California Guidelines for Filing a Group Form 540-NR

Guidelines for Filing a Group Form 540-NR
2023 Guidelines for Filing a Group Form 540NR
1067

FTB Publication

2023
Guidelines for Filing a
Group Form 540NR

Table of Contents
What's New .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3
General Information  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3
Purpose  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4
Terms Used in this Publication  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4
Introduction .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4
Filing Information and Important Due Dates  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4
Requirement for the Electing Individual to File a California Income Tax Return. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5
Why File a Group Nonresident Return .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5
Who Can Be Included in the Group Nonresident Return .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5
Individual’s Decision to be Included in the Group Nonresident Return  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5
Election to File a Group Nonresident Return  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 6
Return for Shareholders/Partners/Members  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 6
Return for Directors .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7
Estimated Tax Requirements  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7
How to Make Estimated Tax Payments on Form 540-ES  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7
Moving Estimated Payments  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8
Important Information – How to Avoid Common Errors  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8
How to Make an Extension Payment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8
Instructions for Completing Group Nonresident Return  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 9
Schedule 1067A, Nonresident Group Return Schedule ..  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11
Instructions for Schedule 1067A .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 14
Schedule 1067B, Group Nonresident Return Payment Transfer Request  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 16
Form FTB 3864, Group Nonresident Return Election  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 17
Sample Form 540-ES, Estimated Tax for Individuals .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 19
Sample Form FTB 3519, Payment for Automatic Extension for Individuals. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 19
Sample Form 540NR, California Nonresident or Part-Year Resident Income Tax Return .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 19
How to Get Additional Information Regarding Group Nonresident Returns  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 20

Page 2  FTB Pub. 1067  2023

2023 Guidelines for Filing a Group Form 540NR
What's New
Reporting Requirements –Taxpayers may need to file
form FTB 4197, Information on Tax Expenditure Items, with
the tax return to report tax expenditure items as part of the
Franchise Tax Board's (FTB's) annual reporting requirements
under R&TC Section 41. To determine if you have an R&TC
Section 41 reporting requirement, get form FTB 4197.

General Information
Elective Tax for Pass-Through Entities (PTE) and Credit
for Owners – For taxable years beginning on or after
January 1, 2021, and before January 1, 2026, California law
allows an entity taxed as a partnership or an “S” corporation
to annually elect to pay an elective tax at a rate of 9.3% based
on its qualified net income. The election shall be made on an
original, timely filed return and is irrevocable for the taxable year.
The law allows a credit against the personal income tax to a
taxpayer, other than a partnership, that is a partner, shareholder,
or member of a qualified entity that elects to pay the elective tax,
in an amount equal to 9.3% of the partner’s, shareholder’s, or
member’s pro rata share or distributive share and guaranteed
payments of qualified net income subject to the election made
by the qualified entity. Generally, a disregarded business entity
and its partners or members cannot receive the credit, except for
a disregarded single member limited liability company (SMLLC)
that is owned by an individual, fiduciary, estate, or trust subject
to personal income tax.
For more information, go to ftb.ca.gov and search for pte
elective tax.
Partnership Audit Regime Amended Return – For partnerships
and LLCs, classified as partnerships that were audited by the
Internal Revenue Service (IRS) under its new partnership audit
regime and that made a federal alternative payment election
(push-out), or were granted a different election to push-out by
the FTB, should file an amended group nonresident return for
nonresident direct individual partners and members that were
included on the original group nonresident return.
New Partnership Audit Regime – For federal purposes, the
federal Bipartisan Budget Act of 2015 replaced the federal Tax
Equity and Fiscal Responsibility Act of 1982, creating a centralized
partnership audit regime, and generally transferring the liability
for the tax due to the partnership. All partnerships with taxable
years beginning after 2017 are subject to this new regime unless
an eligible partnership elects out. For California purposes, taxable
years beginning on or after January 1, 2018, partnerships are
required to report each change or correction made by the IRS, to
the FTB, for the reviewed year within six months after the date of
each final federal determination, and will generally be liable for the
tax due.
Backup Withholding – With certain limited exceptions, payers
that are required to withhold and remit backup withholding
to the IRS are also required to withhold and remit to the FTB
on income sourced to California. If the payee has backup
withholding, the payee must contact the FTB to provide a valid
Taxpayer Identification Number (TIN), before filing the tax return.
Failure to provide a valid TIN may result in a denial of the backup
withholding credit. For more information, go to ftb.ca.gov and
search for backup withholding.
Doing Business – A taxpayer is doing business if it actively
engages in any transaction for the purpose of financial or
pecuniary gain or profit in California or if any of the following
conditions is satisfied:

y	 The taxpayer is organized or commercially domiciled in
California.
y	 The sales, as defined in R&TC Section 25120(e) or (f), of
the taxpayer in California, including sales by the taxpayer’s
agents and independent contractors, exceed the lesser of
$711,538 or 25% of the taxpayer’s total sales.
y	 The real property and tangible personal property of the
taxpayer in California exceed the lesser of $71,154 or 25%
of the taxpayer’s total real property and tangible personal
property.
y	 The amount paid in California by the taxpayer for
compensation, as defined in R&TC Section 25120(c),
exceeds the lesser of $71,154 or 25% of the total
compensation paid by the taxpayer.
In determining the amount of the taxpayer’s sales, property, and
payroll for doing business purposes, include the taxpayer’s pro
rata share of amounts from partnerships and S corporations.
For more information, see R&TC Section 23101 or go to
ftb.ca.gov and search for doing business.
Mental Health Services Tax on Income Over $1 Million –
Nonresident individuals with over $1 million of California taxable
income are eligible to be included in group nonresident returns.
An additional 1% mental health services tax will be assessed
on their entire California taxable income if they elect to be part
of the group return. This differs from when individuals file their
own return and only the taxable income in excess of $1 million
is subject to the additional 1% tax. Individuals should be aware
of this difference when making their irrevocable election to be
included in the group return.
For individuals included in two or more group returns, the
additional 1% tax applies if their combined California taxable
income from all their group returns is more than $1 million. For
example, an individual is included in two group returns. The
individual’s taxable income on each group return is less than
$1 million. However, the combined taxable income from the two
group returns is over $1 million. The individual’s income reported
on each group return is subject to the additional 1% tax. The
business entity/corporation is responsible for finding out from
each individual included in the group return if the individual has
total California taxable income in excess of $1 million.
Single-Sales Factor Formula – R&TC Section 25128.7 requires
all business income of an apportioning trade or business,
other than an apportioning trade or business under R&TC
Section 25128(b), to apportion its business income to California
using the single-sales factor formula. For more information, get
Schedule R, Apportionment and Allocation of Income, or go to
ftb.ca.gov and search for single sales factor.
Market Assignment – R&TC Section 25136 requires all
taxpayers to assign sales, other than sales of tangible personal
property, using market assignment.
The market assignment method and single-sales factor
apportionment may result in California sourced income or
apportionable business income if a taxpayer is receiving income
from intangibles or services from California sources. Such
income includes:
1.	 Sales from services to the extent that the purchaser of the
service receives the benefit of the service in California.
2.	 Sales of intangible property to California to the extent that
the intangible property is used in California. For marketable
securities, the sales are in California if the customer is in
California.
3.	 Sales from the sale, lease, rental, or licensing of real property
if the real property is located in California.
4.	 Sales from the rental, lease, or licensing of tangible personal
property if the property is located in California.

