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N onresident W ithholding E ntertainment G uidelines
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For additional information, contact the Withholding Services and Compliance Section
Telephone: Entertainment Withholding Program General Information
(916) 845-6262 (916) 845-4900 (888) 792-4900 (toll-free)
If you need additional information, please call us. Our automated telephone system allows you to access important information seven days a week, 24 hours a day. If the system does not completely answer your questions, you may speak with a representative Monday through Friday between the hours of 8 a.m. and 5 p.m., except state holidays. Assistance for persons with disabilities: We comply with the Americans With Disabilities Act. Persons with hearing or speech impairments please call TTY/TDD (800) 822-6268.
Asistencia Telefonica y en el Internet
Dentro de los Estados Unidos, llame al . . . . . . . . . . . . . . . . . . . . . . . . . . . (800) 852-5711 Fuera de los Estados Unidos, llame al (cargos aplican) . . . . . . . . . . . . . . . . (916) 845-6500 Sitio en el Internet: www.ftb.ca.gov Asistencia para personas discapacitadas: Nosotros estamos en conformidad con el Acta de Americanos Discapacitados. Personas con problemas auditivos pueden llamar al TTY/TDD (800) 822-6268. To get forms, publications, and other withholding information, you can visit our Website:
www.ftb.ca.gov FAX: (916) 845-9512 (correspondence and waiver requests) Mailing Address: ENTERTAINMENT WITHHOLDING PROGRAM
WITHHOLDING SERVICES AND COMPLIANCE SECTION FRANCHISE TAX BOARD PO BOX 942867 SACRAMENTO CA 94267-0651
Table of Contents
Page(s) Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Frequently Asked Questions Withholding Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Income Subject to Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Payments of $1,500 or Less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Payments Made to Agents or Promoters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Supporting Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Payments for Sound and Lights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Venues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Canceled Performances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Exemptions From Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Waivers or Reduced Withholding Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Reporting and Sending Withholding Amounts and Due Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Withholding Agent Liability, Penalties, and Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Partnerships and Limited Liability Companies That Are Withheld Upon . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Requirement to File a California Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Where to Get Forms and More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
FTB Pub. 1024 (REV 06-2006)
Nonresident Withholding – Entertainment Guidelines
Purpose
This publication explains the requirements for those making payments to nonresident entertainers. These entities are referred to as withholding agents. This publication does not cover withholding on: • Distributions made to nonresident partners. • Payments made to nonresident independent contractors who are not entertainers, including golfers, tennis players, television and movie actors, game show participants, horse racing, and other participants. • Nonresident sellers of California real estate. • Wage withholding from payments made to employees. For more information on partnership, independent contractor and real estate withholding, please refer to FTB Pub. 1017, Nonresident Withholding Partnership Guidelines; FTB Pub. 1023, Nonresident Withholding Independent Contractor Rent & Royalty Guidelines; and FTB Pub. 1016, Real Estate Withholding Guidelines. To determine residency status, get Pub. 1031, Guidelines for Determining Resident Status. You can download and print all forms and publications from our Website at www.ftb.ca.gov. For information on wage withholding, contact the Employment Development Department.
FTB Pub.1024
so, FTB may authorize a withholding rate that more accurately represents the nonresident entertainer’s estimated tax liability. FTB then notifies the withholding agent of the withholding rate for the specific performance by sending the withholding agent Form 594, Notice to Withhold Tax at Source. If the withholding agent does not notify FTB of the performance and/or FTB does not notify the withholding agent of a waiver or reduced withholding rate, the withholding agent must withhold 7% from payments made to nonresident entertainers.
Frequently Asked Questions Withholding Requirements
1. Who is the withholding agent? The withholding agent is any person or entity having the control, receipt, custody, disposal, or payment of compensation for services to withhold. 2. When is a withholding agent required to withhold? A withholding agent is required to withhold from payments made for services performed by a nonresident entertainer when the payments are greater than $1,500 for the calendar year. See Questions 15 and 16 for more information on the $1,500 minimum requirement. 3. Which nonresident entities are subject to withholding? Nonresident entities subject to withholding include: • Individuals who are nonresidents of California. • Corporations that do not have a permanent place of business in California or are not qualified through the Secretary of State to do business in California. • Partnerships and Limited Liability Companies that do not have a permanent place of business in California. • Nonresident estates and trusts. 4. What is the withholding rate? A withholding agent must withhold 7% from all gross payments made to a nonresident entertainer for services performed in California, unless: • The withholding agent receives Form 594, Notice to Withhold Tax at Source, from FTB authorizing a withholding rate of less than 7%. • The withholding agent receives a waiver, Form 595, Notice to Withholding Agent, from the FTB. 5. How can I obtain a Form 594? FTB may send you a Form 594 notifying you to withhold at 7%. If you request a reduced rate, FTB may send you a Form 594 notifying you of the approved withholding rate once it is determined whether the 7% withholding rate is too high. 6. How do I request a reduced rate? You can request a reduced rate by faxing us a completed Form 4089 listing upcoming performances with performance dates at least 10 days prior to the performance date. See the Waivers or Reduced Withholding Rates section of this publication for more information.
