What Form DE 88 (2020) Is For
Form DE 88 (2020) was California’s official method for submitting interim payroll tax deposits to the Employment Development Department (EDD). It was used to remit Unemployment Insurance (UI), Employment Training Tax (ETT), State Disability Insurance (SDI) withholding, and California Personal Income Tax (PIT) withholding. Employers used Form DE 88 (2020) throughout the quarter, as needed, to stay in compliance with their deposit schedules.
With electronic filing fully mandatory in 2020, Human Resources departments were expected to make deposits online through e-Services for Business, unless they had a valid waiver from the EDD.
When You’d Use Form DE 88 (2020)
This form was required when submitting payroll tax deposits before filing quarterly returns. Use cases depended on your deposit schedule and total PIT withholding.
- Quarterly Depositor: Employers who withheld less than $350 in PIT for the quarter were allowed to make quarterly deposits due on April 30, July 31, October 31, and February 1.
- Monthly Depositor: If PIT withholding totaled between $350 and $500 for a month, the deposit was due by the 15th of the following month.
- Semi-Weekly Depositor: Employers with over $500 in PIT withholding who followed the federal semi-weekly deposit schedule were required to submit deposits either the following Wednesday or Friday, based on their payroll dates.
- Next-Day Depositor: Federal next-day depositors with PIT over $500 were required to make the California deposit by the next business day after payday.
- UI and ETT Deposits: These employer-paid taxes were due quarterly, but employers could submit them more frequently in coordination with their PIT and SDI schedules.
Key Rules or Details for 2020
Employers using Form DE 88 (2020) were subject to several requirements and tax-specific rules during that tax year.
- Mandatory Electronic Filing: As of 2020, all employers were required to file payroll deposits electronically using e-Services for Business, phone-based Electronic Funds Transfer (EFT), or other approved systems, unless they received a waiver through Form DE 1245W.
- 2020 Wage Limits and Rates: UI and ETT were applied to the first $7,000 in wages per employee; SDI was applied to the first $122,909 of employee wages; PIT had no wage limit and was based on withholding certificates.
- COVID-19 Relief Extensions: Employers impacted by the COVID-19 pandemic may request a 60-day extension to file and pay without penalty, provided they submit a written request within 60 days of the original due date.
- Noncompliance Penalties: Employers who submitted late payments or paper forms without an approved waiver were subject to a 15% penalty, plus daily interest on the amount due.
- Quarterly Reconciliation: All DE 88 deposits were reconciled with Form DE 9 and DE 9C each quarter to determine total taxes owed and amounts credited.
Step-by-Step (High Level)
Employers were expected to follow a clear process to ensure proper use of Form DE 88 (2020) and remain compliant with the Employment Development Department.
- Step 1 - Determine Deposit Schedule: Use your federal deposit frequency and total California PIT withholding to identify your required deposit schedule, which can be quarterly, monthly, semi-weekly, or next-day.
- Step 2 - Calculate Tax Amounts - Calculate the correct amounts for UI, ETT, SDI, and PIT using the current wage limits, employee withholding data, and employer contribution rates.
- Step 3 - Submit Electronic Payment: Access e-Services for Business or other approved electronic systems, enter the required details, and confirm the payment submission with your EDD employer account number.
- Step 4 - Reconcile with DE 9 and DE 9C: At quarter-end, compare your deposits to total tax liability using Forms DE 9 and DE 9C, ensuring alignment between wages, withholdings, and tax types.
- Step 5 - Adjust or Correct Deposits: If errors or underpayments occur before the DE 9 is filed, submit a new DE 88 with the additional payment, including penalty and interest, or carry overpayments to your next deposit.
Common Mistakes and How to Avoid Them
Several mistakes were frequently made by employers filing Form DE 88 (2020), and each had a specific remedy to prevent compliance issues.
- Misapplying the SDI Wage Limit: Some employers failed to stop withholding SDI at $122,909 in wages, resulting in over- or under-withholding. To apply the correct cap, track cumulative wages per employee.
- Using Old Paper Coupons Without a Waiver: Employers who submitted paper DE 88 forms without an approved waiver were penalized; transition to electronic filing or submit Form DE 1245W before the due date.
- Ignoring Penalties on Late Payments: Submitting only the owed tax without the 15% penalty and interest resulted in a further EDD notice. Use EDD calculators to determine the full amount due before making a payment.
- Showing Negative Amounts on Deposits: Entering negative adjustments on DE 88 confused the system and delayed processing. Instead, reduce your next payment or claim the overpayment on DE 9.
- Omitting Employer Account Numbers: Deposits submitted without the eight-digit EDD account number were delayed or misapplied; always include the account number to avoid processing errors.
- Mailing to Incorrect EDD Address: Waiver holders who mailed paper DE 88 forms to outdated addresses experienced delays; confirm the current mailing address on the EDD website before submission.
What Happens After You File
After submitting Form DE 88 (2020), electronic deposits were typically posted to the employer’s EDD account within 1 to 3 business days. Paper filings, which were only permitted for employers with waivers, took 10 to 14 business days to process. Each quarter, employers reconciled these deposits using Form DE-9 and DE-9C. Overpayments could be credited forward or refunded, while underpayments triggered penalty notices.
FAQs
What was Form DE 88 (2020) used for?
Form DE 88 (2020) was used to submit interim California payroll tax deposits to the EDD for UI, ETT, SDI, and PIT. It allowed employers to make required deposits throughout the quarter before filing quarterly returns.
Was Form DE 88 (2020) filed on paper or electronically?
In 2020, payroll tax deposits were required to be filed electronically through e-Services for Business or approved EFT methods. Paper filings were only allowed if the employer had an approved waiver.
How did employers determine their deposit schedule in 2020?
Deposit schedules were based on total California PIT withholding and the employer’s federal deposit frequency. Employers could be classified as quarterly, monthly, semi-weekly, or next-day depositors.
What penalties apply to late or noncompliant DE 88 deposits?
Late payments or paper filings without a waiver were subject to a 15 percent penalty plus daily interest. Additional notices were issued if penalties and interest were not included with the payment.
How were DE 88 deposits reconciled at quarter-end?
All DE 88 deposits were reconciled with Forms DE 9 and DE 9C at the end of each quarter. Any overpayments were credited or refunded, while underpayments resulted in EDD notices.
