Which entity is responsible for collecting and remitting California Personal Income Tax (PIT) withholdings from employee wages?
Correct Answer
A) The employer to the Employment Development Department (EDD)
Employers are required to withhold California PIT from employee wages and remit these withholdings to the EDD, which administers the state's payroll tax programs.
Why This Is the Correct Answer
Option A is correct. Employers are legally required to withhold California Personal Income Tax from their employees' wages and remit those withholdings to the Employment Development Department (EDD). The EDD administers California's payroll tax programs, including PIT withholding, State Disability Insurance (SDI), Unemployment Insurance (UI), and Employment Training Tax (ETT).
Why the Other Options Are Wrong
Option B: The employer to the California Department of Tax and Fee Administration
The California Department of Tax and Fee Administration (CDTFA) is wrong. CDTFA administers sales and use taxes, excise taxes, and related fees — not payroll income tax withholdings. PIT withholding goes to EDD, not CDTFA.
Option C: The employee directly to the IRS
The employee directly to the IRS is wrong. The IRS is the federal agency; California PIT is a state tax. Additionally, payroll withholding is always an employer responsibility — employees do not remit withholdings themselves. Employees may file returns and make estimated payments, but withheld amounts are remitted by the employer.
Option D: The employee directly to the Franchise Tax Board
The employee directly to the Franchise Tax Board (FTB) is wrong on two counts. First, withholding is an employer duty, not an employee duty. Second, while FTB administers personal income tax at the annual return level, payroll withholdings go to the EDD, not directly to FTB.
Memory Technique
EDD = Employer Delivers Dollars. The employer collects PIT from paychecks and delivers it to EDD. Think of the employer as a collection agent for EDD.
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Previous Question
A California contractor has 5 employees with a monthly payroll of $28,000. What is the monthly State Disability Insurance (SDI) withholding if the current SDI rate is 0.9% on wages up to $153,164 annually?
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A contractor's quarterly payroll is $180,000. The current California Employment Training Tax (ETT) rate is 0.1% on the first $7,000 of each employee's annual wages. With 12 employees, what is the maximum quarterly ETT liability?