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The withholding agent requests that the nonresident payee completes, signs, and returns Form 587 to the withholding agent when a contract is entered into and before a payment is made to the payee.
What is the withholding rate for domestic (nonforeign) partners? The withholding rate is 7 percent of the following: Gross payments made to nonresident independent contractors for services performed in California. Gross payments made to nonresident recipients of California rents or royalties.
Your payer must take 7% from your California income. Backup withholding: Replaces all other types of withholding.
Use Form 587, Nonresident Withholding Allocation Worksheet, to determine. if withholding is required and the amount of California source income subject to withholding.. Withholding is not required if payees are residents or have a permanent place of business in California.
Independent contractors in California are subject to a 15.3% tax, 12.4% for Social Security and 2.9% for Medicare.