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State of California Franchise Tax Board

Nonresident Withholding

What’s new?

  • Beginning January 4, 2016, view available nonwage withholding credits and electronically submit Form 588, Nonresident Withholding Waiver Request, through MyFTB.

Withholding on domestic nonresidents with California source income

We administer withholding laws pertaining to domestic nonresident payees when any of the following is true:

  • Payee provides services in California. Compensation is considered earned where the payee performs the services.
  • Payee receives California source income that includes, but is not limited to:
    • Leases
    • Rents
    • Royalties
    • Winnings
    • Payouts

Nonresident payees are subject to withholding on California source income regardless of where they live, enter into a contract, or receive payment.

Withholding tools and resources

Below are tools and resources for those who withhold on payments of California source income to nonresidents:

  • Webinars - Our webinars cover a variety of withholding topics – some general and some specific to certain industry types or stakeholders.
  • Withholding forms and publications
    • FTB Pub. 1017, Resident and Nonresident Withholding Guidelines - Provides information about resident and nonresident withholding in a question and answer format.
    • FTB 1076, Withholding on Nonresidents with California Source Income - Withholding agents use this document to inform nonresident payees of California's nonresident withholding requirements.
    • FTB 761 RNR - Most common errors that delay document processing and payment allocation for Form 592.
  • Subscription services - Sign up in one place for email updates on nonresident withholding and other withholding topics.
  • Informational charts:

Electronic options

  • Electronic filing information for nonresident withholding agents.
  • New - Electronic Form 589 Nonresident Reduced Withholding Request - Submission information for nonresidents who request reduced withholding.

Backup withholding

Backup withholding - Payers who perform federal backup withholding must also withhold and remit 7 percent of a reportable payment to us.

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