What Form DE 88 (2021) Is For
Form DE 88 (2021) is the official payment method California employers use to deposit four categories of payroll taxes with the Employment Development Department (EDD): Unemployment Insurance (UI), Employment Training Tax (ETT), State Disability Insurance (SDI), and California Personal Income Tax (PIT). Since January 2018, electronic filing has been mandatory for nearly all employers under California’s e-file and e-pay mandate, aligning with federal standards outlined in Section 6011(e) of the Internal Revenue Code.
When You’d Use Form DE 88 (2021)
Employers use Form DE 88 (2021) based on their assigned payroll tax deposit frequency and specific filing circumstances.
Quarterly depositors (under $350 in PIT)
Employers withholding less than $350 in PIT for the quarter must deposit by the quarterly deadlines set by the EDD.
Monthly depositors ($350–$500 in PIT)
If PIT withholdings total between $350 and $500 in a month, deposits are due by the 15th day of the following month.
Semi-weekly depositors (over $500 in PIT)
Employers that follow a federal semi-weekly deposit schedule and withhold more than $500 in PIT must make payments by the following Wednesday or Friday, depending on the payday.
Next-day depositors (over $500 PIT on one payday)
Any employer that withholds over $500 in PIT on a single payday must submit a deposit by the next business day.
Late or corrected payments
Employers who miss a deposit deadline or underpay must use the original payday to submit a corrected DE 88 and include the appropriate penalty and interest.
Overpayments within a quarter
When overpaid amounts occur within the same quarter, the employer may reduce the next DE 88 payment. If this is not possible, the excess can be reported on the quarterly DE 9.
Key Rules or Details for 2021
Electronic filing requirement
All employers were required to submit payroll tax deposits electronically unless granted a waiver, in accordance with California’s electronic filing law and supported by Internal Revenue Service electronic filing procedures.
Waiver exception
Employers unable to comply due to economic hardship or lack of access to electronic systems may request an annual waiver using Form DE 1245W, which functions similarly to IRS Form 8508.
No negative deposits allowed
Employers were not permitted to submit DE 88 forms with negative amounts. Overpayments had to be adjusted through future payments or reported on the quarterly DE 9.
Correct deposit schedule required
Deposit schedules were based on federal IRS assignments and California PIT withholding thresholds. Using the wrong schedule could result in penalties.
Separate tax allocations required
UI, ETT, SDI, and PIT amounts had to be calculated and entered separately on DE 88 to ensure proper reconciliation with quarterly returns.
Record retention requirements
Employers were required to retain DE 88 confirmations and payment documentation for at least four years for audit purposes or review by the Department of Labor.
Step-by-Step (High Level)
Step 1: Determine deposit schedule
Employers identify their federal deposit schedule and compare it with California PIT withholding thresholds to determine the correct timing.
Step 2: Calculate tax components
Each tax is calculated separately: UI and ETT based on the first $7,000 of wages per employee, SDI using the annual wage ceiling, and PIT using employee withholding elections.
Step 3: Access e-Services for Business
Employers log in to the EDD’s e-Services for Business using their eight-digit employer account number and federal EIN.
Step 4: Enter payment details accurately
The system requires entry of the payday, tax quarter, and each tax amount in the correct field before submission.
Step 5: Submit payment electronically
Employers select an approved electronic payment method, such as ACH debit or credit card, and authorize the transaction.
Step 6: Save confirmation
After payment, the system generates a time-stamped confirmation number that should be saved digitally or in print for record-keeping.
Common Mistakes and How to Avoid Them
Selecting the wrong deposit schedule
A single large payday can trigger a different deposit schedule. Payroll system alerts can help identify these changes.
Entering the incorrect payday
Using the submission date instead of the actual payday can result in late payments. Employers should always verify the wage payment date.
Duplicate submissions
Submitting the same deposit more than once can occur due to system timeouts. Reviewing payment history before resubmitting helps avoid overpayments.
Misallocating tax amounts
UI, ETT, SDI, and PIT must be entered in the correct fields. Payroll reports should be used to confirm proper allocations.
Paper filing without a waiver
Submitting paper forms without a valid waiver results in automatic 15 percent noncompliance penalties.
Failing to save confirmation records
Not retaining the electronic confirmation makes it difficult to prove timely payment during audits.
What Happens After You File
After Form DE 88 (2021) is submitted electronically, the EDD processes the payment within one to three business days. Funds are credited to the appropriate tax accounts and appear in the employer’s e-Services payment history. Timely payments generate a confirmation number used to verify compliance.
Late payments trigger automatic penalties of 15 percent plus interest. Repeated issues may result in audits or compliance reviews by the EDD or the U.S. Department of Labor.
FAQs
How do I correct an underpaid Form DE 88 deposit?
An additional DE 88 payment must be submitted electronically using the original payday, including applicable penalties and daily interest.
Can I combine payments for multiple paydays into one DE 88 submission?
Yes, provided all paydays fall under the same deposit schedule and no payday triggers a next-day deposit requirement.
How do I request a refund for a DE 88 overpayment?
If the overpayment cannot be applied to a future deposit, a refund request may be submitted through e-Services or in writing with the employer account number and applicable quarter.
What is the penalty for failing to file electronically without a waiver?
Employers filing on paper without an approved waiver face an additional 15 percent noncompliance penalty.
Are DE 88 records used in other compliance reviews?
Yes. Payroll tax deposit records may be reviewed during audits by state and federal agencies, including the Department of Labor and Social Security Administration.
