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California Reporting Requirements For Independent Contractors

 
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California Reporting Requirements For Independent Contractors

Prepared By: Melissa C. Marsh, Los Angeles Employment Attorney
Written: February 2001
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Effective January 1, 2001, any business that is required to file a federal Form 1099-MISC for services received from an independent contractor is required to report specific information about itself and the independent contractor to the Employment Development Department ("EDD"). According to the EDD, this information will be used to locate parents who are delinquent in their child support obligations.

What Information Must You Report?

You, the reporting agent and service-recipient, must report the following three items:

1. Your:

  • Business name, address and telephone number;
  • Federal Employer Identification Number;
  • California employer account number; and
  • Social security number

2. The Independent Contractor's (Service-Provider's):

  • First name, middle initial, and last name
  • Social security number
  • Address; and

3. Whether itís an Ongoing Contract (check box if applicable) OR the start date of contract, amount of contract (including cents) and the contract expiration date.

When Must You Report?
You are not required to report independent contractors that are corporations, general partnerships, limited liability partnerships, and limited liability companies. You are required to report only if you hire an independent contractor AND:

  1. You are required to file a 1099-MISC form for the services performed by that independent contractor, AND


  2. You pay the independent contractor $600 or more or enter into a contract for $600 or more, AND


  3. The independent contractor is an individual or sole proprietorship.

If all three of the above statements apply, you must report the independent contractor to EDD within twenty (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.

How to Report.

Fill Out the Report of Independent Contractors form (FORM DE 542) and mail or fax it to

Employment Development Department
PO Box 997350 MIC 99
Sacramento CA 95899-7350
Fax: (916) 255-3211

To obtain forms and/or information, call the EDD at: (916) 657-0529 or visit: http://www.edd.ca.gov/taxrep/de542.pdf.

If you have any questions or would like further information, please e-mail us at legalcorner@aol.com or call: 818-849-5206.


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© 2001 Melissa C. Marsh. All Rights Reserved.


 
 

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Disclaimer: The information presented on this web site was prepared by Melissa C. Marsh for general informational purposes only and does not constitute legal advice. The information provided in my articles and alerts should not be relied upon, or used as a substitute for professional legal advice from an attorney you retain to advise or represent you. Your use of this Internet site does not create an attorney- client relationship. Transmission of this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. All uses of the contents of this site, other than personal uses, are prohibited. You may print or email a copy of any information posted on this web site for your own personal, non-commercial, use, but you may not publish any of the articles or posts on this web site without the Express Written Permission of Melissa C. Marsh.


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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.