Enlarge image
Instructions for Reporting Wages and Contributions For Employers Who Have Elected Unemployment and State Disability Insurance Coverage Under Section 708(a) of the California Unemployment Insurance Code Section 708(a) of the California Unemployment Insurance Code (CUIC) (leginfo.legislature.ca.gov/faces/codes.xhtml) extends Unemployment Insurance (UI) and State Disability Insurance (SDI) coverage to an individual who is an employer. To obtain coverage, the employer must file a written election for coverage, which becomes effective once approved by the Employment Development Department (EDD). The employer must regularly perform services for the business (section 708[a] of the CUIC). Coverage will not be approved if the business operates seasonally (section 704 of the CUIC). Section 708(a) of the CUIC says, to determine unemployment benefits only, regardless of actual earnings, the highest amount of wages that can be reported for each calendar quarter to qualify the individual to the maximum benefits is $11,674. For more information, refer to the Unemployment Insurance Benefit Table found in A Guide to Benefits and Employment Services (DE 1275A) (PDF) (edd.ca.gov/ siteassets/files/pdf_pub_ctr/de1275a.pdf). Reportable Wages for Unemployment We determine the maximum unemployment benefits a claimant receives based on reported wages. Since employers do not receive wages, the Legislature has provided a basis for collecting wage information and contributions, and for paying benefits under elective coverage. Compensation is reported based upon services performed. If services are performed during the calendar quarter, all income or wages earned must be reported. For unemployment wages only, if the individual (employer) did not perform any services during the entire or part of a quarter, wages should be reported as follows: 1. If no services were performed in a month, no wages are reportable for that month. 2. If services were performed during less than one-half of the number of normal working days in the month, the monthly wages of $1,273 should be reported for the corresponding month. 3. If services were performed during one-half or more of the normal working days in the month and for one or more other months in the same calendar quarter criteria under 1, 2 or both above are met, the monthly wages of $2,545 should be reported, plus the amounts required under 1, 2 or both above for the corresponding months. 4. If services were performed during one-half or more of the number of normal working days in each month during the calendar quarter, the quarterly wages of $7,634 should be reported. 5. The UI contributions will be paid at the employer’s regular contribution rate. No benefits will be paid based on wages reported under the election unless all contributions due under the election have been paid. Taxable Wages for Unemployment Unemployment contributions are due on the first $7,000 in wages reported for each covered individual and are reported on your Payroll Tax Deposit (DE 88) and paid at your regular employment contribution rate. Preparing the Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C) and Payroll Tax Deposit (DE 88) Per section 1088(h) of the CUIC, all employers must submit tax returns and wage reports electronically effective January 1, 2018. Employers must electronically file the DE 9C using e-Services for Business, Federal/State Employment Tax (FSET) program, or Magnetic Media to report wages as follows: 1. Report all wages on a single DE 9C. 2. Report the total subject wages for each worker that is subject to both UI taxes and SDI contributions with an “S” wage plan code. 3. Report the total reportable wages for each individual covered under your UI election, whether or not all of these wages are taxable, with an “R” wage plan code. Per section 1110(g) of the CUIC, all employers must submit payroll tax deposits electronically effective January 1, 2018. Employers can file and pay online with e-Services for Business (edd.ca.gov/e-Services) to meet these requirements. e-Services for Business is a fast, easy, and secure way to file, pay, and manage your account 24 hours a day, 7 days a week. Note: Unemployment benefits are payable to covered employees who become unemployed through no fault of their own, are able to work, are available for work, are actively seeking employment, and who have met all of the eligibility requirements of the law. (Section 1251 of the CUIC) DE 3F Rev. 62 (12-23) (INTERNET) Page 1 of 2 CU
