How to Fill Out California Form DE-405 (w/Examples) + FAQs

California Form DE-405 is the Notice of Election to Cover Excluded Workers that California employers file with the California Employment Development Department (EDD) to voluntarily bring otherwise excluded workers — such as corporate officers, sole shareholders, certain family employees, and partners — under State Unemployment Insurance (UI), Disability Insurance (DI), or both. The form is governed by California Unemployment Insurance Code §§ 702.1, 708, and 708.5, and once approved, the election locks the employer into a minimum two-year coverage period.

Filing DE-405 incorrectly — or late — can void the election, which means a claim later filed by the worker can be denied retroactively. The EDD processes more than two million employer payroll filings each year, and elective-coverage rejections are among the most common avoidable errors.

Here is what this guide covers:

📝 What DE-405 is, who must file it, and which excluded workers qualify
📂 The exact documents and account numbers you need before you start
🖊️ A line-by-line walkthrough of every field on the current EDD revision
👥 Three real-world filled-out scenarios with named filers
⚖️ Statutes, deadlines, and the two-year commitment that traps unprepared filers

What the Form Is and Who Must File It

California Form DE-405 is the official EDD notice an employer uses to elect coverage for workers who are statutorily excluded from mandatory UI and DI under the California Unemployment Insurance Code. Without DE-405, those workers cannot collect UI or State Disability Insurance benefits, because no contributions are being paid on their wages. The form turns voluntary contributions into a binding agreement between the employer and the State of California.

The most common filers are small corporations electing coverage for their officers, sole shareholders electing self-coverage, partnerships covering active partners, and family-run businesses covering a spouse, registered domestic partner, parent, or minor child who would otherwise be excluded under CUIC § 637.1. Nonprofits and public entities also use DE-405 in narrow situations, but the bulk of filings come from for-profit small businesses.

Employers must already have an active EDD employer payroll tax account (an eight-digit account number issued through the DE-1 registration process) before DE-405 will be accepted. The election is filed with — not in place of — quarterly wage reporting on Form DE-9 and DE-9C. Once the EDD approves the election, the employer must continue paying contributions on the elected wages for at least two complete calendar years before terminating coverage with Form DE-413.

A common misconception is that DE-405 covers federal taxes. It does not. Federal Unemployment Tax Act (FUTA) coverage is handled separately through the IRS, and elective state coverage on DE-405 has no automatic effect on federal liability.

Before You Start: Documents and Information You Need

Filing DE-405 goes faster — and survives EDD review — when you gather every document first. Missing items are the leading cause of rejection letters and back-and-forth correspondence that pushes the effective date into the next quarter.

Use this pre-filing checklist before opening the form on the EDD e-Services for Business portal:

Eight-digit EDD employer account number from your DE-1 confirmation. Without it, the form cannot be matched to your tax account and will be returned.
Federal Employer Identification Number (FEIN) issued by the IRS. The EDD cross-checks this against IRS records, and a mismatch triggers a manual hold.
Legal business name and DBA exactly as registered with the California Secretary of State. Variations cause data-entry rejections.
Each excluded worker’s full legal name, Social Security Number, and date of birth. SSNs are validated against SSA records.
Each worker’s job title and ownership percentage (for officers, shareholders, or partners). This determines which CUIC exclusion applies.
Effective date of coverage you want, which must be the first day of a calendar quarter. Picking the wrong date is the single most common DE-405 mistake.
Type of coverage elected: UI only, DI Elective only, or both. The choice affects the contribution rate.
A signature authority list showing who can legally bind the business (officer, partner, sole proprietor, LLC manager).
Prior election history if any worker was previously covered and terminated. EDD checks for the two-year lockout under CUIC § 704.
Supporting forms when applicable, including DE-459 for sole shareholders and the DE-1378 series for elective coverage agreements.

A common mistake is treating the effective date as flexible. The EDD will not backdate beyond the start of the quarter in which the form is received, so a DE-405 mailed on April 2 cannot have an April 1 effective date.

Where to Get the Form and How to Access It

The current EDD revision of Form DE-405 is available on the EDD forms library as a fillable PDF. Always download a fresh copy from the EDD site rather than reusing a saved version, because the EDD updates wording, contribution rates referenced on the back, and signature blocks periodically. The revision date is printed in the lower-left footer of page 1.

