California Form 570 Draft - Nonadmitted Insurance Tax Return

Instructions for Form 570

Nonadmitted Insurance Tax Return

References in these instructions are to the California Revenue and Taxation Code (R&TC) and the California Insurance Code.

General Information

C Tax Rate

• Call the FTB for information about the

processing of the return or the status of any

Round Cents to Dollars – Round cents to

The tax rate is three percent (.03). This rate

related refund or payments.

the nearest whole dollar. For example, round

is applied to the gross premium paid or to

• Respond to certain FTB notices about math

$50.50 up to $51 or round $25.49 down to

be paid, less premiums returned because

errors, offsets, and return preparation.

$25. If you do not round, the Franchise Tax

of cancellation or reduction of premium on

• The corporation is not authorizing the paid

Board (FTB) will disregard the cents. This helps

which a tax has been paid. Do not include a

preparer to receive any refund check, bind

process the return quickly and accurately.

stamping fee.

the corporation to anything (including

Private Mail Box

any additional tax liability), or otherwise

D When and Where to File

Include the Private Mail Box (PMB) in the

represent the corporation before the FTB.

address field. Write “PMB” first, then the box

File Form 570 on or before the first day of the

The authorization will automatically end no

number. Example: 111 Main Street PMB 123.

third month following the close of any calendar

later than the due date (without regard to

quarter during which a nonadmitted insurance

extensions) for filing the corporation’s your

A Purpose

contract took effect or was renewed:

2009 tax return. If the corporation wants to

Use Form 570, Nonadmitted Insurance Tax

expand the paid preparer’s authorization or

Contract effective date

Return due date

Return, to determine the tax on premiums

revoke the authorization before it ends, get

January-March

June 1

paid or to be paid to nonadmitted insurers on

form FTB 3520, Power of Attorney Declaration

April-June

September 1

contracts covering risks in California. Also,

for the Franchise Tax Board.

July-September

December 1

use Form 570 to file an amended return.

October-December

March 1

Specific Line Instructions

See Section E, Amended Returns, for more

Mail Form 570 and payment to:

information.

Tax Computation

FRANCHISE TAX BOARD

Do not show net or negative amounts on

B Who Must Pay Nonadmitted

PO BOX 942867

line 1 through line 5 to account for returned

SACRAMENTO CA 94267-0651

Insurance Tax

premiums. See line 6 for returned premiums.

The tax is imposed on any corporation,

E Amended Returns

Only use line 1 through line 5 to report taxable

partnership, limited liability company,

premiums paid or to be paid during the

Use Form 570 to file an amended return. File

individual, society, association, organization,

calendar quarter.

an amended return only to correct an error on

governmental or quasi-governmental

Line 1 – Enter premiums paid or to be paid to

the original return.

entity, joint stock company, estate or trust,

a nonadmitted insurer on risks located entirely

receiver, trustee, assignee, referee, or any

Check the “Amended” box at the top of the

within California for contracts entered into or

other person acting in a fiduciary capacity

form. Attach a copy of the original return

renewed during the calendar quarter.

who independently purchases or renews

behind the amended return and write “copy”

Line 2a – Enter the total premiums paid or to

an insurance contract during the calendar

in red across the face of the original return.

be paid on contracts covering risks located

quarter from an insurer, including wholly-

When completing line 1 through line 16 of the

within and outside of California for contracts

owned subsidiaries, not authorized to transact

amended return, use the amounts that should

entered into or renewed during the calendar

business in California.

have been reported on the original return.

quarter.

If you do not know if the insurer is authorized

Amended returns must be filed within four

Line 2b – Enter the amount of premiums on

to conduct business in California, call the FTB

years of the original due date or within one

line 2a allocated to California. You must attach

Nonadmitted Insurance Desk at 916.845.4098

year from the date of the overpayment,

a schedule showing how you determined the

(not toll-free).

whichever period expires later.

allocation. Include the method used for the

The tax will not be imposed on any of the

Do not file an amended return to claim

allocation (such as property value, sales, or

following:

returned premiums. See the Specific Line

number of employees).

Instructions for line 6.

• Insurance coverage for which a tax on the

The amount of premiums allocated to California

gross premium is due or has been paid by

is determined by the proportion that the risk in

F Third Party Designee

surplus line brokers pursuant to Insurance

California bears to the total risk. Use any single

Code Section 1775.5 (surplus lines tax).

If the corporation wants to allow the FTB to

standard rating method in use in all states or

• Gross premiums on businesses governed

discuss its 2008 return with the paid preparer

countries where the insurance applies or, with

by provisions of Insurance Code

who signed it, check the “Yes” box in the

prior approval of the FTB, any other reasonable

Section 1760.5 (reinsurance of the liability

signature area of the return. This authorization

basis.

of an admitted insurer and marine, aircraft,

applies only to the individual whose signature

Allocate each contract individually if more

and interstate railroad insurance).

appears in the “Paid Preparer’s Use Only”

than one contract was entered into or renewed

• Insurance coverage for which a tax on the

section of the return. It does not apply to the

during the calendar quarter.

gross premium is due or has been paid by

firm, if any, shown in that section.

Line 6 – Enter three percent (.03) of the

risk retention groups pursuant to Insurance

If the “Yes” box is checked, the corporation is

Code Section 132.

premiums returned during the calendar

authorizing the FTB to call the paid preparer

quarter because of cancellation or reduction of

Agents or brokers filing a return on behalf of

to answer any questions that may arise during

premiums on which nonadmitted insurance tax

the insured must enter the requested informa-

the processing of its return. The corporation is

was paid.

tion in the space below line 16.

also authorizing the paid preparer to:

Enter the quarter that the returned premiums

• Give the FTB any information that is

were originally taxed. If the returned premiums

missing from the return

are from more than one quarter or policy, attach

a schedule showing the amount of returned

premiums from each quarter and/or policy.

Form 570 Instructions

2008 Page 1

California Form 570 Draft - Nonadmitted Insurance Tax Return - 2008 Page 3

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