Landlord Frequently Asked Questions
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The California Franchise Tax Board (FTB) requires property managers to withhold 7% of gross payments to owners who live outside of California and submit the withholding to the FTB. You may be exempt from this regulation, eligible for a waiver, or eligible for reduced withholding:
Form 590- Withholding Exemption Certificate
If you are a resident of CA or believe you qualify for an exemption under one of the other categories (please read the form for full details), you can complete Form 590 Withholding Exemption Certificate.
Form 588- Nonresident Withholding Waiver
If you are not a resident of CA, you may qualify for a withholding waiver. Please read Form 588 for full details. If you feel you qualify for a waiver, please complete From 588 and send it directly to the FTB.
Form 589- Nonresident Reduced Withholding Request
If you are not exempt and do not qualify for a waiver, you may be entitled to a reduced withholding. You may complete Form 589- Nonresident Reduced Withholding Request and send it directly to the Franchise Tax Board (FTB).
If you complete and mail form 588 or 589 to the FTB, you should get a response within 2-3 weeks. Most of our clients, who were not eligible for a waiver, were granted some sort of reduction. All of the above forms can be found online at https://www.ftb.ca.gov.
To comply with the FTB requirements, we must withhold the 7% of gross rents, unless we receive form 590 from you OR a letter from the FTB instructing us to proceed differently.
If you have questions regarding the FTB regulations, please visit https://www.ftb.ca.gov and/or talk to your tax representative for more information. We are not tax professionals and cannot give you tax advice.
If you choose to complete 588 or 589, put your property manager as the “Withholding Agent”.
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