California Non-Resident Withholding - “You make it, they take it”....for California

If you receive or pay California income, you must withhold taxes regardless of where you live, enter into a contract, or receive payment.

Withholding requirements

Nonwage withholding is required when a nonresident:

Provides services in California, such as independent contractors, performers, athletes, traveling nurses, public speakers.
Receives California income from pensions, distributions, real estate sales, and gambling winnings.

Nonresidents who receive California income

If you don’t live in California and receive California income, your payer withholds 7 percent from your income that exceeds $1,500 in a calendar year. When you file your tax return, you can claim this information as a withholding credit against your individual tax liabilities.

A payer (withholding agent) is the entity that pays you. Examples of payers include: