AB 2660 estimated tax payment information April 2021 Tax News

For taxable years beginning on or after January 1, 2021, and until January 1, 2026, nonresident aliens receiving California source income may elect to be included on a group nonresident return filed by an authorized representative, in lieu of filing an individual nonresident return. The tax rate or rates applicable to an electing nonresident’s taxable income for services performed in this state would consist of the highest marginal rate, plus, if applicable to the electing nonresident, the additional mental health services tax, and no deductions or credits would be allowed. Any authorized entity filing the group return on behalf of electing nonresident aliens would act as their agent and the entity would make all tax payments, additions to tax, interest, and applicable penalties otherwise required to be paid by the electing nonresident alien.

Any nonresident alien who is not eligible for or has not been issued a federal social security number (SSN) or a federal individual taxpayer identification number (ITIN) may be included on the group nonresident return. If a nonresident alien subsequently becomes eligible for and is issued an SSN or ITIN, the Franchise Tax Board may require the nonresident alien to provide a letter or other form documenting the nonresident alien’s SSN or ITIN.

The 2021 Schedule 1067A, Nonresident Group Return Schedule will be updated to allow electing nonresident aliens who do not have an SSN or ITIN to be included in a group nonresident return. As a result of the administrative burden in processing estimated tax payments for electing nonresident aliens, the Franchise Tax Board will not require estimated tax payments to be made for electing nonresident aliens included on a nonresident group return for the 2021 tax year. Payment for the total tax liability for all electing nonresident aliens included on the group nonresident return should be attached to a timely filed nonresident group return, along with any other applicable forms and schedules.

To include a nonresident alien who is not eligible for or has not been issued a federal SSN or ITIN in the group nonresident return:

• Complete the group nonresident return
• Complete and attach Schedule 1067A to the group nonresident return
• Attach the total tax liability payment at time of filing the group nonresident return
• Attach all other applicable forms and schedules to filing the group nonresident return

For additional information, see the 2021 Schedule 1067A or the 2021 group nonresident return, that are expected to be available in December of 2021.