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Withholding on Partnerships and Limited Liability Companies

We administer withholding laws pertaining to domestic and foreign partners of partnerships and members of limited liability companies (LLCs).

Domestic nonresident partners and members

Partnerships and LLCs must withhold 7 percent on distributions of California source income made to domestic nonresident partners or members when distributions to a particular partner or member exceed $1,500 for the calendar year.

Partnerships and LLCs that withhold on domestic nonresident partners or members:

  • Send us the withheld amounts using Forms 592, Resident and Nonresident Withholding Statement, and 592-V, Payment Voucher for Resident and Nonresident Withholding. See Form 592 instructions for more details.
  • Provide resident and nonresident beneficiaries with either an electronic Form 592-B or a printed Form 592-B, Resident and Nonresident Withholding Tax Statement, at the end of the calendar year to show the total amount distributed to them and the total credit withheld.

Nonresident domestic partners or members can request reduced or waived withholding from us using a paper or electronic Form 589, Nonresident Reduced Withholding Request, or Form 588, Nonresident Withholding Waiver Request. See the form instructions for more details.

Foreign partners and members

Partnerships and LLCs must withhold on allocations of California source income to foreign partners and members (payees). Withhold at the maximum California tax rate applicable. For details on tax rates, see instructions on Form 592-A, Payment Voucher for Foreign Partner or Member Withholding.

Partnerships and LLCs that withhold on foreign partners or members:

  • Send us the withheld amounts using Form 592-A, Payment Voucher for Foreign Partner or Member Withholding.
  • Complete Form 592-F, Foreign Partner or Member Annual Return, and send it to us at the close of the taxable year. Form 592-F allows reporting of total withholding for the year and allocates the income or gain and related withholding to foreign partners or members (payees).
  • Provide foreign partners and members (payees) with Form 592-B, Resident and Nonresident Withholding Tax Statement, at the end of the calendar year to show total amount distributed to them and the total amount withheld.

Foreign partners and members can request reduced withholding from us using a paper or electronic Form 589, Nonresident Reduced Withholding Request. Foreign partners and members cannot request waived withholding from us.

Backup withholding on domestic and foreign partners and members

Backup withholding - Payers who perform federal backup withholding must also withhold and remit 7 percent of a reportable payment to us.