Online filers use the e-Services for Business portal, which lets registered employers submit elective-coverage notices, upload supporting forms, and receive an electronic acknowledgment in PDF. The portal validates account numbers and SSNs in real time, which sharply reduces rejection rates compared to paper. EDD strongly prefers electronic filing and prioritizes those submissions in its processing queue.

Paper filers mail the completed DE-405 to the Employment Development Department, Account Services Group, MIC 28, PO Box 826880, Sacramento, CA 94280-0001. Faxed submissions are accepted at the number printed on the current revision of the form, but fax filings still require an original wet-ink signature for the file copy.

In-person submission is available at any EDD Employment Tax Office, though walk-in filings are uncommon and often slower than online. Whichever channel you use, keep a copy of the signed form plus proof of submission for at least four years to match the EDD’s audit lookback window.

Step-by-Step: How to Fill Out DE-405 Line by Line

The DE-405 is a single-page form on the front, with instructions and contribution rate references on the back. Every box matters, and the EDD treats incomplete fields as grounds for rejection. Work top to bottom, and never leave a field blank — write N/A if a box truly does not apply.

Box 1: EDD Employer Account Number

This box asks for your eight-digit EDD payroll tax account number. Enter the number exactly as it appears on your DE-1 confirmation letter or on prior DE-9 filings. Format it as 123-4567-8 with the dashes the EDD uses on its own correspondence.

For example, Maria Lopez, owner of Lopez Catering Inc., enters 987-6543-2 in Box 1, the same number printed on her quarterly DE-9 returns. If your business has multiple EDD accounts (a rare situation involving separate legal entities), file a separate DE-405 for each.

A common edge case is a brand-new employer who has applied for an account but not yet received the number. In that case, register first through e-Services and wait for the number, because DE-405 cannot be processed without it. The most frequent mistake here is transposing two digits, which routes the form to the wrong account and can cause coverage to attach to a different employer entirely.

A misconception is that the FEIN can substitute for the EDD account number. It cannot — the EDD’s payroll tax system is keyed to its own eight-digit number, not the IRS FEIN.

Box 2: Federal Employer Identification Number (FEIN)

Box 2 asks for the nine-digit FEIN the IRS issued to your business. Enter it as XX-XXXXXXX with the standard hyphen after the first two digits. Sole proprietors who use their SSN for federal tax purposes still need a FEIN to be a California employer, and that FEIN goes here.

For example, Carlos Nguyen, sole shareholder of Nguyen Web Studio Inc., enters 47-2938475 in Box 2. The EDD validates this number against IRS records, so a typo will trigger a verification letter.

An edge case arises for newly formed entities whose FEIN was issued the same week as DE-1 registration. Use the FEIN from the IRS confirmation notice (CP 575), not a placeholder. The biggest mistake is leaving Box 2 blank because the filer thinks the EDD already has it on file; missing FEINs cause a manual review delay of two to four weeks.

A misconception is that an ITIN can be used here. It cannot. Only an FEIN belongs in Box 2, and using an ITIN will cause outright rejection.

Box 3: Legal Business Name

Box 3 asks for the exact legal name of the business as registered with the California Secretary of State or, for sole proprietors, the legal name of the owner. Use ALL CAPS, no abbreviations except Inc., LLC, or LP when those are part of the registered name.

For example, Janet Park, an active partner in Park & Park Architects LP, enters PARK & PARK ARCHITECTS LP in Box 3. The ampersand and the LP designator must match the Secretary of State filing exactly.

An edge case involves DBA names. If the business operates under a fictitious business name (DBA), the legal name still goes in Box 3, and the DBA goes on a separate line if the form provides one or in Box 4 (business address) as a continuation. The most common mistake is writing the DBA in Box 3, which causes a name-match failure during EDD processing.

A misconception is that a recent name change automatically updates everywhere. It does not — file Form DE-24 (Change of Employer Account Information) before or with DE-405 if the legal name has changed.

