2025 Instructions for Form 593-V

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A: Form 593 imposes a withholding obligation on the buyer. The buyer is responsible for withholding a portion of the total sales price and remitting it to the California Franchise Tax Board (FTB). The seller then claims this withheld amount as a credit when filing their state income tax return.
Form 593-V is a payment voucher used to submit estimated tax payments to the Franchise Tax Board (FTB) in California. It must include the taxpayers name and address, the tax year for which the payment is being made, the type of tax being paid, the amount of payment, and the payment method.
For the State, the law is written such that all real property being sold requires the payment of tax at the close of escrow in an amount equal to 3.33% of the Sales Price. An Alternative Calculated Amount can also be used.
Any remitter (individual, business entity, trust, estate, or REEP) who withheld on the sale/transfer of California real property must file Form 593 to report the amount withheld. If this is an installment sale payment after escrow closed, the buyer/transferee is the responsible person.
The withholding is 3 1/3% (. 0333) of the down payment during escrow. Buyers/Transferees are required to withhold on the principal portion of all payments made following the close of the real estate transaction unless an approval letter for the elect-out method is received.

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To claim the withholding credit, report the sale or transfer as required and enter the amount from line 5 on the withholding line on your tax return, Withholding (Form 592-B and/or 593). Attach one copy of Form(s) 593, to the lower front of your California tax return.
Exemptions: If the sales price is $100,000.00 or less, the exemption is automatic, no form needs to be completed. The Seller has owned and used the property as his principal residence at least 2 out of the 5 year period right before the sale.
California Withholding Tax at Escrow Closing The form asks whether there is a capital gain on the sale. If so, the California FTB will generally withhold 3.33% of the gross sale price as an advance payment to the state on the capital gain on the sale.

2025 form 593 instructions