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Backup withholding from Form 592-B.

Dodgerfan
Level 3

I am preparing a 2019 Form 1040. My client has state backup withholding which appears on Form 592-B. which I entered in screen 55.012. The diagnostic says that the client needs to provide the FTB with their TIN prior to filing the tax return in order to receive credit for the backup withholding.  How do I do that?  I read that Form 592-B is no longer provided to the FTB by the withholding agent.

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George4Tacks
Level 15

I am just another user, so not an authority. I am guessing that it would not be a bad idea to attach the 592-B.  Be sure to mark the NO button for Send PDF attachment with federal return.  

I find it interesting that the diagnostics  page https://proconnect.intuit.com/community/individual/help/ca-diagnostic-ref-15323-credit-for-backup-wi... makes a link with another software filing service. 

FTB 540 Instructions state: 

"Claiming withholding amounts:

  • Go to ftb.ca.gov and login or register for MyFTB to verify withheld amount or see instructions for line 71 of Form 540. Confirm only California income tax withheld is claimed.
  • Verify real estate or other withholding amount from Form 592-B, Resident and Nonresident Withholding Statement, and Form 593, Real Estate Withholding Tax Statement. See instructions for line 73 of Form 540." 

AND

"Line 73 – Withholding (Form 592-B and/or 593)

Enter the total of California withholding from Form 592-B and Form 593. Attach a copy of Form(s) 592-B and 593 to the lower front of Form 540, Side 1.

If your filing status changed after escrow closed and before filing your California tax return, please contact us at 888-792-4900, prior to filing your California tax return, for instructions on how to claim your withholding credit.

Caution: Do not include withholding from federal Form(s) W-2, W-2G, or 1099, or NCNR member’s tax from Schedule K-1 (568), line 15e on this line."


ex-AllStar

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6 Replies 6
George4Tacks
Level 15
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Dodgerfan
Level 3

I entered everything required and I can file the returns. However the notification to the FTB is what concerns me.

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George4Tacks
Level 15

Does the 592-B have the taxpayer SSN or EIN on it? If so, then the FTB has been notified. 

I can not repeat your diagnostic message. Can you copy it? Does it have a number?


ex-AllStar
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Dodgerfan
Level 3

The Form 592-B has the taxpayer SS# on it. However CA Diagnostic Ref #15323 states that

"To receive credit for backup W/H shown on form 592-B, you must provide the FTB with your TIN

before filing your tax return. Failure to Provide your TIN will result in a denial of your backup W/H

Credit."

The Intuit Lacerte Tax Solution Description states:

"In addition, when filing Form 592 with the FTB, the Withholding Agent is NO Longer required to submit a Form 592-B to the FTB for each payee. However, withholding agents must continue to provide the payees with paper Forms 592-B at the end of the year."

The FTB is now requiring taxpayers to provide the information instead of the withholding agents.

Does this mean that we need to attach Form 592-B to the tax return?

 

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George4Tacks
Level 15

I am just another user, so not an authority. I am guessing that it would not be a bad idea to attach the 592-B.  Be sure to mark the NO button for Send PDF attachment with federal return.  

I find it interesting that the diagnostics  page https://proconnect.intuit.com/community/individual/help/ca-diagnostic-ref-15323-credit-for-backup-wi... makes a link with another software filing service. 

FTB 540 Instructions state: 

"Claiming withholding amounts:

  • Go to ftb.ca.gov and login or register for MyFTB to verify withheld amount or see instructions for line 71 of Form 540. Confirm only California income tax withheld is claimed.
  • Verify real estate or other withholding amount from Form 592-B, Resident and Nonresident Withholding Statement, and Form 593, Real Estate Withholding Tax Statement. See instructions for line 73 of Form 540." 

AND

"Line 73 – Withholding (Form 592-B and/or 593)

Enter the total of California withholding from Form 592-B and Form 593. Attach a copy of Form(s) 592-B and 593 to the lower front of Form 540, Side 1.

If your filing status changed after escrow closed and before filing your California tax return, please contact us at 888-792-4900, prior to filing your California tax return, for instructions on how to claim your withholding credit.

Caution: Do not include withholding from federal Form(s) W-2, W-2G, or 1099, or NCNR member’s tax from Schedule K-1 (568), line 15e on this line."


ex-AllStar

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Dodgerfan
Level 3

Thank you for your help. I agree that attaching the 592-B is the best way to resolve this issue.

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