OBTAINING PAYEE INFORMATION (STD. 204) - 8422.190-NOV-2020
To file Annual Information Returns correctly, below are the requirements for identifying and classifying reportable payments.
Payee Data Record form, STD. 204
The Payee Data Record form, STD. 204 must be completed by suppliers. The purpose of the STD. 204 form is to obtain payee information for income tax reporting and to ensure tax compliance with federal and state law. The STD. 204 is required for any non-governmental entity or individual entering into a transaction that may lead to a payment from the state. Therefore, a completed, dated, and signed STD. 204 with handwritten or electronic signature must be on file with the state before payments are disbursed.
Electronic signatures must meet the requirements of the Secretary of State,California Code of Regulations, Title 2 Division 7, Chapter 10, section 22003. The original form must also be available and provided upon request. For more information on electronic signatures, California Civil Code sections 1633.1 through 1633.17.
A completed STD. 204 is necessary to determine what payments are reportable by the payee and must be attached to each contract. For non-contract transactions, a completed STD. 204 must be retained in the agency’s/department’s business services or accounting office. A completed STD. 204 is also required for non-state employees authorized to receive travel expense reimbursements directly from agencies/departments before the reimbursement is paid.
The payee will provide the following information on the STD. 204 in accordance with IRC section 6109 and RTC sections 18646 and 18661. Instructions for the payee are provided on page 2 of the form.
- Complete legal business name and reporting address of the payee doing business with the state. The business owner's full name is required if the business is a sole proprietorship or a single member Limited Liability Company (LLC). The name of the business or owner should match the name on the payee’s federal tax return.
- Payee entity type and the Taxpayer Identification Number (TIN). Payees must provide one of the following applicable TINs:
- Social Security Number (SSN)
- Individual Taxpayer Identification Number (ITIN)
- Federal Employer Identification Number (FEIN)
The TIN for individuals ,sole proprietors, and single member LLC(disregarded entities) is the SSN. Individuals who do not have an SSN and are not eligible for one provide their ITIN. The ITIN is a tax processing number issued by the Internal Revenue Service (IRS) through the W-7 application process. For all other payees, including LLCs treated as partnerships or corporations, the TIN is the FEIN. Refer to the IRS website for more information on TINs.
- The residency status of the payee by indicating resident or nonresident. Page 2 of the STD. 204 provides information for making this determination. For further information on nonresident withholding, see SAM section 8422.195.
- Complete name, title, e-mail address, telephone number, date, and handwritten or electronic signature of the payee’s authorized representative. This signature certifies the accuracy of the information provided. All data on the submitted STD 204 must be unalterable including the signature.
If a payee does not properly complete and submit a STD. 204, then payment to the payee shall be reduced by the following:
- Federal backup withholding at a rate determined by the IRS. For more information, refer to the IRS Publication 1281, Backup Withholding for Missing and Incorrect Name/TIN(S). Additional resources include IRS Publication 15, Employer’s Tax Guide, and IRS Publication 17, Your Federal Income Tax. For questions about federal backup withholding or information reporting, contact the IRS’ Information Reporting Program Customer Service Section at (866) 455-7438.
- State backup withholding of 7 percent pursuant to RTC section 18664.
Payment may be subject to state income tax withholding if the payee indicates ”nonresident” on the STD. 204 per item #1c listed above. Under circumstances where both backup withholding and nonresident withholding apply, only backup withholding shall be required. Refer to FTB website at www.ftb.ca.gov for further information.
Agencies/departments are liable for amounts not withheld, under-withheld, or not remitted to the FTB pursuant to RTC sections 18662(d) and 18668. Information on federal and state tax withholdings is provided in SAM section 8422.195. In addition, agencies/departments are responsible for sending additional requests to those payees that fail to provide their TIN, as described in SAM section 8422.193.