Under California withholding, which agency receives the withheld funds?

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Multiple Choice

Under California withholding, which agency receives the withheld funds?

California withholding on real property sales is a state tax collection mechanism. When a seller is subject to this rule, the buyer (or closing agent) withholds a portion of the sale proceeds and sends those funds to the Franchise Tax Board (FTB). The FTB then applies the withholding toward the seller’s California income tax liability. This money is not sent to the IRS, the SSA, or any other agency—the state agency responsible for California taxes is the FTB.

California withholding on real property sales is a state tax collection mechanism. When a seller is subject to this rule, the buyer (or closing agent) withholds a portion of the sale proceeds and sends those funds to the Franchise Tax Board (FTB). The FTB then applies the withholding toward the seller’s California income tax liability. This money is not sent to the IRS, the SSA, or any other agency—the state agency responsible for California taxes is the FTB.

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