California Important Payroll Tax Changes in 2011

by admin 1. November 2010 14:55

Change to Quarterly Reporting

Starting with the first quarter of 2011, employers will begin filing new:

  • Quarterly Contribution Return and Report of Wages (DE 9)
  • Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C).

For more information about 2011 payroll tax changes, please review the 2011 Payroll Tax Reporting Changes FAQs.

What reporting changes are taking place in 2011?

Effective January 1, 2011, employers will report total subject wages, Unemployment Insurance (UI) and Disability Insurance (DI) taxable wages and contributions, by filing a New Quarterly Contribution Return and Report of Wages (DE 9) quarterly instead of annually.

Employers will continue to report employee wages and personal income tax withheld quarterly on the New Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C).

These forms will replace the Annual Reconciliation Statement (DE 7) and the Quarterly Wage and Withholding Report (DE 6).

NOTE: Years 2010 and prior, employers will file the DE 7 and DE 6.

How will changing from annual reconciliation to quarterly reporting impact employers?

The new quarterly reporting process will allow the Employment Development Department (EDD) to identify overpayments sooner, which will result in faster refunds, as well as allow us to more quickly identify potential delinquencies.

Will employers continue to use the Payroll Tax Deposit (DE 88) coupon to make payments?

Yes, employers are still required to pay their contributions with the DE 88. Deposit due dates will not be affected by this change. In spring 2011, employers will have more options available to electronically file returns, and make deposits and payments on outstanding liabilities. Watch for additional information as it becomes available on our expanded e-Services for Business.

What happens if a mistake has been made on the DE 7 or the DE 6? How do we correct the DE 9 or DE 9C?

For years prior to 2011, employers will file a DE 7 and DE 6, therefore, any adjustments to either form would be done by filing a Tax and Wage Adjustment Form (DE 678).

Corrections to the DE 9 or DE 9C can be made using the Quarterly Contribution and Wage Adjustment Form (DE 9ADJ). This form will be available online.

Where can employers obtain the new forms?

Registered employers will receive the new forms automatically by mail. They will also be available online and at local EDD offices in December 2010. The DE 6 and DE 7 will continue to be available online for years prior to 2011.

NOTE: The expansion of our e-Services for Business in spring of 2011 will provide multiple options to file your returns electronically as well as make deposits. Watch for additional information as it becomes available on our expanded e-Services for Business.

Will employers have to update their software to complete these new reports?

The EDD will work directly with payroll software companies to make sure they are aware of the new reporting requirements. Employers and their representatives need to contact their payroll software company regarding software updates.

Employers who file alternate forms need to contact the Alternate Forms Coordinator at (916) 255-0649.



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