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Backup withholding for individuals, businesses and government entities.

Effective Jan. 1, payers who are required to withhold and remit backup withholding to the IRS are also required to withhold and remit to the FTB. Payers must withhold and remit 7 percent of a reportable payment when performing federal backup withholding (with certain limited exceptions). If a payer pays California source income to residents or nonresidents at certain minimum levels as required by the IRS, then California backup withholding is required, except for:

* Payments of interest and dividends (reported on IRS Forms 1099-INT, 1099-DIV, 1099-OID and 1099-PATR).

* Any release of loan funds made by a financial institution in the normal course of business.

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Title Annotation:FASBNEWS
Publication:California CPA
Date:Nov 1, 2009
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