California Form 590 Draft - Withholding Exemption Certificate

Instructions for Form 590

Withholding Exemption Certificate

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

General Information

C Who can Execute this Form

a permanent place of business in California only if

it maintains a permanent office in California that is

For purposes of California income tax, references

Form 590 can be executed by the entities listed on

permanently staffed by its employees.

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

this form.

F Withholding Agent

a Registered Domestic Partner (RDP) unless

For payments made for services of a performing

otherwise specified. For more information on

entity, the performing entity or the performing

Keep Form 590 for your records. Do not send this

RDPs, get FTB Pub. 737, Tax Information for

entity’s partnership or corporation should

form to the FTB unless it has been specifically

Registered Domestic Partners.

complete this form. The performing entity’s agent

requested.

Private Mail Box. Include the Private Mail Box

or other third party cannot complete this form.

For more information, contact Withholding

(PMB) in the address field. Write “PMB” first,

The grantor of a grantor trust shall be treated

Services and Compliance, see General

then the box number. Example: 111 Main Street

as the vendor/payee for withholding purposes.

Information G.

PMB 123.

Therefore, if the vendor/payee is a grantor trust

The vendor/payee must notify the withholding

A Purpose

and one or more of the grantors is a nonresident,

agent if any of the following situations occur:

withholding is required. If all of the grantors

Use Form 590, Withholding Exemption Certificate,

• The individual vendor/payee becomes a

on the trust are residents, no withholding is

to certify an exemption from nonresident

nonresident.

required. Resident grantors can check the box on

withholding. California residents or entities

• The corporation ceases to have a permanent

Form 590 labeled “Individuals — Certification of

should complete and present Form 590 to the

place of business in California or ceases to be

Residency.”

withholding agent. The withholding agent is then

qualified to do business in California.

D Who is a Resident

relieved of the withholding requirements if the

• The partnership ceases to have a permanent

agent relies in good faith on a completed and

place of business in California.

A California resident is any individual who is in

signed Form 590 unless told by the Franchise Tax

• The LLC ceases to have a permanent place of

California for other than a temporary or transitory

Board (FTB) that the form should not be relied

business in California.

purpose or any individual domiciled in California

upon.

• The tax-exempt entity loses its tax-exempt

who is absent for a temporary or transitory

status.

Important – This form cannot be used for

purpose.

exemption from wage withholding. If you are

The withholding agent must then withhold and

An individual domiciled in California who is absent

an employee, any wage withholding questions

remit the withholding using Form 592-A, Foreign

from California for an uninterrupted period of at

should be directed to the FTB General Information

Partner or Member Quarterly Withholding

least 546 consecutive days under an employment-

number, 800.852.5711. Employers should

Remittance Statement. Form 592, Quarterly

related contract is considered outside California

direct their calls to the California Employment

Resident and Nonresident Withholding Statement,

for other than a temporary or transitory purpose.

Development Department (EDD) at 888.745.3886

and Form 592-B, Resident and Nonresident

An individual is still considered outside California

or go to their website at

Withholding Tax Statement, is retained by the

for other than a temporary or transitory purpose

withholding agent and a copy is given to the

Sellers of California real estate use Form 593-C,

if return visits to California do not total more than

payee.

Real Estate Withholding Certificate, not Form 590.

45 days during any taxable year covered by an

G Where to Get Publications,

B Requirement

employment contract.

Forms, and Additional

This provision does not apply if an individual

R&TC Section 18662 requires withholding of

has income from stocks, bonds, notes, or

Information

income or franchise tax on payments of California

other intangible personal property in excess

source income made to nonresidents of California.

You can download, view, and print California tax

of $200,000 in any taxable year in which the

Withholding is required on the following, but is

forms and publications from our website at

employment-related contract is in effect.

not limited to:

ftb.ca.gov.

A spouse/RDP absent from California for an

• Payments to nonresidents for services

To have publications or forms mailed to you

uninterrupted period of at least 546 days to

rendered in California.

or to get additional nonresident withholding

accompany a spouse/RDP under an employment-

• Distributions of California source income

information, contact the Withholding Services and

related contract is considered outside of California

made to domestic nonresident S corporation

Compliance.

for other than a temporary or transitory purpose.

shareholders, partners and members and

WITHHOLDING SERVICES AND

Generally, an individual who comes to California

allocations of California source income made to

COMPLIANCE MS F182

for a purpose which will extend over a long or

foreign partners and members.

FRANCHISE TAX BOARD

indefinite period will be considered a resident.

• Payments to nonresidents for rents if the

PO BOX 942867

However, an individual who comes to perform

payments are made in the course of the

SACRAMENTO CA 94267-0651

a particular contract of short duration will be

withholding agent’s business.

considered a nonresident. For assistance in

Telephone: 888.792.4900

• Payments to nonresidents for royalties for

determining resident status, get FTB Pub. 1031,

916.845.4900

(not toll-free)

the right to use natural resources located in

Guidelines for Determining Resident Status, or

Fax:

916.845.9512

California.

call the FTB at 800.852.5711 or 916.845.6500

• Distributions of California source income to

Assistance for persons with disabilities:

(not toll-free).

nonresident beneficiaries from an estate or

We comply with the Americans with Disabilities

trust.

E What is a Permanent Place of

Act. Persons with hearing or speech impairments

• Prizes and winnings received by nonresidents

call TTY/TDD 800.822.6268.

Business

for contests in California.

Asistencia para personas discapacitadas.

A corporation has a permanent place of business

For more information on withholding and

Nosotros estamos en conformidad con el Acta

in California if it is organized and existing

waiver requests, get FTB Pub. 1017, Resident

de Americanos Discapacitados. Personas con

under the laws of California or if it is a foreign

and Nonresident Withholding Guidelines. To

problemas auditivos pueden llamar al TTY/TDD

corporation qualified to transact intrastate

get a withholding publication see General

800.822.6268.

business by the California SOS. A corporation that

Information G, Where to Get Publications, Forms,

has not qualified to transact intrastate business

and Additional Information.

(e.g., a corporation engaged exclusively in

interstate commerce) will be considered as having

Form 590 Instructions 2008

California Form 590 Draft - Withholding Exemption Certificate - 2009 Page 3

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