SOLE SHAREHOLDER/CORPORATE OFFICER EXCLUSION STATEMENT
                      (Section 637.1 of the California Unemployment Insurance Code [CUIC])

Eligibility Requirements
In a private corporation, any person who is a corporate officer and sole shareholder, or the only shareholder other than his or 
her spouse, may file a statement electing to be excluded only from State Disability Insurance (SDI) coverage for contributions 
and benefits, which includes Paid Family Leave (PFL). You may file your exclusion request online using e-Services for 
Business. Log in to your e-Services for Business (edd.ca.gov/e-Services_for_Business) account or enroll.
I hereby declare that I am a corporate officer of the above-named private corporation, and 
CHECK ONLY ONE            The sole shareholder, or  
                          The only shareholders are my spouse and me.
Please print or type. Prepare an original and retain a copy with your payroll records. Mail or fax immediately upon 
completion to the address or fax number shown on the Reporting Instructions. Your exclusion is effective on the first day of 
the calendar quarter in which this statement is filed.
Employer Payroll Tax Account Number 
Federal Employer Identification Number (FEIN) 
Secretary of State Corporate Entity Number 
Corporation Name 
Doing Business As 
Corporation Mailing Address                               City                               State        ZIP Code 
Contact Person’s Phone Number                           Fax Number 
Sole Shareholder’s Name 
The Last Four Digits of Social Security Number 
Sole Shareholder’s Spouse’s Name 
The Last Four Digits of Social Security Number 
Election Statement
  I hereby elect to be excluded from any rights to SDI benefits based on wages paid to me by this corporation.
  Spouse (If electing to be excluded, must be both a corporate officer and shareholder.)
IMPORTANT - PLEASE NOTE CAREFULLY
The corporation must report your wages and pay contributions for Unemployment Insurance (UI) and Employment Training 
Tax (ETT) unless your corporation is not subject to the Federal Unemployment Tax Act (FUTA). Refer to section 637 of the 
CUIC for further information. Only certain types of nonprofit and agricultural corporations are not subject to FUTA.
I understand that this statement is effective in the calendar quarter filed and is effective during the remainder of the calendar 
year in which the statement is filed and for not less than the two succeeding complete calendar years, and in all subsequent 
calendar quarters until withdrawn. Any changes in the ownership of the stock or status of the corporate officer may terminate 
this exemption. I also understand that this exclusion applies only to SDI taxes administered by the State of California and has 
no effect on the administration of federal UI taxes.
Sole Shareholder’s Signature  ______________________________________________________ Date 
Sole Shareholder’s Spouse’s Signature  ______________________________________________ Date 

                                                FOR DEPARTMENT USE ONLY
                                 EFF. DATE  _________________  LTR. SENT  _______________
                                 EXAMINER  ________________  DATE  ___________________

                                 SEE THE FOLLOWING REPORTING INSTRUCTIONS
DE 459 Rev. 21 (7-19) (INTERNET)                      Page 1 of 2                                                   CU

                                         REPORTING INSTRUCTIONS

You are required to electronically submit employment tax returns, wage reports, and payroll tax deposits using e-Services for 
Business to comply with the e-file and e-pay mandate. Visit the E-file and E-pay Mandate for Employers  
(edd.ca.gov/payroll_taxes/e-file_and_e-pay_mandate_for_employers.htm) website for more information.

Please follow these reporting procedures:

1.  File a single Quarterly Contribution Return and Report of Wages (DE 9) for the quarter and include wages and 
withholdings for all of the corporation’s employees, including the sole shareholder and sole shareholder’s spouse, if 
electing the exclusion.

2.  If you have an approved e-file and e-pay mandate waiver to file the Quarterly Contribution Return and Report of Wages 
(Continuation) (DE 9C) by paper, the sole shareholder wages and withholdings must be reported on a separate DE 9C for 
the quarter. Write “Sole Shareholder” across the top of the DE 9C. Report all other employees’ wages and withholdings 
on a separate DE 9C.

3.  When filing electronically, one DE 9C for the quarter may be used to report wages and withholdings for all the 
corporation’s employees, including the sole shareholder and the sole shareholder’s spouse, if electing exclusion. Insert 
Plan Code “R” on the wage line(s) to designate the sole shareholder wages and sole shareholder’s spouse, if electing 
exclusion, only when reporting on an account that is subject to UI and SDI.

                                         GENERAL INFORMATION

NOTE: A DE 459 is not required if services performed are not subject to California law for UI, ETT, or SDI purposes. Please 
refer to Information Sheet: Multistate Employment (DE 231D) (PDF) (edd.ca.gov/pdf_pub_ctr/de231d.pdf) to determine 
whether the services are subject to employment taxes in California.

If the corporation does not have an employer payroll tax account number, please register online through e-Services for 
Business. Do not submit this form until you have received an employer payroll tax account number.

It is important to file the form during the calendar quarter in which you want the exemption to take effect. The exemption 
becomes effective the first day of the calendar quarter in which it is filed. A delay in filing this form may cause your 
exemption to take effect in the next calendar quarter. Do not file this form as an attachment to your DE 9, DE 9C, or any 
other Employment Development Department (EDD) form.

The EDD reserves the right to request additional information pertaining to this form.

The exemption may be terminated at any time by a change in stock ownership or status of the corporate officer as described 
in section 637.1 of the CUIC.

The exemption may be voluntarily terminated after two succeeding complete calendar years have passed. The corporate 
officer/sole shareholder must submit a written request to the EDD for termination.

If you have any questions concerning the exemption or reporting requirements, please contact the EDD at the address below.

                                         Attention: Specialized Coverage Desk 
                                 Employment Development Department
                                         Taxpayer Assistance Center
                                                       PO Box 2068
                                         Rancho Cordova, CA 95741-2068

                                         Phone:  1-888-745-3886
                                                 Fax:  1-916-319-1179

The EDD is an equal opportunity employer/program. Auxiliary aids and services are available upon request to individuals with disabilities. Requests for 
services, aids, and/or alternate formats need to be made by calling 1-888-745-3886 (voice) or TTY 1-800-547-9565.

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