Independent Contractor Reporting
UPDATE 2/4/01
Beginning January 1, 2001, any business or government entity that is required to file a Federal Form 1099-MISC for services received may have to report specific independent contractor information to EDD.
When do I have to report?
You must report information to EDD within twenty (20) days of either
making payments of six hundred dollars ($600) or more
or entering into a contract for $600 or more
with an independent contractor in any calendar year,
whichever is earlier.
Who has to report?
Any business that is required to file a Federal Form 1099-MISC
for services performed by an independent contractor.
What information do I report?
You are required to provide the following information that applies.
Your:
Federal employer identification number
California employer account number
Social security number
Business name, address, and telephone number
The independent contractor’s:
First name, middle initial, and last name
Social security number
Home address
Start date of contract
Amount of contract (including cents)
Contract expiration date
On-going contract (check box if applicable)
What type of penalty is charged if the report is late?
Currently, there is no penalty for reporting late.
However, there is pending legislation (AB 1358)
which will establish a penalty of $24 for each instance
a report is late or not filed.
For more information -- which you must
read!
http://www.edd.ca.gov/txicr.htm
and
http://www.edd.ca.gov/txicrfs.htm
UPDATE - 2/4/01 The reporting form DE 542 requires SSN, it does not accept ETIN.
INDEPENDENT CONTRACTOR REPORT
DE-542 PROBLEM
Most businesses get a Form W-9, Request for Taxpayer Identification Number and
Certification, from their independent contractors. Since many ICs provide only their
FEIN on Form W-9, we asked the EDD if a business could provide an FEIN instead
(on the DE 542 form).
They responded, “We do not accept the FEIN in lieu of the SSN. For child support
purposes, we do not have an FEIN/SSN matching program.” So, you will need to obtain
the SSN as well as the FEIN for some sole proprietors. If you do not have an SSN,
enter “Unable to obtain SSN” in the SSN box. The EDD may abate the service
recipient’s penalties if it is found that there is reasonable cause for not including the
SSN. The EDD has also advised us that they will accept in the SSN field either: zeros:
000-00-0000, or a blank field.
For more information select this link (pdf format).
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Source of update information: Spidell's California Taxes On-Line.
Spidell's California Taxes On-Line is operated by Spidell Publishing, Inc.,
P.O. Box 61044, Anaheim, CA 92803-6144. FAX: (714) 776-9906.