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Instructions for Completing the
Quarterly Adjustment Form for Voluntary Plan Disability Insurance Employers (DE 938)
The Employment Development Department’s (EDD) Quarterly Adjustment Form for Voluntary Plan Disability Insurance
Employers (DE 938) is used to make changes to the Quarterly Contribution Return (DE 3D).
You need to complete this form if You do not need to complete this If you are not an employer with
you are an employer with Voluntary adjustment form if: Voluntary Plan Disability
Plan Disability Insurance and: 1. You have made an overpayment and can Insurance, do not use a DE 938
1. You are adjusting wages and/or Personal internally adjust the contribution on a to request adjustments to your
Income Tax (PIT) withholding by subsequent Payroll Tax Deposit (DE 88). account.
individual. or For example, an overpayment of Personal Contact the Taxpayer Assistance Center
Income Tax (PIT) is considered as a at 888-745-3886 for assistance, forms,
2. You are reporting additional wages prepayment of the PIT for the subsequent or if you are reporting back pay awards.
and/or PIT. or DE 88. The amount reported and paid on
3. You are filing a claim for refund. or the subsequent DE 88 should be the actual Forms are also available on our website
amount of PIT withheld for the period minus at www.edd.ca.gov.
4. You have reported wages, withholdings, the overpayment in PIT. or
or contributions incorrectly and need to
adjust them. 2. You have reported contributions incorrectly
and can internally adjust the individual
contributions on your subsequent DE 88s.
I. ADJUSTMENTS TO WAGES AND CONTRIBUTIONS
Lines A through G:
• Column 1 - Enter the amounts previously reported on your return, report, or your most recent adjustment form. Complete for
affected fields only.
• Column 2 - Enter the amounts that you should have reported on the above return report or adjustment form.
• Column 3 - Enter the difference between Column 1 and Column 2.
rd
Line I: Penalty: Penalty of 15% (10% for periods prior to 3 quarter 2014) of Line H is due if you are paying additional taxes with this
adjustment form.
Line J: Interest: Interest is computed on the total of Line H and Line I. Since the interest rate changes periodically, please contact your
nearest Employment Tax Office for assistance.
Line K: Erroneous SDI Deductions Not Refunded: Since SDI deductions (includes Paid Family Leave amount) are employee contributions,
the EDD cannot refund these contributions to you unless the erroneous deductions have been first refunded to the employees.
Line L: Enter total contributions and withholdings paid.
Line M: Total: Add Subtotal (Line H2), plus Penalty (Line I) and Interest (Line J), plus Erroneous SDI Deductions Not Refunded (Line K),
minus contributions and withholdings paid for the quarter (Line L). If a balance is due, please pay this amount. In order to reduce costs,
credits under $10 will not be refunded unless requested in writing.
Personal Income Tax Overpayments
After you have issued a Form W-2 to an employee, you cannot adjust the amount reported as income tax withheld when you have
over-withheld from an employee’s wages. The EDD cannot allow a credit or refund of any overpayment of income tax withheld from an
employee’s wages that are reported on Form W-2. The employee will receive credit for any overwithholding when filing their California
Resident Income Tax return (Form 540) with the Franchise Tax Board. You should not refund the overwithholding to the employee,
change the California PIT withholding amount shown on the Form W-2, or file a claim for refund with the EDD.
You may claim a credit or refund of California PIT overwithheld from an employee’s wages when the excess amount is credited or
refunded to the employee during the same calendar year and the excess amount is not shown on the Form W-2 issued to the
employee. If you paid the EDD more than the amounts withheld from an employee’s wages, and you want a refund, you can adjust the
amount reported on this form. Otherwise, you can consider this overpayment of PIT as a prepayment of the PIT for the subsequent
deposit. You do not need to complete this adjustment form. The amount indicated on the subsequent payment should be the actual
amounts due in the PIT minus the overpayment in PIT. The payment submitted should always equal the stated amounts on deposit.
Do not show a credit on the DE 88.
If you issued a Form W-2 showing the wrong amount, you must issue a Form W-2C to the employee and make the necessary changes
in Section III on page 1 of this form, or submit the appropriate Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C)
with this adjustment form.
II. REASON FOR ADJUSTMENT. This item is used to explain the reason for the adjustment in the above section.
III. EMPLOYEE WAGES/PIT WITHHOLDINGS ADJUSTMENT. Attach additional DE 9C forms if you need additional space.
Complete as described in the following examples:
A. Incorrect wages and/or PIT withholdings reported. Enter Social Security Account (SSA) number, name, and correct amount of
wages and PIT withholdings.
B. Wrong SSA number originally reported. This correction requires two entries. First enter the incorrect SSA number, name, zero (0)
wages, and zero (0) PIT withholdings; then enter the correct SSA number, name, correct amount of wages and PIT withholdings.
IV. SIGNATURE. Please include your phone number so we can contact you if we need additional information. Thank you.
DE 938 Rev. 46 (7-14) (INTERNET) Page 2 of 2 P.O. Box 826880 / Sacramento CA 94280-0001
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