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EDD:  Independent Contractors and Independent Contractor Reporting: What You Need to do!!

Independent Contractor Reporting

 

Per the Employment Development Department (EDD) website, any business or government entity that is required to file a federal Form 1099-MISC for services received from an independent contractor is required to report specific independent contractor information to the Employment Development Department (EDD).  This information will be used to locate parents who are delinquent in their child support obligations. The independent contractor reporting requirements apply if you hire an independent contractor and the following statements all apply:

  • You are required to file a Form 1099-MISC for the services performed by the independent contractor.
  • You pay the independent contractor $600 or more OR enter into a contract for $600 or more.
  • The independent contractor is an individual or sole proprietorship.

If all the above statements apply, you must report the independent contractor to EDD within 20 days of paying/contracting for $600 or more in services. You are not required to report independent contractors that are corporations, general partnerships, limited liability partnerships, and limited liability companies.

How to Report:

You may use any of the following to report independent contractor information:

  • Submit a Report of Independent Contractor(s) (DE 542) electronically with the expanded e-Services for Business (Minimum browser requirements: Internet Explorer 6.0 or Netscape 7.2); or
  • Submit a paper Report of Independent Contractor(s) (DE 542).  A fill-in DE 542M can be downloaded if you have the Adobe Reader. Forms may also be ordered on the Internet Order Form or by calling our toll-free number (888) 745-3886 or visiting your nearest Employment Tax Office. You may also print your data directly from your computer to the DE 542 by following the Print Specifications.
  • You may create your own form with the required information.

For More Information About Independent Contractors or Independent Contractor Reporting:

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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