Cal. Code Regs. Tit. 18, § 19002 - Credit for Tax Withheld

(a) The tax withheld under Article 5 (commencing with Section 18661) of the Revenue and Taxation Code or Section 13020 of the Unemployment Insurance Code is allowable as a credit against the tax of the income on a return for the taxable year with respect to the amount withheld, as set forth in FTB Form 592-B, Resident and Nonresident Withholding Tax Statement, or any successor form designated by the Franchise Tax Board on its website at www.ftb.ca.gov ("FTB Form 592-B") and FTB Form 593, Real Estate Withholding Tax Statement, or any successor form designated by the Franchise Tax Board on its website at www.ftb.ca.gov ("FTB Form 593"). The required information specified in FTB Form 592-B and FTB Form 593 is set forth in subsection (f) and subsection (g), respectively, herein. If the tax has actually been withheld at the source, a credit or refund shall be made to the recipient of the income even though the tax has not been paid over to the Franchise Tax Board. For purposes of the credit, the recipient of the income is the taxpayer who received amounts that were subject to withholding, as reported on FTB Form 592-B and FTB Form 593, and included those income amounts on a return. Under Revenue and Taxation Code section 19307, no refund or credit of tax withheld and reported on FTB Form 592-B and FTB Form 593 or estimated tax paid can be allowed unless and until a taxpayer has filed a valid return for the year.

(b) Payments to Pass-Through Entities. Tax withheld from payments to pass-through entities must be passed through to the entity's owners and reported on FTB Form 592-B according to their ownership interest in the pass-through entity, except that owners of pass-through entities may authorize the pass-through entity to use some or all of the withholding credit to satisfy the entity-level tax of the pass-through entity due for the taxable year. No refund of tax withheld from payments to pass-through entities is allowed. Any credit passed through and reported on FTB Form 592-B must be claimed by the entity's owners on their respective tax returns.

(c) Special Rule for Pass-Through Entity Year-End Distributions. Subject to the authorization of the owners of the pass-through entity, taxes withheld on FTB Form 592, Resident and Nonresident Withholding Statement, or any successor form designated by the Franchise Tax Board on its website at www.ftb.ca.gov ("FTB Form 592") and FTB Form 592-V, Payment Voucher for Resident and Nonresident Withholding, or any successor form designated by the Franchise Tax Board on its website at www.ftb.ca.gov ("FTB Form 592-V"), from payments made after the close of the taxable year can be applied as payments either to the previous taxable year or to the following taxable year to the extent those payments represent income required to be included in the return for that respective taxable year. The required information specified in FTB Form 592 and FTB Form 592-V is set forth in subsection (h) and subsection (i), respectively, herein.

(d) Date of Credit.

(1) For purposes of computing the statute of limitations on refund claims, the date of all withholding payments is deemed to be the original due date for filing the income tax return.

(2) For purposes of computing the estimated tax penalty, the date the withholding is credited to the account is deemed to be the date withheld on FTB Form 592 and FTB Form 592-V. For individuals, withholding is treated as paid on each applicable estimated tax payment due date, unless an individual taxpayer elects to treat all withholding of tax at source for the year as paid on the date withheld. (For further discussion of the date for the crediting of the estimated tax payments, see Internal Revenue Code section 6654, subsection (g).)

(3) For purposes of computing interest and penalties imposed under Revenue and Taxation Code section 18668, withholding payments are credited on the date such payments are remitted to the Franchise Tax Board on FTB Form 592, FTB Form 592-V, FTB Form 593, and FTB 593-V, Payment Voucher for Real Estate Withholding, or any successor form designated by the Franchise Tax Board on its website at www.ftb.ca.gov ("FTB Form 593-V"). The required information specified in FTB Form 593-V is set forth in subsection (j), herein.

(e) Federal Regulations Applicable. Regulations issued under the California Revenue and Taxation Code shall apply to the crediting of tax withheld, and, to the extent applicable, Internal Revenue Code sections 31 and 6513 and accompanying regulations.

(f) FTB Form 592-B, Resident and Nonresident Withholding Tax Statement. See Regulation section 18662-8, subsection (m).

(g) FTB Form 593, Real Estate Withholding Tax Statement. See Regulation section 18662-3, subsection (j).

(h) FTB Form 592, Resident and Nonresident Withholding Statement. See Regulation section 18662-4, subsection (i).

(i) FTB Form 592-V, Payment Voucher for Resident and Nonresident Withholding. See Regulation section 18662-8, subsection (j).

(j) FTB Form 593-V, Payment Voucher for Real Estate Withholding. See Regulation section 18662-3, subsection (k).

Notes

Cal. Code Regs. Tit. 18, § 19002

1. New section filed 3-10-2014; operative 7-1-2014 (Register 2014, No. 11).

Note: Authority cited: Section 19503, Revenue and Taxation Code. Reference: Section 19002, Revenue and Taxation Code.

1. New section filed 3-10-2014; operative 7-1-2014 (Register 2014, No. 11).