Depositing and Reporting Withheld Taxes: California

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.