FTB Pub. 1067  2023  Page 3

For more information, see R&TC Section 25136 and Cal. Code
Regs., tit. 18 section 25136-2, get Schedule R, and FTB Legal
Ruling 2022-01, or go to ftb.ca.gov and search for market
assignment.
Registered Domestic Partners (RDP) – For purposes of
California income tax, references to a spouse, husband, or wife
also refer to a California RDP, unless otherwise specified. When
we use the initials RDP they refer to both a California registered
domestic “partner” and a California registered domestic
“partnership,” as applicable. For more information on RDPs, get
FTB Pub. 737, Tax Information for Registered Domestic Partners.

Purpose
This publication is for corporations, partnerships, and limited
liability companies (LLCs) that elect to file a group nonresident
return, also commonly referred to as a composite return.

Terms Used in this Publication
Business entity refers to an S corporation, partnership, or LLC
that elects to file a group nonresident return on behalf of its
individual nonresident shareholders, partners, or members.
Pass-through income refers to the shareholder’s, partner’s,
or member’s distributive share of income from the business
entity derived from California sources or from doing business in
California.
Corporation refers to a corporation that elects to file a group
nonresident return on behalf of its individual nonresident
directors.
Director’s compensation refers to the director’s wages,
salaries, fees, or other compensation from the corporation for
director services sourced to California, including attendance at
board of directors’ meetings.
Individual refers to a shareholder, partner, member, or director
who is a natural person and his or her spouse/registered
domestic partner (RDP). Individual also includes the grantor of
a grantor trust described under Internal Revenue Code (IRC)
Sections 671-679 and not recognized as a separate taxable
entity for income tax purposes when the grantor is an individual.

A	Introduction
A group nonresident 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. See R&TC Section 18535.
2.	 A corporation, acting as the authorized agent for its electing
nonresident directors, to report the directors’ wages, salaries,
fees, or other compensation from that corporation for director
services sourced to California, including attendance of board
of directors’ meetings. See R&TC Section 18536.
3.	 A business entity, acting as the authorized agent for its
electing nonresident aliens without an SSN or ITIN, to report
the nonresident aliens’ compensation for services performed
in California. See R&TC Section 18537.
The business entity/corporation files the return and pays the
tax on behalf of the electing nonresident individuals. A group
nonresident return is considered a group of individual returns
that meets the California individual income tax return filing
requirement. Thus, a qualified nonresident individual who elects
to be included in the group nonresident return does not file a
separate personal income tax return for the tax year.
Income Taxed at the Highest Marginal Rate – The income
reported on the group return is taxed at the highest marginal rate
of 12.3%.

Page 4  FTB Pub. 1067  2023

Use Form 540NR – The business entity/corporation uses
Form 540NR, California Nonresident or Part-Year Resident
Income Tax Return, for the group nonresident return. Special
instructions for completing Form 540NR are explained in
Section O, Instructions for Completing Group Nonresident Return.
Use a Calendar Year End – The group nonresident return and
any estimate payments are due on a calendar year basis, even if
the business entity/corporation has a fiscal year end. The group
returns for any tax periods ending in 2023 are due April 15, 2024.
The group returns for any periods ending in 2024 will be due
April 15, 2025. For example:
y	 If a partnership’s taxable year ends on June 30, 2023, then
report on the 2023 group return the California source income
from each electing partner’s Schedule K-1 (565), Partner’s
Share of Income, Deductions, Credits, etc., for the taxable
year ending June 30, 2023. Even though the fiscal year ends
June 30, 2023, the estimate payments are not due until
4/15/23, 06/15/23, 9/15/23, and 1/15/24.
y	 The corporation reports the director’s compensation that he
or she received in 2023 on the 2023 group return.

B	 Filing Information and Important
Due Dates
Form Type
Group
Return

Form Number

Can be Filed Due Dates for
Electronically? Tax Year 2023

Form 540NR,
California
Nonresident
or Part-Year
Resident
Income Tax
Return

No.

10/15/24 –
Extended due
date
California
extension is
automatic.

See Section O
and the sample
on page 19
for special
instructions.
Extension
Form
Tax Payment FTB 3519,
Voucher
Payment for
Automatic
Extension for
Individuals
See Section N
and the sample
on page 19
for special
instructions.
Estimate Tax Form 540-ES,
Payment
Estimated Tax
Voucher
for Individuals

4/15/24 –
Original due
date

Yes. Use
4/15/24
Web Pay for
Individuals at
ftb.ca.gov/pay.
For mandatory
e‑pay, see
Section K.

Yes. Use
Web Pay for
Individuals at
ftb.ca.gov/pay.

See Sections J,
K, L and
For mandatory
the sample
e‑pay, see
on page 19
Section K.
for special
instructions.

Due dates for
taxable year
2023.
4/15/24 – 1st
installment
6/15/24 – 2nd
installment
9/15/24 – 3rd
installment
1/15/25 – 4th
installment

When the due date falls on a weekend or holiday, the deadline to
file and pay without penalty is extended to the next business day.

C	 Requirement for the Electing
Individual to File a ­California
Income Tax Return
The requirement to file a C
­ alifornia personal income tax return is
determined on an individual basis. See “Do I Have to File?” in the
Form 540NR tax booklet.
For 2023, a full-year nonresident is required to file a return if the
individual has any ­California source income and has more than
$21,561 gross income from all sources or more than $17,249
adjusted gross income from all sources. For prior years, get the
Form 540NR booklet for the appropriate year.

