In response to the state's emergency budget crisis, Sacramento lawmakers have authorized a 10% increase in the amount of taxes withheld from worker paychecks starting November 1, 2009, and through 2010. In addition, the state imposed a 0.6% increase in supplemental wage withholding and a 1.20% increase on wage stock options and bonus payments. The withholding rates have been increased in order to accelerate tax collections by the State and to prevent under withholding by employees.

California employers may wish to provide DE-4 forms to employees to allow them to adjust their state withholding.