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FTB Offers Alternative to American Indian Tribes Submitting Per Capita Income Withholding

May 2009 - Currently, when American Indian Tribes withhold on the per capita income for their California resident tribal members, it is sent to the Employment Development Department (EDD). Unfortunately, sometimes the tribal members file their California tax return with us and their credit is disallowed due to difficulties transferring this unique type of withholding between EDD and us. This affects the tribal members because it results in erroneous notices of tax due, delayed refunds, and unnecessary contacts.

As an alternative to submitting the withholding to EDD, tribes may now send the withholding directly to us with 2009 Form 592, Quarterly Resident and Nonresident Withholding Statement. Form 592 includes a Schedule of Payees section to identify the payment recipients (payee) and the income and withholding amounts. This schedule allows us to allocate the withholding payments to the taxpayer (payee) upon receipt of the completed Form 592.

The tribe will also need to provide a 2009 Form 592-B, Resident and Nonresident Withholding Tax Statement to the tribal member. The member will include the 592-B in their 2009 Form 540, California Resident Income Tax Return to claim their withholding credit. This will ensure the tribal member receives the appropriate amount of credit at the time of filing.

If a tribe chooses to implement this process, 2009 Form 592 will replace EDD Form DE 6 and the current process of remitting to EDD. Currently, several Indian tribes successfully use Form 592 to submit other types of withholding to us. 

In April, we began reaching out to American Indian Tribes located within California to explain this alternative process and the benefits.

For more information on non-wage withholding visit ftb.ca.gov and search for withholding.