INSTALLMENT AGREEMENT

Employers have a legal obligation to voluntarily report        DE 926B, for individuals or Financial Statement 
and pay contributions and withholdings when due.               for Businesses, DE 926C, or Corporate Information 
However, the Employment Development Department                 Questionnaire, DE 204, for installment agreements less 
(EDD) recognizes that there are situations where it is in the  than one year.  To obtain the DE 926B and DE 926C, 
best interest of California’s taxpayers that the EDD accept    contact the Taxpayer Assistance Center at 888-745-3886 
an installment agreement to liquidate debts due to the         or visit the EDD website at 
state over a period of time. Please consider the following     www.edd.ca.gov/Payroll_Taxes/Forms_and_Publications.htm.
information in order to determine whether an installment 
agreement is appropriate.                                      We will also ask that you sign an Installment Agreement, 
                                                               DE 927.
Resources Available to Pay the Liability
                                                               The installment agreement will be in effect 10 business 
Do you have sufficient money of your own to pay this           days after a verbal agreement has been established, and 
liability? Can you borrow the money from other sources         the balance due must be paid in full on or before the 
to pay the liability? Are there other resources available to   agreed upon completion date. 
pay the liability which will not force the closure of your 
business? If yes, you must make arrangements to pay the        Long-Term Installment Agreement
entire amount within 30 days.
                                                               The EDD will consider a long-term installment agreement. 
NOTE: All employers who fail to file and pay liabilities       Submit a written request for a long-term installment 
timely are subject to the filing of a Notice of State Tax      agreement, addressed to the office that is handling your 
Lien. This lien is issued to protect the interest of the State account. Your request should include the following:
of California and is not considered involuntary collection 
action. The filing of a State Tax Lien is an automatic process (1)  How the delinquent liability was established and 
and cannot be stopped unless the liability is fully paid.                  what action has been taken to resolve the liability. 
                                                                           Submit your proposed payment schedule and 
Requesting an Installment Agreement                                        describe how you will keep current on future 
                                                                           financial obligations to the EDD.
If immediate payment is not possible and you have an           (2)  A good faith payment.
established history of timely reporting and payments 
with the EDD, and are not insolvent or bankrupt, contact       (3)  All DE 9, DE 9C, and DE 88s that have not been filed/
your assigned representative to negotiate an installment                   paid through the current quarter for tax years 2011 
agreement. If you’re not currently in contact with a                       forward. For years prior to 2011, any delinquent DE 7 
representative, you may contact the Taxpayer Assistance                    and DE 6s must be filed.
Center at 888-745-3886 or visit the EDD website at                         You can electronically submit employment tax 
www.edd.ca.gov/pdf_pub_ctr/de927b.pdf to obtain an                         returns, wage reports, and payroll tax deposits using 
Installment Agreement Request, DE 927B. When the                           e-Services for Business at 
completed DE 927B is received, an EDD representative                       www.edd.ca.gov/e-Services_for_Business to 
will contact you to finalize the agreement.                                comply with the e-file and e-pay mandate. For more 
                                                                           information on this mandate, visit 
Short-Term Installment Agreement                                           www.edd.ca.gov/EfileMandate.
A short-term installment agreement can generally be            (4)  Financial information on business as well as personal 
negotiated. The liability must be satisfied as quickly as                  assets. The DE 926B and DE 926C are available by 
possible. The EDD will require a good faith payment for all                contacting the Taxpayer Assistance Center at  
delinquent Quarterly Contribution Return and Report of                     888-745-3886 or from the EDD website at
Wages, DE 9, Quarterly Contribution Return and Report of                   www.edd.ca.gov/Payroll_Taxes/Forms_and_ 
Wages (Continuation),   DE 9C, and Payroll Tax Deposit    ,                Publications.htm,but any recent financial statement 
DE 88, forms that have not been filed/paid through the                     which has substantially the same data is acceptable. 
current quarter for tax years 2011 forward. For years prior                Corporations and all corporate officers, individual 
to 2011, any delinquent Annual Reconciliation Statement,                   business owners, partnerships, and each general 
DE 7, and Quarterly Wage and Withholding Report,                           partner are required to complete financial statements. 
DE 6, forms must be filed. In addition, the EDD may also                   Corporate officers should provide personal financial 
require the taxpayer to complete a Financial Statement,                    information as well as information involving the 
                                                                           corporation.

