FAQs - 2011 Payroll Tax Reporting Changes

What are the recent changes to payroll tax reporting?

Effective January 1, 2011, employers will report total subject wages, Unemployment Insurance (UI), Employment Training Tax (ETT), and Disability Insurance (DI) taxable wages and contributions, and Personal Income Tax (PIT) subject wages and withholdings quarterly by filing a New Quarterly Contribution Return and Report of Wages (DE 9) quarterly instead of annually.

Employers will continue to report employee wages and personal income tax withheld quarterly on the New Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C).

NOTE: Employers and/or agents who are required to file the DE 9 and DE 9C must file both each quarter.

These forms will replace the Annual Reconciliation Statement (DE 7) and the Quarterly Wage and Withholding Report (DE 6).

NOTE: Years 2010 and prior, employers will file the DE 7 and DE 6.

How will changing from annual reconciliation to quarterly reporting impact employers?

The new quarterly reporting process will allow the Employment Development Department (EDD) to identify overpayments sooner, which will result in faster refunds, as well as allow us to more quickly identify potential delinquencies.

Will employers continue to use the Payroll Tax Deposit (DE 88) coupon to make payments?

Yes, employers are still required to pay their contributions with the DE 88. Deposit due dates will not be affected by this change. Starting March 1, 2011, employers will have more options available to electronically file returns, and make deposits and payments on outstanding liabilities. Please refer to e-Services for Business for more information on online options.

What happens if a mistake has been made on the DE 7 or the DE 6? How do we correct the DE 9 or DE 9C?

For years prior to 2011, employers will file a DE 7 and DE 6, therefore, any adjustments to either form would be done by filing a Tax and Wage Adjustment Form (DE 678).

Corrections to the DE 9 or DE 9C can be made using the Quarterly Contribution and Wage Adjustment Form (DE 9ADJ). This form is available online.

Where can employers obtain the new forms?

Registered employers will receive the new forms automatically by mail. They are also available online and at local EDD offices. The DE 6 and DE 7 will continue to be available online for years prior to 2011.

NOTE: Starting March 1, 2011, employers will be able to log in to e-Services for Business to file returns and make deposits/payments online. Visit the e-Services for Business homepage for additional information.

Will employers have to update their software to complete these new reports?

The EDD will work directly with payroll software companies to make sure they are aware of the new reporting requirements. Employers and their representatives need to contact their payroll software company regarding software updates.

Employers who file alternate forms need to contact the Alternate Forms Coordinator at (916) 255-0649.

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