D	 Why File a Group Nonresident
Return
A group nonresident return is filed on behalf of the electing
nonresident individuals for their convenience. When filing an
individual return, a nonresident must report all income from
all sources in addition to the ­California source income. On
the group nonresident return, only the California source passthrough income, director's compensation, or nonresident alien's
compensation is reported. The income is taxed at the highest
marginal tax rate of 12.3% and no deductions or credits are
allowed except those directly attributable to the business entity’s
activity. Nonresident individuals with more than $1 million of
California taxable income are subject to an additional 1% tax
on their California taxable income when included in the group
return. See General Information, Mental Health Services Tax on
Income Over $1 Million, for more information.

E	 Who Can Be Included in the Group
Nonresident Return
To be included in the group nonresident return, all the following
requirements must be met:
1.	 Only individuals can be included on the group return.
Individual means a natural person and his or her spouse/
RDP. Individual also includes the grantor of a grantor trust
described under IRC Sections 671-679 and not recognized as
a separate taxable entity for income tax purposes when the
grantor is an individual.
Example: The ABC partnership consists of a general partner
and 20 limited partners. The general partner is a corporation.
The limited partners consist of 15 nonresident individuals, an
S corporation, a nonresident estate, an LLC, a limited liability
partnership (LLP), and a trust (which is not a grantor trust).
The 15 nonresident individuals may qualify to be included in
the group nonresident return. None of the other partners can
be included in the group nonresident return.
2.	 The individual must be a full-year nonresident of California.
For information to help you determine your residency status,
get FTB Pub. 1031, Guidelines for Determining Resident
Status.
3.	 The income from the business entity/corporation is the only
California source income of the individual, unless the other
California source income is being reported on another group
nonresident return.
Example: A nonresident individual has California source
income from a business entity and from an individually owned
California rental property. This individual cannot be included in
the group return of the business entity because the individual
has income from an individually owned California rental
property.

Example: A nonresident individual has California source
income from the ABC partnership and the XYZ partnership.
The individual does not have California source income from
any other source. The individual can elect to be included
in the group nonresident return of both partnerships. The
individual cannot elect to be included in the group nonresident
return of only one of the partnerships.
Example: A nonresident individual is a corporate director
of a corporation and received California source director
fees. The individual is also a partner in a partnership that
derives income from California sources. The individual can
be included in the group nonresident returns of both the
corporation and the partnership. The individual cannot be
included in only one of the group nonresident returns.
Example: XYZ partnership does business in California and
has three partners -- two nonresident individuals (A and B)
and partnership CDF. Partnership CDF has two partners –
nonresident individual M and a C corporation. Individuals
A, B, and M wish to file one group return to include all
of the partners deriving California sourced income from
XYZ partnership.
Tiered partnerships (and other tiered ownership structures)
are not allowed to file a group return to combine all of their
business entities and individual nonresident partners on
one group return. Each of the tiered partnerships must file a
separate group nonresident return for their electing individual
nonresident partners and cannot include any business
entities in the group nonresident return.
XYZ partnership may file a group nonresident return
for individuals A and B. XYZ partnership cannot include
partnership CDF or any of CDF’s partners in the group
nonresident return. For taxable years beginning on or after
January 1, 2009, partnership CDF may elect to file a group
nonresident return for nonresident individual partner M.
However, the C corporation may not be included in the group
nonresident return because group nonresident returns cannot
include business entities.

F	 Individual’s Decision to be Included
in the Group Nonresident Return
The Individual’s Decision is Irrevocable – Each nonresident
individual must decide whether to be included in the group
nonresident return prior to its filing. Once the group nonresident
return is filed, the election to be included in the group
nonresident return is irrevocable for the taxable year. Once filed,
the group return cannot be amended to either include or exclude
a nonresident individual. Similarly, once an electing nonresident
individual is included in the group return, the individual may not
subsequently file a separate individual return for the taxable year.
Exception: The individual may discover after the group return
was filed that he or she did not qualify to be included in the
group nonresident return. For example, the individual had income
from other California sources that were not reported on any other
group nonresident return. The individual must file a return on a
separate basis reporting all his or her California source income.
Having other sources of California losses will not disqualify the
individual from being included in a group nonresident return.
Residents of Arizona, Guam, Oregon, and Virginia – If you
file your own individual return, you may qualify to claim the other
state tax credit. This credit is not allowed if you are included
in the group return. Thus, you may want to consult with a tax
advisor before making the irrevocable election to be included in
the 2023 group return.
Business Entity’s/Corporation’s Responsibility to Inform
Individuals – The business entity/corporation is responsible for:

FTB Pub. 1067  2023  Page 5

y	 Allowing each nonresident individual the annual option of
being included in the group nonresident return.
y	 Informing each nonresident individual of the terms and
conditions of filing a group nonresident return specified on
form FTB 3864, Group Nonresident Return Election, included
in this publication.
The business entity/corporation is responsible for finding out
from each individual included in the group return if the individual
has total California taxable income in excess of $1 million. If so,
it is the business entity/ corporations’ responsibility to report and
pay the additional 1% mental health services tax on the group
return. See General Information, for more information.

G	 Election to File a Group
Nonresident Return
The business entity/corporation makes an annual election to file
a group ­nonresident return on behalf of the electing nonresident
individuals. Once made, the election is irrevocable for the taxable
year. Make the election by attaching a completed and signed
form FTB 3864, to the Form 540NR filed for the group.

H	 Return for Shareholders/Partners/
Members
Shareholders/partners/members report on the group nonresident
return their distributive share of income from the business
entity derived from California sources or from doing business in
California.

Reporting of Gains/Losses
Capital Gains/Losses – All limitations normally applied at
the individual level apply on the nonresident group return. For
instance, an individual’s ­California source capital losses from a
business entity may only be deducted to the extent of ­California
source capital gains, plus $3,000. The allowable capital loss for
each electing nonresident is totaled and entered on the return.
The filing status of nonresident electing individuals is deemed
to be single, limiting each to a $3,000 capital loss. The business
entity must keep track of the allocable share of the California
source capital gains and losses (including carryovers) for each
electing nonresident individual.
IRC Section 1231 net losses are allowed in full.
Passive Losses – The business entity must complete a single
form FTB 3801, Passive Activity Loss Limitations, for the electing
nonresident individuals included in the group return. Only
­California source passive losses are reported on form FTB 3801.
Passive losses will be allowed only to the extent of passive
income. When losses are not allowed, they are suspended at
100% for each electing nonresident individual. When suspended
passive losses are released by current year passive income,
the suspended prior year losses offset the current year passive
income on the group return. Suspended prior year losses are
also released upon disposition of the entire interest in the
passive activity. The business entity must keep track of the
allocable share of the suspended ­California source passive
losses for each electing nonresident individual included in the
group return.