Law
California Revenue and Taxation Code (R&TC) Section 18662 and the related regulations require withholding of California income or franchise taxes from payments to nonresident entities performing services in California. The Franchise Tax Board (FTB) may require any person or entity having the control, receipt, custody, disposal, or payment of compensation for services to withhold. California R&TC Section 18668 makes the withholding agent liable for any tax required to be withheld. Per R&TC Section 17951, nonresidents are taxed on all income from sources within California. Income from sources within California includes compensation for personal services performed within California. Compensation earned by nonresident entertainers is considered earned where the services are performed regardless of where the nonresident entertainers live, enter into the contract, or receive payment. Nonresident entertainers and athletes must include in California gross income the gross payments for all services performed in California.
Overview
Withholding is required when making payments to nonresident entertainers, including, but not limited to actors, singers, bands, orchestras, plays, dance teams, wrestlers, boxers, and speakers. FTB generally receives performance information from the withholding agent before performances occur. You can request a reduced rate by completely filling out and faxing us Form 4089, Notification of Performance Withholding for Nonresident Entertainers, at least 10 business days prior to the nonresident’s performance date to allow time for processing. Based on this information, FTB determines if withholding at the statutory 7% rate will result in over-withholding. If
FTB Pub. 1024 (REV 06-2006) Page 1
7. What are the exceptions to the withholding requirements? Withholding is not required if one of the following exceptions is met: • The entertainer is a California resident. • The entertainer is a corporation that is qualified to do business in California or has a permanent place of business in California. • The entertainer is a partnership or a Limited Liability Company that has a permanent place of business in California. • The entertainer is an organization that has current tax-exempt status under either California or federal law. • The total payments of California source income to the entertainer are equal to or less than $1,500 for the calendar year. Please see Question 2, 15, and 16 for additional information. • The services provided by the entertainer are not performed in California. • The entertainer or the withholding agent receives a withholding waiver from the FTB. Note: The exceptions listed above apply to the actual entertainer and not the entertainer’s agent. See the Exemptions From Withholding section of this publication for more information. 8. Is withholding required if the withholding agent has not received Form 594 or Form 595 from the FTB prior to the performance date or the date the nonresident entertainer is paid? Yes. If a withholding agent has not received Form 594, stating the withholding rate, or Form 595, authorizing a waiver, by the date of the performance or payment, then withholding at 7% is required. See Question 36 for additional information. 9. Are withholding agents required to withhold tax when the nonresident entertainer’s contract states that there shall be no withholding from compensation? Yes. California law requires the withholding agent to withhold, and the withholding agent can be held accountable for the withholding. 10. Are withholding agents required to notify nonresident entertainers of the withholding requirements? No. Withholding agents are not required to notify nonresident entertainers of the withholding requirements. However, we recommend that they explain California’s withholding requirements, before actually withholding, to avoid confusion. 11. Does withholding relieve entertainers from the requirement to file California tax returns? No. Entertainers must file California tax returns if they meet the filing requirements. If withholding is more than the actual tax liability, we will refund the overpayment. If withholding is less than the actual tax liability, additional tax will be due.
are not limited to, guaranteed payments, overages, royalties, and residual payments. 13. Are payments exempt from California tax and not subject to withholding if the payments are exempt from federal tax due to tax treaties? No. California does not conform to federal law relating to income protected by U.S. tax treaties. California source income is subject to withholding. Nonresident aliens are required to report income from their California performances on Form 540NR, California Nonresident or Part-Year Resident Income Tax Return. 14. Are withholding agents required to withhold from payments made to reimburse expenses? If the reimbursement is separately accounted for and is not subject to federal Form 1099 reporting, withholding agents are not required to withhold on payments to reimburse a nonresident entertainer for expenses relating to services performed in California. When the reimbursed expenses do not meet these requirements, the withholding agent should withhold on the total payment.
