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Blank California 592 B PDF Form

The California Form 592 B is a tax statement used to report withholding for payments made to both residents and nonresidents. This form is essential for ensuring that the appropriate taxes are withheld from various types of income, including payments to independent contractors and distributions from trusts. Understanding how to accurately complete and submit this form is crucial for compliance with California tax regulations.

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Article Guide

The California Form 592-B plays a crucial role in the state's tax system, particularly for individuals and entities involved in withholding taxes. This form is utilized by withholding agents, such as corporations, partnerships, and trusts, to report amounts withheld from payments made to both resident and nonresident recipients. It provides detailed information about the income subject to withholding, including payments to independent contractors, estate distributions, and rents or royalties. The form also outlines the total tax withheld, which is essential for ensuring compliance with California tax laws. Notably, the form has specific sections that require the withholding agent to provide their identification details, the recipient's information, and the type of income involved. Additionally, it highlights important changes in tax rates and backup withholding requirements, making it essential for withholding agents to stay informed about current regulations. Completing the Form 592-B accurately and submitting it on time is vital, as failure to do so can result in penalties. Understanding the nuances of this form is essential for anyone involved in financial transactions that fall under California's tax jurisdiction.

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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)

SSN or ITIN

Address (suite, room, PO Box, or PMB no.)

 FEIN

 CA Corp no.  SOS ﬁle no.

City

State

ZIP Code

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

7101123

5	Form 592-B 2011 (REV 12-12)

THIS PAGE INTENTIONALLY LEFT BLANK

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:	ftb.ca.gov
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
	habla

Page 4 Form 592-B 2011

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Form Specifications

Fact Name	Description
Purpose	The California Form 592-B is used to report amounts withheld from payments made to both resident and nonresident recipients. It ensures that the correct tax is withheld and reported to the state.
Who Must File	Any person or entity that withholds taxes on payments to residents or nonresidents, including partnerships and S corporations, must complete this form.
Filing Deadline	The form must be provided to recipients by January 31 of the year following the close of the calendar year, with some exceptions for brokers and foreign partners.
Backup Withholding Rate	The current backup withholding rate in California is 7% on reportable payments, unless exempted, such as dividends and interest under certain conditions.
Governing Law	The use and requirements for Form 592-B are governed by California Revenue and Taxation Code Sections 18662 and 18666, which outline withholding obligations for various entities.

California 592 B: Usage Guidelines

Completing the California 592-B form is a straightforward process that requires attention to detail. This form is essential for reporting payments subject to withholding and ensuring compliance with state tax regulations. Below are the steps to fill out the form accurately.

Locate the taxable year section in the upper left corner of the form and enter the calendar year in which the withholding took place.
In Part I, enter the name of the withholding agent, their tax identification number (SSN or ITIN), and their address, including the city, state, and ZIP code. Don’t forget to include a daytime telephone number.
Proceed to Part II and fill in the recipient's name, doing business as (DBA) if applicable, and their tax identification number. Provide the recipient's address as well.
In Part III, check the applicable boxes to indicate the type of income subject to withholding. You may select multiple options if necessary.
Move to Part IV. For line 1, enter the total income subject to withholding. For line 2, report the total California tax withheld, excluding backup withholding. For line 3, provide the total backup withholding amount.
Review all entries to ensure accuracy and completeness. Make sure no fields are left blank.
Sign and date the form at the bottom to certify the information provided is accurate.
Distribute copies of the completed form to the recipient and retain a copy for your records.

After completing the form, it is important to provide it to the recipient by the required deadline, which is typically January 31 of the following year. This ensures that the recipient can accurately report their income on their tax return. Keep in mind that failure to provide the form on time may result in penalties.

Your Questions, Answered

What is the purpose of California Form 592-B?

The California Form 592-B is used to report payments or distributions that are subject to withholding tax for both residents and nonresidents. This form provides recipients with a statement of the amount withheld, which they will need when filing their California tax returns. It is essential for ensuring compliance with California tax laws, especially for payments made to independent contractors, trusts, and foreign entertainers or athletes.

Who is required to complete Form 592-B?

Any person or entity that has withheld taxes on payments to residents or nonresidents must complete Form 592-B. This includes withholding agents such as S corporations, partnerships, LLCs, and trusts. Additionally, if backup withholding has been applied, Form 592-B must also be completed. It is important to provide accurate information to avoid penalties.

When is Form 592-B due?

