EDD Installment Agreements
If you have an EDD tax liability and cannot full pay it immediately, you have the right to make payments in monthly installments. The Los Angeles EDD tax attorneys at Disparte Tax Law are skilled and experienced in negotiating affordable installment agreements with the EDD.
The EDD generally categorizes installment agreements into two kinds: short term and long term.
Short-term EDD Installment Agreement
A short-term installment agreement is an installment agreement that satisfies the EDD tax liability as quickly as possible, generally under 12 months. A good faith payment may be appropriate as a sign of good faith. In addition, EDD may also require the taxpayer to complete a Financial Statement (DE 926B) for individuals or Financial Statement for Businesses (DE 926C) or Corporate Information Questionnaire (DE 204) for installment agreements less than one year. To obtain these forms, visit the EDD website at www.edd.ca.gov/Payroll_Taxes/Forms_and_Publications.htm.
The installment agreement will be in effect ten (10) business days after a verbal agreement has been established, and the balance due must be paid in full on or before the agreed upon completion date.
LONG-TERM EDD INSTALLMENT AGREEMENT
If you cannot pay the EDD tax liability within 12 months, you may negotiate an installment agreement for a longer term. The EDD typically requests financial information on business as well as personal assets. It is your responsibility to establish the amount that you can pay in monthly installment agreements.
Default of EDD Installment Agreement
Once you have negotiated an EDD installment agreement, the agreement will remain in effect for the period negotiated unless you:
- Fail to make timely, full payments as agreed. This includes nonpayment, late payment, paying less than agreed, or checks returned by your bank unpaid.
- Incur additional liability after the agreement is negotiated. Additional liability usually arises because of nonpayment of current year taxes. If the additional liability results from a nonfraudulent assessment covering a prior period, then your payment plan may not be rescinded.
- Fail to file all required reports and/or DE 88’s on a timely basis without good cause.
- Fail to submit timely an Interim Contribution Return (DE 2858) with payment when specifically required as a condition of the agreement.
Contact an EDD Tax Attorney
If you have an EDD tax liability and need fast and accurate relief, contact an EDD attorney at Disparte Tax Law for a free consultation.