A New California Labor Law Mandates Electronic Submission of Tax Returns, Wage Reports, and Payroll Tax Deposits for All Employers
According to the Employment Development Department (EDD) website, beginning on January 1, 2017, employers with 10 or more employees will be required to electronically submit employment tax returns, wage reports, and payroll tax deposits to the EDD.
All remaining employers will be subject to this requirement beginning January 1, 2018. Any employer required under existing law to electronically submit wage reports and/or electronic funds transfer to the EDD will remain subject to those requirements.
This mandate does contain a waiver provision for employers who are unable to electronically submit employment tax returns, wage reports, and payroll tax deposits. The EDD will accept waiver requests from employers beginning July 2016.
To request a waiver, employers must complete and submit the E-file and E-pay Mandate Waiver Request(DE 1245W).
How It Works: A Graphic View
The EDD has stressed that there are benefits for employers from the new requirements. In a recent letter issued to business owners, they highlighted the following:
- Increased data accuracy
- Data protection through encryption, which is safer and more secure than paper forms
- Reduced paper and mailing costs
- Lost mail eliminated
- Faster processing of returns and payments
While this is great news for most employers, there is still the maze of regulatory requirements to navigate. This infographic provides an overview of the essentials.
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