The California DE35 form is an Employment Development Department (EDD) notice that defines when California employers must forward an employee's withholding allowance certificate to the Franchise Tax Board (FTB). Understanding this requirement is essential for payroll tax compliance in the state.
Trigger conditions. Forwarding is required when the employee claims more than 10 California withholding allowances on their DE 4 or federal W-4 form, or when the employee asserts exemption from state or federal income tax withholding and expects weekly wages to exceed $200. Both conditions apply equally to new hires and existing employees who update their withholding status.
Employer obligations after forwarding. After submitting the certificate to the FTB, the employer continues withholding taxes based on the employee's original submission. This continues until the FTB sends a written notice specifying the correct marital status and allowable withholding exemptions for California Personal Income Tax (PIT) purposes. Employers must update payroll records as soon as the FTB notice is received.
Employee rights and the review process. If the FTB's determination conflicts with the employee's claimed allowances, the employee may request a formal review. The employee must submit supporting documentation to justify the claimed exemptions. After evaluating the evidence, the FTB may revise its determination. Employees have the right to receive a written explanation of the outcome.
Penalties for non-compliance. When the FTB finds an employee's claimed allowances to be unreasonable, it may assess a $500 penalty under Section 13101 of the California Unemployment Insurance Code. This penalty applies to the employee. Accurate completion of the California DE 4 withholding certificate reduces the risk of FTB penalties and keeps both employers and employees in good standing.
Additional payroll documents commonly used with this notice include the Earnings Withholding Order (WG-001) and the Income Withholding for Support form. Employers managing California payroll compliance can also review our full employment forms library.
| Question | Answer |
|---|---|
| Form Name | Ca De35 Form |
| Form Length | 2 pages |
| Fillable? | No |
| Fillable fields | 0 |
| Avg. time to fill out | 30 sec |
| Other names | de35 form ca, form de 35, ca de35, de35 |
