How to Fill Out California Form FTB 3525: Substitute for W-2 or 1099-R

To fill out California Form FTB 3525, you enter your identifying information and the payer’s details on lines 1 through 6, reconstruct your wages and withholdings (or pension distribution figures) on lines 7 through 15 using your best estimates, describe how you arrived at those numbers on line 16, and explain on line 17 why the original W-2 or 1099-R is missing and what you did to get it. You then sign under penalty of perjury and attach the form to your Form 540, 540 2EZ, or 540NR.¹

The form covers two situations: a W-2 or 1099-R that never arrived, and one that arrived with wrong figures. Both use the same form.²

Try to Get the Real Document First

Before filing the substitute, make a genuine effort to obtain the original. Contact your employer or payer by phone, email, or letter and request a copy. Employers are required under California’s Unemployment Insurance Code to furnish wage statements, and those who fail to do so face a $50 penalty per occurrence.³ Keep notes on who you contacted, when, and how. You need those details for line 17.

If February passes without a response, call the IRS at 800-829-1040. The IRS may contact the employer or open a wage investigation. While that runs, you can go ahead and file your California return using Form 3525.¹

Records You’ll Use to Fill In the Numbers

The FTB tells you to enter your best estimates and attach supporting documents. Your final pay stub of the year is the single most useful one. The year-to-date column should show gross wages, state income tax withheld, and State Disability Insurance withheld.¹

Watch one detail. The gross wages on your final pay stub aren’t necessarily the taxable wages that would appear in Box 1 of a W-2. Pre-tax deductions such as health insurance premiums, retirement contributions, and flexible spending accounts reduce taxable wages below gross pay. If your stub breaks these out, subtract them to get closer to the W-2 figure. When in doubt, report the gross amount and explain your method on the form. Underreporting is riskier than a slight overstatement you can correct later.

IRS Wage and Income Transcript

If you can’t find your final pay stub, request a free IRS wage and income transcript, which shows the W-2 and 1099-R data your employer reported to the federal government. You can get one at IRS.gov or by calling 800-829-1040.⁴ The transcript for the most recent tax year isn’t available until mid-summer, so this option fits late filers or amended returns better than someone trying to file by April.

Social Security Earnings Records

The Social Security Administration keeps its own record of your reported earnings. Yearly totals are free at ssa.gov/myaccount. An itemized statement with employer names and addresses, useful for the payer section, costs $61 through SSA Form SSA-7050-F4.⁵ SSA records can lag behind the current tax year, so plan accordingly.

Filling In Form 3525 Line by Line

The form is a single page with 17 numbered items. You sign under penalty of perjury that the figures are as accurate as you can make them, so keep your calculations and source documents.

Lines 1 Through 6: You and the Payer

Lines 1 through 4 are identification: your name, Social Security number or ITIN, current address, and the tax year the form covers. Lines 5 and 6 ask for the employer’s or payer’s name, full address, and Federal Employer Identification Number. If you don’t know the FEIN, check old pay stubs or a prior year’s W-2 before marking it unknown.¹

Lines 7 Through 11: Wages and Withholding

This is the core of the form when substituting for a W-2. Line 7a is state income tax withheld from your wages during the tax year. Line 8 is wages, tips, and other compensation, meaning the taxable wage figure rather than gross pay. Line 9 is State Disability Insurance withheld. Lines 10 and 11 capture Social Security wages and tips plus Medicare wages and tips; those matter less for California but help the FTB cross-reference your federal filing.¹

Pull these numbers from your final pay stub’s year-to-date column. If you only have partial-year stubs, add them up and note on line 16 that you estimated from incomplete records.

Lines 12 Through 15: Pension and Retirement Distributions

If you’re substituting for a missing 1099-R rather than a W-2, use lines 12 through 15 instead. Line 12 is the gross distribution from your IRA, pension, or profit-sharing plan. Line 13 is the taxable portion, often the same as the gross unless you made after-tax contributions. Line 14 captures any capital gain included in the taxable amount, and line 15 is the federal income tax withheld from the distribution.¹

Line 16: How You Estimated

Line 16 asks how you determined the amounts you entered. Identify your sources: final pay stub, bank deposit records, IRS transcript, whatever you used. Attach copies of those documents to the form.

Line 17: Why the Original Is Missing

Line 17 is the narrative section and it trips people up. Explain why you don’t have the original W-2 or 1099-R and describe your attempts to get it. Be specific. Something like this works: “Called former employer ABC Corp at (555) 123-4567 on January 15 and February 3; no answer. Sent certified letter on February 10; returned as undeliverable.” Vague statements such as “employer wouldn’t respond” won’t hold up if the FTB reviews your return.¹

Attaching the Form to Your Return

Attach the completed Form 3525 to your California income tax return, whether that’s Form 540, Form 540 2EZ, or Form 540NR depending on your residency and filing situation. For paper filers, place it behind the main return before any other supporting schedules.¹ If you had multiple employers or payers who failed to send forms, fill out a separate Form 3525 for each.

Most tax software includes prompts for entering substitute wage information and transmits the Form 3525 data electronically. Either way, expect a longer wait for your refund. The FTB typically processes e-filed returns within three weeks and paper returns within three months, but returns with substitute wage forms often take longer because the FTB may cross-reference your reported figures with IRS records or contact the employer.⁶

Form 3525 handles the California return only. If you’re also missing the same document for your federal filing, the equivalent is IRS Form 4852.⁷ The numbers on both should match. Reporting $55,000 in wages to the IRS and $52,000 to the FTB will likely trigger a notice from one agency or the other.

If the Real W-2 Arrives After You File

Compare the actual numbers to your estimates. If they match, you’re done. If they differ, file an amended California return using Schedule X attached to a corrected Form 540 or 540NR.⁸ On the federal side, use Form 1040-X.⁹

Don’t ignore small differences. The FTB eventually matches your return against employer records filed with the IRS and the Employment Development Department. A $200 gap can turn into a notice, interest charges, and more trouble than the amendment would have been.

Penalties for Misuse

The FTB’s instructions warn that the substitute form exists for genuinely missing documents, not to fabricate figures or reduce tax liability. Penalties for improper use include an accuracy-related penalty of 20% of the tax that should have been paid, a civil fraud penalty of 75% of the tax that should have been paid, and a frivolous return penalty under California Revenue and Taxation Code Section 19179, which follows the federal penalty amount set by IRC Section 6702. These apply on top of the tax and interest you already owe.²

If your reason for filing the form is legitimate and your estimates are reasonable, the penalties aren’t a concern, but document everything. The narrative on line 17 and your attached pay stubs are your proof of good faith.

1
Franchise Tax Board. California Form 3525 – Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R
2
Franchise Tax Board. California Form 3525 – Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R
3
California Legislative Information. California Code, Unemployment Insurance Code – UIC 13052
4
Internal Revenue Service. Get Your Tax Records and Transcripts
5
Social Security Administration. Request for Social Security Earnings Information
6
Franchise Tax Board. Where’s My Refund?
7
Internal Revenue Service. About Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R
8
Franchise Tax Board. Correct an Income Tax Return
9
Internal Revenue Service. Topic No. 154, Form W-2 and Form 1099-R (What To Do if Incorrect or Not Received)