Withholding credit required by state for non-resident property owners

March 26, 2010

As of January 1, 2010, California law now requires anyone living outside of California and owning rental property in California to pay quarterly withholding credit on rents collected.

Further, property management companies are required to withhold 7 percent of all payments associated with rents paid to non-resident owners when the amount of the rents are greater than $1500 per calendar year. Management companies must forward the appropriate amount withheld on behalf of the non-resident property owner to the California Franchise Tax Board along with necessary Franchise Tax Board forms. This is to be performed quarterly.

There are some exemptions to this law. For more information, download the FTB article Withholding on Nonresidents With California Source Income, consult your tax professional or contact TenantFinders at 925.284.7200 or email: propinfo@tenantfinders.com

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• "Living several hundred miles away, there is no way I could take on the daily responsibility of managing my property or establishing the relationship with tenants the way TennantFinders has. When it comes to finding a tenant it's as though they magically match the perfect tenant with me, most of whom have turned into long-term tenants. And TenantFinders is equally competent when it comes to maintenance issues – taking care of routine items and providing me with options for non-routine items when needed. I trust TenantFinders implicitly with any matter regarding my rental."
  
  Phil Hammond,
  Property Owner