Box 4: Business Mailing Address

Box 4 asks for the mailing address where the EDD should send correspondence about this election. Enter the street address, suite number, city, state, and ZIP code. PO Boxes are accepted for mailing purposes.

For example, Maria Lopez enters 4821 SUNSET BLVD STE 200, LOS ANGELES, CA 90027 in Box 4. The EDD prefers ALL CAPS to match its postal automation.

An edge case is an out-of-state mailing address for a California employer. That is allowed, but the physical workplace of the elected worker must still be reported separately if the form requests it. The biggest mistake is using an old address; correspondence sent to a stale address still counts as legally delivered, and missing an EDD letter can cost you appeal rights.

A misconception is that updating an address on the federal side updates the state. It does not — California requires its own update on DE-24.

Box 5: Type of Coverage Elected

Box 5 is the heart of the form. It asks which coverage you are electing: Unemployment Insurance only, Disability Insurance Elective Coverage only, or both. Check the box that matches your decision; do not check more than one option unless you are electing both.

For example, Carlos Nguyen checks the box for both UI and DI Elective Coverage because he wants full safety-net protection as a sole shareholder. Janet Park checks only DI Elective Coverage because her partnership already opts out of UI.

An edge case involves switching coverage later. Once the two-year minimum runs, you can change the election by filing a new DE-405, but you cannot reduce coverage retroactively. The most common mistake is checking both without understanding that contribution rates differ for each program — a UI rate is set by the EDD’s experience-rating schedule, while DI Elective is a flat percentage published annually.

A misconception is that DI Elective Coverage includes Paid Family Leave automatically. It does not for all categories of elected workers; check the current DE-231EB Information Sheet for the specific category of worker before electing.

Box 6: Excluded Worker Category

Box 6 asks you to identify the statutory category that makes the worker excluded in the first place. Options typically include corporate officer/sole shareholder under CUIC § 637.1, partner of a partnership, member of an LLC treated as a partnership, family employment under CUIC § 631, and other narrow categories listed on the back of the form.

For example, Maria Lopez checks Corporate Officer/Sole Shareholder because she owns 100% of Lopez Catering Inc. Janet Park checks Partner because she is an active general partner.

An edge case is the worker who fits more than one exclusion (e.g., a spouse who is also a corporate officer). Pick the most specific exclusion that applies; the EDD’s processing manual treats the corporate-officer exclusion as primary when both apply. The biggest mistake is selecting a category that does not actually fit, which voids the election because the worker was not legally excluded to begin with.

A misconception is that independent contractors can be elected on DE-405. They cannot — DE-405 is for excluded employees, not 1099 workers.

Box 7: Worker Information (Name, SSN, Title, Effective Date)

Box 7 asks for the elected worker’s full legal name as it appears on their Social Security card, their nine-digit SSN, their job title, and the effective date of coverage. Use MM/DD/YYYY format for the date, and the date must be the first day of a calendar quarter (January 1, April 1, July 1, or October 1).

For example, Carlos Nguyen enters NGUYEN, CARLOS T. / 123-45-6789 / PRESIDENT / 07/01/2026 in Box 7. The effective date is the first day of Q3 2026, which is the next quarter after the form is mailed in June 2026.

An edge case is electing multiple workers at once. Most revisions of DE-405 provide space for two or three workers; if you have more, attach a continuation sheet referencing the same employer account number. The most common mistake is choosing an effective date in the current quarter when the form is filed mid-quarter — the EDD will roll the date forward to the next quarter, and benefits will not be available for any claim arising before that date.

A misconception is that the effective date can be the worker’s hire date. It cannot, unless the hire date happens to be the first of a quarter. Coverage runs in calendar-quarter blocks.

Box 8: Authorized Signature, Title, and Date

Box 8 is the signature block. The form must be signed in wet ink (paper) or by an authorized e-signature credential (e-Services). The signer must be an officer, owner, partner, LLC manager, or other person legally authorized to bind the entity.

For example, Janet Park signs as General Partner and dates the form 06/15/2026 for an effective date of 07/01/2026. A bookkeeper or tax preparer cannot sign Box 8 unless they hold a written power of attorney on file with the EDD via Form DE-48.

