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Employment Development Department
Employment Development Department

Independent Contractor Reporting

Background

California State Senate Bill 542 was passed during the 1999-2000 legislative session and signed into law effective January 1, 2001. This law requires businesses and government entities (defined as a "service-recipient") to report specified information to the Employment Development Department (EDD) on independent contractors (defined as a "service-provider").

You are required to report independent contractor information if you hire an independent contractor and the following statements all apply:

The information you provide to the EDD will increase child support collection by helping to locate parents who are delinquent in their child support obligations.

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You must report independent contractor information to the EDD within 20 days of either making payments totaling $600 or more or entering into a contract for $600 or more with an independent contractor in any calendar year, whichever is earlier. Businesses that transmit electronically are required to submit 2 monthly reports that are not less than 12 days and not more than 16 days apart. No report should be submitted if there are no new independent contractors to report.

You are required to provide the following information:

Service-Recipient (Business or Government Entity):

  • Federal employer identification number (FEIN)
  • California employer payroll tax account number (if applicable)
  • Social Security number (SSN)
  • Service-recipient name/business name, address, and phone number

Service-Provider (Independent Contractor):

  • First name, middle initial, and last name
  • Social Security number
  • Address 
  • Start date of contract (if no contract, date payments equal $600 or more) 
  • Amount of contract including cents (if applicable) 
  • Contract expiration date (if applicable) 
  • Ongoing contract (check box if applicable)

Use e-Services for Business to submit a Report of Independent Contractor(s) (DE 542) online. e-Services for Business is your fast, easy, and secure way to file, pay, and manage your employer payroll tax account(s) online. With e-Services for Business you can:

  • File returns/reports.
  • Make payments.
  • File a Report of Independent Contractor(s) (DE 542).
  • File a Report of New Employee(s) (DE 34).
  • And more!

Or submit a paper report of independent contractors by mail or fax. You may complete the DE 542 or create your own form with all the required information. You can obtain a DE 542 using the following options:

Mail or fax your paper DE 542 to:

Mail: 
Employment Development Department
P.O. Box 997350, MIC 96
Sacramento, CA 95899-7350

Fax: 916-319-4410

For additional information:

A service-recipient may be charged a penalty of $24 for each failure to report within the required time frames, unless the failure is due to good cause. If the failure to report is an intentional agreement between the service-recipient and service-provider to not supply the required information or to supply a false or incomplete report, a penalty of $490 may be charged.