California efile and epay mandate

California eFile and ePay Mandate

California efile and epay mandate

In August 2015 California Governor Jerry Brown signed Assembly Bill 1245, for the California efile and epay mandate. This bill mandates the electronic submission of employment tax returns, wage reports, and payroll tax deposits with the Employment Development Department (EDD). It is expected to increase the processing time and accuracy of payroll tax returns and payments. It is also aimed at protecting employer and employee information through data encryption on the EDD’s website.

On January 1, 2017 employers with 10 or more employees were required to electronically submit employment tax returns, wage reports, and payroll tax deposits with the EDD.

Beginning January 1st, 2018 the state of California is requiring all employers to electronically file employment tax returns, wage reports and payroll tax deposits with the EDD. This includes all employers who have 1 or more employees, and employers of 1 or more household employees.

Out of state employers who report payroll taxes to the EDD are also affected and must comply with this mandate.

Advantages the California eFile and ePay Mandate 

  • Accuracy of the information submitted is increased
  • Data is protected through encryption. This is so much safer and secure than info submitted on paper forms
  • Reduction in mailing costs
  • There is no need to worry about these important documents getting lost in the mail
  • Faster processing of returns and payments.

Penalties for non-compliance

For employers and household employers who do not comply with the California efiling and epay mandate, there are penalties involved. These are quite stiff and chances of forgiveness are slim to none unless you have a very good reason. But in the grand scheme of things, coming up with a very good reason for non-compliance is going to be a long shot. Here are the penalties for non-compliance with the mandate:

  • Paper tax return (DE9, DE 3HW, DE 3D) - $50 penalty
  • Paper wage reports (DE 9C, DE 3BHW) - $20 per wage item
  • Payroll tax deposits (DE 88) - there will be a 15% penalty on the amount due

The EDD will not be automatically mailing employment tax returns, wage reports or tax deposit coupon books after this mandate takes effect.

Employers who can show “good cause” for being unable to facilitate electronic filing by the January 1, 2018 mandate can complete and request an E-File and E-Pay Mandate Waiver Request (DE 1245W). Requests can be faxed to 916.255.1181 or mailed to:

Employment Development Department

Document and Information Management Center

PO BOX 989779

West Sacramento, Ca 95798-9779

The EDD will send a letter to the employer either approving or denying the request. Approved waiver requests are valid for only one year. After the approval expires the employer must begin electronically filing all reports and payments, or submit a new waiver request. The EDD will NOT notify the employer when the waiver expires.

What can AccuPay do to help?

If Accupay is your payroll processor there is nothing you need to do. We have your back, and are in full compliance with the EDD mandate. If Accupay is not your current payroll provider, contact your payroll representative for assurance your employer tax returns, wage reports, and tax deposits are being electronically submitted with the EDD.

Employers who process their own payroll and file the required forms should enroll in EDD’s e-Services for Business. This service is free to use. Employers can log into their account 24 hours a day, 7 days a week to file payroll tax returns, and make payments.

Please visit EDD’s for FAQ, tips, and tutorials for more information.

AccuPay has been helping small businesses in California and beyond since 1992. We serve the small business community from 1 employee up to 150 employees. We pay all taxes electronically and file all the respective tax returns, reports and year-end forms such as W-2s and 1099s electronically.

Oh ... and our prices are amazingly low. Want proof? Check out our pricing page

We serve all industries, as long as they are legal entities from sole proprietorships to corporations to household (nanny payroll). Contact us at 949 202 0078 right away to get set up.

Want to comply, save time and money?

About the Author

I live in the intersection of technology and entrepreneurship. I am a technology enthusiast but my passion is helping small businesses succeed, including mine.

When I am not working, you will find me goofing with my wife and kids. When not with family and/or friends, you will find me doing some home improvement projects.

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