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Withholding on California 565, line 25, is not showing the full amount in Lacerte

by Intuit Updated 5 days ago

Per the 565 instructions for line 25:

If taxes were withheld from payment to the partnership, the partnership can either allocate the entire withholding credit to all its partners or claim a portion (not to exceed the total tax due) and allocate the remaining portion to all its partners. If the partnership claims any of the amount withheld, attach Form 592-B or Form 593, Real Estate Withholding Tax Statement, from the withholding entity to the front lower portion of the partnership return. The partnership must file Forms 592 and 592-B to allocate any remaining withholding credit to its partners. For more information, get FTB Pub. 1017, Resident and Nonresident Withholding Guidelines.

Line 24 is an annual tax of $800, therefore if the withholding is greater than $800, line 25 will not exceed the tax on line 24, but the remainder may be passed out to all partners.

To distribute all or part of the Nonresident / Real Estate withholding, enter the amount to appear on each Partner's K-1:

  1. Go to Screen 32.1, Schedule K-1 Miscellaneous
  2. Select the desired Partner
  3. Scroll down to the California Nonresident Withholding Tax Statement (Form 592-B) section.
  4. In the Amounts Withheld subsection, enter in the 1st quarter field, the amount of withholding to appear on the partner's 592-B and the partner's California Schedule K-1
Lacerte Tax

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