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CA withholding on rents

While waiting for the Christmas ham to cook --- got a letter from my CA property manager. I own rental real estate in CA and I am a non-resident. Per my property manager, he is required to withhold 7% of the gross rents unless I obtain a waiver from ftb. I went to ftb web site and found the form 588 to request the waiver, but I am curious about this. At first blush I figured this was some new revenue enhancement thing from CA, but looking at the web site, it doesn't seem like this is new. Maybe my property manager just figured out he was supposed to be withholding?

I make regular estimated tax payments and file my non-res CA taxes every year, so I'm assuming the waiver should be no big deal? 7% of the gross is rather steep, esp since CA seems unable to cover income tax refunds timely.

scott s. ..

Reply to
scott s.
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Although you may be filing a non-resident return every year, I suspect the reason behind this is that there's alot of noncompliance in this area, and California is after every cent it can get its "hands" on.

Reply to
D. Stussy

Is your rental property commercial or residential? From the form 588 instructions, it seems only a payer in a trade or business needs to withhold from your rent payments.

Maybe, as you suggest, your property management company is just trying to cover their behind.

-Mark Bole

Reply to
Mark Bole

Mark Bole wrote in news:hh8766$pgm$ snipped-for-privacy@news.eternal- september.org:

This is a single-family residence. The property manager is a firm which does rental management only as its business. From reading the ftb forms it sounds like they are mainly interested in entertainers/ sports persons who are non-residents but come into the state and get 1099 income. In

2008 my CA income tax was 3.3% of my gross rents, so a 7% withholding would result in significant overwithholding.

scott s. ..

Reply to
scott s.

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