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Reservation Source Income - Not Subject to Taxation


Tribal members who live on their reservation and who receive income from reservation sources are not subject to state tax on that income.

Income Taxation of Native Americans

FTB’s clarification

Posted 4/12/13: In response to several recent court cases and questions, we examined the issue of whether “reservation source income” should be interpreted as income paid by any employer (public or private) and earned by a tribal member while that member is physically located within the geographic borders of the reservation, or more narrowly limited to income earned on the reservation and paid only by a tribal payer. 

After reviewing legal authority, we determined that income earned for services performed on the reservation by tribal members who live on their tribe’s reservation is tax-exempt, whether it is paid by the tribe or by a third party. 

Am I entitled to a refund?

You are entitled to file a claim for refund or credit if you previously reported "reservation source income" as taxable income on your California income tax return within either of these timeframes:

  1. Four years from the original due date of the return
  2. Four years from the date the return is filed if the return was filed within the "automatic extension" period.

Additionally, you are entitled to file a claim if you made payments within one year of the date you file the claim (known as the "look back" provision).

How to file a claim for refund

Follow these steps:

  1. File an amended return.
  2. Indicate at the top of your amended return in red: RESERVATION SOURCE INCOME.
  3. Include a computation of your claimed refund amount.
  4. Mail your amended return and computation to us.

Where to mail your amended return, claim for refund, and computation

For regular mail, send to:

Reservation Source Income Claim for Refund 347 MS F381
Franchise Tax Board
PO Box 1779
Rancho Cordova CA 95741-1779

For private carrier or overnight delivery service, send to:

Franchise Tax Board
Reservation Source Income Claim for Refund 347 MS F381
Sacramento CA 94267-0001

Update to FTB 674, Income Taxation of Native Americans

We are revising FTB 674, Income Taxation of Native Americans, and will make it available as soon as possible.

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