Got a Form 593 in Escrow? It Doesn't Mean You're a Foreign Seller: California 593 vs. Federal FIRPTA

You're selling a home in California, and escrow hands you a Form 593. You think: "Wait, I'm not a foreigner. Why do I need to fill this out?"

A lot of people confuse Form 593 with a different system. In my last post I covered federal FIRPTA. This one covers California's Form 593 and how the two differ.

What is Form 593?

Form 593 is the Real Estate Withholding Statement, a California Franchise Tax Board (FTB) form for California real estate withholding.

The key point: it isn't used to determine whether you're a U.S. person. Any sale or transfer of California real property can involve these withholding rules.

On Form 593, the seller either:

Certifies that they qualify for an exemption, or
Calculates whether withholding is required and how much

Why do some sellers have nothing withheld?

Because receiving a 593 doesn't automatically mean withholding. According to the FTB's Form 593 instructions, if you meet one of the exemptions listed on the form, withholding may not be required. Examples include:

Certain qualifying principal residences
Transactions with no taxable gain
Other situations that meet the rules

Whether an exemption actually applies depends on the details of your transaction, so have a CPA or tax professional confirm it.

If there's no exemption, how is it calculated?

If you don't qualify for an exemption, the FTB's 2026 Form 593 instructions provide:

The standard sales price method: sale price × 3⅓%
The alternative withholding calculation: when the rules allow, withholding based on the gain on the transaction

As a hypothetical example, on a $900,000 sale, the standard method gives $900,000 × 3⅓% = $30,000 withheld. If the gain on the sale is modest, the alternative calculation could produce a much lower number.

How is Form 593 different from FIRPTA?

The rule that's directly tied to being a foreign seller is FIRPTA:

	Form 593	FIRPTA
Level	California (state)	Federal
Agency	FTB	IRS
What it mainly looks at	The California transaction and exemptions	Whether the seller is a foreign person
General withholding rate	3⅓% of sale price (or alternative calculation)	15% of amount realized (with exceptions and reduced rates)

An easy way to remember it: 593 is California; FIRPTA is federal. Form 593 looks at the California transaction and exemptions; FIRPTA mainly looks at whether the seller is foreign.

If you're a foreign seller, you may have to deal with both, calculated separately.

Withholding is not your final tax

Another common misunderstanding: the amount withheld isn't the tax you ultimately owe. Withholding just sets money aside up front. Your actual tax is calculated when you file, and any excess withholding may be refundable.

My advice to sellers

If escrow gives you a Form 593, it doesn't mean they think you're a foreigner, and it doesn't mean 3⅓% will definitely be withheld. It's simply a California tax step that has to be confirmed as part of closing.

My suggestions:

Have a CPA look at which exemptions or calculation methods might apply before you list
Gather your purchase cost and improvement records early
Don't wait until closing day to discover your proceeds are much smaller than expected

Getting ready to sell in California?

If you're thinking about selling a home in Los Angeles or Southern California and have questions about closing forms and withholding, reach out. I can help you get the documents together early and coordinate with your CPA and escrow.