Payments of $1,500 or Less
15. When should a withholding agent start withholding if the total payments to a nonresident entertainer are expected to exceed $1,500 during the year? Begin withholding on the first payment to the nonresident entertainer. The total payments (not just the amount exceeding $1,500) are subject to withholding. 16. Does FTB require withholding on previous payments made to a nonresident entertainer if the withholding agent reasonably believed that total payments to a nonresident entertainer for the year would not exceed $1,500 but later determines that the total payments will exceed $1,500? No. The FTB will not require the withholding agent to withhold on the prior payments. Withholding must begin as soon as the withholding agent determines that total payments of California source income for the calendar year will exceed $1,500.
Payments Made to Agents or Promoters
17. Is withholding required if the compensation paid to nonresident entertainers is made to their California agents or promoters? Yes. If the withholding agent receives Form 594, Notice to Withhold Tax at Source, withholding is required even though the payment is not made directly to the nonresident entertainer. Withholding is required even if the agent or promoter meets one of the exceptions listed in Question 7. Since the entertainer performed the service, the entertainer is required to report their compensation for the performance and is solely entitled to the entire withholding credit. 18. How is compensation and withholding, earned by the entertainer and paid to the agent, reported to the FTB? You must provide the name and identification number, i.e., SSN, FEIN, or Corp number on
Income Subject to Withholding
12. What types of payments are subject to withholding? Payments made to nonresident entertainers for services rendered in the State of California are subject to withholding. These payments include, but
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Form 594 for the performing entity and not the agent and/or promoter. Note: For more information on how the performing entity should report distribution of the withholding credit among its members, see the Reporting and Sending Withholding Amounts and Due Dates section of this publication.
Exemptions From Withholding
24. How can entertainers certify that they are exempt from withholding? Entertainers should complete Form 590, Withholding Exemption Certificate, to certify that they are residents of California or entities not subject to withholding, and give the completed form to the withholding agent. 25. Who is exempt from withholding? Form 590, Withholding Exemption Certificate, should be completed by: a. Residents of California. The term “resident” includes every individual who is in California for other than a temporary or transitory purpose as well as every individual domiciled in California who is absent for a temporary or transitory purpose. Generally, an individual who comes to California for a purpose extending over a long or indefinite period will be considered a resident. An individual who comes to perform a particular contract of short duration will be considered a nonresident. Withholding agents can rely on a California street address as an indication of an entertainer’s residency status. If the entertainer has a California street address, no withholding is required and Form 590 is not needed to verify residency status unless the withholding agent has reason to believe such address is merely a forwarding address. A valid California street address does not include a California post office box or an “in care of” address. If a change of address occurs, the withholding agent needs to re-evaluate the entertainer’s residency status. For assistance in determining residency status, obtain FTB Publication 1031, Guidelines for Determining Resident Status. b. Corporations with a permanent place of business in California, and corporations qualified through the Secretary of State to do business in California. A corporation has a permanent place of business in this state if it is organized and existing under the laws of this state or, if a foreign corporation, it has qualified through the Secretary of State to transact intrastate business. A corporation that has not qualified to transact intrastate business, i.e., a corporation engaged exclusively in interstate commerce, will be considered as having a permanent place of business in this state only if it maintains a permanent office in this state that is permanently staffed by its employees. c. Partnerships and Limited Liability Companies with a permanent place of business in California. d. Tax-exempt entities under California or federal law. e. California trusts and estates.
Supporting Acts
19. What should withholding agents do when they receive Form 594 for a supporting act when the contract is negotiated with a headliner and the headliner is paying the supporting act? If withholding agents receive Form 594 for the supporting act, they should provide FTB with the necessary information to allow FTB to notify the headliner. FTB will send the headliner Form 594 to withhold on the supporting act and will send the withholding agents Form 595 to withdraw the original notice.
Payments for Sound and Lights
20. Is withholding required on payments made to nonresidents of California for sound and lights services provided in California? Yes. Withholding is required on payments made for sound and lights services if payable to a nonresident.