Individual Deductions Not Allowed on the
Group Nonresident Return
Individual deductions are not allowed on the group nonresident
return. Individual deductions include, but are not limited to,
the deduction for self-employment tax, the IRC Section 179
deduction, charitable contributions, itemized deductions, and
the standard deduction. However, there is an exception for the
deduction for contributions to a deferred compensation plan.

Page 6  FTB Pub. 1067  2023

Net Operating Loss (NOL)
An NOL is also an individual deduction. An individual cannot
claim an NOL deduction on the group nonresident return. An
individual who reports a net loss on the group nonresident return
forgoes any NOL deduction that could have resulted on an
individual nonresident return from that net loss.

Contributions to a Deferred
Compensation Plan
Partners of a partnership and members of an LLC (but not
shareholders of an S corporation) are allowed a deduction
on the group nonresident return under IRC Section 401
through Section 424, as modified by California. If an electing
nonresident individual has earned income from any other
source, no deduction is allowed. The definition for “earned
income” means the net earnings from self‑employment per
IRC Section 401(c)(2).
The deduction is computed by multiplying the allowable federal
deduction by the electing nonresident individual’s California
apportionment percentage.

Credits
Credits that can be claimed on the group nonresident return
are credits that are directly attributable to the business entity’s
activities such as the new employment credit, the low-income
housing credit, and the research credit. Get the business
entity tax booklets for more information on credits that can be
claimed. Attach the applicable business credit forms to the group
Form 540NR.
Individual credits, such as the personal, blind, senior, or
dependent exemption credits, the other state tax credit, and the
PTE elective tax credit are not allowed on the group nonresident
return. To use individual credits, such as the other state tax
credit or the PTE elective tax credit, the individual should file a
separate Form 540NR and should not be included in the group
return. See Section F, Individual’s Decision to be Included in the
Group Nonresident Return, for more information.
If the credits directly attributable to the business entity’s activities
exceed the amount of tax for a given year and are available
for carryover, the business entity will properly account for such
credit with respect to each individual included in the group
nonresident return.
Nonbusiness income from intangibles should generally be
allocated to each shareholder's/partner’s/member’s state of
residence. For more information, see instructions for Form 565,
Partnership Return of Income, or Form 568, Limited Liability
Company Return of Income.

Special Information for Partnerships and
LLCs Subject to Apportionment
Cal. Code Regs., tit. 18 section 17951-4 applies to the
income computation of the nonresident partners/members
of a partnership/LLC. The regulation provides that 100%
of the nonresident’s distributive share of the partnership’s
business income plus any guaranteed payment, is subject to
apportionment. Guaranteed payments are treated as part of a
partner’s distributive share of partnership business income. See
R&TC Section 17854.
Investment Partnership – If the partnership qualifies as an
investment partnership under R&TC Section 17955(c), generally
the dividends, interest, gains, and losses from that partnership
will be sourced in the partner’s/member’s state of residence.
If the partnership does not qualify as an investment partnership
under R&TC Section 17955(c) or if the partnership does
qualify as an investment partnership but the partner/member
is disqualified under R&TC Section 17955(b), pertaining to

investment activities interrelated with trade or business within
this state, then the normal apportionment and allocation rules
apply in determining the character of the income as business or
nonbusiness. Business income should be apportioned using the
partnership factors.

Withholding Requirements of S Corporation/
Partnership/LLC
Withholding is required if either of the following apply:
y	 California source income is allocable under IRC Section 704
to a foreign nonresident partner/member.
y	 California source income distributed to a domestic
(nonforeign) nonresident shareholder/partner/member
exceeds $1,500 in the calendar year.
Withholding is not required if the shareholder/partner/member
has received authorization waiving the withholding from the FTB.
However, there is no provision in the tax law to allow a waiver of
­withholding for a foreign nonresident partner/member.
Non-California partnerships are subject to withholding
requirements on a sale of California real property at a rate of
3 1/3% (.0333) of sales price or 12.3% of gain. The alternative
withholding rate for the gain on the sale of California real
property by S corporations is 13.8% and 15.8% for financial
S corporations. The withholding rates are 8.84% for foreign
corporate partners/members, 12.3% for foreign nonresident
individual partners/members, and 7% for all domestic
nonresident shareholders/partners/members.
For withholding rates and additional information regarding
­California withholding requirements, get FTB Pub. 1016, Real
Estate Withholding Guidelines; FTB Pub. 1017, Resident and
Nonresident Withholding Guidelines, or call the Withholding
Services and Compliance phone service at 888.792.4900.

I	 Return for Directors
Directors report on the group nonresident return their director’s
wages, salaries, fees, or other compensation from the
corporation for director services sourced to California, including
attendance at board of directors’ meeting.
Deductions Are Not Allowed – Directors are not allowed to
claim any deductions on the group nonresident return. This
includes, but is not limited to, expenses related to their director
compensation, itemized deductions, standard deduction, net
operating losses, and adjustments to income such as individual
retirement account deductions.
Credits Are Not Allowed – Directors are not allowed to claim
any credits on the group return. Credits include, but are not
limited to, the personal, blind, senior, or dependent exemption
credit and all special credits such as the other state tax credit.
To use individual credits, the director should file a separate
Form 540NR and should not be included in the group return.
See Section F, Individual’s Decision to be Included in the Group
Nonresident Return, for more information.
S Corporations Filing A Group Nonresident Return for Both
Directors and Shareholders – An S corporation that has both
electing nonresident directors and nonresident shareholders
must file only one group nonresident return including both
directors and shareholders.
Nonresident Alien – For taxable years beginning on or after
January 1, 2021, and before January 1, 2026 a nonresident
group return can be filed on behalf of electing nonresident
aliens receiving California source income from a taxpayer.
A nonresident alien, who is not eligible for or has not been
issued a federal social security number (SSN) or individual
tax identification number (ITIN), could be included in the group
return or file an individual return without obtaining an SSN or
ITIN.

