covered under the State Plan for Unemployment Insurance. This applies only to public entity employees.
P = Employee is covered for Personal Income Tax withholding purposes only.
Please see Appendix U of the Federal State Employment Taxes Implementation (DE 545).
- How do I report a “no payroll” Quarterly Contribution Return and Report of Wages (DE 9) or Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C)?
- DE 9 - Include the “NoPayrollAnnualElect” tag with the value “X”.
- DE 9C - Include the “NoPayrollElect” tag with the value “X”.
- How do I report a supplemental Quarterly Contribution Return and Report of Wages (DE 9) or Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C)?
The FSET program has the capability to accept supplemental DE 9 and DE 9C returns by entering the enumeration “Supplemental” in the “FilingAction.Action” tag in the file.
- How do I report an amended Quarterly Contribution Return and Report of Wages (DE 9) or Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C)?
You cannot file amended DE 9 or DE 9C by FSET. You will need to complete and send the Quarterly Contribution and Wage Adjustment Form (DE 9ADJ).
The files within each transmission are then validated and an acknowledgment (ACK2) is generated for retrieval. If the ACK2 states that there is an error(s) in the file, the file must be corrected and retransmitted to the EDD. If there are no errors in the return(s), the ACK2 will indicate as much and information contained in the file(s) will be processed accordingly.
The EDD reserves the right to suspend the electronic filing privilege of any participant who varies from the requirements, specifications, and procedures stated in the Federal/State Employment Taxes (FSET) Implementation Guide (DE 545) or any corresponding administrative rules, or who does not consistently transmit correct returns. When suspended, the participant will be advised of the requirements for reinstatement into the program.
Please refer to the current issue of the California Employer’s Guide (DE 44) for due dates and settlement dates for the DE 9, DE 9C, and DE 88 payments.
If you have selected to pay DE 88 payments by FSET and have an ACH debit block on your bank account, you must inform your bank of the EDD’s Company Identification number to avoid your tax payment being rejected. The Company Identification number is a 10-digit number used to identify an originator of the transaction.
The EDD’s Company Identification number is: 2282533055
The FTP is only used for sending and retrieving files. Web Services can return acknowledgements and errors and allows us to interact with our transmitters. This allows transmitters to correct their returns in many cases without manual intervention.
- How does a bulk transmitter request tax rates or employer payroll tax account numbers for their clients?
A bulk transmitter can use the FSET schema Version 4.3 for Data Exchange to request employers’ rates and/or payroll tax account numbers electronically. For more information, refer to the Federal/State Employment Taxes (FSET) Implementation Guide (DE 545).