What is the Mandate?
On January 1, 2017, the E-file and E-pay Mandate for Employers (Assembly Bill 1245) in the state of California became effective for all employers with 10 or more employees. The new state law mandates the electronic submission of wage reports, employment tax returns, and payroll tax deposits through the Employment Development Department (EDD).
The next phase of this mandate will roll out January 1, 2018, and ALL California employers will be subject to the e-file and e-pay requirements. Let’s take a look at the steps California employers should take to ensure compliance before January.
If You Outsource Your Payroll
If you’re using a payroll provider to manage your tax filings and payments, contact them to make sure they are electronically submitting your payroll tax deposits, wage reports, and employment tax returns. It is the responsibility of the employer to ensure this is handled correctly.
If You Process Payroll In-House
If you are currently processing your payroll in-house and using paper-based filing methods, you will need to make arrangements to start e-filing and e-paying with the EDD. Information on how to electronically file and pay can be found on the EDD’s website under their FAQs section.
The Benefits of Electronic Filing and Payments
There are several benefits of electronic filing and payments that go beyond compliance:
- Increases data accuracy.
- Protects data through encryption, which is safer and more secure than paper forms.
- Reduced paper and mailing costs.
- Eliminates the potential for lost mail.
- Faster processing of returns and payments.
Penalties for Non-Compliance
Penalties will incur for non-compliance of this mandate:
|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|
How APS Can Help
APS provides payroll and tax compliance services designed to give you peace of mind. Electronic filing and paying is our tax compliance department’s preferred method as it ensures accuracy and on-time tax payments and filings. To learn more about how APS can help you save time and money, schedule a demo today.
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