Revenue Backup Withholding REV266

This program calculates backup withholding and reports on Detail Sales Ledger (DSL) items that are subject to withholding for State Backup Withholding, Federal Withholding (FD), and Foreign Owner Withholding (FOW). Currently, the only state with backup withholding is California. In Post mode, Detail Sales Ledger (DSL) items are created and General Ledger transactions are created which are then processed by Revenue Check Processing - REV200. Before you process in Post mode, run the process in Verify mode to obtain summary and/or detail reports of the Detail Sales items subject to withholding. REV266 Revenue Backup Withholding must be run before running Revenue Withholding - REV268.  Please see the documentation for Revenue Withholding Defaults - REV298 for setup and processing logic.

Overview

CA Backup Withholding

• Payers that are required to withhold and remit backup withholding to the IRS are also required to withhold and remit to the State of California Franchise Tax Board.

• Payers must withhold and remit 7 percent of reportable income to California when performing federal backup withholding.  

• Backup withholding replaces all other types of withholding.

• Backup withholding applies to VA residents, and non-residents not providing a TIN.

• CA residents are subject to CA backup withholding on all payments received regardless of source.

• Non-residents are subject to CA backup withholding on payments received from California source.

Federal/Foreign Withholding

A federal law is included for Federal withholding for owners with no Tax ID (FD) and Foreign Owner Withholding (FOW) for out of country residents.

Excluded DSLs

Selection of DSLs to be processed are for all states setup in Revenue Withholding Defaults - REV298 and the following DSLs are excluded for:

• DSLs already run for the withholding option specified.

• DSLs whose state withholding company is not the same as the current company.

• DSLs whose type interest category is exempt for the state as specified in Revenue Withholding Defaults - REV298.

• DSLs whose owner is flagged to suppress withholding when specified in Owner Detail - REV120 (Note for Federal and Foreign withholding only).

• DSLs whose owner has an insider company reference specified in Owner Detail - REV120.

• DSLs whose pay balance is less than zero (0).

• DSLs whose pay category is 'M'inimum and the pay balance is less than the minimum pay amount.

Additional Exclusions

For State Backup Withholding:

• DSLs with a pay code that has a type category of "X", release with no pay.

For Foreign Withholding:

• DSLs whose state has a valid API number.

• DSLs who have a tax id.