Trust and estate withholding
Withholding is required on distributions made by a trust to a nonresident unless at least one trustee is a California resident. Provide Form 590, Withholding Exemption Certificate, to certify their resident status.
If the trust receives withholding from the sale of real estate, the trust must file Form 592, Resident and Nonresident Withholding Statement, to allocate the related withholding credit to the beneficiaries reporting the income from the sale.
There is no provision in the law to grant a withholding exemption to an estate because the decedent was a California resident. However, if the property being sold qualifies as the decedent’s principal residence, withholding is not required.
Withholding by another entity
Trusts and estates that have been withheld upon by another entity or are passing a withholding credit to its beneficiaries from the sale of real estate must do the following:
- Use Form 592 to pass-through the withholding credit to their California resident and nonresident beneficiaries..
- Provide California resident and nonresident beneficiaries with either an electronic Form 592-B or a printed Form 592-B, Resident and Nonresident Withholding Tax Statement, at the end of the calendar year to show the total amount distributed to them and the total credit withheld.
For withholding forms, go to Forms and Publications.
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Last Updated: 02/28/2018