The California Form 592-B is a tax statement used to report withholding for payments made to both residents and nonresidents. This form provides essential information regarding the income subject to withholding and the amount of tax withheld. Understanding how to complete this form accurately is crucial for compliance with California tax laws.
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The California Form 592-B is an essential document for reporting withholding taxes on payments made to both residents and nonresidents. This form is particularly relevant for withholding agents, such as S corporations, partnerships, and trusts, who are required to disclose amounts subject to withholding. In its structure, the form is divided into several parts, each addressing key elements such as the withholding agent's information, recipient details, and the types of income that are subject to withholding. Notably, it includes sections for reporting total income subject to withholding, the California tax withheld, and backup withholding amounts. Understanding the nuances of Form 592-B is crucial for compliance, as it outlines the obligations of withholding agents to provide accurate and timely information to recipients, ensuring that all parties meet their tax responsibilities. Additionally, the form highlights important updates, such as changes in tax rates and specific instructions for various types of income, making it a vital resource for anyone involved in financial transactions within California.
TAXABLE YEAR
Resident and Nonresident Withholding
CALIFORNIA FORM
2012 Tax Statement
592-B
Part I Withholding Agent
Name of withholding agent (Payer/S Corporation/Partnership/LLC/Trust)
SSN or ITIN
Address (suite, room, PO Box, or PMB no.)
FEIN
CA Corp no. SOS file no.
City
State
ZIP Code
Daytime telephone number
(
)
Part II Recipient
Name of recipient
DBA (if applicable)
Part III Type of Income Subject to Withholding. Check the applicable box(es).
A Payments to Independent Contractors
E Estate Distributions
G Payments to Independent Contractor
B Trust Distributions
F Allocations to Foreign (non-U.S.)
Entertainers/Athletes/Speakers
C Rents or Royalties
Nonresident Partners/Members
H Other ___________________________
D Distributions to Domestic (U.S.)
(describe)
Nonresident Partners/Members/
Beneficiaries/S Corporation Shareholders
Part IV Tax Withheld
1 Total income subject to withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 Total California tax withheld (excluding backup withholding). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 Total Backup Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Withholding Agent Instructions
What’ New
Increase in Rates – For taxable years beginning on or after January 1, 2012, the maximum personal income tax rate increased to 12.3%. In addition, non-California partnerships are subject to withholding requirements on a sale of California real property at a rate of 3 1/3% (.0333) of sales price or 12.3% of gain. The alternative withholding rate for the gain on sale of California real property by S corporations increased to 13.8% and 15.8% for financial
S corporations.
General Information
Backup Withholding – Beginning on or after January 1, 2010, with certain limited exceptions, payers that are required to withhold and remit backup withholding to the Internal Revenue Service (IRS) are also required to withhold and remit to the Franchise Tax Board (FTB). The California backup withholding rate is 7% of the payment. For California purposes, dividends, interests,
and any financial institutions release of loan funds made in the normal course of business
are exempt from backup withholding. For additional information on California backup withholding, go to ftb.ca.gov and search for backup withholding.
Registered Domestic Partners (RDPs) – Under California law, RDPs must file their California income tax returns using either the married/RDP filing jointly or married/RDP filing separately filing status. RDPs have the same legal benefits, protections, and responsibilities as married couples unless otherwise specified.
If you entered into a same-sex legal union in another state, other than a marriage, and that union has been determined to be substantially equivalent to a California registered domestic partnership, you are required to file a California income tax return using either the married/RDP filing jointly or married/RDP filing separately filing status.
For purposes of California income tax, references to a spouse, husband, or wife also refer to a California RDP, unless otherwise specified. When we use the initials RDP they refer to both a California registered domestic “partner” and a California registered domestic “partnership,” as applicable. For more
information on RDPs, get FTB Pub. 737, Tax Information for Registered Domestic Partners.
A Purpose
For purposes of Form 592-B, the term “nonresident” refers to both domestic and foreign recipients. A domestic nonresident is a person living outside of California, but living in the United States. If you are a resident living outside of the United States, you are a foreign nonresident.
