Form 590 Instructions 2018 Page 1
2019 Instructions for Form 590
Withholding Exemption Certificate
References in these instructions are to the California Revenue and Taxation Code (R&TC).
General Information
California Revenue and Taxation Code (R&TC)
Section 18662 requires withholding of income
or franchise tax on payments of California
source income made to nonresidents of
California. For more information, See General
Information B, Income Subject to Withholding.
Registered Domestic Partners (RDP) – For
purposes of California income tax, references
to a spouse, husband, or wife also refer to a
California RDP unless otherwise specified. For
more information on RDPs, get FTB Pub. 737,
Tax Information for Registered Domestic
Partners.
A Purpose
Use Form 590, Withholding Exemption
Certificate, to certify an exemption from
nonresident withholding.
Form 590 does not apply to payments of
backup withholding. For more information,
go to ftb.ca.gov and search for backup
withholding.
Form 590 does not apply to payments for
wages to employees. Wage withholding is
administered by the California Employment
Development Department (EDD). For more
information, go to edd.ca.gov or call
888.745.3886.
Do not use Form 590 to certify an exemption
from withholding if you are a seller of
California real estate. Sellers of California
real estate use Form 593-C, Real Estate
Withholding Certificate, to claim an exemption
from the real estate withholding requirement.
The following are excluded from withholding
and completing this form:
• The United States and any of its agencies or
instrumentalities.
• A state, a possession of the United States,
the District of Columbia, or any of its
political subdivisions or instrumentalities.
• A foreign government or any of its political
subdivisions, agencies, or instrumentalities.
B Income Subject to
Withholding
Withholding is required on the following, but is
not limited to:
• Payments to nonresidents for services
rendered in California.
• Distributions of California source income
made to domestic nonresident partners,
members, and S corporation shareholders
and allocations of California source income
made to foreign partners and members.
• Payments to nonresidents for rents if the
payments are made in the course of the
withholding agent’s business.
• Payments to nonresidents for royalties
from activities sourced to California.
• Distributions of California source income
to nonresident beneficiaries from an estate
or trust.
• Endorsement payments received for
services performed in California.
• Prizes and winnings received by
nonresidents for contests in California.
However, withholding is optional if the total
payments of California source income are
$1,500 or less during the calendar year.
For more information on withholding, get
FTB Pub. 1017, Resident and Nonresident
Withholding Guidelines. To get a withholding
publication, see Additional Information.
C Who Certifies this Form
Form 590 is certified (completed and signed)
by the payee. California residents or entities
exempt from the withholding requirement
should complete Form 590 and submit it
to the withholding agent before payment is
made. The withholding agent is then relieved
of the withholding requirements if the agent
relies in good faith on a completed and signed
Form 590 unless notified by the Franchise Tax
Board (FTB) that the form should not be relied
upon.
An incomplete certificate is invalid and the
withholding agent should not accept it. If the
withholding agent receives an incomplete
certificate, the withholding agent is required
to withhold tax on payments made to the
payee until a valid certificate is received. In
lieu of a completed exemption certificate, the
withholding agent may accept a letter from
the payee as a substitute explaining why they
are not subject to withholding. The letter must
contain all the information required on the
certificate in similar language, including the
under penalty of perjury statement and the
payee’s taxpayer identification number (TIN).
The certification does not need to be renewed
annually. The certification on Form 590
remains valid until the payee’s status changes.
The withholding agent must retain a copy
of the certification or substitute for at least
five years after the last payment to which the
certification applies. The agent must provide it
to the FTB upon request.
If an entertainer (or the entertainer’s business
entity) is paid for a performance, the
entertainer’s information must be provided.
Do not submit the entertainer’s agent or
promoter information.
The grantor of a grantor trust shall be treated
as the payee for withholding purposes.
Therefore, if the payee is a grantor trust and
one or more of the grantors is a nonresident,
withholding is required. If all of the grantors
on the trust are residents, no withholding is
required. Resident grantors can check the
box on Form 590 labeled “Individuals —
Certification of Residency.”
D Definitions
For California nonwage withholding purposes,
nonresident includes all of the following:
• Individuals who are not residents of
California.
• Corporations not qualified through the
California Secretary of State (CA SOS)
to do business in California or having no
permanent place of business in California.
• Partnerships or limited liability companies
(LLCs) with no permanent place of
business in California.
• Any trust without a resident grantor,
beneficiary, or trustee, or estates where the
decedent was not a California resident.
Foreign refers to non-U.S.
For more information about determining
resident status, get FTB Pub. 1031, Guidelines
for Determining Resident Status. Military
servicemembers have special rules for
residency. For more information see General
Information E, Military Spouse Residency
Relief Act (MSRRA), and FTB Pub. 1032, Tax
Information for Military Personnel.
Permanent Place of Business:
A corporation has a permanent place of
business in California if it is organized and
existing under the laws of California or it has
qualified through the CA SOS to transact
intrastate business. A corporation that has
not qualified to transact intrastate business
(e.g., a corporation engaged exclusively in
interstate commerce) will be considered as
having a permanent place of business in
California only if it maintains a permanent
office in California that is permanently staffed
by its employees.
E Military Spouse Residency
Relief Act (MSRRA)
Generally, for tax purposes you are considered
to maintain your existing residence or domicile.
If a military servicemember and nonmilitary
spouse have the same state of domicile, the
MSRRA provides:
• A spouse shall not be deemed to have lost
a residence or domicile in any state solely
by reason of being absent to be with the
servicemember serving in compliance with
military orders.
• A spouse shall not be deemed to have
acquired a residence or domicile in any
other state solely by reason of being there
to be with the servicemember serving in
compliance with military orders.
Domicile is defined as the one place:
• Where you maintain a true, fixed, and
permanent home.
• To which you intend to return whenever you
are absent.