J	 Estimated Tax Requirements
Generally, taxpayers with a tax liability less than $500 do not
need to make estimated tax payments. If the tax is underpaid, a
penalty for the underpayment of estimated tax will be assessed
based on the net tax of the group nonresident return. Get
Form 540-ES, Estimated Tax for Individuals, and form FTB 5805,
Underpayment of Estimated Tax by Individuals and Fiduciaries,
for more information.
Estimated Tax Payments – Installments due for each taxable
year shall be:
y	 30% of the required annual payment for the 1st required
installment
y	 40% of the required annual payment for the 2nd required
installment
y	 No installment is due for the 3rd installment
y	 30% of the required annual payment for the 4th required
installment

K	 How to Make Estimated Tax
Payments on Form 540-ES
Mandatory Electronic Payments (e-pay) – You are required
to remit all your payments electronically once you make an
estimate or extension payment exceeding $20,000 or you file
an original return with a total tax liability over $80,000. Once
you meet this threshold, all subsequent payments regardless of
amount, tax type, or taxable year must be remitted electronically.
The first payment that would trigger the mandatory e-pay
requirement does not have to be made electronically. Individuals
who do not send the payment electronically may be subject to a
1% noncompliance penalty. Electronic payments can be made
using Web Pay. For more information, go to ftb.ca.gov/e-pay.
You can request a waiver from mandatory e-pay if one or more of
the following is true:
y	 You have not made an estimated tax or extension payment in
excess of $20,000 during the current or previous taxable year.
y	 Your total tax liability reported for the previous taxable year
did not exceed $80,000.
y	 The amount you paid is not representative of your total tax
liability.
For more information or to obtain the waiver form, go to
ftb.ca.gov/forms and search for 4107.
Caution: Do not include estimate payments due for the
business entity with your group return payments. Business entity
payments must be made separately from the group payments to
avoid delays and errors in processing returns.
To make group nonresident return estimated tax payments:
1.	 Whether required to pay electronically or not, Web Pay
for Individuals may be used to make your estimated tax
payments electronically. For Web Pay instructions, go to
ftb.ca.gov/pay for more information.
2.	 If not using Web Pay, mail your estimate payments
using Form 540‑ES. Caution: If you make estimated tax
payments with any other estimated tax voucher, such as the
Form 100-ES, Corporation Estimated Tax, the payments will
not be properly credited for the group nonresident return.
3.	 Type or print the following information in the top margin of the
Form 540-ES:
		GROUP FILING PROGRAM  MS L170
	ATTN: IVS (732)
4.	 Enter the name, address, and federal employer identification
number (FEIN) as follows:
y	 First name: Enter “ A ” if a partnership or LLC. Enter “ C ” if
a corporation.

FTB Pub. 1067  2023  Page 7

y	 Last name: Enter “ PTSP ” if a partnership or LLC. Enter
“ SGNF ” if a corporation.
y	 Address: Enter the business entity’s or corporation’s name
and address.
y	 Social security number (SSN) or Individual Taxpayer
Identification Number (ITIN): Enter the FEIN of the
business entity/corporation.
See the sample on page 19 of this publication.
5.	 Mail the estimate voucher with payment to the address shown
on the Form 540-ES.
To avoid penalties and interest, submit your payments by the
estimate payment due dates. See Section B, Filing Information
and Important Due Dates.
Use MyFTB for Individuals to verify receipt of your payment.
For more information, go to ftb.ca.gov and login or register for
MyFTB.

L	 Moving Estimated Payments
You may need to move estimated tax payments “from the group
nonresident return to the individual nonresident return”
or “from the individual nonresident return to the group
nonresident return.”
Caution: The election to be included in the group return is
irrevocable once the group return is filed for the taxable year.
Therefore, after the group return is filed, individuals cannot elect
out of the group return and move their share of the group return’s
tax payments to their individual account.
Schedule 1067B – Use Schedule 1067B, Group Nonresident
Return Payment Transfer Request, to authorize us to move
estimated tax payments.
1.	 Complete one Schedule 1067B to move payments to the
group. Complete a separate Schedule 1067B to move
payments to the individual. Do not combine these requests
on one Schedule 1067B.
2.	 A general partner, member-manager, corporate officer, or
attorney-in-fact of the business entity/corporation must sign
the form.
3.	 Fax or mail the completed form to:
Fax: 	 916.845.9392
Mailing address:
GROUP FILING PROGRAM MS L170
ATTN: INFORMATION VALIDATION SECTION (732)
FRANCHISE TAX BOARD
PO BOX 1468
SACRAMENTO CA 95812-1468
Time Period to Move the Payments – Once a request is
received, it takes six to eight weeks to move the estimated tax
payments and have the payments available to be claimed on the
return. Allow sufficient time for the transfers to take place before
filing the group and individual returns.
y	 If an individual files a separate return before the transfer to
the individual becomes effective, the individual will not get
credit for these payments when the return is processed and a
tax-due notice will be issued.
y	 If the group nonresident return is filed before estimated tax
payments can be transferred to the individual, the estimated
payments may be applied to the group nonresident return
during processing and be unavailable for transfer to the
individual.
y	 If the group nonresident return is processed before estimated
tax payments from an individual can be transferred to the
group, a tax-due notice will be issued.

Page 8  FTB Pub. 1067  2023

To Ensure Proper Credit for the Estimated Tax Payments
on the Individual’s Return, the individual should write
“Group Return Payment” and the FEIN of the business entity/
corporation to the left of the amount on line 82 of their individual
Form 540NR return.

M	 Important Information – How to
Avoid Common Errors
Use Forms for the Correct Tax Year – You can download, view,
and print current and prior year forms at ftb.ca.gov/forms.
Fiscal Year End Returns are not Allowed – Use a calendar
year for the group nonresident return, even if the business entity/
corporation has a fiscal year end. See Section A, Introduction.
Also make any estimated tax payments on a calendar year basis.
See Section B, Filing Information and Important Due Dates.
Use Web Pay or Form 540-ES to Make Estimated Tax
Payments for the Group Nonresident Return – Follow
the instructions to make electronic payments on Web Pay
or see Section K, How to Make Estimated Tax Payments on
Form 540-ES, for mailing in your estimated tax payments.
Caution: You may be required to make your estimated tax
payments electronically. See Section K for more information. If
not otherwise required by law, you may mail your estimated tax
payments using Form 540-ES. Estimated tax payments made on
Form 100-ES will not be credited to the group nonresident return.
Election to be Included in the Group Nonresident Return is
Irrevocable – Inform individuals included in the group that once
the group nonresident return is filed, it cannot be amended to
either include or exclude a nonresident individual.
Include Only Individuals in the Group Nonresident Return –
You cannot include in the group nonresident return Partnerships,
LLCs, C corporations, S corporations, Estates, or Trusts
(other than the grantor of grantor trusts described under IRC
Sections 671-679 and not recognized as a separate taxable
entity for income tax purposes).
Use Form 540NR and Attach all parts of the Schedule 1067A
and a Signed Form FTB 3864 – Use Form 540NR to file the
group return. Follow the instructions in Section O, Instructions
for Completing Group Nonresident Return, for completing the
return. Attach all parts of Schedule 1067A, Nonresident Group
Return Schedule, and the form FTB 3864. An authorized
general partner, member-manager, corporate officer, or an
attorney‑in‑fact of the business entity must sign form FTB 3864.
A new election must be signed each year and attached to each
group nonresident return filed.
Use Form FTB 3519 to Make an Extension Payment for the
Group Nonresident Return – Form FTB 3519, Payment for
Automatic Extension for Individuals, is the extension payment
voucher to use for the group nonresident return. Follow the
instructions in Section N, How to Make an Extension Payment.
Caution: The payment will not be properly credited to the group
nonresident return if you use any other extension payment
voucher, such as the form FTB 3537, Payment for Automatic
Extension for LLCs.