Use Form 592-B to report to the recipient the amount of payment or distribution subject to withholding and tax. Complete a separate Form 592-B for each resident or nonresident. Pass-through entities which were withheld upon by another entity should use Form 592 to flow-through the withholding to their S corporation shareholders, partners, members, or beneficiaries whether they are residents or nonresidents of California.
Use Form 592-V, Payment Voucher for Resident and Nonresident Withholding, to remit withholding payments during the year. To remit foreign partner withholding payments use Form 592-A, Payment Voucher for Foreign Partner or Member Withholding.
For Privacy Notice, get form FTB 1131.
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Form 592-B 2011 (REV 12-12)
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visit our website:
ftb.ca.gov
Page 2 Form 592-B 2011
B Common Errors/Helpful Hints
•Get taxpayer identification numbers (TINs) from all payees.
•Complete all fields.
•Complete all forms timely to avoid penalties.
C Who Must Complete
Form 592-B must be completed by any person who:
•Has withheld on payments to residents or nonresidents.
•Has withheld backup withholding on payments to residents or nonresidents.
•Is a pass-through entity that was withheld upon and must flow-through the withholding credit.
Record Keeping
The withholding agent retains the proof of withholding for a minimum of four years and must provide it to the FTB upon request. Form 592-B is provided to the recipient to file with their state tax return. This form can be provided to the payee electronically. A broker can provide Form 592-B as a composite statement. For more information go to ftb.ca.gov and search for electronic 592-B requirements.
D When To Complete
Form 592-B must be provided to:
•Each resident or nonresident by January 31 following the close of the calendar year, except for brokers as stated in Internal Revenue Code (IRC) Section 6045.
•A recipient before February 15 following the close of the calendar year for brokers.
•Foreign partners in a partnership or members in a limited liability company (LLC) on
or before the 15th day of the 4th month following the close of the taxable year.
If all the partners in the partnership or members in the LLC are foreign, Form(s) 592-B must be provided on or before the 15th day of the 6th month after the close of the taxable year.
When making a payment of withholding tax to the IRS under IRC Section 1446, a partnership must notify all foreign partners of their allocable shares of any IRC Section 1446 tax paid to the IRS by the partnership. The partners use this information to adjust the amount of estimated tax that they must otherwise pay to the IRS. The notification to the foreign partners must be provided within 10 days of the installment due date, or, if paid later, the date the installment payment is made. See Treas. Regs. Section 1.1446-3(d)(1)(i) for information that must be included in
the notification and for exceptions to the notification requirement. For California withholding purposes, withholding agents should make a similar notification. No particular form is required for this notification, and it is commonly done on the statement
accompanying the distribution or payment. However, the withholding agent may choose to report the tax withheld to the payee on a Form 592-B.
E Penalties
The withholding agent must furnish complete and correct copies of Form(s) 592-B to the recipient (payee) by the due date.
If the withholding agent fails to provide complete, correct, and timely Form(s) 592-B to the recipient (payee), the penalty per Form 592-B is:
•$50 for each payee statement not provided by the due date.
•$100 or 10 percent of the amount required to be reported (whichever is greater), if the failure is due to intentional disregard of the requirement.
Specific Instructions
Year – Make sure the year in the upper left corner of Form 592-B represents the calendar year in which the withholding took place. If an S corporation’s, partnership’s, LLC’s, or trust’s current distribution represents a prior taxable year of California source income, the taxable year on Form 592-B must represent the year the income was earned. (Except for foreign partners, withholding of tax by withholding agents must be on a calendar-year basis, regardless of the accounting period adopted by the payee or withholding agent.)
For foreign partners in a partnership, or foreign members in an LLC, make sure the year in the upper left corner of Form 592-B is the year that the partnership’s or LLC’s taxable year ended. For example, if the partnership’s or LLC’s taxable year ended 12/31/09, use the 2009 Form 592-B.
Private Mail Box (PMB) – Include the PMB in the address field. Write “PMB” first, then the box number. Example: 111 Main Street PMB 123.
Foreign Address – Enter the information in the following order: City, Country, Province/ Region, and Postal Code. Follow the country’s practice for entering the postal code. Do not abbreviate the country’s name.
Part I – Withholding Agent
Enter the withholding agent’s name, tax identification number, address, and telephone number.
