California group nonresident tax return advisory.

• Position: FTB news

The FTB recently discussed issues to consider if your client is considering making an irrevocable election to file a nonresident group return on behalf of its electing nonresident individuals.

California law imposes a tax on the income of a nonresident taxpayer that is derived from or attributable to sources within this state. Your clients that are nonresident taxpayers will either need to file a Form 540NR, California Nonresident or Part-Year Resident Income Tax Return or, if they qualify each year (annually), they can make an election to be included in group nonresident tax returns. A group nonresident tax return may be filed by:

1. A business entity, acting as the authorized agent for its electing nonresident individual shareholders/partners/ members, to report the distributive shares of income from the business entity derived from California sources or from doing business in California.

2. A corporation, acting as authorized...