N	 How to Make an Extension Payment
Get form FTB 3519, for more information.
Use form FTB 3519 only if both apply:
y	 You cannot file your 2023 return by April 15, 2024.
y	 You owe tax for 2023.
Caution: Do not include extension payments due for the
business entity with your group return payments. Business entity
payments must be made separate from the group payments to
avoid delays and errors in processing returns.

To make a group nonresident return extension payment:
1.	 Whether required to pay electronically or not, Web Pay for
Individuals may be used to make your extension payment
electronically. For Web Pay instructions, go to ftb.ca.gov/pay
for more information.
2.	 If not using Web Pay, mail in your form and payment. Type or
print the following information in the top margin of the form
FTB 3519:
		GROUP FILING PROGRAM MS L170
	ATTN: IVS (732)
3.	 Enter the name, address, and FEIN as follows:
y	 First name: Enter “ A ” if a partnership or LLC. Enter “ C ” if a
corporation.
y	 Last name: Enter “ PTSP ” if partnership or LLC. Enter
“ SGNF ” if a corporation.
y	 Address: Enter the business entity’s/corporation’s name
and address.
y	 SSN or ITIN: Enter the FEIN of the business entity/
corporation.
See the sample on page 19 of this publication.
4.	 Mail the voucher with payment to the address shown on the
form FTB 3519.
Caution: An extension payment made with any other extension
voucher, such as the form FTB 3537 for LLCs, will not be
properly credited to the group.

O	 Instructions for Completing Group
Nonresident Return
First complete Schedule 1067A. Then, complete the group
nonresident return using personal income tax Form 540NR.
Follow the instructions for the Form 540NR with the following
modifications:
y	 Identify the Return as a Group Nonresident Return – Type
or print the following information in the top margin of Form
540NR; Side 1:
GROUP FILING PROGRAM MS L170
ATTN: IVS (732)
y	 Fiscal Year not Allowed – You cannot file using a fiscal
year end. Group nonresident returns must be for a calendar
year. For more instructions and examples, see Section A,
Introduction.
y	 Name and Address – Enter the name and address as
follows:
y	 First name: Enter “ A ” if a partnership or LLC. Enter “ C ” if
a corporation.
y	 Last name: Enter “ PTSP ” if a partnership or LLC. Enter
“ SGNF ” if a corporation.
y	 Additional Information: Enter the business entity's/
corporation's name.
y	 Street Address: Enter the business entity’s/corporation’s
address.
See the sample on page 19 of this publication.
y	 SSN or ITIN – Enter the FEIN of the business entity/
corporation.
y	 Filing Status – Use the Single filing status. To the right of the
Single filing status, write “Group Nonresident Return.”
y	 Skip line 6 through line 31.
y	 Line 32, CA Adjusted Gross Income.

Group nonresident return
for:

Enter on Form 540NR, line
32

Shareholders/partners/
members

Total from Schedule 1067A,
Part I, line 1(e)

Directors

Total from Schedule 1067A,
Part II, line 2(e)

Both S corporation directors
and shareholders

Total from Schedule 1067A,
Part II, line 3(e)

Nonresident aliens with no
SSN/ITIN

Total from Schedule 1067A,
Part III, line 4(b)

y	 Line 35, CA Taxable Income. Enter the same amount
entered on line 32.
y	 Skip line 36 through line 39.
y	 Line 40, CA Regular Tax Before Credits.
Group nonresident return
for:

Enter on Form 540NR,
line 40

Shareholders/partners/
members

Total from Schedule 1067A,
Part I, line 1(f)

Directors

Total from Schedule 1067A,
Part II, line 2(f)

Both S corporation directors
and shareholders

Total from Schedule 1067A,
Part II, line 3(f)

Nonresident alien with no
SSN/ITIN

Total from Schedule 1067A,
Part III, line 4(c)

y	
y	
y	
y	

Skip line 41.
Line 42, enter the amount from line 40.
Skip line 50 through line 55.
Line 58 through line 60, Credits.

Group nonresident return
for:

Enter on Form 540NR,
line 58 through line 60

Shareholders/partners/
members

Line 58 and line 59, the
credit name, code number,
and total amount of each
type of credit. Only credits
directly attributable to
the business entity’s
activities can be claimed.
See Credits in Section H,
Return for Shareholders/
Partners/ Members, for more
information.

Directors

Skip these lines. Directors
are not allowed to claim any
credits.

y	 Skip line 61.
y	 Line 62, add line 58 through line 60. These are your total
credits.
y	 Line 63, subtract line 62 from line 42. If less than zero, enter 0.
y	 Skip line 71.
y	 Line 72, Mental Health Services Tax. (See General
Information, for more information)

FTB Pub. 1067  2023  Page 9

Group nonresident return
for:

Enter on Form 540NR,
line 72

Group nonresident return
for:

Enter on Form 540NR,
line 83

Shareholders/partners/
members

Total from Schedule 1067A,
Part I, line 1(h)

Shareholders/partners/
members

Directors

Total from Schedule 1067A,
Part II, line 2(g)

Both S corporation directors
and shareholders

Total from Schedule 1067A,
Part II, line 3(g)

Nonresident aliens with no
SSN/ITIN

Total from Schedule 1067A,
Part III, line 4(d)

The total California tax
withheld from Forms 592-B,
Resident and Nonresident
Withholding Tax Statement
and 593, Real Estate
Withholding Statement for
the individuals included
in the group nonresident
return. Attach a copy of the
Forms 592‑B and 593 to the
group nonresident return.

Directors

Do not make an entry.

Nonresident aliens with no
SSN/ITIN

Do not make an entry.

y	 Skip Line 73.
y	 Line 74, Total Tax.
Group nonresident return
for:

Enter on Form 540NR,
line 74

Shareholders/partners/
members

Total from Schedule 1067A,
Part I, line 1(i)

Directors

Total from Schedule 1067A,
Part II, line 2(h)

Both S corporation directors
and shareholders

Total from Schedule 1067A,
Part II, line 3(h)

Nonresident alien with no
SSN/ITIN

Total from Schedule 1067A,
Part III, line 4(e)

y	 Line 81, California Income Tax Withheld. (Withholding from
Form W-2 only.)
Group nonresident return
for:

Enter on Form 540NR,
line 81

Shareholders/partners/
members

Do not make an entry. Skip to
line 82.

