non resident shareholder of S corporation - Spidell

non resident shareholder of S corporation

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Message Board non resident shareholder of S corporation

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    • #199870
      Teresa Vail
      Participant

      CA S corporation, no income was earned for services in CA for 2019 (loan-out for actor) and actor is a citizen of Australia. He qualified as a US resident in prior years when corporation was formed. We continue to file as a US resident and pay US tax each year, even when he hasn’t stepped foot in the US for any job (2017 and 2018)
      All work in 2019 was in CANADA and 23% non-resident tax was withheld so I’ll safely avoid US tax for 2019

      Can I file non-resident for him individually for CA so his wages from the corporation are NOT subject to CA withholding? Will the income passed through from the S corp be subject to CA tax, regardless?

      Is the only way around this in the future to dissolve the CA corporation and register/incorporate in NV or other no-tax state since he rarely works in CA….

    • #200257
      Lynn Freer
      Participant

      He needs to file a CA S corp return and determine if there is any CA-source income to apportion to him. As far as him personally, he sounds like a resident of Australia and if he’s not working in CA, should not have wage income as he spent no time in CA. But the Corp could have some apportioned income. Check out our California Taxation of multistate businesses on demand webinar

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