EDD REFUND CLAIMS
Part 1 – Making the Claim for Refund
By Robert S. Schriebman
Every California taxing agency has statutes and regulations allowing refund claims for the overpayment of taxes. The EDD is no exception. The EDD refund statutes are found in California Unemployment Insurance Code (CUIAC) § 1176 through § 1185. If you wish to make a claim for refund you should start by reviewing CUIC § 1178 through § 1180.
All state refund laws have several elements in common. First, you can not obtain a refund without making a written claim. Second, the claim must be filed timely. Third, if your claim is denied you must exhaust your administrative remedies before you can file a lawsuit for refund in the Superior Court.
TIME REQUIREMENTS FOR CLAIMING REFUND OR CREDIT
CUIC § 1178 sets forth the basic time limit for filing your refund claim with the EDD. Basically, the claim must be filed with a director of the EDD.
CUIC § 1178
To be timely, a claim for refund or credit must be filed within the time limits prescribed under CUIC § 1178, and is the LATER of the following periods:
- Three years from the last day of the calendar month following the close of the calendar quarter for which the overpayment was made, or
- Six months after an assessment levied by EDD becomes final, or
- Sixty days from the date of overpayment.
(Source: EDD Tax Audit Guidelines, Chapter XVIII)
An EDD assessment must be paid in full before a refund claim is filed. This means that all taxes, penalties, and accruing interest must be fully paid before you are eligible to file your refund claim. See Masi v. Nagle, 5 Cal. App.4th 608 (1992).
CONTENTS OF THE CLAIM FOR REFUND
The rules for the contents of a Claim for Refund are set forth in CUIC § 1179. No specific form is necessary or required. The EDD website has several forms available, and one may fit your needs. All forms come with instructions. These forms are as follows:
- DE 678 Tax and Wage Adjustment Form.
- DE 938P Claim for Adjustment or Refund of Personal Income Tax.
- DE 1964 Claim for Refund of Excess California State Disability Insurance Deductions.
If you do not wish to use one of the above forms, or they do not fit your needs, you may simply write your own claim using the guidelines set forth in CUIC § 1179. Your claim must have the following information:
- Request for refund or credit.
- Account number.
- Specific grounds on which the claim is based
- Period covered
- Amount claimed
- Date of payment/credit
- The letter should be signed by the employer or employer’s agent.
When filing any version of an EDD Claim for Refund make certain that you have complete proof that you timely filed your claim. I suggest that you send the claim by FedEx, UPS, etc., as these companies have excellent records regarding proof of delivery. You may also use the USPS by sending your claim via Registered or Certified Mail with a Return Receipt Requested. Make certain the Post Office “round stamps” your receipt to prove it was delivered to the USPS.
PETITION AUTOMATIC CONVERSION
If you are considering filing a petition to have your case heard by an administrative law judge, or you have filed your petition, consider fully paying your assessment while your petition is pending. Not only will this save you accruing interest, but the full payment automatically converts your petition to a claim for refund. These rules are stated in CUIC § 1179.5. You do not have to wait for the EDD to formally deny your petition. The petition will automatically become a petition to review a denial of the claim for refund by the EDD’s director.
For more information you can download the EDD’s Tax Audit Guidelines. Chapter XVIII deals with refund and credits.
In Part 2 of this article we will discuss what to do when your filed refund claim is denied.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure”, both published by Commerce Clearing House.