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PERSONAL INCOME TAX WAGES REPORTED ON THE QUARTERLY
CONTRIBUTION RETURN AND REPORT OF WAGES (CONTINUATION) (DE 9C)

The purpose of this information sheet is to explain the on the DE 9C. For additional information regarding PIT
requirement to report California Personal Income Tax wages and PIT withholding for domestic services, please
(PIT) wages in Item H on the Quarterly Contribution refer to the Information Sheet: Personal Income Tax
Return and Reports of Wages (Continuation) (DE 9C). Wages Reported on the Quarterly Report of Wages and
Withholdings for Employers of Household Workers
It may be helpful to keep in mind the purpose for the (DE 3BHW) (DE 231PH).
wage items required on the DE 9C. The “Total Subject
Wages” in Item G on the DE 9C are wages subject to WHAT ARE WAGES?
Unemployment Insurance (UI), Employment Training
Tax (ETT), and/or State Disability Insurance* (SDI). The “Wages” are payments made to an employee for
“Total Subject Wages” are used to determine UI and SDI personal services and may be paid by cash, check, or
benefits. The “PIT Wages” in Item H on the DE 9C are the reasonable cash value of remuneration paid to an
used by the Franchise Tax Board (FTB) to determine an employee in any medium other than cash (for example,
individual’s income and should agree with amounts in lodging and meals). Wages in any form other than cash
Box 17 (“State Wages, Tips, etc.”) on the federal Wage are measured by the fair market value of the goods given
and Tax Statement (Form W-2). The “PIT Withheld” as compensation for the employee’s services.
in Item I on the DE 9C represents the amount of PIT
withheld from the individual’s wages. The FTB utilizes the The definition of wages includes hourly wages, salaries,
“PIT Wages” and “PIT Withheld” information to verify an commissions, bonuses, fees, piece rates, incentive
individual’s wages and withholding. payments, and certain fringe benefits. Cash tips are
also considered wages under certain conditions even if
WHAT ARE “PIT WAGES”? tips are paid by the customer and not the employer. For
reporting purposes, wages are taxable when paid, made
The “PIT Wages” in Item H on the DE 9C are the wages available to the employee, or at the time the employee
subject to California PIT which must be reported as receives remuneration other than cash.
income on an individual’s California income tax return.
Most payments for employee services are reportable For a further explanation of “Wages,” “Total Subject
on the DE 9C as PIT wages. Wages,” and wages subject to California PIT withholding,
please refer to the Information Sheet: Wages (DE 231A)
The PIT wages may not be subject to UI, ETT, SDI, and the California Employer’s Guide (DE 44) “Types of
or California PIT withholding in every situation. For Payments” section.
example, wages for agricultural and domestic services
are subject to UI, SDI, ETT, and reportable as PIT REFERENCES
wages, but are excluded from PIT withholding (unless
For a more extensive definition of PIT wages, the
both the employer and the employee agree to withhold
following are recommended:
PIT).
1. Refer to the FTB’s Personal Income Tax Booklet
However, all wages subject to PIT withholding are for California Resident Forms and Instructions,
reportable as PIT wages except for pension, annuity, “Instructions for Form 540/540A, Line 12, State
and other deferred income distributions reported Wages.”
on a Distributions From Pensions, Annuities,
Retirements or Profit-Sharing Plans, IRAs, Insurance 2. If more information is required regarding the
Contracts, etc. (federal Form 1099-R). Please refer definition of wages by the federal income tax law
to the attached table, which lists examples of the (Internal Revenue Code), please review the following
most common reporting differences between “Total publications:
Subject Wages,” “PIT Wages,” and “PIT Withheld”

*Includes Paid Family Leave (PFL)

DE 231PIT Rev. 5 (1-11) (INTERNET) Page 1 of 6 CU

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• Internal Revenue Service (IRS) 1040 booklet The federal (IRS) toll-free number for assistance and
and Instructions for Line 7 - Wages, Salaries, ordering forms is (800) 829-1040. If you have access to
Tips, etc. the Internet, you may download, view, and print federal
income tax forms by accessing IRS’ Web site at
• The IRS Publication 17, Your Federal Income Tax www.irs.gov.
for Individuals, Chapter 2, “Wages, Salaries, and
Other Earnings,“ and “Tip Income.” ADDITIONAL INFORMATION
• Sections listed in the index of the Internal
Revenue Code under “Compensation.” For further assistance, please contact the Taxpayer
Assistance Center at (888) 745-3886 or visit the nearest
If you are still unclear on what should be considered Employment Tax Office listed in the DE 44 or access
reportable as California PIT wages, please contact the Employment Development Department’s (EDD) Web site
FTB at their toll-free number (800) 852-5711 (bilingual at www.edd.ca.gov/Office_Locator/.
assistance available). You may also order FTB forms by
calling (800) 338-0505. Select and follow the recorded The EDD is an equal opportunity employer/program.
instructions for personal income tax forms. If you have Auxiliary aids and services are available upon request to
access to the Internet, you may download, view, and individuals with disabilities. Requests for services, aids,
print California income tax forms by accessing the FTB and/or alternate formats need to be made by calling
Web site at www.ftb.ca.gov. (888) 745-3886 (voice) or TTY (800) 547-9565.

