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Depositing and Reporting Withheld Taxes: California

Depositing and Reporting Withheld Taxes requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

  • The personal income tax (PIT) and state disability insurance (SDI) deposit filing requirements and due dates are based on each employer's federal deposit schedule and the amount of accumulated PIT the employer has withheld. See Deposit Thresholds and Schedules; Deposit and Filing Due Dates.
  • All tax payments must be submitted with a properly completed Payroll Tax Deposit Coupon, and the Quarterly Contribution Return and Report of Wages must be filed to reconcile payroll tax payments and total subject wages reported for each quarter. See Forms.
  • Penalties are imposed for failure to comply with the income tax depositing and filing requirements. In addition, the California Department of Labor Standards Enforcement will not register or renew the business registration of an employer subject to the California Property Service Workers Protection Act if the employer has failed to remit the proper amount of Social Security and Medicare (FICA) tax to the IRS and has not fully paid any delinquency for those unpaid taxes. See Penalties.
  • All employers are required to make deposits by electronic funds transfer (EFT). Penalties are imposed for noncompliance. See Electronic Deposit Requirements.
  • California employers are not required to file an annual reconciliation return. See Annual Reconciliation Forms and Filing Deadlines.
  • Employers are not required to send copies of Forms W-2 or Forms W-2c to the state of California. See Form W-2 Reporting Requirements.

Income Tax Depositing and Filing Requirements

Deposit Thresholds and Schedules

The personal income tax (PIT) and state disability insurance (SDI) deposit thresholds and due dates are based on each employer's federal deposit schedule and the amount of accumulated PIT the employer has withheld.

California Deposit Schedule Requirements
Next Business Day Employer is required to make next business day deposits if required to make federal next business day deposits and has accumulated more than $500 in California withholding during one or more payroll periods.
The next business day deposit schedule requires deposits to be made by the next business day. Business days do not include Saturdays, Sundays, federal or state legal holidays and days the Employment Development Department is closed.
Semi-weekly Employers are required to make semiweekly deposits if required to make federal semiweekly deposits and have accumulated more than $500 in California withholding during one or more payroll periods.
Semiweekly deposit schedule requires deposit for paydays on Wednesday, Thursday and Friday to be made by the following Wednesday. For paydays on Saturday, Sunday, Monday or Tuesday, deposits must be made by the following Friday. Semiweekly depositors always have three business days after the end of the semiweekly period to make a deposit. If any of the three business days after the end of the semiweekly period is a legal holiday, the employer will have an additional business day to make the deposit.
Monthly Employers are required to make monthly deposits if required to make federal annual, quarterly or monthly deposits and have accumulated $350 or more in California withholding during one or more months of a quarter. Employers are required to make monthly deposits if required to make federal semiweekly or next business day deposits and have accumulated $350-$500 in California withholding during one or more months of a quarter.
Monthly deposits are due by the 15th day of the following month. If the 15th is a Saturday, Sunday or legal holiday, the last timely date would be the next business day.
Quarterly Employers are required to deposit with the same due dates as a quarterly tax return if withholding is less than $350 during the quarter.

Forms

All tax payments must be submitted with a properly completed Payroll Tax Deposit Coupon, Form DE 88/DE 88ALL, unless payment is made using one of the various electronic payment options.

Employers must file Form DE 9, Quarterly Contribution Return and Report of Wages, on a quarterly basis (e.g., by January 1, April 1, July 1, and October 1) to reconcile payroll tax payments and total subject wages reported for the quarter. The DE9 is mailed to employers in March, June, September and December of each year.

Deposit and Filing Due Dates

Deposits of withheld taxes must be made by the following due dates in California:

If Federal Deposit Schedule Is Have Accumulated State PIT Withholding Of If Payday Is PIT and SDI Deposit Due By
Next Business Day Less than $350 Any day Quarterly
$350-$500 Any day 15th of the following month
More than $500 Any day Next business day
Semi-weekly Less than $350 Any day Quarterly
$350 to $500 Any day 15th of the following month
More than $500 Wed., Thurs. or Fri. Following Wednesday
More than $500 Sat., Sun., Mon. or Tues. Following Friday
Monthly Less than $350 Any day Quarterly
$350 or more Any day 15th of the following month
Quarterly or Annually Less than $350 Any day Quarterly
$350 or more Any day 15th of the following month

Due dates for depositing quarterly are April 30; July 31; October 31; and January 31.

The Quarterly Contribution Return and Report of Wages (DE9) is due according to the following schedule:

Report Covering Due Date Delinquent If Not Filed By
January, February, March April 1 April 30
April, May, June July 1 July 31
July, August, September October 1 October 31
October, November, December January 1 January 31

Deposit and filing dates do not include Saturdays, Sundays and legal holidays. Employers will make deposits on the next business day.

Penalties

A penalty of 15%, plus interest, applies to late payroll tax payments and return filings. The penalty for not reporting employee wage information is $20 per wage item. Penalties and interest are also charged for reports that are filed late.

Property Service Workers Protection Act

The California Department of Labor Standards Enforcement will not register or renew the business registration of an employer subject to the California Property Service Workers Protection Act (the Act) if the employer has failed to remit the proper amount of Social Security and Medicare (FICA) tax to the IRS and has not fully paid any delinquency for those unpaid taxes. This provision also applies to certain successor employers.

The Act applies to janitorial employers with at least one worker covered by the Act, including any employee, contractor or franchisee performing janitorial duties. The term janitor does not include individuals whose work duties are predominantly final cleanup of debris, grounds, and buildings near the completion of a construction or repair work project (e.g., street cleaners).

+2015 Bill Text CA A.B. 1978.

For additional information regarding employer liability under the Act, see Payment of Wages: California and Unemployment and Disability Insurance Taxes: California. For additional requirements under the Act relating to sexual harassment training, see Training and Development: California.

Electronic Deposit Requirements

All employers are required to file quarterly returns electronically and remit amounts withheld by EFT. An employer may request a one-year waiver from these requirements by the EDD director (or longer at the director's discretion), if the employer establishes that it lacks the required automated systems, has or would suffer a severe economic hardship, is currently exempt from electronic filing for federal reporting purposes or for any other good cause.

An employer that fails to file a quarterly return electronically, without good cause, is subject to a $50 penalty per return, in addition to any other applicable penalties. An employer that was not required to electronically file returns prior to January 1, 2018, will not be subject to the $50 penalty until December 31, 2018, so long as the employer files within the time required by law.

+2015 Bill Text CA A.B. 1245.

California accepts two Automated Clearing House (ACH) payment methods-ACH Debit and ACH Credit. Payment by credit card does not satisfy the EFT requirements.

An employer that is mandated to make deposits by EFT and fails to do so is subject to a 15% noncompliance penalty.

Annual Reconciliation Forms and Filing Deadlines

An annual reconciliation return is not required to be filed.

Form W-2 Reporting Requirements

Employers are not required to send state copies of Forms W-2 or Forms W-2c to the state of California.

Future Developments

There are no developments to report at this time. Continue to check XpertHR regularly for the latest information on this and other topics.