Instructions for Form 590
Withholding Exemption Certificate
References in these instructions are to the California Revenue and Taxation Code (R&TC).
General Information
shareholders, partners and members and
why the payee is not subject to withholding. The
allocations of California source income made
letter must contain all the information required
For purposes of California income tax,
to foreign partners and members.
on the certificate in similar language, including
references to a spouse, husband, or wife
• Payments to nonresidents for rents if the
the under penalty of perjury statement and the
also refer to a Registered Domestic Partner
payments are made in the course of the
payee’s taxpayer identification number. The
(RDP) unless otherwise specified. For more
withholding agent’s business.
withholding agent must retain a copy of the
information on RDPs, get FTB Pub. 737, Tax
• Payments to nonresidents for royalties with
certificate or substitute for at least four years
Information for Registered Domestic Partners.
activities in California.
after the last payment to which the certificate
Private Mail Box (PMB) – Include the PMB
• Distributions of California source income to
applies, and provide it upon request to the
in the address field. Write “PMB” first, then
nonresident beneficiaries from an estate or
Franchise Tax Board.
the box number. Example: 111 Main Street
trust.
For example, if an entertainer (or the
PMB 123.
• Prizes and winnings received by
entertainer’s business entity) is paid for a
nonresidents for contests in California.
Foreign Address – Enter the information in
performance, the entertainer’s information
the following order: City, Country, Province/
However, withholding is optional if the total
must be provided. Do not submit the
Region, and Postal Code. Follow the country’s
payments of California source income are
entertainer’s agent or promoter information.
practice for entering the postal code. Do not
$1,500 or less during the calendar year.
The grantor of a grantor trust shall be treated
abbreviate the country’s name.
For more information on withholding get
as the payee for withholding purposes.
FTB Pub. 1017, Resident and Nonresident
Therefore, if the payee is a grantor trust and
A Purpose
Withholding Guidelines. To get a withholding
one or more of the grantors is a nonresident,
publication see General Information H,
withholding is required. If all of the grantors
Use Form 590, Withholding Exemption
Publications, Forms, and Additional
on the trust are residents, no withholding
Certificate, to certify an exemption from
Information.
is required. Resident grantors can check
nonresident withholding. California residents or
the box on Form 590 labeled “Individuals
entities should complete and present Form 590
Backup Withholding – Beginning on or
— Certification of Residency.”
to the withholding agent. The withholding agent
after January 1, 2010, with certain limited
is then relieved of the withholding requirements
exceptions, payers that are required to
D Who is a Resident
if the agent relies in good faith on a completed
withhold and remit backup withholding to
and signed Form 590 unless told by the FTB
the Internal Revenue Service (IRS) are also
A California resident is any individual who
that the form should not be relied upon.
required to withhold and remit to the Franchise
is in California for other than a temporary or
Tax Board (FTB). The California backup
The following are excluded from withholding
transitory purpose or any individual domiciled
withholding rate is 7% of the payment. For
and completing this form:
in California who is absent for a temporary or
California purposes, dividends, interests,
transitory purpose.
• The United States and any of its agencies or
and any financial institutions release of loan
instrumentalities
An individual domiciled in California who is
funds made in the normal course of business
• A state, a possession of the United States,
absent from California for an uninterrupted
are exempt from backup withholding. For
the District of Columbia, or any of its
period of at least 546 consecutive days under
additional information on California backup
political subdivisions or instrumentalities
an employment‑related contract is considered
withholding, go to ftb.ca.gov and search for
• A foreign government or any of its political
outside California for other than a temporary or
backup withholding.
subdivisions, agencies, or instrumentalities
transitory purpose.
If a payee has backup withholding, the payee
Important – This form cannot be used
An individual is still considered outside
must contact the FTB to provide a valid
for exemption from wage and real estate
California for other than a temporary or
Taxpayer Identification Number (TIN) before
withholding.
transitory purpose if return visits to California do
filing a tax return. The following are acceptable
not total more than 45 days during any taxable
• If you are an employee, any wage
TINs: social security number (SSN); individual
year covered by an employment contract.
withholding questions should be directed
taxpayer identification number (ITIN); federal
to the FTB General Information number,
This provision does not apply if an individual
employer identification number (FEIN);
800.852.5711. Employers should call
has income from stocks, bonds, notes, or
California corporation number (CA Corp
888.745.3886 or go to edd.ca.gov.
other intangible personal property in excess
No.); or Secretary of State (SOS) file number.
• Sellers of California real estate use
of $200,000 in any taxable year in which the
Failure to provide a valid TIN will result in the
Form 593‑C, Real Estate Withholding
employment‑related contract is in effect.
denial of the backup withholding credit. For
Certificate, to claim an exemption from real
more information go to ftb.ca.gov and search
A spouse/RDP absent from California for
estate withholding.
for backup withholding.
an uninterrupted period of at least 546
days to accompany a spouse/RDP under an
B Requirement
C Who Certifies this Form
employment‑related contract is considered
outside of California for other than a temporary
R&TC Section 18662 requires withholding
Form 590 is certified by the payee. An
or transitory purpose.
of income or franchise tax on payments of
incomplete certificate is invalid and the
California source income made to nonresidents
Generally, an individual who comes to
withholding agent should not accept it. If the
of California.
California for a purpose which will extend over
withholding agent receives an incomplete
a long or indefinite period will be considered a
certificate, the withholding agent is required to
Withholding is required on the following, but is
resident. However, an individual who comes to
withhold tax on payments made to the payee
not limited to:
perform a particular contract of short duration
until a valid certificate is received. In lieu of a
• Payments to nonresidents for services
will be considered a nonresident.
completed certificate on the preprinted form, the
rendered in California.
withholding agent may accept as a substitute
For assistance in determining resident status,
• Distributions of California source income
certificate a letter from the payee explaining
made to domestic nonresident S corporation
Form 590 Instructions 2011 Page