California Employment Development Department (EDD) may require you to report “Independent Contractor” payments above $600 to them within 20 days of making payment.
The information you provide to the EDD will increase child support collection by helping to locate parents who are delinquent in their child support obligations.
Who has to report?
Any business or government entity (defined as a "service-recipient") that is required to file a federal Form 1099-MISC for services performed by an independent contractor (defined as a "service-provider") must report.
Who is a service-recipient?
A service-recipient is any business or government entity that is required to file a federal Form 1099-MISC for services performed by an independent contractor. A service-recipient means any individual, person, corporation, association, or partnership, or agent thereof, doing business in this state, deriving trade or business income from sources within this state, or in any manner in the course of trade or business subject to the laws of this state. A service-recipient also includes the State of California or any political subdivision thereof, including the Regents of the University of California, any charter city, or any political body not a subdivision or agency of the state, and any person, employee, department, or agent.
Who is a service-provider?
A service-provider is defined as an independent contractor; an independent contractor is any individual who is not an employee of the service-recipient for California purposes and who receives compensation or executes a contract for services performed in or outside California.
What information do I report?
You are required to provide the following information.
Service-Recipient (Business or Government Entity):
Federal employer identification number (FEIN)
California employer payroll tax account number (if applicable)
Social Security number (SSN)
Service-recipient name/business name, address, and phone number
Service-Provider (Independent Contractor):
First name, middle initial, and last name
Social Security number
Start date of contract (if no contract, date payments equal $600 or more
Amount of contract including cents (if applicable)
Contract expiration date (if applicable)
Ongoing contract (check box if applicable)
When do I have to report?
As of January 1, 2001, you must report information to the EDD within 20 days of either making payments totaling $600 or more or entering into a contract for $600 or more with an independent contractor in any calendar year, whichever is earlier. Report each independent contractor once each year.
How do I report?
Submit a Report of Independent Contractor(s) (DE 542), electronically with e-Services for Business. For information on reporting independent contractors online, visit the FAQ - e-Services for Business page or the Electronic Filing Guide for the Independent Contractor Reporting Program (DE 542M).
Submit a paper report of independent contractors by mail or fax. You may complete the DE 542 or create your own form with all the required information. You can obtain a DE 542 using the following options:
Download a fill-in DE 542 form from the EDD website.
Order the form through the Online Forms and Publications webpage.
Print your data directly from your computer to the DE 542 by following the Print Specifications.
Call the Taxpayer Assistance Center at 1-888-745-3886 to obtain a form.
Create your own form with all of the required information.
Visit your nearest Employment Tax Office.
Mail or fax your paper DE 542 form to:
Employment Development Department
P.O. Box 997350, MIC 96
Sacramento, CA 95899-7350
Click here for more information: https://www.edd.ca.gov/Payroll_Taxes/FAQ_-_California_Independent_Contractor_Reporting.htm