This information sheet is provided as a public service and is intended to provide nontechnical assistance. Every attempt
has been made to provide information that is consistent with the appropriate statutes, rules, and administrative and
court decisions. Any information that is inconsistent with the law, regulations, and administrative and court decisions
is not binding on either the Employment Development Department or the taxpayer. Any information provided is not
intended to be legal, accounting, tax, investment, or other professional advice.

DE 231PIT Rev. 5 (1-11) (INTERNET) Page 2 of 6 CU

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ATTACHMENT

REPORTING OF COMMON TYPES OF EMPLOYMENT AND WAGE PAYMENTS

The table below lists examples of the most common reporting differences between “Total Subject Wages”
and “PIT Wages” on the Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C). As
shown in the grid below, some wage items are considered “PIT Wages” and reported in Item H on the
DE 9C, even though the wages are not subject to Personal Income Tax (PIT) withholding. The table is
based on the “Types of Employment” and “Types of Payments” tables in the California Employer’s Guide
(DE 44). Please refer to the DE 44 for further explanations on types of employment and wage payments.

TYPES OF EMPLOYMENT AND “TOTAL SUBJECT WAGES” “PIT WAGES”
WAGE PAYMENTS Reportable in Item G on the DE 9C Reportable in Item H on the DE 9C

Agricultural Labor YES YES, but not subject to PIT
Refer to federal Agricultural Employer’s Tax withholding (unless both
Guide Publication 51. the employer and employee
agree to withhold the tax).

Deceased Employee Wages YES (Unless paid after the NO
Wages paid to beneficiary or estate after the calendar year in which the
date of the worker’s death. employee died).

Family Employees NO (This only applies to sole YES
Minor child under 18 employed by a father or proprietorships and partner-
mother; an individual employed by spouse, ships). Refer to Information
registered domestic partner, son, or daughter. Sheet: Family Employment
(DE 231FAM).

Fishing and Related Activities YES NO
Refer to Information Sheet: Commercial
Fishing (DE 231CF).

Homeworkers (Industrial) YES YES, but not subject to PIT
Statutory employees. withholding.
Refer to Information Sheet: Statutory
Employees (DE 231SE).

Homeworkers (Industrial) YES YES, but not subject to PIT
Common law employees. withholding.
Refer to Information Sheet: Employment
(DE 231).

Household Employment (Domestic) YES, if employer is required YES, but not subject to PIT
In private homes, local college clubs, to be registered. Refer to withholding (unless both
fraternities, and sororities. Information Sheet: Household the employer and employee
Employment (DE 231L) and/or agree to withhold the tax).
Household Employer’s Guide
(DE 8829).

Lodging and Meals YES YES (Unless furnished for
Please refer to the California Employer’s Guide the employer’s convenience
(DE 44) or the Tax Rates, Wage Limits, and and on employer’s
Value of Meals and Lodging (DE 3395) for the premises).
current rate.

(Table continued)
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ATTACHMENT

REPORTING OF COMMON TYPES OF EMPLOYMENT AND WAGE PAYMENTS (cont.)

TYPES OF EMPLOYMENT AND “TOTAL SUBJECT WAGES” “PIT WAGES”
WAGE PAYMENTS Reportable in Item G on the DE 9C Reportable in Item H on the DE 9C

Newspaper NO (Unless occupation is NO (Unless occupation is
Newspaper carriers under 18 years old regular full-time work). regular full-time work).
delivering to consumers.

Newspaper NO NO
Newspaper and magazine vendors buying at
fixed prices and retaining excess from sales to
consumers.

Noncash Payments NO NO
Service not in the course of employer’s trade
or business.

Religious Organizations (Employees of) NO YES
Churches, convention, or associations of
churches, or religious organizations which are
operated primarily for religious purposes and
operated, supervised, controlled, or principally
supported by a church, convention, or
associations of churches. Refer to Information
Sheet: Nonprofit and/or Public Entities
(DE 231NP).

Retirement and Pension Plans: NO NO, but subject to PIT
A. Payments from a qualified plan. withholding (unless the
Pension, annuity, and other deferred individual is no longer a
income distributions reported on federal resident of California).
Form 1099R. Refer to Information Sheet:
Withholding from Pensions, Annuities, and
Certain Deferred Other Income (DE 231P).

B. Employee contributions to a qualified cash YES YES (Unless payments
or deferred compensation plan as defined are not includable
in Section 401(k) of the Internal Revenue in gross income for
Code (IRC). California income tax
purposes).