Part II – Recipient
Enter the name of recipient, DBA (if applicable), tax identification number, and address for the recipient (payee).
If the recipient is a grantor trust, enter the grantor’s individual name and social security number (SSN) or individual taxpayer identification number (ITIN). Do not enter the name of the trust or trustee information. (For
tax purposes, grantor trusts are transparent. The individual grantor must report the income and claim the withholding on the individual’s California tax return.)
If the recipient is a non-grantor trust, enter the name of the trust and the trust’s federal employer identification number (FEIN). Do not
enter trustee information.
If the trust has applied for a FEIN, but it has not been received, zero fill the space for the trust’s FEIN and attach a copy of the federal application behind Form 592-B. After the FEIN is received, amend Form 592-B to submit the assigned FEIN.
Only withholding agents can complete an amended Form 592-B. Upon completion, the withholding agent should provide a copy of the amended Form 592-B to the recipient. If a recipient notices an error, the recipient should contact the withholding agent.
If the recipients are married/RDP, enter only the name and SSN or ITIN of the primary spouse/RDP. However, if the recipients intend to file separate California tax returns, the withholding agent should split the withholding and complete a separate Form 592-B for each spouse/RDP.
Part III – Type of Income Subject to Withholding
Check the box(es) for the type of income subject to withholding.
Part IV – Tax Withheld
Line 1
Enter the total income subject to withholding.
Line 2
Enter the total California tax withheld (excluding backup withholding). The amount of tax to be withheld is computed by applying a rate of 7% on items of income subject to withholding, i.e. interest, dividends, rents and royalties, prizes and winnings, premiums, annuities, emoluments, compensation
for personal services, and other fixed or determinable annual or periodical gains, profits and income. For foreign partners, the rate is 8.84% for corporations, 10.84% for banks and financial institutions, and 12.3% for all others. For pass through entities, the amount withheld is allocated to partners, members,
S corporation shareholders, or beneficiaries, whether they are residents or nonresidents of California, in proportion to their ownership or beneficial interest.
Line 3
Enter the total backup withholding. Compute backup withholding by applying a 7% rate to all reportable payments subject to IRS backup withholding with a few exceptions. For California purposes dividends, interests, and any financial institutions release of loan funds made in the normal course of business are exempt from backup withholding.
Form 592-B 2011 (REV 12-12) Page 3
Instructions for Recipient
This withholding of tax does not relieve you of the requirement to file a California tax return within three months and fifteen days (two months and fifteen days for a corporation) after the close of your taxable year.
You may be assessed a penalty if:
•You do not file a California tax return.
•You file your tax return late.
•The amount of withholding does not satisfy your tax liability.
How to Claim the Withholding
Report the income as required and enter the amount from Form 592-B, Part IV, line 2 on your California tax return as real estate and other withholding from Form(s) 592-B or 593. Attach a copy of Form 592-B to your California tax return. If you received a composite statement from a broker, attach only the Form 592-B information. Make a copy for your records.
If you have an amount in line 3, backup withholding, you must provide us with your TIN before filing your tax return. Using the information provided on this page, contact us as soon as you receive this form. Failure to provide your TIN will result in a denial of your backup withholding credit.
If you are an S corporation, partnership, or LLC, you may either flow-through the entire amount to your shareholders, partners, or members or claim the withholding, to the extent of your outstanding tax liability, on your tax return.
If the withholding exceeds the amount of tax you still owe on your tax return, you must flow-through the excess to your shareholders, partners, or members.
If you do not have an outstanding balance on your tax return, you must flow-through the entire amount to your shareholders, partners, or members. Use Form 592 to flow the withholding to your partners or members.
If you are an estate or trust, you must flow- through the withholding to your beneficiaries if the related income was distributed. Use Form 592 to flow-through the withholding to your beneficiaries. If you did not distribute the income, you must claim the withholding on the fiduciary return, Form 541, California Fiduciary Income Tax Return.
The amount shown as “Total income subject to withholding” may be an estimate or may only reflect how withholding was calculated. Be sure to report your actual taxable California source income. If you are an independent contractor or receive rents or royalties, see your contract and/or Form 1099 to determine your California source income. If you are an S corporation shareholder, partner, member, or beneficiary of an S corporation, partnership, LLC, estate, or trust, see your California Schedule K-1 (100S, 565, 568, 541), Share of Income, Deductions, Credits, etc., issued by that entity to determine your California source income.
