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Top Ten Real Estate Withholding Errors That Delay Document Processing and Payment Allocation

Category Error Solution
Forms Filed incorrect taxable year Form 593. File the correct taxable year Form 593. Ensure that the taxable year matches the income year on the top left of Form 593.
Form fields left blank or incorrectly entered. Enter information into all applicable fields completely and accurately. Enter your phone number so we can reach you directly if we discover an error or omission.
Entered multiple or unrelated sellers on one withholding form. File a separate withholding form for each of the sellers (other than joint filers) to allocate the proportional share of withholding.
Sent unnecessary paperwork to Franchise Tax Board (FTB). Send us the required forms only. Cover letter, closing statement, and form instruction documents are generally not necessary to allocate withholding to taxpayers.
Sent Form 593-C and Form 593-E to allocate withholding. Do not send us Form 593-C, Real Estate Withholding Certificate, and Form 593-E, Real Estate Withholding - Computation of Estimated Gain or Loss, unless we request them. Sellers should retain Form 593-E for five years, and escrow persons should retain Form 593-C for five years.
Entered incorrect withholding agent or seller. Enter the withholding agent as the individual or entity who withheld and sent the payment to us. Enter the seller as the entity or individual named on the title.
Identification Omitted or entered incorrect tax identification numbers on Form 593. Enter the correct social security number, individual taxpayer identification number, or federal employer identification number to avoid processing delays.
Sent non-real estate related payments. Do not send lien or bill payments when you send real estate withholding payments. For additional information on payoff amounts for liens, call us at 916.845.4350.
Payments No information sent with your payment. Send your payment using Form 593-V, Payment Voucher for Real Estate Withholding. Enter the same withholding agent information as you entered on Form 593. Or, if eligible, send your payment using Electronic Funds Transfer (EFT). For more information on EFT, go to ftb.ca.gov and search for EFT, or call 916.845.4025.
One payment for multiple transactions does not equal the amount you entered on the withholding forms you submitted. Ensure the payment you send for multiple transactions equals the total amount you enter on the withholding forms you submit.

For additional information on real estate withholding, go to ftb.ca.gov and search for real estate withholding.

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Last Updated: ised 04/2014

 

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