Venues
21. What should lessors of a venue do upon receiving Form 594 from FTB for a performance they are not promoting? The lessor should contact FTB and provide the necessary information on Form 4089 to allow FTB to notify the correct promoter who the withholding agent will be. FTB will send the correct promoter Form 594 for the performance and will send the venue/lessor Form 595, Notice to Withholding Agent, to withdraw the original notice. 22. What happens if two entities are requesting to be a withholding agent for a entertainer for the same event? FTB will evaluate the requested Form 4089 and will issue Form 594 to the selected withholding agent and Form 595 to the other entity to release the other entity from any withholding responsibility.
Canceled Performances
23. What is the procedure if a withholding agent receives Form 594 when no payment is made to the nonresident entertainer because the performance was canceled? The withholding agent should write “Canceled” on Form 594, and return all copies of the form to the FTB, with an explanation that withholding was not done because the performance was canceled and no payment was made. FTB may request additional information to validate the canceled performance.
FTB Pub. 1024 (REV 06-2006) Page 3
26. What should the withholding agent do if an entertainer gives the withholding agent an incomplete Form 590? Before accepting Form 590 from an entertainer, the withholding agent should check the Form 590 for the following: a. The name and address of the entertainer. b. The entertainer’s taxpayer identification number, i.e., SSN, FEIN, or Corp number. c. The withholding agent’s name. d. A box checked in front of the applicable exemption. e. The name and title of the individual completing the form, the individual’s signature, and the date. An incomplete Form 590 is invalid and the withholding agent should not accept it. If the withholding agent receives an incomplete or invalid Form 590, the withholding agent is required to withhold tax on payments made to the entertainer until a valid form is received. The withholding agent should also verify that the information on the form pertains to the entertainer and not for the entertainer’s representative or agent. 27. What should a withholding agent do if they receive a false Form 590? The withholding agent should not accept the Form 590 and should inform the entertainer that the form was not accepted. The withholding agent and the entertainer can contact the FTB if they have any questions. 28. Is the withholding agent liable for knowingly accepting and submitting to FTB a false Form 590? Yes. A withholding agent who knowingly accepts a false Form 590 is subject to the liabilities and penalties relating to failure to withhold.
Waivers or Reduced Withholding Rates
29. What are the procedures for requesting a reduced withholding rate? The withholding agent should complete Form 4089 with the entertainer’s information and fax it to FTB at (916) 845-9512 at least 10 days prior to the performance date. FTB will send the withholding agent Form 594 notifying them of the approved withholding rate. If you are submitting your request more than 30 days prior to the performance date, you can mail it to: ENTERTAINMENT WITHHOLDING PROGRAM WITHHOLDING SERVICES AND COMPLIANCE SECTION FRANCHISE TAX BOARD PO BOX 942867 SACRAMENTO CA 94267-0651. If you are an entertainer or entertainer’s agent (not withholding agent), and you would like to request a rate that is lower than the rate indicated on Form 594, please refer to Question 30 and 31 for requesting a waiver or reduced withholding rate.
30. When does FTB authorize reduced withholding rates? FTB only authorizes reduced withholding rates when the entertainer shows that the amount of tax due on their income is significantly less than either the 7% withholding or the amounts given on Form 594. 31. What are the procedures for requesting a waiver or reduced rate if you are an entertainer or entertainer’s agent (not withholding agent)? The nonresident entertainer or representative should submit to FTB all the information outlined on Form 4080, Guidelines For Requesting a Withholding Reduction or Waiver, and submit Form 4080 to FTB preferably 10 days before the performance date. You can get Form 4080 on our Website at www.ftb.ca.gov. Submit the requested information to: ENTERTAINMENT WITHHOLDING PROGRAM WITHHOLDING SERVICES AND COMPLIANCE SECTION FRANCHISE TAX BOARD PO BOX 942867 SACRAMENTO CA 94267-0651 Or, FAX the request to the FTB at (916) 845-9512. FTB issues Form 595, Notice to Withholding Agent, to authorize a waiver from the withholding. If we do not authorize a full waiver from withholding, we send the withholding agent Form 594, Notice to Withhold Tax at Source. Form 594 will show the required withholding rate. In those cases where we deny the waiver request entirely, we send a letter to the entertainer and to the withholding agent informing them of the denial. 32. Under what conditions does FTB grant waivers from withholding? FTB may grant waivers if the nonresident entertainer has a current history of filing California tax returns and/or is currently making estimated tax payments to the FTB. 33. What should a withholding agent do if they withheld at 7% and FTB subsequently authorizes a reduced withholding rate or waiver? The withholding agent must return any excess amounts withheld (the difference between 7% withheld and the authorized withholding rate) to the entertainer. 34. How does FTB determine whether an entertainer qualifies for a waiver? Some of the things that FTB considers to determine whether an entertainer qualifies for a waiver are: • Entertainer’s California tax return filing history. • If entertainer is registered with the Secretary of State and is in good standing. • If entertainer has California Tax exempt status.