C. Employer contributions to a qualified cash NO (Unless the contributions YES (Unless payments
or deferred compensation plan as defined result from a salary reduction are not includable
in Section 401(k) of the IRC. agreement). in gross income for
California income tax
purposes).

D. Employer contributions to a Simplified NO (Unless the contributions YES (Unless payments
Employee Plan- Individual Retirement result from a salary reduction are not includable
Arrangement (SEP-IRA) as defined in agreement). in gross income for
Section 408(k) of the IRC. California income tax
purposes).

(Table continued)

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ATTACHMENT

REPORTING OF COMMON TYPES OF EMPLOYMENT AND WAGE PAYMENTS (cont.)

TYPES OF EMPLOYMENT AND “TOTAL SUBJECT WAGES” “PIT WAGES”
WAGE PAYMENTS Reportable in Item G on the DE 9C Reportable in Item H on the DE 9C

E. Employer contributions to a qualified NO (Unless the contributions NO
annuity contract as defined in result from a salary reduction
Section 403(b) of the IRC (applies to agreement).
Section 501(c)(3) of the IRC organizations
and public school employers).

F. Employer contributions to certain YES (When services are YES
nonqualified deferred compensation plans. performed or when there
is no substantial risk of a
forfeiture of the right to the
amount, whichever is later).

Salespersons:
Refer to Information Sheet: Salespersons
(DE 231N).

A. Real estate salespersons. YES (Unless certain YES (However, not
conditions are met). subject to PIT withholding if
certain conditions are met).

B. Direct sales salespersons. YES (Unless certain YES (However, not
conditions are met). subject to PIT withholding if
certain conditions are met).

C. Salespersons who are statutory YES YES, but not subject to PIT
employees. withholding.
Refer to Information Sheet: Statutory
Employees (DE 231SE).

Sickness or Injury Payments under:

A. Workers” Compensation law. NO NO

B. Employer plans and contracts of YES (However, not reportable YES, to the extent the
insurance. after the end of six calendar payments into the plan were
months following the calendar made by the employer and
month when the employee were not included in the
last worked for the employer). gross taxable income of the
employee.

Sick Pay Paid by Third-Party Payers YES YES, but not subject to PIT
Reportable by the payer, such as insurance withholding unless employee
companies and trusts, unless payer notifies requests withholding by filing
the recipient’s last employer within 15 days a Request for State Income
after payment. Reporting is the responsibility Tax Withholding from Sick
of the last employer if timely notified by the Pay (DE 45) with the third-
payer. Refer to Information Sheet: Third-Party party payer.
Sick Pay (DE 231R).

(Table continued)

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                                               ATTACHMENT

REPORTING OF COMMON TYPES OF EMPLOYMENT AND WAGE PAYMENTS (cont.)

TYPES OF EMPLOYMENT AND                           “TOTAL SUBJECT WAGES”                “PIT WAGES”
         WAGE PAYMENTS                           Reportable in Item G on the DE 9C Reportable in Item H on the DE 9C

Students:

A.  Working for a public or private school,      NO                                YES 
college or university, if enrolled and 
regularly attending classes at that school.

B.  Spouse of student, if such spouse is         NO                                YES
advised at the time service commences 
at the school that employment is provided 
under a program to provide financial 
assistance to the student by the school, 
college, or university, and that employment 
will not be covered by unemployment 
insurance.

C.  Under age 22 enrolled in a full-time         NO (Unless the program            YES
program at a nonprofit or public education       established for or on behalf 
institution.  Institution must normally          of an employer or group of 
maintain a regular faculty and curriculum        employers).
normally have a regularly organized body 
of students where its educational activities 
are located.  Student’s service must be 
taken for credit at such institution.  It must 
combine academic instruction with work 
experience.  It must be an integral part 
of such program, and the institution must 
have so certified to the employer.

D.  Student nurse working for a hospital.        NO                                YES

E.  Full-time student working for an organized   NO                                YES
camp.  A “full-time student” is enrolled for the 
current term of academic year or, if between 
terms, for the immediately preceding period 
with a reasonable assurance of enrollment 
in the immediate subsequent period.  An 
“organized camp” offers outdoor living 
experience for social, spiritual, educational 
or recreational purposes; must not operate 
more than seven months a year, or at least 
2/3 of its previous yearly gross income must 
have been in any six of the twelve months of 
the year.

Vacation Pay, Sick Pay, and Holiday Pay          NO                                YES
Earned but not paid prior to termination of 
employment.  

Worker Adjustment and Retraining Notification    NO                                YES
(WARN) Act payments for failure to provide 
60-day notice of plant closure or mass layoffs.

DE 231PIT Rev. 5 (1-11) (INTERNET)               Page 6 of 6                                                        CU

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