DE 631P Rev. 14 (4-17) (INTERNET)                              Page 1 of 2                                                      CU

(5)  Corporations, limited liability companies (LLC), and   (4)  Fail to submit timely an Interim Contribution Return,
limited liability partnerships (LLP) will be required                  DE 2858, with payment when specifically required as 
to complete a DE 204. The form establishes the                         a condition of the agreement.
responsible persons of the corporation, LLC, or             (5)  Are found to have intentionally provided false, 
LLP. Responsible persons who willfully fail to pay                     materially inaccurate, or incomplete information. This 
contributions, withholdings, penalties, and interest                   does not apply to simple mistakes.
on the date they become delinquent may be held 
personally liable.                                          NOTE: Failure to meet the terms of the installment 
                                                            agreement may result in involuntary collection action, 
Provide Supportive Documentation                            including, but not limited to, seizure and sale of assets.

It is your responsibility to provide the information        Finalizing the Installment Agreement
necessary to substantiate your inability to pay the full 
amount due. Provide sufficient documentation such           When all the necessary information, forms, and 
as loan denials from financial institutions, tax returns,   supporting documentation have been received, we will 
the past three months’ bank statements, CPA financial       review the data and contact you to finalize the installment 
reports, etc.                                               agreement, if appropriate, or request payment in full.

We may request documentation to support your entries        When the installment agreement has been approved, you 
on the financial statement. For instance, if you state that will receive a DE 927. You must return the signed form 
your monthly income is $2,500, we may require proof of      and first payment to your EDD representative within 
that income. If your utility bill is $200 per month, we may 10 business days. The installment agreement will not be 
request copies of your utility bills.                       in effect until the signed DE 927 is received.

We may also request a credit bureau report periodically to  Additional Information
help clarify your financial situation.
                                                            If you have entered into a valid installment agreement 
The Agreement                                               and an audit assessment is issued, you should be 
                                                            prepared to renegotiate the terms of the agreement. The 
In negotiating the installment agreement, numerous factors  exception to this general rule would be if the auditor 
are considered. However, the principal factor is whether    applied the penalty under Section 1128 of the California 
the interests of the taxpayers of California would be best  Unemployment Insurance Code (CUIC) in the 
served by accepting the agreement. Generally, this occurs   assessment. In most cases, you should be prepared to pay 
when an installment agreement will allow a business         this assessment in full.
that would otherwise be forced to close, to continue in 
operation and to pay all debts owed to the state.           If you have either a significant improvement or 
                                                            deterioration in your financial circumstances during the 
Your past history with the EDD should indicate your ability repayment period, contact the EDD immediately. When 
and willingness to honor the terms of the agreement. This   you voluntarily provide updated financial information, the 
means you have an established history of timely reporting   terms of the agreement can be renegotiated. If the EDD 
and payments with us.                                       determines during a periodic review that your financial 
                                                            condition has improved and you did not notify us, the 
Once an agreement is reached, the plan will remain in       installment agreement may be voided immediately.
effect for the period negotiated unless you:
                                                            Please note that even if the installment agreement is 
(1)  Fail to make payments as agreed. This includes         approved, offsets of any state refunds and federal income 
nonpayment, late payment, paying less than agreed,          tax refunds will be enforced during the payment term. Any 
or checks returned by your bank unpaid.                     payments received from these sources will be in addition 
(2)  Incur additional liability after the agreement is      to the installment payments.
negotiated. Additional liability usually arises because 
you do not pay current taxes. This condition would not      The EDD is an equal opportunity employer/program. 
apply if the additional liability results from a            Auxiliary aids and services are available upon request to 
nonfraudulent assessment covering a prior period.           individuals with disabilities. Requests for services, aids, 
                                                            and/or alternate formats need to be made by calling 
(3)  Fail to file all required reports and/or DE 88s on a   888-745-3886 (voice) or TTY 800-547-9565.
timely basis without good cause.

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 631P Rev. 14 (4-17) (INTERNET)                           Page 2 of 2