Additional Information
For more information or to speak to a representative regarding this form, call the Withholding Services and Compliance’s automated telephone service at: 888.792.4900 or 916.845.4900.
OR write to:
WITHHOLDING SERVICES AND COMPLIANCE FRANCHISE TAX BOARD
PO BOX 942867 SACRAMENTO CA 94267-0651
For all other questions unrelated to withholding or to access the TTY/TDD number, see the information below.
Internet and Telephone Assistance Website: ftb.ca.gov
Telephone: 800.852.5711 from within the United States 916.845.6500 from outside the United States
TTY/TDD: 800.822.6268 for persons with hearing or speech impairments
OR to get forms by mail, write to:
TAX FORMS REQUEST UNIT FRANCHISE TAX BOARD PO BOX 307
RANCHO CORDOVA CA 95741-0307
Asistencia Por Internet y Teléfono
Sitio web:
Teléfono:
800.852.5711 dentro de los
Estados Unidos
916.845.6500 fuera de los Estados
Unidos
TTY/TDD:
800.822.6268 personas con
discapacidades auditivas y del
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Page 4 Form 592-B 2011
Filling out the California 592-B form is an important task for those who have withheld taxes from payments to residents or nonresidents. This form provides essential information about the amounts withheld and ensures compliance with California tax regulations. Below are the steps to complete the form accurately.
Once the form is filled out, it is crucial to keep a copy for your records. This documentation may be needed for future reference or if the Franchise Tax Board requests proof of withholding. Make sure to submit the form in a timely manner to avoid any penalties.
The California Form 592-B is used to report the amount of payments or distributions subject to withholding and tax. It is essential for both residents and nonresidents who receive income from California sources. This form helps ensure that the correct amount of tax is withheld and reported to the state.
Any person or entity that has withheld payments to residents or nonresidents must complete Form 592-B. This includes those who have withheld backup withholding. Additionally, pass-through entities, such as partnerships or S corporations, that have been withheld upon must also use this form to flow-through the withholding credit to their shareholders or partners.
Form 592-B must be provided to each recipient by January 31 following the close of the calendar year. For brokers, the deadline is February 15. If dealing with foreign partners in a partnership or members in an LLC, the form must be provided by the 15th day of the fourth month following the close of the taxable year.
Various types of income are subject to withholding, including:
It’s important to check the applicable boxes on the form to indicate the type of income being reported.
If the withholding agent fails to provide complete and correct copies of Form 592-B by the due date, penalties may apply. The penalties include:
Recipients should report the income as required and enter the amount from Form 592-B on their California tax return. Specifically, they should include the amount listed in Part IV, line 2, as real estate and other withholding. A copy of Form 592-B must be attached to their tax return for proper documentation.
To complete Form 592-B, the following information is needed:
Ensure that all fields are completed accurately to avoid delays or penalties.
Yes, Form 592-B can be provided to recipients electronically. This option is available to streamline the process and is compliant with California's requirements. If you choose to provide it electronically, ensure that you follow the specific guidelines outlined by the Franchise Tax Board.
For additional information, you can visit the California Franchise Tax Board's website at ftb.ca.gov. They offer resources and guidance related to withholding and tax forms. You can also contact their office directly via phone or mail for personalized assistance.
Omitting Taxpayer Identification Numbers (TINs): It is essential to collect TINs from all payees. Failing to do so can lead to complications and potential penalties.
Incomplete Fields: Every section of the form must be filled out completely. Incomplete forms can result in delays and the possibility of fines.
Missing Deadline: Timeliness is crucial. Submitting the form late can incur penalties. Ensure all forms are completed and submitted by the due date.
Incorrect Tax Year: The year indicated in the upper left corner should match the calendar year of the withholding. Errors here can lead to significant issues.
Improper Address Formatting: When entering addresses, especially for foreign entities, follow the specified format. This includes placing "PMB" before the box number and ensuring the country’s name is not abbreviated.
