What Form DE 88 (2017) Is For
Form DE 88 (2017) is used by California employers to submit payroll tax deposits to the California Employment Development Department. It serves as the official payment coupon for Unemployment Insurance, Employment Training Tax, State Disability Insurance withholding, and California Personal Income Tax withholding. Deposits made using Form DE 88 are applied during the quarter and are separate from the DE 9 quarterly return, which reconciles total tax liability. The form ensures each deposit is credited to the correct employer account, tax category, and reporting period.
When You’d Use Form DE 88 (2017)
Employers use Form DE 88 (2017) whenever payroll tax deposits are required based on Personal Income Tax withholding amounts and the employer’s federal deposit schedule.
Quarterly deposits
This applies when less than $350 in California Personal Income Tax is withheld during the entire quarter. A single deposit covering UI, ETT, SDI, and PIT is submitted for that quarter.
Monthly deposits
This applies when California Personal Income Tax withholding totals between $350 and $500 during a month. Deposits for PIT and SDI are due by the 15th of the following month.
Semi-weekly deposits
This applies to employers following the federal semi-weekly deposit schedule who withhold more than $500 in a payroll period. Deposits are due the following Wednesday or Friday, depending on the payday.
Next-day deposits
This applies to employers on a federal next-day deposit schedule who withhold more than $500 in a payroll period. Deposits are due the next business day after the payday.
Late or corrective deposits
This applies when an employer needs to correct underpayments or overpayments or submit additional deposits within the same quarter.
Key Rules or Details for 2017
Several compliance rules governed Form DE 88 (2017) filing and payment.
Mandatory e-file and e-pay mandate
Employers with 10 or more employees were required to file and pay electronically starting January 1, 2017. All remaining employers were required to comply by January 1, 2018, using e-Services for Business.
Penalty structure
A 15 percent penalty applied to late deposits. An additional 15 percent penalty applied to paper filings submitted without an approved waiver. Daily interest accrued until payment was made.
Deposit thresholds
Employers were required to monitor when Personal Income Tax withholding crossed $350 or $500, as this triggered changes in deposit frequency.
Allocation rules
If deposits were misallocated among UI, ETT, SDI, or PIT, final reconciliation occurred when DE 9 and DE 9C were filed.
Household employer considerations
Household employers filing annual returns using Form DE 3HW followed similar deposit concepts but tracked payroll and deposits under the Household Employer’s Guide.
Step-by-Step (High Level)
Step 1: Determine the deposit schedule
Employers should identify the correct deposit frequency by reviewing the federal deposit schedule and total California Personal Income Tax withheld for the payroll period.
Step 2: Calculate payroll tax amounts
Employers should calculate amounts owed for Unemployment Insurance, Employment Training Tax, State Disability Insurance, and Personal Income Tax using applicable rates and wage limits.
Step 3: Access e-Services for Business
Employers should log in to the California Employment Development Department’s e-Services for Business portal and initiate the payroll tax deposit electronically.
Step 4: Enter deposit information
Employers should enter the employer account number, payroll date, quarter, deposit schedule, and exact tax amounts for each category.
Step 5: Select a payment method
Employers may choose ACH debit, ACH credit, or credit card payments and must submit payments before the 3:00 p.m. Pacific Time cutoff to avoid late penalties.
Step 6: Save confirmation records
Employers should download or print confirmation receipts and retain them with payroll records for compliance and audit purposes.
Common Mistakes and How to Avoid Them
Filing paper forms without a waiver
Employers should enroll in e-Services for Business or submit Form DE 1245W if unable to file electronically.
Using the wrong deposit schedule
Employers should track Personal Income Tax withholding carefully and confirm thresholds using the California Employer’s Guide.
Missing electronic payment cutoff times
Payments should be initiated before 3:00 p.m. Pacific Time to ensure same-day settlement.
Entering incorrect payroll dates
The actual pay date must be entered, not the submission date, to avoid reconciliation issues.
Refunding PIT after issuing Form W-2
Once Form W-2 is issued, excess Personal Income Tax should not be refunded by the employer; employees must claim it on their California tax return.
Ignoring penalties and interest
Employers should calculate and include penalties and interest on late deposits to prevent additional billing and notices.
What Happens After You File
After electronic submission, employers receive a confirmation number that should be retained. The Employment Development Department processes the deposit and credits UI, ETT, SDI, and PIT accordingly. These deposits are later reconciled with DE 9 and DE 9C filings. Underpayments result in billing with interest, while overpayments may be applied to future periods or refunded. Employers can monitor account activity through e-Services for Business.
FAQs
Is Form DE 88 (2017) used for Independent Contractors?
No. Payments to Independent Contractors are reported using Form 1099-MISC and are not subject to Form DE 88.
What happens if an ACH debit payment is rejected?
If an ACH debit fails, the deposit is considered late and penalties and interest begin accruing immediately.
Can household employers use Form DE 88 (2017)?
Household employers generally file annual returns using Form DE 3HW and follow separate procedures outlined in the Household Employer’s Guide.
Do workers’ compensation programs affect Form DE 88 filing?
No. Workers’ compensation programs do not impact payroll tax deposits reported using Form DE 88 (2017).
Where can employers get help with Form DE 88 (2017)?
Employers can contact the Employment Tax Office or the Taxpayer Assistance Center for assistance with filing requirements, mandate waivers, or e-Services account issues.
