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Backup Withholding for Individuals, Businesses, and Government Entities

With certain limited exceptions, we require payers who remit backup withholding to the Internal Revenue Service (IRS) to also withhold and remit to the Franchise Tax Board (FTB). (Revenue and Taxation Code Section 18664)

Payers must withhold and remit 7 percent of reportable income to California when performing federal backup withholding (with certain limited exceptions). If a payer pays income to a nonresident or to a resident at certain minimum levels as required by the IRS, then California backup withholding is required, except for:

  • Payments of interest and dividends (reported on IRS Forms 1099-INT, 1099-DIV, 1099-OID, and 1099-PATR).
  • Any release of loan funds made by a financial institution in the normal course of business.

Instructions for stockbrokers

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When do payers backup withhold

Payers backup withhold when a payee submits an IRS Form W-9 that:

  • Does not provide a taxpayer identification number (TIN).
  • Provides an invalid TIN.
  • Fails to certify exemption from backup withholding.

Priority for withholding - Backup withholding replaces all other types of withholding.

Source of income

  • Backup withholding applies to California residents and nonresidents not providing a TIN.
  • California residents are subject to California backup withholding on all payments received regardless of source.
  • Nonresidents are subject to California backup withholding on payments received from California source income. See FTB Pub. 1017, Resident and Nonresident Withholding Guidelines, for information regarding California source income.

Waivers - There are no waivers for backup withholding.

Real estate withholding - Does not apply to California real estate withholding.

Payees who are exempt

Certain payees are exempt, such as government entities and tax-exempt organizations. To get a complete list, refer to IRS Form W-9.

Forms used to submit backup withholding to FTB

Payers use the following forms, found on our withholding forms and publications page, to report and remit backup withholding:

Form Use When
Form 592, Resident and Nonresident Withholding Statement Submitting resident and nonresident backup withholding information to FTB.
Form 592-V, Payment Voucher for Resident and Nonresident Withholding Remitting resident and nonresident backup withholding to FTB.
Form 592-F, Foreign Partner or Member Annual Return Submitting foreign partner and member backup withholding information to FTB.
Form 592-A, Payment Voucher for Foreign Partner or Member Withholding Remitting foreign partner or member backup withholding to FTB.
Form 592-B, Resident and Nonresident Withholding Tax Statement, or electronic Form 592-B Providing the payee with a year-end information statement.

Other FTB withholding publications

These publications explain the guidelines of resident and nonresident withholding.

  • FTB Pub. 1017, Resident and Nonresident Withholding Guidelines
  • FTB Pub. 1023S, Resident and Nonresident Withholding Electronic Submission Requirements

Federal withholding forms and publications

To get IRS forms, go to

  • Form 1099-MISC, Miscellaneous Income
  • Pub. 1281, Backup Withholding for Missing and Incorrect Name/TIN(s)
  • Form W-2G, Certain Gambling Winnings
  • Form W-9, Request for Taxpayer Identification Number and Certification

If a payer withholds incorrectly

If a payer backup withholds in error or backup withholds too much, then the payer may refund the incorrect amount withheld if payment has not yet been sent to us. The refund must be made prior to the end of the calendar year.

If the payer already sent the incorrect amount to us, then the payer may adjust subsequent remittance of withholding.

How a payee provides their TIN to claim backup withholding

To receive credit for your backup withholding, you must provide us with your TIN (SSN, ITIN, FEIN, or CA Corp Number) before filing your tax return. Contact us as soon as you receive your Form 592-B. Failure to provide your TIN will result in a denial of your backup withholding credit.

The withholding amount shown on your Form 592-B must be claimed on one of the following FTB tax returns, as appropriate:

  • Form 540, California Resident Income Tax Return
  • Form 540NR, California Nonresident or Part-Year Resident Income Tax Return (Long Form)
  • Form 541, California Fiduciary Income Tax Return
  • Form 109, California Exempt Organization Business Income Tax Return
  • Form 100, California Corporation Franchise or Income Tax Return
  • Form 100S, California S Corporation Franchise or Income Tax Return
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