E-file and E-pay Mandate for Employers (Assembly Bill 1245)

State law mandates electronic submission of tax returns, wage reports, and payroll tax deposits for all employers.

In August 2015, California passed Assembly Bill (AB) 1245 requiring all employers to electronically submit employment tax returns, wage reports, and payroll tax deposits to the Employment Development Department (EDD). This law became effective for employers with 10 or more employees January 1, 2017 and for all employers January 1, 2018.

For more information, visit FAQs – E-file and E-pay Mandate for Employers.

Note: Any employer currently required to electronically submit wage reports under California Unemployment Insurance Code (CUIC) section 1088(e) and/or remit deposits by electronic funds transfer under CUIC section 13021(d)(1) remain subject to those requirements.

Benefits of Electronic Filing and Payments

Increases data accuracy.
Protects data through encryption, which is safer and more secure than paper forms.
Reduces paper and mailing costs.
Eliminates lost mail.
Faster processing of returns and payments.

File and Pay Electronically with e-Services for Business

Employers can use e-Services for Business to comply with the e-file and e-pay mandate. e-Services for Business is a fast, easy, and secure way to manage your employer payroll tax accounts online. With e-Services for Business, you can:

Register for an employer payroll tax account number.
File returns and reports.
Make payroll tax deposits and pay other liabilities.
View and update account information.
And more!

Waiver

This mandate contains a waiver provision for employers who are unable to electronically submit employment tax returns, wage reports, and payroll tax deposits.

To request a waiver, employers must complete and submit the E-file and E-pay Mandate Waiver Request (DE 1245W).

Here are the ways to obtain a DE 1245W:

Download the DE 1245W from the EDD website.
Contact the Taxpayer Assistance Center at 888-745-3886.
Visit the nearest Employment Tax Office.

Waiver requests can be submitted by mail or fax to:

Mail:
Employment Development Department
Document and Information Management Center
PO Box 989779
West Sacramento, CA 95798-9779

Fax: 916-255-1181

Employers will be notified by mail if their waiver is approved or denied. An approved waiver will be valid for one year. Upon the expiration of the approval period, an employer must start to electronically file and pay, or submit a new waiver request to avoid a non-compliance penalty.

Penalties for Not Complying with the E-file and E-pay Mandate

Penalties for non-compliance will be charged in accordance with sections 1112, 1112.1, and 1114 of the California Unemployment Insurance Code. You can use e-Services for Business to meet the requirements of the mandate and avoid the penalties below.


Type	Forms	Penalty
Tax Returns	DE 9 – Quarterly Contribution Return and Report of Wages DE 3HW – Employer of Household Worker(s) Annual Payroll Tax Return DE 3D – Quarterly Contribution Return	$50 per return

Wage Reports	DE 9C – Quarterly Contribution Return and Report of Wages (Continuation) DE 3BHW – Employer of Household Worker(s) Quarterly Report of Wages and Withholdings	$20 per wage item

Payments	DE 88 – Payroll Tax Deposit	15% of amount due

Additional Resources

Other Electronic Filing and Payment Options

The following options also fulfill the e-file and e-pay mandate:

Federal/State Employment Taxes (FSET) – Bulk Transmissions
Electronic Funds Transfer (EFT)

State Data Collector
Automated Clearing House (ACH) Credit

Credit Card

Credit card payments are completed through Official Payments Corp. (OPC) and are subject to a convenience fee.