Directors

Total from Schedule 1067A,
Part II, line 2(j)

Nonresident aliens with no
SSN/ITIN

Total from Schedule 1067A,
Part III, line 4(f)

y	 Line 82, 2023 CA Estimated Tax and Other Payments.
Enter the total of any:
a.	 California estimated tax payment you made (Form 540-ES)
for 2023,
b.	 Overpayment from your 2022 California group nonresident
return that you applied to your 2023 estimated tax, and
c.	 Payment you sent with form FTB 3519.
d.	 If you are including Nonconsenting Nonresident (NCNR)
tax, write LLC on the dotted line to the left of the amount
on line 82, and attach Schedule K-1 (568) with the amount
of NCNR tax claimed.
Caution: If claiming payments made by an individual included
in the group nonresident return, you may need to have those
payments moved to the group account before filing the group
return. See Section L, Moving Estimated Payments.
y	 Line 83, Withholding (Form 592-B and/or 593).

Page 10  FTB Pub. 1067  2023

y	 Complete the remaining lines of the Form 540NR as
appropriate.
y	 If an amount is due, you may make the payment online.
To make a payment online, go to ftb.ca.gov/pay for more
information. If you are mailing in your payment, use black
or blue ink, make the check or money order payable to the
“ Franchise Tax Board ” for the full amount. Write the FEIN of
the business entity/corporation, and “2023 Group 540NR” on
the check or money order.
y	 Make all checks or money orders payable in U.S. dollars and
drawn against a U.S. financial institution.
y	 Complete, sign, and attach form FTB 3864 to Form 540NR.
The form FTB 3864 must be signed by an authorized person
or attorney-in-fact. Signing form FTB 3864 means the
business entity/corporation and all the electing individuals
agree to the terms and conditions for filing a group
nonresident return.
y	 Attach Schedule 1067A.
y	 Attach business credit form used to report credits on Form
540NR, lines 58-60.
y	 Do not attach any federal returns.
y	 Mail the group nonresident return using one of the
appropriate addresses shown in the Refund or Amount You
Owe Section on Form 540NR.

For Privacy Notice, get FTB 1131 ENG-SP

7161233

Schedule 1067A  2023  Side 1

Nonresident Group Return Schedule
CA corporation no. or CA Secretary of State file no.

FEIN

1067A

CALIFORNIA  SCHEDULE

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

(b)
First name, MI, Last name

1.	 Total of Part I . . . . . . . . . . . . . . . . . . . . . . . . . . .

•

•

(a)
SSN or ITIN
(FEINS not allowed
see instructions)

•
•

•

•

•

•

•

•

•

•

•

•

(d)
Deferred
compensation

•

•

•

•

•

•

•

•

•

•

(c)
Total CA
source income

•

•

•

•

•

•

•

•

•

•

•

(e)
CA source income
less deferred
compensation,
col. (c) – col. (d)

•

•

•

•

•

•

•

•

•

•

•

(f)
Col. (e) x 12.3%

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•

•

•

•

•

•

•

•

•

•

(g)
Credit

•

•

•

•

•

•

•

•

•

•

•

(h)
Mental Health
Services Tax
If the individual's
total CA taxable
income from all
sources is more
than $1 million,
multiply col. (e)
by 1%

•

•

•

•

•

•

•

•

•

•

•

(i)
Total tax
col. (f) –
col. (g) + col. (h)

•

•

•

•

•

•

•

•

•

•

•

(j)
Nonresident and
Backup Withholding
Reported on Form
592-B

Part I  Electing Nonresident Individuals (Shareholders/Partners/Members) Included in the Group Nonresident Return (Use additional sheet(s) if necessary)
Note:	 Column (a) and (b) – If the nonresident individual has a spouse/RDP, include the spouse’s/RDP’s information in both columns.
Column (c) – Enter the individual’s distributive share of California source income from the business entity’s taxable year ending in 2023.
	
Column (d) – Amount of deferred compensation deduction. See FTB Pub. 1067, Section H, for more information.
	
Column (g) – Tax credit allowable. See FTB Pub. 1067, Section H, for more information.
	
Column (h) – See Schedule 1067A Instructions, Part I, for more information.
Note:	 If Part I and/or Part II is filled out, but not Part III, attach all Parts of Schedule 1067A and any supplemental schedules, if applicable, to Form 540NR. Then mail the group
nonresident return using the applicable address shown in the Refund or Amount You Owe section of Form 540NR.

DBA

S Corporation/Partnership/Limited Liability Company name

Attach this schedule to your California group Form 540NR.

2023

TAXABLE  YEAR

Side 2  Schedule 1067A  2023

7162233

CA corporation no. or CA Secretary of State file no.

FEIN

•

•

•

•

•

•
•

•

•

•

•

•

•

•

•

•

•

•

•

3. Grand Total (Add Part I, line 1 and Part II, line 2) . . . . . . 

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•

•

•

•

•

•

•

•

2. Total of Part II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

•

•

•

•

•

•

•

•

•

•

•

•

(c)
Director’s
Form 1099
income

(d)
Director’s
Form W-2
Income

•

•

•

•

•

•

•

•

•

•

•

•

•

•

(e)
Total
col. (c) + col. (d)

Director’s Compensation from California Sources

•

•

•

•

•

•

•

(b)

Director’s Name

(a)

Director’s SSN or ITIN

•

•

•

•

•

•

•

•

•

•

•

•

•

•

(f)
Net tax
col. (e)
x 12.3%

•

•

•

•

•

•

•

•

•

•

•

•

•

•

(g)
Mental Health
Services Tax
If the director's
total CA taxable
income from all
sources is more
than $1 million,
multiply col. (e)
by 1%

•

•

•

•

•

•

•

•

•

•

•

•

•

•

(h)
Total tax
col. (f) + col. (g)

•

•

•

•

•

•

•

•

•

•

•

•

•

•

CA Wage
Withholding
Reported on
Form W-2 (or
CA Sch. W-2)

(i)

Part II   Electing Nonresident Directors Included in the Group Nonresident Return (Use additional sheet(s) if necessary.)
Note:	 Column (g) – See Schedule 1067A Instructions Part II, for more information.
Note:	 No credits allowed.
Note:	If Part I and/or Part II is filled out, but not Part III, attach all Parts of Schedule 1067A and any supplemental schedules, if applicable, to Form 540NR. Then mail the
group nonresident return using the applicable address shown in the Refund or Amount You Owe section of Form 540NR.