Form 592-B must be provided to each recipient by January 31 of the year following the close of the calendar year. For brokers, the deadline is February 15. If dealing with foreign partners in a partnership or members of an LLC, the form must be provided by the 15th day of the fourth month following the close of the taxable year. Timely submission is crucial to avoid penalties.

What types of income are subject to withholding reported on Form 592-B?

Various types of income are subject to withholding and should be reported on Form 592-B. This includes payments to independent contractors, rents, royalties, estate distributions, and allocations to foreign entertainers or athletes. Each applicable type of income must be checked on the form to ensure proper reporting.

What happens if Form 592-B is not completed correctly or on time?

Failure to provide complete and accurate Form 592-B can result in penalties. The withholding agent may incur a $50 penalty for each statement not provided by the due date. If the failure is due to intentional disregard of the requirements, the penalty can increase to $100 or 10% of the amount required to be reported, whichever is greater. It is essential to ensure accuracy and timeliness to avoid these penalties.

How does a recipient claim the withholding reported on Form 592-B?

Recipients must report the income as required and include the amount from Form 592-B when filing their California tax return. Specifically, the amount shown in Part IV, line 2 should be entered as real estate and other withholding. It is also necessary to attach a copy of Form 592-B to the tax return. If backup withholding is indicated, recipients must provide their Tax Identification Number (TIN) to ensure they receive the appropriate credit.

Where can I find more information about Form 592-B?

For additional information regarding Form 592-B, individuals can visit the Franchise Tax Board’s website at ftb.ca.gov. They can also contact the Withholding Services and Compliance at 888.792.4900 for automated assistance or 916.845.4900 for direct inquiries. It is advisable to keep informed about any updates or changes to the form and its requirements.

Common mistakes

Missing Taxpayer Identification Numbers: Ensure that you obtain and include taxpayer identification numbers (TINs) for all payees. Failing to do so can lead to complications and delays.
Incomplete Fields: Every field on the form should be filled out completely. Leaving any section blank may result in penalties or the form being rejected.
Timeliness: Submit the form on time to avoid penalties. The deadline for providing Form 592-B to recipients is January 31 of the following year.
Incorrect Tax Year: Verify that the year in the upper left corner matches the calendar year in which the withholding occurred. An incorrect year can lead to misreporting.
Improper Address Formatting: When entering addresses, especially for foreign recipients, follow the required format closely. This includes specifying “PMB” before the box number if applicable.
Failure to Check Income Types: Make sure to check all applicable boxes for the type of income subject to withholding. Omitting this step can result in inaccurate reporting.
Incorrect Tax Calculation: Ensure that the tax withheld is calculated correctly based on the applicable rates. Double-check the amounts entered on lines 1, 2, and 3 for accuracy.
Not Amending When Necessary: If an error is discovered after submission, promptly amend the form. Only the withholding agent can complete this process.
Ignoring Backup Withholding Requirements: Be aware of backup withholding obligations and ensure that you report any applicable amounts. Failure to do so can lead to penalties.

Documents used along the form

The California 592 B form is an essential document used for reporting withholding on payments made to both residents and nonresidents. When dealing with this form, it’s helpful to be aware of other related documents that often accompany it. Each of these forms serves a unique purpose in the tax reporting process, ensuring compliance with California's tax laws.

Form 592: This form is used by pass-through entities to report the total amount of withholding that has been allocated to each partner, member, or beneficiary. It helps in distributing the withholding credits appropriately among stakeholders.
Form 592-V: This payment voucher is utilized to remit withholding payments throughout the year. It’s important for ensuring that the correct amounts are paid to the Franchise Tax Board (FTB) in a timely manner.
Form 592-A: Specifically designed for foreign partners, this form serves as a payment voucher for withholding on distributions to foreign partners or members. It ensures that the tax obligations for these entities are properly managed.
Form 541: This is the California Fiduciary Income Tax Return. Estates and trusts use this form to report income and claim any withholding credits. It’s crucial for fiduciaries managing tax responsibilities on behalf of the beneficiaries.
Form 1099: This form is commonly issued to independent contractors and other service providers. It reports income earned, which may be subject to withholding, and is essential for recipients when filing their tax returns.
Schedule K-1: Issued by partnerships, S corporations, and LLCs, this schedule reports each partner's or shareholder's share of income, deductions, and credits. It is vital for individuals to accurately report their tax liabilities.
Form FTB 1131: This privacy notice informs taxpayers about the collection and use of their personal information by the FTB. It’s important for maintaining transparency and protecting taxpayer rights.

