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Entertainers and Performers

This page provides resources on tax exemption, tax forms, and other requirements for UC Davis entertainers and performers.

California Withholding Requirements

California Franchise Tax Board – Nonresident Withholding Requirement
(Including Foreign Individuals and Entities)

Under California Revenue and Taxation Code (R&TC) Section 18662, any person or entity that has control, receipt, custody, disposal, or payment of California-source income is required to withhold and remit tax on payments made to nonresidents of California for services performed in the state.

This requirement applies to nonresident individuals, corporations, partnerships, limited liability companies (LLCs), and foreign entities (i.e., those domiciled or incorporated outside California or outside the United States) who earn income from California sources.

Specifically, withholding is required on payments to nonresident entertainers, such as:

  • Actors
  • Athletes
  • Singers
  • Musicians
  • Comedians
  • Other performers

who perform services in California and receive income as a result.

Note: The withholding requirement still applies even if payment is made to a third party (such as an agent, manager, or representative) on behalf of the nonresident or foreign payee. Withholding is based on the gross California-source payment, not the net after commissions or fees.

Key Requirements:

  • Withholding is currently 7% of the gross payment amount paid to a nonresident (individual or entity) if total payments exceed $1,500 in a calendar year.
  • The person or entity making the payment is responsible for:
    • Determining the residency status of the payee.
    • Withholding the appropriate tax amount.
    • Remitting the withheld tax to the Franchise Tax Board (FTB).
    • Filing appropriate withholding forms (e.g., Form 592 and 592-B).

Exemptions or Waivers:

Nonresident or foreign payees may request a waiver or reduction of withholding by submitting Form 588 (Nonresident Withholding Waiver Request) or Form 589 (Nonresident Reduced Withholding Request) to the FTB for approval before payment is made.

Federal IRS Withholding Requirements (for U.S. and Foreign Persons):

In addition to California requirements, federal law also mandates withholding under various IRS provisions, especially for foreign (non-U.S.) individuals or entities earning U.S.-source income.

For Foreign Persons (Nonresident Aliens and Foreign Entities):

  • Under IRC Section 1441, payers must withhold 30% federal tax on U.S.-source fixed or determinable annual or periodical (FDAP) income, which includes:
    • Compensation for services
    • Royalties

Penalties (California and Federal):

California (FTB):

  • Failure to withhold, remit, or report withholding properly can result in:
    • Penalties
    • Interest
    • Collections or enforcement actions

Federal (IRS):

  • Penalties apply for failure to:
    • Withhold required amounts
    • File correct forms (e.g., 1042, 1042-S for foreign payees)
    • Submit valid W-8/W-9 documentation
    • Timely remit taxes