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S Corporations – New Withholding Rule for the 2009 Form 100S

Beginning tax year 2009, S corporations may claim withhold at source on their S corporation return, but not in excess of their tax liability. Since S corporations are taxed at the entity level, they can choose to:

  • Allocate the withholding credit to their S corporation shareholders.
  • Claim the withholding on the S corporation tax return (not to exceed the amount of tax).
  • Use a combination of both the above.

S corporations may not receive a refund of withholding on Form 100S.

Next Step-Allocating Withhold at Source

Any remaining withhold at source credit in excess of the tax liability must be allocated to the S corporation shareholders using Form 592.

Need more information about withholding?

Web: Go to and search for nonresident withholding
Phone: Within the U.S., call: 888.792.4900
Outside the U.S., call: 916.845.4900
Fax: 916.845.9512

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