An edge case is a single-member LLC where the same person is the worker being elected. That person can sign as both the worker and the authorized representative, but two signatures may be required on some revisions. The biggest mistake is an unsigned form — the EDD rejects unsigned DE-405s without further review, and the rejection letter often arrives a month later, blowing the quarterly deadline.

A misconception is that a typed name counts as a signature on a paper form. It does not. Paper requires wet ink; only e-Services credentials count electronically.

Three Filled-Out Examples Using Real Scenarios

Concrete walk-throughs help you see how the form looks when finished. Each scenario below follows one named filer through the most important fields of DE-405.

Scenario 1: Maria Lopez, Sole Shareholder of an S-Corp

Maria owns 100% of Lopez Catering Inc. and pays herself a W-2 salary. She wants UI and DI coverage so she can collect benefits if a recession idles the business.

Form Section	What Maria Enters
Box 1: EDD Account Number	987-6543-2
Box 2: FEIN	84-1029384
Box 3: Legal Business Name	LOPEZ CATERING INC.
Box 4: Mailing Address	4821 SUNSET BLVD STE 200, LOS ANGELES, CA 90027
Box 5: Coverage Elected	Both UI and DI Elective
Box 6: Excluded Worker Category	Corporate Officer/Sole Shareholder (CUIC § 637.1)
Box 7: Worker Info	LOPEZ, MARIA E. / 555-22-1111 / PRESIDENT / 07/01/2026
Box 8: Signature	Maria E. Lopez, President, 06/10/2026
Attachment	DE-459 Sole Shareholder Acknowledgment

Scenario 2: Carlos Nguyen, Sole Shareholder Electing Self-Coverage

Carlos runs Nguyen Web Studio Inc. He is the only employee and wants DI Elective Coverage only, because he is willing to self-insure unemployment risk.

Form Section	What Carlos Enters
Box 1: EDD Account Number	112-3344-5
Box 2: FEIN	47-2938475
Box 3: Legal Business Name	NGUYEN WEB STUDIO INC.
Box 4: Mailing Address	1100 MARKET ST APT 12, SAN FRANCISCO, CA 94102
Box 5: Coverage Elected	DI Elective Coverage only
Box 6: Excluded Worker Category	Corporate Officer/Sole Shareholder
Box 7: Worker Info	NGUYEN, CARLOS T. / 123-45-6789 / PRESIDENT / 07/01/2026
Box 8: Signature	Carlos T. Nguyen, President, 06/02/2026
Attachment	DE-459

Scenario 3: Janet Park, General Partner Covering a Partner-Spouse

Janet’s partnership, Park & Park Architects LP, wants to elect DI Elective Coverage for her partner-spouse, who is statutorily excluded as a partner.

Form Section	What Janet Enters
Box 1: EDD Account Number	554-7788-9
Box 2: FEIN	33-1112223
Box 3: Legal Business Name	PARK & PARK ARCHITECTS LP
Box 4: Mailing Address	200 N BRAND BLVD, GLENDALE, CA 91203
Box 5: Coverage Elected	DI Elective Coverage only
Box 6: Excluded Worker Category	Partner of Partnership
Box 7: Worker Info	PARK, DAVID H. / 444-55-6677 / GENERAL PARTNER / 07/01/2026
Box 8: Signature	Janet S. Park, General Partner, 06/15/2026
Attachment	DE-1378P Partnership Agreement Acknowledgment

Other named filers who appear elsewhere in this guide include Aisha Robinson, an LLC member electing UI for herself, and Marcus Bell, a family-business owner electing coverage for his minor child employee under CUIC § 631.

How to File the Completed Form

The EDD accepts DE-405 through four channels, but each has different processing speeds and proof requirements. Pick the channel that gives you the cleanest paper trail and the fastest acknowledgment.

Online via e-Services for Business. Log into the e-Services portal, select Elective Coverage, and upload the completed PDF along with any required attachments. There is no filing fee. Processing time is typically 5–10 business days, and your proof of filing is the confirmation number plus the PDF receipt the portal generates. Save both.

