Top 10 questions for Form 593, Real Estate Withholding Statement July 2020 Tax News

On January 1, 2020, our new Form 593, Real Estate Withholding Statement went live. The new form is a combination of the prior:

• Form 593, Real Estate Withholding
• Form 593-C, Real Estate Withholding Certificate
• Form 593-E, Real Estate Withholding - Computation of Estimated Gain or Loss
• Form 593-I, Real Estate Withholding Installment Sale Acknowledgement

All essential information from the forms was consolidated into the new Form 593.

These are the top 10 questions we have received to date from withholding agents regarding the new Form 593.

1. Can someone without a social security number (SSN) complete the new Form 593?

   Yes, the Form 593 can be completed without an SSN. However, if an individual does not have an SSN/ITIN, they cannot meet a full or partial exemption in Part III or IV of the form and withholding is due. The seller will have to contact FTB to provide an SSN/ITIN after they obtain one.

2. Why does Form 593 require the escrow company to be the Remitter?

   The remitter has been defined as the person who will send the tax withheld on any disposition from the sale or exchange of California real estate and file the prescribed forms on the buyer’s / transferee’s behalf (18 CCR section 18662-2(v)). Typically, the REEP is the individual who remits the form and tax withheld to the Franchise Tax Board, and should identify themselves as the remitter.

3. Is the Buyer’s signature required for every real estate transaction?

   No, the Buyer’s signature is required only when the transaction is an Installment Sale.

4. Is the Remitter required to send a Form 593 for every real estate transaction?

   Yes, Form 593 must be submitted for every real estate transaction, unless an automatic exemption applies under 18 CCR section 18662-3(d)(1).

5. In an installment sale, during escrow, would the Remitter complete the Buyer's information in Part I as the Remitter instead of REEP?

   During escrow, the remitter would be the REEP as they are the one submitting the payment and Form 593. The remitter is the person who will remit the tax withheld on any disposition from the sale or exchange of CA real estate and file the prescribed forms on the buyer’s/transferee’s behalf. (18 CCR section 18662-2(v)) Post escrow, the buyer would likely be the remitter.

6. Are electronic signatures accepted?

   Yes. We accept DocuSign, wet signatures, and scanned/fax signatures.

7. Explain how and when Form 593 is to be submitted? Can they be submitted in bulk each month or should they be sent in individually?

   The forms should be submitted by mail. You can only submit electronically if you are authorized to submit via SWIFT. The forms are due the 20th day of the month following the close of escrow. It is up to each business as to whether they want to submit all Form 593s in one batch or individually.

8. Where can we overnight Form 593?

   WITHHOLDING SERVICES AND COMPLIANCE MS F182
   FRANCHISE TAX BOARD
   PO BOX 942867
   SACRAMENTO CA 94267-0651

9. If the Buyer is required to sign, can they sign in counterpart?

   Yes, but we ask that only one Form 593 be submitted per transaction.

10. Under what circumstance is the seller’s signature required?

    We require a Seller’s signature in all circumstances.

    Visit our website at ftb.ca.gov for more information about real estate withholding.