Nicole Rice

New state law mandates electronic filing and payment for all employers

By Nicole Rice, Policy Director, Government Relations

Capitol Update, Sept. 23, 2016

Beginning next year, all employers will be required to electronically file their employment tax returns, wage reports and payroll tax deposits to the Employment Development Department (EDD) in accordance with AB 1245 (Chapter 222, Statutes of 2015) that was signed last year by Governor Brown. To ease the transition into this new mandate, CMTA and others successfully negotiated the inclusion of a two-year phase-in period and hardship waiver for impacted small businesses.

Employers with 10 or more employees will be required to submit electronic filings starting January 1, 2017. All remaining employers will become subject to the mandate the following January. Those who are currently required under existing law to electronically submit wage reports and/or electronic funds transfer to the EDD will remain subject to those requirements.

EDD is currently accepting waiver requests from those business who will suffer a hardship in meeting this requirement. The waiver would be available for only one year and would be issued on a case-by-case basis.

According to EDD, the use of these e-file and e-pay tools will increase efficiencies for both EDD and the employer community. It will result in better protection of company information through encryption, quicker posting of returns and payments to an employer’s payroll tax accounts, and decreased postage costs and paper consumption.

EDD’s e-Services for Business systemcan help companies meet the new mandate. There is no cost to enroll and use the program and no special computer software is required – just an internet connection.

For more information about this new compliance requirement, visit FAQs – E-file and E-pay Mandate for Employers. For assistance with enrolling, filing, or paying with e-Services for Business, contact the Taxpayer Assistance Center at 888-745-3886, Monday through Friday, 8 a.m. to 5 p.m. (Pacific Time).

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