By mail. Send the signed original to Employment Development Department, Account Services Group, MIC 28, PO Box 826880, Sacramento, CA 94280-0001. There is no fee. Use USPS Certified Mail with Return Receipt or a tracked carrier; processing runs 3–6 weeks, and your proof is the green card or tracking record plus the EDD acknowledgment letter.

By fax. Fax to the number on the current DE-405 revision. Keep the fax confirmation page; processing runs 2–4 weeks. Faxed forms still require an original signed copy retained in your records for audit.

In person. Walk into any EDD Employment Tax Office during business hours. There is no fee. Ask the clerk to date-stamp a copy as your proof of filing. In-person processing is not faster than online and is rarely worth the trip.

Whichever channel you choose, retain copies for at least four years, the EDD’s standard audit lookback period under CUIC § 1085.

What Happens After You File

After the EDD receives DE-405, the Account Services Group reviews the form for completeness, validates the EDD account number, FEIN, and SSN, and confirms the worker’s exclusion category fits the statutory list. If everything matches, the EDD mails an approval letter listing the effective date, the contribution rates that apply, and the two-year minimum coverage period.

If the EDD finds a problem, it issues a correction request or a flat rejection. Correction requests give you 30 days to fix the issue while keeping the original effective date; rejections require a brand-new filing with a new effective date in a future quarter. The EDD also assigns an elective-coverage indicator to your account so that future DE-9C wage reports correctly attribute UI and DI wages for the elected worker.

Once approved, you must report the elected worker’s wages on every quarterly DE-9C, pay UI contributions at your experience rate (or DI Elective at the published flat rate), and continue for at least eight consecutive quarters. Early termination requires filing Form DE-413 and is rejected if the two-year minimum has not run.

A misconception worth correcting is that approval is automatic. It is not — roughly one in eight elective-coverage notices receives a correction request, usually for missing signatures or wrong effective dates.

Mistakes to Avoid When Filling Out the Form

Form DE-405 looks short, but each box has a way to trip up filers. The mistakes below are the ones the EDD’s own correction letters cite most often.

Wrong effective date. Picking a date that is not the first day of a quarter forces the EDD to roll the date forward, leaving a coverage gap.
Missing EDD account number. A blank Box 1 makes it impossible to attach the election to your tax account, and the form is returned.
FEIN typo. A single transposed digit triggers IRS-match failure and a 2–4 week manual review.
Mismatched legal business name. Using a DBA in Box 3 instead of the registered legal name causes a name-match rejection.
Wrong exclusion category in Box 6. Selecting a category that does not legally apply voids the election even after approval.
Unsigned form. No signature in Box 8 means automatic rejection without review.
Wrong signer. A non-authorized employee or unlicensed preparer signing without DE-48 power of attorney invalidates the form.
Including 1099 contractors. DE-405 covers only excluded employees; electing a contractor is rejected on its face.
Skipping required attachments. Forgetting DE-459 for sole shareholders or DE-1378 for elective coverage triggers a correction request.
Filing during the lockout window. Filing within two years of a prior termination violates CUIC § 704 and is rejected outright.
Listing wrong SSN. SSN-mismatch with SSA records halts processing and may require an in-person visit to verify identity.
Assuming retroactive coverage. The EDD never backdates beyond the start of the receiving quarter, so a claim before the effective date will be denied.

Do’s and Don’ts

A short, opinionated list helps filers stay on the safe side of the EDD’s review process.

Do’s

Do download the form fresh from the EDD forms library every time, because revisions change without public announcement.
Do file through e-Services for Business when possible, because real-time validation catches errors before submission.
Do pick an effective date that gives you at least 30 days of mailing buffer, so a postal delay does not push the date out a quarter.
Do retain copies for four years, matching the EDD’s audit lookback under CUIC § 1085.
Do attach DE-459 or the appropriate DE-1378 form whenever the worker category requires it.
Do confirm the worker’s SSN matches the Social Security card before submitting, because SSA-mismatch is the most common cause of delay.

Don’ts

Don’t use a DBA in Box 3; the EDD matches Box 3 against Secretary of State records.
Don’t elect coverage for a 1099 contractor; the form is for excluded employees only.
Don’t sign as a tax preparer without DE-48 power of attorney on file.
Don’t terminate coverage early; the two-year minimum is statutory and ignoring it triggers back-contributions plus penalties.
Don’t assume Paid Family Leave is automatic with DI Elective; check the DE-231EB sheet first.
Don’t mail the form without tracking; lost mail without proof of filing can cost a full quarter of coverage.