Reporting and Sending Withholding Amounts and Due Dates
35. How should the withholding agent report and remit withholding when they receive Form 594? The withholding agents should complete Part I of Form 594 and have the performing entity complete Part II of Form 594 with the performing entity’s Tax ID and the name that will be used on the tax return.
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The withholding agent should mail the original Copy A of Form 594 to FTB with payment by the 20th day of the month following the month of the performance date. FTB will not accept faxed copies or duplicate forms. The withholding agent should follow the instructions on Form 594 for proper distribution of Copies B, C, and D. 36. What forms should withholding agents use to report and remit withholding when the withholding agents have not received Form 594, Notice to Withhold Tax at Source, from the FTB? Payment Requirements (Form 592-A): If the withholding agent does not receive a Form 594, they should use Form 592-A, Nonresident Withholding Remittance Statement, to remit the tax withheld. Payments sent with Form 592-A are due by the 20th day of the month following the month that the combined total amounts withheld from all nonresident entertainers during the calendar year, that were previously not remitted, exceed $2,500. Annual Reporting Requirements (Forms 592 and 592-B): At the end of the calendar year, withholding agents should use Form 592, Nonresident Withholding Annual Return, to report the total amount of tax withheld and remitted with Forms 592-A during the calendar year. Caution: There is no year-end reporting requirement for tax withheld and remitted with Form 594. Do not include any withholding paid with Forms 594 on Form 592 or 592-B. Complete one Form 592-B, Nonresident Withholding Tax Statement, to report the amount subject to withholding and the amount withheld for the year, which were not previously reported on Form 594, for each nonresident entertainer withheld on. Form 592-B is used by the performing entity to claim the credit on their California tax return. Attach Copy A of each Form 592-B to Form 592 and send to FTB by January 31 of the year following the year of the withholding. Send Copies B and C of Form 592-B to the nonresident entertainers by January 31 of the year following the year of withholding. Nonresident entertainers attach Copy B of Form 592-B to the front of their California tax returns to obtain credit for the amount withheld. Nonresident entertainers should retain copy C for the nonresident entertainer’s records. Retain Copy D for the withholding agent’s records. Please refer to the instructions for Forms 592, 592-A and 592-B. 37. What forms should the performing entity use to allocate withholding credits when the performing entity is a partnership and is distributing compensation to its members? Complete Form 592 to report the total amounts withheld, and attach copy A of Form 592-B for each member receiving compensation and withholding credit. The withholding agent should follow the instructions on Form 592-B for proper distribution of Copies B, C, and D. Attach any Forms 594 or Forms 592-B received from the withholding agent for proof of withholding, and send these forms to FTB by January 31 of the year following the year of the withholding.
38. When are withholding amounts due to the FTB? • Form 594 When the withholding agent receives Form 594, withholding is due by the 20th day of the month following the month the performance closed. • Form 592-A If Form 594 is not received, the withholding agent should use Form 592-A to send the amounts withheld. Payments sent with Form 592-A are due by the 20th day of the month following the month during which the combined total amounts withheld from all nonresident entertainers and not previously remitted exceed $2,500. Example: If the combined total withholding for three nonresident entertainers exceeds $2,500 during March, the amounts withheld are due by April 20. If the combined total did not exceed $2,500, any amounts withheld and not previously remitted are due by January 31 of the following year. See the instructions for Forms 592, 592-A, and 592-B for more information. 39. Where should withholding agents send the amounts withheld? The withholding agent should send payments with Form 594 or Form 592-A to: ENTERTAINMENT WITHHOLDING PROGRAM WITHHOLDING SERVICES AND COMPLIANCE SECTION FRANCHISE TAX BOARD PO BOX 942867 SACRAMENTO CA 94267-0651
Withholding Agent Liability, Penalties, and Interest
40. What is the withholding agent’s liability for failure to remit withholding? A withholding agent who fails to withhold or fails to remit withholding to FTB is liable for the greater of: • The amount actually withheld. • The amount of taxes due from the nonresident entertainer, but not more than the amount required to be withheld. 41. What additional penalties could the withholding agent become liable for? The additional penalties could include: • Underpayment penalty — 5% plus .5% (maximum of 25%) per month from the date the payment is due. • Late filing penalty — 5% per month (maximum of 25%) from the date the return was due to the date the return was filed. • Accuracy-related penalty — 20%. • Demand penalty — 25%. See California Revenue and Taxation Code Sections 18668, 19132, 19101, 19164 and 19709 for further information. 42. May penalties resulting from failure to withhold be withdrawn? Yes. If the withholding agent shows that the failure to withhold was due to reasonable cause, the penalties will be withdrawn.
