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Instructions for Form 590

Withholding Exemption Certificate

References in these instructions are to the California Revenue and Taxation Code (R&TC).

General Information

D Definitions

• Payments to nonresidents for royalties from

natural resources with activities in California.

Registered Domestic Partners (RDP) – For

Nonresident includes all of the following:

• Distributions of California source income to

purposes of California income tax, references

• Individuals who are not residents of

nonresident beneficiaries from an estate or

to a spouse, husband, or wife also refer to a

California.

trust.

Registered Domestic Partner (RDP) unless

• Corporations not qualified through the

• Endorsement payments received for services

otherwise specified. For more information on

California Secretary of State (CA SOS)

performed in California.

RDPs, get FTB Pub. 737, Tax Information for

to do business in California or having no

• Prizes and winnings received by

Registered Domestic Partners.

permanent place of business in California.

nonresidents for contests in California.

• Partnerships or limited liability companies

However, withholding is optional if the total

A Purpose

(LLCs) with no permanent place of business

payments of California source income are

in California.

Use Form 590, Withholding Exemption

$1,500 or less during the calendar year.

• Any trust without a resident grantor,

Certificate, to certify an exemption from

For more information on withholding get

beneficiary, or trustee, or estates where the

nonresident withholding.

FTB Pub. 1017, Resident and Nonresident

decedent was not a California resident.

Form 590 does not apply to payments of

Withholding Guidelines. To get a withholding

Foreign refers to non-U.S.

backup withholding. For information on

publication, see Additional Information.

California backup withholding, go to ftb.ca.gov

For more information about determining

C Who Certifies this Form

and search for backup withholding.

resident status, get FTB Pub. 1031,

Guidelines for Determining Resident Status.

Form 590 does not apply to payments for

Form 590 is certified by the payee. California

Military servicemembers have special rules

wages to employees. Wage withholding is

residents or entities exempt from the

for residency. For more information, get

administered by the California Employment

withholding requirement should complete

FTB Pub. 1032, Tax Information for Military

Development Department (EDD). For more

Form 590 and submit it to the withholding

Personnel.

information, go to edd.ca.gov or call

agent. The withholding agent is then relieved

888.745.3886.

Permanent Place of Business:

of the withholding requirements if the agent

A corporation has a permanent place of

Do not use Form 590 to certify an exemption

relies in good faith on a completed and signed

business in California if it is organized and

from withholding if you are a Seller of

Form 590 unless notified by the Franchise Tax

existing under the laws of California or if it

California real estate. Sellers of California

Board (FTB) that the form should not be relied

is a foreign corporation qualified to transact

real estate use Form 593-C, Real Estate

upon.

intrastate business by the CA SOS. A

Withholding Certificate, to claim an exemption

An incomplete certificate is invalid and the

corporation that has not qualified to transact

from real estate withholding.

withholding agent should not accept it. If the

intrastate business (e.g., a corporation

The following are excluded from withholding

withholding agent receives an incomplete

engaged exclusively in interstate commerce)

and completing this form:

certificate, the withholding agent is required to

will be considered as having a permanent place

withhold tax on payments made to the payee

• The United States and any of its agencies or

of business in California only if it maintains

until a valid certificate is received. In lieu of a

instrumentalities.

a permanent office in California that is

completed certificate on the preprinted form, the

• A state, a possession of the United States,

permanently staffed by its employees.

withholding agent may accept as a substitute

the District of Columbia, or any of its

certificate a letter from the payee explaining

political subdivisions or instrumentalities.

E Military Spouse Residency

why the payee is not subject to withholding. The

• A foreign government or any of its political

Relief Act (MSRRA)

letter must contain all the information required

subdivisions, agencies, or instrumentalities.

on the certificate in similar language, including

Generally, for tax purposes you are considered

the under penalty of perjury statement and the

B Income Subject to

to maintain your existing residence or domicile.

payee’s taxpayer identification number. The

If a military servicemember and nonmilitary

Withholding

withholding agent must retain a copy of the

spouse have the same state of domicile, the

certificate or substitute for at least four years

California Revenue and Taxation Code (R&TC)

MSRRA provides:

after the last payment to which the certificate

Section 18662 requires withholding of income

• A spouse shall not be deemed to have lost

applies, and provide it upon request to the FTB.

or franchise tax on payments of California

a residence or domicile in any state solely

source income made to nonresidents of

For example, if an entertainer (or the

by reason of being absent to be with the

California.

entertainer’s business entity) is paid for a

servicemember serving in compliance with

performance, the entertainer’s information

Withholding is required on the following, but is

military orders.

must be provided. Do not submit the

not limited to:

• A spouse shall not be deemed to have

entertainer’s agent or promoter information.

acquired a residence or domicile in any

• Payments to nonresidents for services

The grantor of a grantor trust shall be treated

other state solely by reason of being there

rendered in California.

as the payee for withholding purposes.

to be with the servicemember serving in

• Distributions of California source income

Therefore, if the payee is a grantor trust and

compliance with military orders.

made to domestic nonresident S corporation

one or more of the grantors is a nonresident,

shareholders, partners, and members and

Domicile is defined as the one place:

withholding is required. If all of the grantors

allocations of California source income made

• Where you maintain a true, fixed, and

on the trust are residents, no withholding

to foreign partners and members.

permanent home.

is required. Resident grantors can check

• Payments to nonresidents for rents if the

• To which you intend to return whenever you

the box on Form 590 labeled “Individuals

payments are made in the course of the

are absent.

— Certification of Residency.”

withholding agent’s business.

Form 590 Instructions 2013 Page 1

California Form 590 Draft - Withholding Exemption Certificate With Instructions - 2014 Page 3

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