Senate Bill 422 – Motion Picture Industry and Loan-Out Companies
Senate Bill 422 recognized the role of loan-out companies and clarified their responsibility to pay employment taxes under the California Unemployment Insurance Code (CUIC).
The bill requires a Motion Picture Payroll Services Company to file with EDD a report of payments made to a loan-out company each quarter, beginning with the first calendar quarter ending March 31, 2026.
Loan-Out Companies
A loan-out company is a corporation, or a limited liability company that is classified as a corporation for federal income tax purposes, and:
- The main business activity is the performance of personal services for a motion picture production company or allied motion picture services company.
- The person doing most of the work is an employee who also owns more than 10% of the company’s stock during the taxable year.
Motion Picture Payroll Services Companies
A Motion Picture Payroll Services Company (MPPSC) is a business that directly or through its affiliated entities meets all the following criteria:
- Provides the services of motion picture production workers to a motion picture production company or to an allied motion picture services company or makes payments to a loan-out company as directed by a motion picture production company or an allied motion picture services company.
- Is a signatory to a collective bargaining agreement for one or more of its clients.
- Controls the payment of wages to the motion picture production workers and pays those wages from its own account or accounts.
- Is contractually obligated to pay wages to the motion picture production workers without regard to payment or reimbursement by the motion picture production company or allied motion picture services company.
- At least 80 percent of the wages paid by the MPPSC each calendar year are paid to workers associated between contracts with motion picture production companies and MPPSCs.
Section 679 of the CUIC allows an MPPSC to be treated as the employer of motion picture production workers when meeting these requirements. MPPSCs have additional filing and reporting requirements.
The following requirements must be met for an MPPSC to be treated as the employer:
- The MPPSC pays and controls the payment of wages of a motion picture production worker for services either to a motion picture production company or to an allied motion picture production company.
- Within 15 days after first paying wages, submits an Application to Be a Motion Picture Payroll Services Company (MPPSC) (DE 679) to EDD.
The DE 679 is not an application for an employer payroll tax account number. If you are a new employer, visit Am I Required to Register as an Employer? for information on how to get a payroll tax account number and enroll in e-Services for Business.
If you’re an MPPSC, you must report to EDD the total amount of payments made to loan-out companies performing services in California each quarter.
An MPPSC is required to report the following information for both the MPPSC and the loan-out company:
MPPSC
- Legal name
- Federal Employer ID Number (FEIN)
- CA Employer Account Number
- Year and Quarter of the report
- Address
Loan-Out Company
- Federal Employer Identification Number (FEIN)
- Legal name
- CA Employer Account Number
- Phone number
- Total amount of payments made
- Address
- Name of principal officer or member providing the service
- Social Security number of that person
Reporting Due Dates
You must start reporting beginning with the first calendar quarter of 2026. Reports are due on the first day of the month after each quarter ends. If your report is not submitted by the last day of that month, it’s considered late. If the due date falls on a Saturday, Sunday, or legal holiday, then the due date is extended to the next business day.
| Report Covering | Due Date | Delinquent if Not Filed By |
|---|---|---|
| January, February, March | April 1, 2026 | April 30, 2026 |
| April, May, June | July 1, 2026 | July 31, 2026 |
| July, August, September | October 1, 2026 | November 2, 2026 |
| October, November, December | January 1, 2027 | February 1, 2027 |
How to Submit Your Report
Online
Enter the information yourself or upload a spreadsheet (.csv) securely through e-Services for Business.
Visit Online Forms and Publications to download DE 422. The DE 422 form is not currently available but will be available soon.
Mail to:
Employment Development Department
P.O. Box 980148
West Sacramento, CA 95798-0148
Is there a penalty?
You may be charged a penalty if you:
- Don’t file the report.
- File it late, without good cause.
- Willfully or fraudulently fail to comply.
For additional information or assistance, call our Taxpayer Assistance Center at 1-888-745-3886.