Pros and Cons of Filing on Your Own vs. With Help

DE-405 is short enough that many small employers file it themselves, but professional help has real value when stakes are high.

Pros of filing on your own

No professional fees, which matters for solo S-corp owners watching every dollar.
Direct control over timing, so you can target a specific quarterly effective date.
Faster turnaround when you use e-Services, because there is no preparer handoff.
Builds your own knowledge of California payroll tax rules, which pays off across DE-9, DE-9C, and DE-34 filings.
You learn to spot the same exclusion issues in future hires without paying twice.

Cons of filing on your own

Higher risk of choosing the wrong exclusion category in Box 6, which voids the election.
Easy to miss the right attachment (DE-459, DE-1378), which triggers a correction request.
No one to challenge an EDD rejection on your behalf if the agency reads the statute differently.
The two-year lock can be costly if your business situation changes and you regret electing.
You bear full audit exposure if the EDD later reclassifies the worker.

For complex situations — multi-owner LLCs, mixed family employment, or prior terminated coverage — a CPA or enrolled agent familiar with California payroll tax usually pays for itself.

Filing by Mail vs. Online

Filing Channel	Key Differences
Mail	3–6 week processing, requires Certified Mail for proof, accepts wet-ink signature only
Online (e-Services)	5–10 business day processing, real-time validation, electronic acknowledgment, requires e-Services credentials

FAQs

Is California Form DE-405 the same as Form DE-1?

No. DE-1 registers a new employer for a payroll tax account; DE-405 elects voluntary coverage for excluded workers under that existing account. They serve different stages of the employer life cycle.

Can I file DE-405 before I receive my EDD account number?

No. The form requires the eight-digit EDD employer account number in Box 1, and submissions without it are returned without processing.

Do I write my Social Security Number or my FEIN in Box 2?

No SSN goes in Box 2. Only the nine-digit Federal Employer Identification Number issued by the IRS belongs there, formatted as XX-XXXXXXX.

Can the effective date in Box 7 be any date I choose?

No. The effective date must be the first day of a calendar quarter — January 1, April 1, July 1, or October 1 — and cannot be earlier than the quarter the EDD receives the form.

Do I check both UI and DI Elective in Box 5 if I want maximum protection?

Yes. Checking both elects full coverage, but be aware that contribution rates apply to each program separately under the EDD’s experience-rating and DI Elective schedules.

Is DE-405 required for every new corporate officer?

No. It is voluntary. Officers and sole shareholders are excluded by default under CUIC § 637.1, and DE-405 is only needed if you want them covered.

Can a payroll service sign Box 8 on my behalf?

No. A payroll service or tax preparer cannot sign Box 8 unless a Form DE-48 power of attorney is on file with the EDD authorizing them to do so.

Does electing DI Elective Coverage automatically include Paid Family Leave?

No. PFL inclusion depends on the worker category and current EDD policy; check the DE-231EB Information Sheet before assuming PFL is part of the election.

Can I terminate elective coverage anytime after filing DE-405?

No. California law imposes a two-year minimum coverage period, and termination requires a separate filing on Form DE-413 only after that period runs.

Do I list a DBA in Box 3 if my business uses one?

No. Box 3 must contain the legal business name registered with the California Secretary of State; the DBA can be added on a separate line if the form provides one.

Can I cover a 1099 independent contractor on DE-405?

No. The form covers only statutorily excluded employees; independent contractors are not employees, and electing one is rejected automatically.

Is there a filing fee for DE-405?

No. The EDD charges no fee to file DE-405 through any channel — online, mail, fax, or in person.

Can I backdate the effective date to when the worker was hired?

No. The EDD does not backdate beyond the start of the quarter in which the form is received, regardless of when the worker was hired or began earning wages.

What happens if I sign DE-405 but forget to date Box 8?

No automatic rejection in every case, but the EDD often returns undated forms for correction, which can push the effective date into the following quarter.

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