Form 592 Draft - Nonresident Withholding Annual Return

Instructions for Form 592

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

What’s New

partnership’s taxable year. If all the partners are

Magnetic media is required if you withheld on

foreign, Form 592 must be filed on or before

250 or more payees.

Round Cents to Dollars – Beginning with the

the 15th day of the 6th month after the close of

Part I

– Enter the withholding agent’s name,

2007 tax forms, round cents to the nearest

the partnership’s taxable year.

ID number, address, and contact person

whole dollar. For example, round $50.50 up to

Send any payment due, Form 592, and

information. If your entity is an S corporation,

$51 or round $25.49 down to $25.

Forms 592-B to:

partnership, LLC, estate, or trust that was

General Information

withheld upon by another entity and you are

FRANCHISE TAX BOARD

flowing through the withholding credit to

For California withholding purposes only, a

PO BOX 942867

your S corporation shareholders, partners,

reference in these instructions to:

SACRAMENTO CA 94267-0651

members, or beneficiaries, enter your entity’s

• “Nonresident” includes individuals who are

Magnetic Media Requirements

name, ID number, address, and contact person

not residents of California, corporations not

Form 592-B information must be filed with

information in the withholding agent area.

qualified through the California Secretary of

the FTB via magnetic media instead of paper

Part II

– Complete Part II only if you withheld

State (SOS) to do business in California or

when the number of Forms 592-B is 250 or

on payments to nonresidents. If you are

having no permanent place of business in

more. However, withholding agents must

an S corporation, partnership, LLC, estate,

California, partnerships, or limited liability

continue to provide vendors/payees with paper

or trust that was withheld upon by another

companies (LLCs) with no permanent place

Forms 592-B. Complete Form 592 and send

entity and you are filing Form 592 only to

of business in California, any trust without

the original Form 592 with any payment to the

flow the withholding to your S corporation

a resident grantor, beneficiary, or trustee,

address shown on the Form 592 and separately

shareholders, partners, members, or

or estates where the decedent was not a

send a copy of Form 592 (marked “copy” at

beneficiaries, skip Part II and go to Part III.

California resident.

the top) with the disk to:

• “Foreign” refers to non-U.S.

Type of Income – Check the box(es) that

WITHHOLDING SERVICES AND COMPLIANCE

reflect the type of income withheld upon.

For information on the withholding

FRANCHISE TAX BOARD

requirements or to send withholding payments

Line – Enter the number of Forms 592-B

PO BOX 942867

during the year, get Form 592-A, Nonresident

attached for payees you withheld upon. There

SACRAMENTO CA 94267-0651

Withholding Remittance Statement.

should be only one Form 592-B for each payee

If you are the preparer for more than one

withheld upon.

Purpose

withholding agent, provide a separate

Line 2 – Enter the total amount of California

Use Form 592, Nonresident Withholding

Form 592 and disk for each withholding agent.

source income subject to withholding.

Annual Return, to report the total withholding

For the required file format and record layout,

for the year under California Revenue and

get FTB Pub. 1023F, Nonresident Withholding

Line 3 – Enter the total amount withheld.

Taxation Code (R&TC) Sections 18662 and

Magnetic Media Requirements.

Line 4 – List the date and amount of each

18666. Form 592 is also a transmittal form for

payment previously sent to the FTB for the

Interest and Penalties

Form(s) 592-B, Nonresident Withholding Tax

calendar year. Enter the total of these payments

Interest on late payments is computed from

Statement. Also, Form 592, with Forms 592-B,

on line 4.

the due date of the withholding to the date

is used by pass-through entities to flow through

Line 5 – Subtract line 4 from line 3 and enter

paid. Failure to withhold may result in the

withholding credit to their S corporation

the balance due. If less than zero, enter -0-.

withholding agent being personally liable

shareholders, partners, members, or

Attach a check or money order for the full

for the amount of tax that should have been

beneficiaries. Real Estate Withholding should

amount payable to the “Franchise Tax Board.”

withheld and for interest and penalties.

not be reported on a Schedule K-1 or this form.

Write the withholding agent’s ID number and

• Failure to provide correct Forms 592-B

Do not use Form 592 if:

“2007 Form 592” on the check or money order.

to the FTB by the due date may result in

• You are the buyer or escrow person

Part III

penalties up to $100 per Form 592-B.

– Complete Part III only if either of

withholding on the sale of real estate. Use

• Failure to provide correct Forms 592-B to

the following apply:

Form 593, Real Estate Withholding Tax

the payees by the due date may result in

• You are an S corporation, partnership, or

Statement, to remit and report real estate

penalties up to $100 per Form 592-B.

LLC and you were withheld upon by another

withholding.

entity.

• You already paid the withholding with

Specific Instructions

Form 594, Notice to Withhold Tax at Source,

• You are an estate or trust, you were withheld

Private Mail Box

upon by another entity, and you distributed

for a particular engagement.

Include the Private Mail Box (PMB) in the

the related income in the current year.

Common Errors/Helpful Hints

address field. Write the acronym “PMB” first,

Line 6 – Enter the number of additional

If you are filing Form 592 only to flow through

then the box number. Example: 111 Main

Forms 592-B that you have prepared to reflect

withholding to your S corporation shareholders,

Street PMB 123.

how the amount withheld on your entity

partners, members, or beneficiaries:

Nonresident Withholding (Side )

has been allocated to your S corporation

• Enter your information in Part I as the

shareholders, partners, members, or

Year – Make sure the year in the upper left

withholding agent. Do not enter the name or

beneficiaries. The credit must be allocated

corner of Form 592 represents the calendar

ID number of the entity which withheld on

to all S corporation shareholders, partners,

year in which the withholding took place. If a

you.

members, or beneficiaries whether residents or

partnership’s, LLC’s, S corporation’s, or trust’s

• Skip Part II and go to Part III.

nonresidents according to their interests in your

current distribution represents prior year

entity.

When and Where to File

California source income, go to our Website

at and get the Form 592 that

Example – You are a partnership with four

For withholding on independent contractors,

represents the year the income was earned. In

partners. Three are California residents and

recipients of rents and royalties, domestic

addition, attach a letter to Form 592 explaining

one is a nonresident. Since you did not make

nonresident S corporation shareholders,

that the distribution took place in the current

any distributions during the year, you did not

partners, and beneficiaries of estates and trusts,

withholding year, but was source income from

withhold on the nonresident partner. However,

file Form 592, Side 1 on or before January 31

a prior year.

you were withheld upon by another withholding

following the close of the calendar year.

agent. The amount withheld on you must be

Form 592-B Type – Check one of the two

For withholding on foreign partners, file

allocated to all four partners according to

boxes to show how you are providing the

Form 592, Side 2 on or before the 15th day

their partnership interests. Since none of your

Form 592-B information to FTB.

of the 4th month following the close of the

Form 592 Instructions 2007 Page

Form 592 Draft - Nonresident Withholding Annual Return - 2007 Page 4

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