Understanding these forms can simplify the tax filing process and ensure compliance with California tax regulations. Each document plays a role in accurately reporting income and withholding, which is crucial for both individuals and entities involved in financial transactions within the state.

Similar forms

The California 592-B form is important for reporting withholding on payments to residents and nonresidents. Several other forms serve similar purposes in different contexts. Here’s a list of documents that share similarities with the California 592-B form:

Form 1099-MISC: This form is used to report miscellaneous income, including payments made to independent contractors. Like the 592-B, it provides details about the income and tax withheld.
Form 1099-NEC: Specifically for reporting nonemployee compensation, this form is similar to the 592-B in that it tracks payments made to individuals who are not employees, ensuring proper tax withholding.
Form W-2: Used by employers to report wages paid to employees, it also includes information about taxes withheld. Both forms provide necessary data for tax reporting purposes.
Form 1042-S: This form is for reporting income paid to foreign persons, similar to how the 592-B reports withholding for nonresident recipients. It details amounts paid and taxes withheld.
Form 592: This form is used to report withholding for pass-through entities. It is directly related to the 592-B as it flows through the withholding amounts to partners or shareholders.
Form 593: This form reports withholding on the sale of California real property. It is similar to the 592-B as it ensures that tax withholding is properly documented for transactions involving nonresidents.
Form 540NR: This is the California nonresident income tax return. While it is a return rather than a reporting form, it utilizes information from forms like the 592-B to determine tax liability for nonresidents.
Form 941: This form is used by employers to report payroll taxes, including withheld income taxes. It shares the purpose of tracking withheld amounts, similar to the California 592-B.

Dos and Don'ts

When filling out the California 592 B form, there are several important dos and don'ts to keep in mind to ensure accuracy and compliance. Below is a list of these guidelines:

Do ensure that you have the correct taxpayer identification numbers (TINs) for all recipients.
Do complete all required fields on the form to avoid delays or penalties.
Do submit the form by the due date, which is January 31 for most recipients, to prevent penalties.
Do check the year in the upper left corner of the form to ensure it reflects the correct taxable year.
Don't leave any sections blank; incomplete forms can lead to issues with processing.
Don't forget to provide a copy of the form to the recipient, as they need it for their tax return.
Don't mix up the income types; ensure you check the correct boxes for the type of income subject to withholding.

Misconceptions

Understanding the California 592 B form is crucial for compliance. However, several misconceptions can lead to confusion. Here are eight common misconceptions and clarifications regarding the form:

Misconception 1: Only California residents need to file Form 592 B.

This is incorrect. Both residents and non-residents who receive payments subject to withholding must be reported using this form.

Misconception 2: The form is only for independent contractors.

While it includes payments to independent contractors, it also applies to various types of income, including estate distributions and payments to foreign entertainers.

Misconception 3: You do not need to provide a copy of the form to the recipient.

This is false. The withholding agent must furnish a complete and correct copy of Form 592 B to the recipient by the due date.

Misconception 4: Backup withholding does not apply to California taxes.

In fact, California has its own backup withholding requirements, which can apply to certain payments.

Misconception 5: You can file the form at any time during the year.

This is misleading. The form must be provided to recipients by January 31 of the following year, with specific deadlines for brokers and foreign partners.

Misconception 6: The withholding rates are the same for all types of income.

This is not true. Different types of income may have different withholding rates, especially for foreign partners and specific entities.

Misconception 7: You can ignore errors on the form.

Errors must be corrected promptly. Failure to provide accurate information can lead to penalties for the withholding agent.

Misconception 8: Filing Form 592 B eliminates the need to file a California tax return.

This is incorrect. Recipients are still required to file their California tax returns, regardless of the withholding.

Addressing these misconceptions is essential for ensuring compliance with California tax laws. If there are any uncertainties, it is advisable to seek assistance promptly.

Key takeaways

Filling out and using the California 592-B form is essential for reporting income subject to withholding. Here are four key takeaways to consider:

Timeliness is Crucial: Ensure that Form 592-B is provided to each recipient by January 31 following the close of the calendar year. If the recipient is a broker, the deadline shifts to February 15.
Complete All Fields: It is important to fill out every section of the form accurately. Missing information can lead to penalties, so double-check the entries for both the withholding agent and the recipient.
Understand the Types of Income: Familiarize yourself with the various types of income that are subject to withholding. This includes payments to independent contractors, rents, royalties, and distributions to nonresident partners.
Record Keeping is Essential: The withholding agent must retain proof of withholding for at least four years. This documentation should be readily available for review by the Franchise Tax Board if requested.