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FRANCHISE TAX BOARD WITHHOLDING: s.sdcpm.com/FTB

Beginning January 1, 2010, California law requires, with some exceptions, anyone who lives outside of California and who owns a rental property in this state to pay a quarterly withholding credit on any rents collected.


As your contracted management company, we are mandated by law to withhold 7 percent of the payments we make to you and send those funds to the Franchise Tax Board, once we have paid you more than $1,500 in a calendar year.


The law may not apply to you, and, in that case, we are required to keep on file an FTB590 FORM that demonstrates your exemption. Alternatively, you may be eligible for a reduced withholding or a waiver altogether.   In order to qualify, read and follow these instructions:


If it appears you live in California and thus are exempt, you do not need to do anything but if you live outside California and we do not receive a completed FTB590 FORM within 30 days from the date we start managing your property, we will start paying the Franchise Tax Board 7 percent of any payment made we make to you .These payments will be made in January, April, June, and September each year.


HOW CAN I CLAIM A CREDIT FOR THE PAYMENTS YOU MADE, WHEN I FILE MY TAXES EACH YEAR WITH THE FTB?



EXEMPTIONS


This law does not apply to you if you are one of the following, but you still need to complete an exemption form  using FTB590 FORM

When completing FTB590 FORM, the vendor /payee address is your address and not the property address that we manage for you 


California resident;


Corporations, Partnerships, LLC’s qualified with the Secretary of State to do business in California or that have a permanent place of business in California;


Estates where the deceased was a California resident at the time of death;


Tax-exempt organizations;


Insurance Companies, IRA’s, Qualified Pension and Profit Sharing Plans; or


California non-grantor trusts


If you meet any of these requirements above, please complete the  FTB590 FORM in order to certify your status as exempt, and return it to us. You can send the form 590 by email to ac@sdcpm.com or by fax to (619) 330-4649 OR by mail to SDCPM at 7853 El Cajon Blvd Suite E, La Mesa CA 91942


WAIVERS


If you are not exempt, you may still be eligible to receive a waiver from the tax withholding if:


You have California tax returns on file for the past two taxable years in which there were a filing requirement and you are considered current on any outstanding FTB tax obligations; or


If you have no tax filing history but are making estimated tax payments for the current year and are current on any outstanding FTB tax obligations.


If you wish to receive a waiver from the withholding requirements, please complete the FTB FORM 588 and attach any pertinent information and return it to

us. See FTB TIPS ON FTB588 FORM


We will file the information with the FTB on your behalf and once you receive approval from the FTB please send us a copy and will stop sending them the 7% payment.


INFORMATION NEEDED  FROM USE FOR FORM 588


Use the following information on Form 588 under Part 1 “Withholding agent information”


Business name  “SDPM INC”. Check the box “FEIN” and put “20-1126920”

First name:”James”. Initial:”P”. Last name “Burrell”  Contact telephone” (619) 742-8543”

Address: “7853 El Cajon Blvd Suite E, La Mesa CA 91942

FAX number “(619) 839-3919”

City “La Mesa"  State “CA” Zip Code “91942”


PART 2: You are the requestor.

PART 4: You are the payee.


A Note on Waivers:  They are available to domestic nonresident owners only.  Waivers are generally granted for fixed periods. 


The Franchise Tax Board generally responds to a waiver request within 21 working days.



Reduced Withholding


If you don’t qualify for an exemption or a waiver, you may still be eligible for a reduced withholding.  The reduced withholding credit is based upon the expenses paid out each month related to your property.  You will need to complete FTB FORM 589 Nonresident Reduced Withholding Request.


We will file the information with the FTB on your behalf and once you receive approval from the FTB please send us a copy and will stop sending them the 7% payment.



MORE INFORMATION INCLUDING LIVE CHAT WITH FTB WHEN AVAILABLE AT