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Changes to 2011 Forms

Updates to the Form 570A on 04/06/2012 –– Nonadmitted Insurance Tax Return

We replaced text on the instructions on:

  1. Page 1, Column 1, What’s New, first paragraph
  2. Page 1, Column 2, What’s New, last paragraph
  3. Page 2, Column 1, Specific Instructions, Line 2
  4. Page 2, Column 2, Part III – Insurance Contracts, Column a
  5. Page 2, Column 3, Part III – Insurance Contracts, Column d, first and second sentence

Previous Version

  1. Thus, if a person is determined to be a California home state insured, then all premiums related to all insurance policies obtained from a nonadmitted insurer are subject to tax, whether or not the insurance coverage is associated with California.
  2. The total gross premium paid or to be paid for all nonadmitted insurance placed in a single transaction with one underwriter or group of underwriters, whether in one or more policies, in that calendar quarter during which the taxable insurance contract or contracts took effect or were renewed, is now the entire gross premium charged on all nonadmitted insurance for the California home state insured.
  3. Line 2 – Enter all gross premiums paid or to be paid by California home state insured for all policies issued by a nonadmitted insurer for coverage both inside and outside of California which were entered into or renewed during the calendar quarter.
  4. Column a – Enter the policy number for each contract.
  5. Column d – Enter the full name of the country or the two letter abbreviation of the state where the risk is located for each contract. If your policy covers more than one state or country, then use additional lines to list the locations of the risk separately.

Revised Version

  1. Thus, if a person is determined to be a California home state insured, then all premiums related to all insurance policies obtained from a nonadmitted insurer are subject to tax, as long as the premiums are for policies related to risks within the United States. This is a change from when California only taxed premiums related to California risk.
  2. The total gross premium paid or to be paid for all nonadmitted insurance placed in a single transaction with one underwriter or group of underwriters, whether in one or more policies, in that calendar quarter during which the taxable insurance contract or contracts took effect or were renewed, is now the entire gross premium charged on all nonadmitted insurance for the California home state insured. Enter only premiums for policies related to risks within the U.S.
  3. Line 2 – Enter all gross premiums paid or to be paid by California home state insured for all policies issued by a nonadmitted insurer for coverage both inside and outside of California which were entered into or renewed during the calendar quarter. Note: Enter only premiums for policies related to risks within the U.S.
  4. Column a – Enter the policy number for each contract. Enter only policies related to risks within the U.S.
  5. Column d – Enter the full name or the two letter abbreviation of the state where the risk is located for each contract. If your policy covers more than one state, then use additional lines to list the locations of the risk separately.

Reason for the changes

FTB’s Legal Division reached a decision to administer RTC Section 13210 with respect to “California home state insured’s” that directly obtain insurance coverage from nonadmitted insurers so that only premiums related to risks within the United States will be subject to the 3% premium tax.

Impact

No tax impact.

Back to Tax Form Changes for 2011


Updates to the Form 570A on 12/28/2011 –– Nonadmitted Insurance Tax Return

We replaced text on:

  1. Form 570-A, Side 1, Line 2
  2. Form 570-A, Side 2, Column D
  3. Form 570-A, Side 2, Column E
  4. Instructions, Page 1, Column 1, Principal place of business
  5. Instructions, Page 1, Column 1, Principal residence
  6. Instructions, Page 2, Column 2, Paragraph 2
  7. Instructions, Page 2, Column 3, Paragraph 1
  8. Instructions, Page 2, Column 3, Paragraph 2

Previous Version

  1. Gross premiums paid or to be paid by California home state insured, with policies that have multistate risks.
  2. d
    State
  3. e
    Total Premium for State
  4. Principal place of business – the state where the insured maintains its headquarters and where the insured’s high-level officers direct, control, and coordinate the business activities; or if the insured’s high-level officers direct, control, and coordinate the business activities in more than one state (outside the U.S.), the state in which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated; or if the insured maintains its headquarters or the insured’s high-level officers direct, control, and coordinate the business activities outside any state, the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.
  5. Principal residence – the state where the insured resides for the greatest number of days during a calendar year; or if the insured’s principal residence is located outside any state (outside the U.S.), the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.
  6. Refunds resulting from returned premiums must be claimed within four years from the date of cancellation or reduction of premium.
  7. Column d – Enter the full name of the country or the two letter abbreviation of the state where the risk is located for each contract. If your policy covers more than one state or country, then use additional lines to list the locations of the risk separately.
  8. Column e – Enter the total premium amount for each contract and each state listed in column d. If your policy covers more than one state, then use additional lines to list the premium for each state separately.

Revised Version

  1. Gross premiums paid or to be paid by California home state insured, including policies with risks outside California.
  2. d
    Location of Risks
  3. e
    Total Premium
  4. Principal place of business – the state where the insured maintains its headquarters and where the insured’s high-level officers direct, control, and coordinate the business activities; or if the insured’s high-level officers direct, control, and coordinate the business activities in more than one state, the state in which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated; or if the insured maintains its headquarters or the insured’s high-level officers direct, control, and coordinate the business activities outside the U.S., the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.
  5. Principal residence – the state where the insured resides for the greatest number of days during a calendar year; or if the insured’s principal residence is located outside the U.S., the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated
  6. Refunds resulting from returned premiums must be claimed within four years from the original due date of the return, four years from the date the return was filed or one year from the date of cancellation or reduction of premium, whichever is later.
  7. Column d – Enter the full name of the country or the two letter abbreviation of the state where the risk is located for each contract. If your policy covers more than one state or country, then use additional lines to list the locations of the risk separately.
  8. Column e – Enter the total premium amount for each contract.

Reason for the changes

Changes needed to correct the 2011 Form 570-A due to Assembly Bill 315.

Impact

There is no tax impact.

Back to Tax Form Changes for 2011