Failing to Check Income Type Boxes: It is critical to check all applicable boxes for the type of income subject to withholding. Neglecting this can result in incorrect reporting.
The California Form 592-B is an important document used to report withholding for payments made to residents and nonresidents. When dealing with such tax matters, several other forms and documents may be required to ensure compliance and proper reporting. Below is a list of forms that are often used in conjunction with the California 592-B form, along with brief descriptions of each.
Understanding these forms and their purposes can greatly assist in navigating the complexities of California tax withholding requirements. Each form plays a vital role in ensuring compliance and proper reporting, ultimately helping both withholding agents and recipients manage their tax obligations effectively.
The California Form 592-B is similar to the IRS Form 1099-MISC, which is used to report payments made to independent contractors and other non-employees. Both forms provide information about the income paid to the recipient and the amount of tax withheld. The 1099-MISC is typically issued by businesses to report payments of $600 or more, while the 592-B serves a similar purpose specifically for California tax purposes. Both forms require the payer to include the recipient's taxpayer identification number (TIN) and provide a summary of the payments made during the tax year.
Another document that resembles the California Form 592-B is the IRS Form W-2. This form is used by employers to report wages paid to employees and the taxes withheld from those wages. Similar to the 592-B, the W-2 includes details about the income earned and the amount of federal, state, and other taxes withheld. While the W-2 is specifically for employee wages, both forms share the purpose of reporting income and tax withholding to the recipient and the tax authorities.
The California Form 592-B is also akin to the IRS Form 1042-S, which is used to report income paid to foreign persons. Both forms deal with withholding tax on payments made to non-residents, but the 1042-S is specifically for payments made to foreign individuals or entities. Each form outlines the type of income subject to withholding and the amount withheld, ensuring compliance with tax obligations for non-resident recipients.
Another comparable document is the California Form 593, which is used to report withholding on the sale of real property. Like the 592-B, the 593 provides details about the transaction and the amount of tax withheld. Both forms are essential for ensuring that the appropriate taxes are collected and reported to the state. However, the 593 is specifically focused on real estate transactions, whereas the 592-B covers a broader range of income types.
The IRS Form 945 is another similar document, which is used to report annual backup withholding. Both the 592-B and the 945 require the reporting of amounts withheld from payments made to recipients. However, the 945 is specifically for backup withholding on payments that are not subject to regular withholding, while the 592-B covers various types of income, including payments to independent contractors and distributions to non-resident partners.
California Form 592-A is also relevant, as it is used for payment vouchers related to foreign partner withholding. Similar to the 592-B, the 592-A ensures that the correct amount of tax is withheld from payments made to foreign partners in a partnership or members in an LLC. Both forms facilitate compliance with California tax laws regarding withholding on payments to non-residents.
Finally, the IRS Form 8862 is another document that shares some similarities with the California Form 592-B. This form is used by taxpayers who have previously been denied the Earned Income Tax Credit (EITC) and want to claim it again. While the primary focus of Form 8862 is on claiming a tax credit, it requires detailed information about income, which can also be found on the 592-B. Both forms aim to ensure accurate reporting and compliance with tax regulations.
When filling out the California 592 B form, it is important to follow specific guidelines to ensure accuracy and compliance. Below is a list of things you should and should not do:
Understanding the California Form 592-B can be challenging, and various misconceptions can lead to confusion. Here are five common misconceptions about this important tax form, along with clarifications to help clear the air.
In reality, this form applies to both residents and nonresidents. It is used to report payments made to individuals living outside California, including those who reside in other states or countries.
This form covers a wide range of income types, not just payments to independent contractors. It includes rents, royalties, distributions to beneficiaries, and even payments to foreign entertainers.
While the form is typically provided to recipients by January 31 of the following year, withholding agents must also keep records and may need to submit related forms throughout the year for various payments.
On the contrary, failing to provide complete and timely forms can result in significant penalties. Withholding agents may face fines for each missed or incorrect form, emphasizing the importance of compliance.
This is incorrect. California has its own backup withholding requirements, separate from federal regulations. Payers must adhere to these rules, which can include withholding a percentage of certain payments to ensure tax obligations are met.
Key Takeaways on Filling Out and Using the California 592 B Form