What Is a California Employer Payroll Tax Account Number?
For California employers: Grasp the vital state identification number needed to effectively manage payroll tax responsibilities and ensure compliance.
Understanding state-specific payroll tax obligations is fundamental for businesses with employees. Employers must navigate various requirements for proper withholding, reporting, and payment of taxes to state agencies. This involves identifying correct state-level identification numbers and adhering to prescribed procedures.
Defining the California Employer Payroll Tax Account Number
The California Employer Payroll Tax Account Number is a unique identification number issued by the California Employment Development Department (EDD). This eight-digit number serves as a primary identifier for businesses to manage state payroll tax responsibilities. It is also known as a State Employer Identification Number (SEIN) or State ID number.
The main purpose of this account number is to track and manage various state payroll taxes. These include Unemployment Insurance (UI), State Disability Insurance (SDI), Employment Training Tax (ETT), and California Personal Income Tax (PIT) withholding. Any employer who pays wages exceeding $100 to one or more employees in a calendar quarter in California is required to obtain this number. This applies to various business entities, including sole proprietorships, partnerships, and corporations. While the Federal Employer Identification Number (EIN) is necessary for federal tax purposes, the California Employer Payroll Tax Account Number is distinct and required for state-level compliance.
Steps to Obtain Your Account Number
Before applying for a California Employer Payroll Tax Account Number, businesses need to gather specific information to ensure a smooth registration process. This preparatory information typically includes the Federal Employer Identification Number (EIN), the legal business name, and the physical business and mailing addresses. Other details required are the type of business entity, the date wages were first paid or will be paid, and contact information for the business and a designated contact person. If applicable, information regarding any previous EDD employer payroll tax accounts and the business name as recorded with the California Secretary of State should be prepared.
The primary method for obtaining this account number is through the EDD’s online registration portal, known as e-Services for Business. To use this portal, new users must first create a username and password, then enroll by providing the required information and verifying their email address. After enrollment, users can log in and complete the online application. Alternatively, businesses can register by mailing in a paper application, specifically Form DE 1, the Registration Form for Commercial Employers, or faxing it to the EDD.
When completing the online application or Form DE 1, accurately input all gathered information. This includes the EIN, the date wages exceeded $100 in a calendar quarter, and details about the business’s owners or officers, including their names and Social Security numbers. The form also requires a detailed description of the business’s industry or principal product/service to help the EDD assign an industrial classification code. While online registration can often issue an account number within minutes, more complex requests or those requiring additional information may take up to ten business days or longer.
Utilizing Your Account Number for Payroll Taxes
Once a California Employer Payroll Tax Account Number is issued, it becomes central to ongoing payroll tax compliance. This eight-digit number is required for all interactions with the EDD, including filing payroll tax returns and wage reports. Employers must use this number when submitting the Quarterly Contribution Return and Report of Wages (Form DE 9) and its continuation, Form DE 9C. These forms reconcile reported wages and paid taxes for each quarter, with the DE 9C detailing individual employee wage and withholding information.
The account number is also essential for making timely payroll tax payments to the EDD. Employers are required to electronically submit employment tax returns, wage reports, and payroll tax deposits. The EDD’s e-Services for Business portal is the primary platform for electronic filing and payments once the account number is active. Payments for Unemployment Insurance (UI) and Employment Training Tax (ETT) are typically due quarterly, while State Disability Insurance (SDI) and Personal Income Tax (PIT) withholdings may require more frequent deposits depending on the amount owed and federal deposit schedules. Penalties, including a 15% penalty plus interest, can be assessed for late payments.