What Is Form 590 Withholding Exemption Certificate

Marginal payments to non-California residents are subject to a 7% income tax withholding if total payments exceed $1,500 in a calendar year. Some beneficiaries may apply to the Franchise Tax Board (FTB) for an exemption from withholding tax or a reduced rate of withholding tax. In this case, a copy of the FTB`s approval letter must be retained. If a waiver has been approved, there is no holdback. If a reduced tax rate has been approved, the amount of tax specified in the approval letter must be retained. The amount of income and tax withheld is reported to each beneficiary on Form 592-B, Resident and Non-Resident Withholding Return (see related information). Form 592-B must be issued to each beneficiary no later than January 31 following the end of the calendar year. Form 590, Certificate of Exemption from Withholding (see Related Information) must be completed by the recipient to certify the exemption. .