How to Fill Out California Form 587: Payee Info, Allocation, and Signing

To fill out California Form 587, the Nonresident Withholding Allocation Worksheet, you work through four short parts: the withholding agent’s information, your information as the nonresident payee, the type of payment involved, and the allocation of that payment between California and non-California sources. You sign under penalty of perjury and give the completed worksheet to the person or business paying you, not to the Franchise Tax Board. The current PDF is available at ftb.ca.gov.¹

The form exists so the withholding agent can apply California’s 7% nonresident withholding to only the California-source portion of what they pay you, instead of the full amount once your annual payments exceed $1,500.² Without a Form 587 on file, the agent has no basis to reduce the withholding and will apply 7% to everything above the threshold.³

What to Gather Before You Start

You need three things in front of you: the withholding agent’s legal name and address, your own taxpayer identification number, and a defensible breakdown of how much of the payment relates to work performed inside California versus outside. For the allocation, pull together work logs, travel records, project calendars, or the contract itself. The FTB expects a factual basis, not a rough guess.

Part I: Withholding Agent Information

The withholding agent is whoever is paying you. Enter their legal name, street address, city, state, and ZIP code. For a foreign address, follow the formatting notes on the form. Part I does not ask for the agent’s taxpayer identification number; that information travels on Form 592 when the agent later reports what was withheld.¹

Part II: Nonresident Payee Information

This is you. Check either the business box or the individual box, not both, and enter your name and current mailing address. Provide one valid taxpayer identification number: a Social Security number, Individual Taxpayer Identification Number, Federal Employer Identification Number, California corporation number, or California Secretary of State file number.⁴ A missing or wrong TIN is the fastest way to stall the whole process; the agent cannot act on a reduced-withholding allocation without one.

Part III: Payment Type

Part III tells the agent what kind of transaction they are paying for. Check one box:

Performs services totally outside California. No withholding required. Skip to the certification and sign.
Provides only goods or materials. No withholding required. Skip to the certification and sign.
Provides goods and services in California. Continue to Part IV.
Provides services within and outside California. Continue to Part IV.
Other. Describe the payment type and continue to Part IV if any portion is California-source.

Choose carefully. Checking “provides only goods or materials” when services were actually part of the deal removes withholding that should have applied; checking a Part IV box when nothing was California-source triggers withholding you did not owe. If you are an out-of-state vendor shipping goods into California with no services attached, the goods-or-materials box ends the form.¹

Part IV: Income Allocation

Part IV is the heart of the form. Three columns: (a) payments within California, (b) payments outside California, and (c) total payments. The withholding agent applies the 7% rate only to column (a).⁴

For services, the FTB instructions treat work physically performed in California as California-source for withholding purposes. If a contract has you on-site in Los Angeles for three weeks and working from your home office in Oregon for one week, roughly three-quarters of the service payment lands in column (a). Document the split as you go; the logs you keep now are the evidence that supports the number later.

If your California work is part of a larger unitary business operating across multiple states, the instructions direct you to use your California apportionment percentage from Schedule R instead of a straight time-based split.⁴ That calculation follows the Uniform Division of Income for Tax Purposes Act and typically uses a sales-factor formula. Review the Schedule R instructions or speak with a tax professional before completing Part IV in that case.

An inflated California figure means money sits with the state until you reclaim it on your return. An understated one creates a liability for the withholding agent, which is why agents who cannot verify your allocation tend to default to full 7% withholding.

Certify, Sign, and Hand It Over

Sign and date the form. Your signature certifies, under penalty of perjury, that the allocation is accurate and that you will notify the agent promptly if anything material changes.⁴

Give the signed form to the withholding agent before the first payment is issued. The form does not go to the Franchise Tax Board; the agent keeps it on file and applies the allocation to each payment. The agent is required to retain it for a minimum of five years and produce it for the FTB on request.⁵ Keep your own copy as well.

When to Submit a New Form 587

One Form 587 covers the life of the contract as long as the facts you certified stay accurate. You do not file a fresh one every January for an ongoing engagement. You do file a new one when something material shifts: total payment amounts change, or the share of work performed in California grows or shrinks from what you originally allocated. The withholding agent should also reassess whether an update is needed when circumstances change.

When Form 587 Is Not the Right Form

Several situations call for a different form entirely:

California residents use Form 590 to certify exemption from nonresident withholding.⁶
Nonresidents seeking a full waiver file Form 588 with the FTB at least 21 business days before the first payment. An approved waiver is good for up to 24 months.⁷
Foreign (non-U.S.) partners or members use Form 589.
Sellers of California real estate use Form 593.

If your services were performed entirely outside California, Form 587 is still the right form; you simply check that box in Part III, sign, and the agent withholds nothing.¹

1
Franchise Tax Board. Form 587 Nonresident Withholding Allocation Worksheet
2
Cornell Law Institute. Cal. Code Regs. Tit. 18, 18662-4
3
Franchise Tax Board. Withholding on nonresidents
4
Franchise Tax Board. 2025 Instructions for Form 587
5
Franchise Tax Board. 2026 Instructions for Form 587
6
Franchise Tax Board. Instructions for Form 590
7
Franchise Tax Board. 2026 Instructions for Form 588