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California Form 593: How to Fill Out Real Estate Withholding

California Form 593 is the Real Estate Withholding Tax Statement. If you sell California real estate, you use it to certify an exemption from withholding or to tell escrow how much to withhold, and you must return it to escrow before the sale closes. This guide shows which box to check for each seller situation, based on the Franchise Tax Board (FTB) instructions for Form 593 as published for the 2025 tax year.

Who Must Complete Form 593

Withholding is required when California real estate is sold or transferred. Per the FTB instructions, the real estate escrow person (the escrow company, title company, attorney, or qualified intermediary handling the money) must notify the buyer of the requirement and, in most cases, remits the withheld tax to the FTB.

Withholding is not required when any of these apply:

  • The sales price is $100,000 or less.
  • The property is in foreclosure.
  • The transferor is a bank acting as a trustee (other than under a deed of trust).
  • The seller certifies an exemption in Part III of Form 593.

If none of those apply, escrow withholds 3 1/3% (.0333) of the total sales price, or a smaller amount if you choose the alternative withholding calculation described below. On a $900,000 sale, the default withholding is about $30,000. That money is a credit toward your California tax, not an extra fee, but it ties up cash at closing.

Each seller gets a separate Form 593. Spouses or registered domestic partners who will file jointly can go on the same form, and the FTB treats them as equal owners unless you file separate forms.

Which Exemption Box to Check

Part III lists certifications that fully exempt the sale. You check every box that applies and then sign the perjury statement on Side 3. The buyer does not sign for a traditional sale.

Your situation Box Key condition from the FTB instructions
Selling your main home Line 1 Owned and lived in it as your main home at least two years of the last five (exceptions for job change, health, or unforeseen events)
Sold a home that was last your main home Line 2 Last use was as your principal residence. A vacation home, second home, or rental does not qualify
Selling at a loss or break-even Line 3 Amount realized is at or below adjusted basis, and you complete Part VI
Property seized, destroyed, or condemned Line 4 You intend to buy similar replacement property
Transfer to your corporation or partnership Line 5 Qualifies under IRC Section 351 or 721
California corporation Line 6 Permanent place of business in California
California partnership or qualifying LLC Line 7 Must still withhold on nonresident partners or members
Tax-exempt organization Line 8 Exempt under California or federal law
Insurance company, IRA, qualified plan, charitable remainder trust Line 9 Seller is one of those entity types

Two points trip people up. First, a zero-proceeds sale is not automatically a loss: the FTB says you cannot certify a loss just because you receive no money or feel you are selling below value. Second, if only part of the property is your principal residence, a second Form 593 is needed for the rest.

Step by Step: Filling Out the PDF

You can complete the form in your browser with PDF Editify. Open the Form 593 template, or upload your own copy at fill PDF, and work through these parts.

  1. Use the right year. The taxable year at the top must match the closing year, and the FTB says it cannot process a form with the wrong year. A sale closing in 2025 uses the 2025 form. Check ftb.ca.gov/forms for the current one.
  2. Part I, Remitter. Usually your escrow officer fills this in: escrow number, name, ID number, and address. Ask escrow to complete it, or leave it for them.
  3. Part II, Seller. Enter either an individual name or a business name, not both, plus mailing address and SSN, ITIN, or FEIN. Match the order of names and numbers if two spouses are listed.
  4. Part III, Exemptions. Check every box from the table above that applies. If one applies, you are done with the exemption analysis.
  5. Part IV, Only if Part III does not apply. Line 10 covers a simultaneous or deferred 1031 exchange (withholding still applies if you receive more than $1,500 in cash or other property). Line 11 covers an installment sale. Line 12 means no exemption applies.
  6. Part VI, Computation. Needed for a loss or zero gain claim (line 3) and for the alternative withholding calculation. Estimates are allowed, but they cannot show a loss when you actually have a gain.
  7. Side 3, Signature. Sign and date the perjury statement. The FTB states that electronic signatures, such as DocuSign, and scanned copies are as valid as originals. You can place a signature with sign PDF.

Installment Sales and the Alternative Calculation

For an installment sale, withholding is 3 1/3% of the down payment at closing, and the buyer withholds on the principal portion of later payments unless the FTB approves an elect-out request. The buyer also completes Part V and a copy of the promissory note goes to the FTB with the down payment.

If your actual gain is small compared with the price, the alternative withholding calculation can reduce what escrow holds back. It multiplies your applicable tax rate by your estimated gain from Part VI. Run the numbers with your CPA first, because underestimating is risky. A seller who knowingly signs a false certificate to avoid withholding faces a penalty of $1,000 or 20% of the required withholding, whichever is greater.

Deadlines and Payment

  • Seller to escrow: an exempt seller must get Form 593 to escrow before the transaction closes. After closing, withheld money can only be recovered as a credit on your tax return.
  • Escrow to the FTB: by the 20th day of the month after the month escrow closes, with Form 593-V and the payment. For a June closing, that is July 20.
  • Copies: the remitter gives the seller a copy by the same date and keeps one for at least five years.

Late or incorrect filings carry penalties on the remitter, such as $40 to $130 per seller depending on how late the information return is, according to the FTB instructions. Those fall on escrow, which is why escrow officers chase the form early.

Handing It to Escrow

Send escrow the signed form as a PDF, ideally a few days before the closing date so they can confirm there is no withholding. Keep a copy for your records. If you were withheld on, attach Form 593 to your California return and enter the amount from line 37 as withholding. Exemption from withholding does not remove your duty to file a California return and pay any tax due on the sale.

Escrow officers sometimes send Form 593 inside a larger closing packet. If the PDF is a flattened scan, use edit PDF to add text boxes over each field. For more closing paperwork tools, see our real estate form templates and our roundup of real estate document management software.

Fill and Sign Without a Subscription

You may only need to complete one form this month. PDF Editify is a paid editor, but you can try the editor without a card and the One Week Plan is $3 one-time. It expires on its own, so there is nothing to cancel, unlike a monthly subscription that keeps billing after your closing is done. Your files are deleted automatically after processing, which matters for a document with Social Security numbers.

Final Check Before You Send

Confirm that the year matches the closing year, the names and ID numbers are in the same order, every applicable Part III box is checked, and the signature and date are present. This article is general information, not tax or legal advice. For a sale with large gain, a 1031 exchange, an LLC, or a trust, confirm your choices with a CPA or your escrow officer.

Frequently Asked Questions

A seller who qualifies for a full, partial, or no withholding exemption completes Form 593 and returns it to escrow before closing. The escrow company or other remitter completes its own parts and files the form with the Franchise Tax Board.

Unless an exemption applies, withholding is 3 1/3% (.0333) of the total sales price, or a smaller amount if the seller uses the alternative withholding calculation based on estimated gain. Sales of $100,000 or less are not subject to withholding.

Usually yes. If the property qualifies as your principal residence under IRC Section 121, you check line 1 in Part III and sign the certification. You still need to give the form to escrow before closing.

Only by claiming it as a credit on your California tax return. After escrow closes, the FTB says an amended Form 593 cannot cancel the withholding.

Yes. The FTB instructions state that electronic signatures, such as DocuSign, and scanned copies of Form 593 are considered as valid as originals.