DBA

Corporation name

•

•

•

•

•

•

•

•

•

•

•

•

•

•

(j)
Nonresident
and Backup
Withholding
Reported on
Form 592-B

7163233

Schedule 1067A  2023  Side 3

CA corporation no. or CA Secretary of State file no.

FEIN

•
•
•
•
•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

(e)
Total tax
col. (c) + col. (d)

•

•

•

•

•

•

•

•

•

•

•

•

•

GROUP FILING PROGRAM  MS 170
ATTN: 732 IVS AUDIT (NONRESIDENT ALIEN)
FRANCHISE TAX BOARD
PO BOX 1565
SACRAMENTO CA 95812-1565

(d)
Mental Health Services Tax
If the individual’s total CA
taxable income from all sources
is more than $1 million,
multiply col. (b) by 1%

Mailing address:	
	
	
	
	

(c)
Col. (b) x 12.3%

If only Part III is filled out, attach all Parts of Schedule 1067A and
any supplemental schedules, if applicable, to Form 540NR. Then mail
the group nonresident return using the address on this page. 	
	

5. Total of Part II, line 3
and Part III, line 4  . . . . . . . . 

•

•

•

4. Total of Part III  . . . . . . . . . . . 

•

•

•

•
•

•

•

•

•

•

(b)
Total CA source income

(a)

First name, MI, Last name

Part III   Electing Nonresident aliens with no SSN/ITIN included in the Group Nonresident Return (Use additional sheet(s) if necessary.)
Note:	Column (a) – If the nonresident alien has a spouse/RDP, include the spouse’s/RDP’s information in the column.
Column (b) – Enter the nonresident alien’s California source compensation from the business entity.
Column (d) – See Schedule 1067A Instructions, Part III, for more information.
	
Note: No credits allowed.

DBA

S Corporation/Partnership/Limited Liability Company/Corporation name

(f)
Nonresident and Backup
Withholding Reported on
Form 592-B

Instructions for Schedule 1067A
General Information
Complete the applicable Part(s) of Schedule 1067A and attach
all Parts of Schedule 1067A and any supplemental schedules,
if applicable, to the group nonresident return (Form 540NR).
The additional schedules must contain the same columns in
the same order as the Schedule 1067A.
Use this table to determine which parts of Schedule 1067A to
complete. If a Part of Schedule 1067A is not applicable, leave
blank.

Group Nonresident Return for:

Complete

Shareholders/partners/members

Side 1 – Part I

Directors

Side 2 – Part II

Nonresident Aliens with no SSN/ITIN

Side 3 – Part III

Both S corporation directors and
shareholders

Side 1 and Side 2 - Part I and
Part II 	

Instructions for Part I
Side 1 Entity Information
Enter the name, federal employer identification number (FEIN),
doing business as (DBA), and the California corporation
number or California Secretary of State (SOS) file number of
the business entity that is filing the group nonresident return on
behalf of its electing shareholders/partners/members.

Part I – Electing Nonresident Individuals
(Shareholders/Partners/Members) Included
in the Group Nonresident Return
Columns (a) and (b)
y	 Enter the social security number (SSN) or individual taxpayer
identification number (ITIN) and name of each electing
individual. If the individual has a spouse/RDP, include the
spouse’s/RDP’s information in both columns.
y	 For a qualified grantor trust (described in IRC
Sections 671-679 and not recognized as a separate taxable
entity for income tax purposes), do not enter the name of the
trust. Enter the grantor’s name and SSN.
Only individuals (and the grantor of a grantor trust not
recognized as a separate taxable entity) can be included on
the group nonresident return. Do not enter partnerships, LLCs,
corporations, estates, trusts, or other entities.
Column (c) Enter the individual’s distributive share of California
source income. For example, if a partnership’s taxable year
ends on June 30, 2023 then report on the 2023 group return
the California source income from each electing partner’s
Schedule K-1 (565) for the taxable year ending June 30, 2023.
Column (d) Deferred compensation deductions are for partners
and members only. S corporation shareholders do not qualify
for this deduction. See FTB Pub. 1067, Section H, Return for
Shareholders/Partners/Members, for more information.

Column (g) Enter the allowable amount of credits. Only credits
directly attributable to the business entity’s activities can be
claimed. See FTB Pub. 1067, Section H, Return for Shareholders/
Partners/Members, for more information.
If the credits exceed the amount of tax for a given year and
credits are available for carryover, the business entity will
properly account for such credit with respect to each individual
included in the group nonresident return.
Column (h) If the nonresident individual’s total CA taxable
income from all sources is more than $1 million, then multiply
the amount from column (e) by 1%.
If a taxpayer’s distributive share of California source income is
over $1 million from a single business entity, then an additional
1% mental health services tax will be assessed on the entire
California taxable income if the taxpayer elects to be part of the
group return.
For individuals included in two or more group returns, the
additional 1% tax applies if their combined California taxable
income from all their group returns is more than $1 million.
For example, a taxpayer is included in two group returns. The
taxpayer’s distributive share on each group return (amount
in column (c)) is less than $1 million, however, the combined
taxable income from the two group returns is over $1 million.
The taxpayer’s entire income reported on each group return is
subject to the additional 1% mental health services tax.
Column (j) Enter the total amount withheld for nonresident and
backup withholding from Form 592-B reported for the taxable
year.
Note: If Part I and/or Part II is filled out but not Part III, attach
Part I through Part III and any supplemental schedules, if
applicable, to Form 540NR. Then mail the group nonresident
return using the applicable address shown in the Refund or
Amount You Owe section of Form 540NR.

Instructions for Part II
Side 2 Entity Information
Enter the corporation name, FEIN, DBA, and the California
corporation number or California SOS file number of the
corporation that is filing the group nonresident return on behalf of
its electing nonresident directors.

Part II – Electing Nonresident Directors
Included in the Group Nonresident Return
Columns (c) and (d) Report each director’s wages, salary, fees,
or other compensation from the corporation for director services
sourced to California, including attendance of board of director
meetings. Enter in Column (c) the California source amount
the corporation reported on a Form 1099. Enter in Column (d)

Page 14  FTB Pub. 1067  2023

the California source amount the corporation reported on a
Form W-2.
Column (e) Enter in Column (e) the total of Column (c) and
Column (d).
Column (g) If the nonresident director’s total CA taxable income
from all sources is more than $1 million, then multiply the
amount from column (e) by 1%.
If a director’s compensation from California source is over
$1 million from a single business entity, then an additional
1% mental health servi