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January 15, 2020
2020-0096

California employees are now required to use state Form DE 4 in addition to federal Form W-4

California employees are now required to submit both a federal Form W-4, Employee’s Withholding Certificate, and state Form DE 4, Employee’s Withholding Allowance Certificate, when beginning new employment or changing their state withholding allowances. Previously, an employer could mandate use of state Form DE 4 only when employees wished to use additional allowances for estimated deductions to reduce the amount of wages subject to state withholding.

The California Employment Development Department (EDD) posted information regarding this issue to its website. The 2020 Form DE 4, Employee’s Withholding Allowance Certificate, has not yet been posted to the EDD website. Once available, it may be found here.

New hires and existing employees making changes to their withholdings must submit both the Form W-4 and the Form DE 4. If a new employee does not submit state DE 4, the employer must withhold state income tax as if the employee were single and claiming zero withholding allowances.

Current employees who submitted a Form W-4 before 2020 are not required to submit a new form if they have no changes to their withholding allowances. Employers should continue to calculate withholding based on previously submitted Forms DE 4.

2020 state withholding tables released

As we reported, the EDD issued the wage-bracket and percentage method withholding tables for calendar year 2020 to its website.(EY Payroll Newsflash Vol. 21, #006, 1-10-2020.)

The 2020 Publication DE 44, California Employer’s Guide is not yet available. Once released, it may be found here.

For more information on California payroll taxes, see the EDD website.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)
   • Kristie Lowery (kristie.lowery@ey.com)

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EY Payroll News Flash

 
 

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