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43. What is “reasonable cause?” “Reasonable cause” is a standard exception to the imposition of most penalties imposed under the California Revenue and Taxation Code and the Internal Revenue Code. Generally, reasonable cause exists where the failure to comply occurs despite the exercise of ordinary business care and prudence. 44. Is interest charged on late payments of withholding? Yes. The law requires the assessment of interest on late payments of withholding. Interest is computed from the due date of the withholding payment to the date paid. The imposition of interest is not a penalty. It is compensation to the state for the loss of the use of funds.
Requirement to File a California Return
47. How can nonresident entertainers determine if they have a requirement to file California income tax returns? In most cases, nonresident entertainers who receive California source income will have a California filing requirement. For more information on the California filing requirements, call the numbers listed below: From within the United States, call (toll-free) . . . . . . . . . . . . . . . . . .(800) 852-5711 From outside the United States, call. . . . . . . . . . . . . . . . . . . . . . . . . .(916) 845-6500 For hearing impaired with TDD, call (toll-free) . . . . . . . . . . . . . . . . .(800) 822-6268 48. Does withholding relieve a nonresident entertainer from the requirement to file a California tax return? No. The nonresident entertainer must file a California tax return if the nonresident entertainer meets the filing requirements. 49. Does a waiver from withholding (Form 595) relieve a nonresident entertainer from the requirement to file a California tax return? No. A nonresident entertainer must file a California tax return if the nonresident entertainer meets the filing requirements even if a waiver was granted or the nonresident entertainer was exempted from withholding.
Partnerships and Limited Liability Companies That Are Withheld Upon
45. When a partnership or Limited Liability Company (LLC) is withheld upon, how does it transfer its withholding credit to its partners or members? When a partnership or LLC is withheld upon, it receives a withholding document (Form 592-B or Form 594) from the withholding agent showing how much was withheld. To allocate the amount withheld to its partners or members, it must complete Form 592 Side 1, Part I, III, and IV. Complete Form 592-B for each partner or member showing each partner’s or member’s share of the withholding. The tax withheld must be allocated to all partners or members, whether residents or nonresidents of California, based on the partner’s or member’s interest in the partnership or LLC. For more information on these procedures, see the instructions for Forms 592 and 592-B and get Pub. 1017, Nonresident Withholding Partnership Guidelines. 46. May a partnership or Limited Liability Company (LLC) that is withheld upon claim a refund for the tax withheld on the partnership or LLC? No. Refunds of withholding credits are not allowed for partnerships or LLCs. Although limited partnerships and LLCs may use the withholding to offset their outstanding tax liability, any excess withholding must be allocated to the partners or members. General partnerships must allocate the entire amount to its partners. A partnership has no tax liability, except for the minimum tax paid by a limited partnership. Form 565, Partnership Return of Income, is an information return. The income or loss reported on Form 565 flows through to the partners and is reported on their tax returns. The withholding must follow the income and flow through to the partners. The partners can claim the withholding credit against their individual tax liabilities. See Pub. 1017 for more information.
Where to Get Forms and More Information
50. Where can I get more information about the withholding requirements? For Entertainment Withholding questions, contact the FTB’s Entertainment Withholding Program at (916) 845-6262. For general withholding information, call the Withholding Services and Compliance Section’s automated telephone service at (888) 792-4900 (US toll-free) or (916) 845-4900. Our automated telephone service allows you to access important information seven days a week, 24 hours a day. If the service does not completely answer your questions, you may choose to speak with a representative Monday through Friday between the hours of 8 a.m. and 5 p.m., except state holidays. If you have Internet access, you can view, download, and print withholding forms, publications (including additional copies of Pub. 1024), and California tax forms from the FTB’s Website at www.ftb.ca.gov.
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