QuickBooks Payroll Bulletin

Interview: State Tax Expert Jo Ann Costa Outlines Electronic Filing Benefits for Employers

Jo Ann Costa is the section chief for the E-Commerce Section of the Tax Processing and Accounting Division of the California Employment Development Department (EDD). EDD has several programs to help businesses file and pay their employment taxes electronically: Internet programs for the Quarterly Wage and Withholding Report (DE 6), the Report of New Employees (DE 34), or the Report of Independent Contractors (DE 542).

EDD offers electronic funds transfer, allows payments by credit card, and accepts magnetic media (which allows employers to file their forms using CD-ROM or cartridge). EDD also provides a Telefile system, so that users can file and pay taxes over the phone. EDD's newest program allows employers to file tax documents electronically using third-party software, such as QuickBooks Payroll, to create XML attachments that they can send over the Internet.

QuickBooks Payroll Bulletin: What are the benefits for taxpayers who electronically file and pay their taxes?

Costa: There are several benefits. It's fast, easy, and secure. Businesses don't need to manually fill in forms or make copies of the forms for their records. Businesses also can view and edit their reports prior to submitting them to EDD, and they can still print the report if they want a paper copy. They can save on postage because they don't need to mail anything to us. Electronic filing is more secure than sending data through the mail on a CD-ROM, cartridge, or on paper.

Also, with electronic filing, businesses will receive a confirmation from EDD, so they will know that the data and the dollars are in EDD's hands. In addition, information is posted to EDD's records quickly, so when an employee of the business files a claim for unemployment insurance or disability, all their wages are posted immediately and are available for benefits.

QBPB: What advice do you give new business owners who are just establishing themselves?

Costa: We have numerous new-employer seminars throughout the year in various locations within California. The seminars teach employers how to file and pay their taxes. In the seminars, we encourage electronic filing wherever possible, and we instruct the employers on the different types of electronic filing that are available to them.

QBPB: Do you see any upcoming trends related to e-file and pay—continued adoption, mandates for smaller businesses, etc.?

Costa: There's definitely continued adoption, and we're actually seeing an increase in the number of employers who file electronically versus employers who file paper, which is what we'd like to see.

QBPB: How has e-file and pay benefited your agency?

Costa: It's faster, more efficient, and more cost-effective for us. There are fewer accounting functions required by our staff, because electronic filing has calculations and built-in edits. It eliminates a lot of the manual workload that we would need to process for employers who file using paper.

For more information on electronic filing and other resources available from California's EDD, visit http://www.edd.ca.gov/eddhome.htm.

QuickBooks Payroll Bulletin | March 2008

Interview: State Tax Expert Jo Ann Costa Outlines Electronic Filing Benefits for Employers