Term Definitions for Resident and Nonresident Withholding
Composite statement – Composite statement means one in which two or more required Internal Revenue Service statements (for example: Forms 1099-B and 1099-DIV) are furnished to the recipient on one document.
Entertainment industry independent contractors can be individuals, corporations, limited liability companies (LLCs), or partnerships. They include, but are not limited to:
- Dance teams
- Sports entertainers
- Stage help
- Lighting crews
- Talent agents
Entertainment industry withholding agents must withhold at the 7 percent rate when appropriate. See independent contractor below.
Financial institution – A depository institution (i.e., any bank or savings association), an institution-affiliated party (i.e., any director, officer, employee, or controlling shareholder), or a federal or state credit union.
Independent contractor – An independent contractor is an individual or entity that contracts to perform services. Employees are not independent contractors.
Nonwage compensation examples include, but are not limited to:
- Real estate transactions
- Interest and dividends
- Rents and royalties
- Prizes and winnings
- Premiums and annuities
- Compensation for personal services
- Other fixed or determinable annual or periodic gains, profits, and income
Payee – For purposes of our withholding tax forms, we use the term “payee” to describe any person or entity that receives payment from a payer (see more at "Withholding agent" below). We may also refer to the payee as the “vendor.” Payees may be residents or nonresidents of California.
Payer – A payer is an individual, a business, or a government entity that makes payments to a payee. Payers are also known as withholding agents.
Withholding agent – A withholding agent is any person or entity having the control, receipt, custody, disposal, or payment of California source income. We also refer to withholding agents as “payers.”
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