CA Nonresident Withholding Waiver Question

[Dan Cournoyer]

Hi everyone,

I have a client that has a duplex rental in California. Her property manager has been submitting nonresident withholding payments to CA as required by law. We just filed her 2018 CA tax return and she received a refund for the full amount because (like most rentals) she had a taxable loss for the first year.

We expect taxable losses for a number of years so we filed a waiver request. It was rejected because she technically doesnt meet any of the waiver reasons. The one we tried was "taxpayer makes timely quarterly estimated tax payments" but she actually hasn't made any estimates because she hasn't needed to. I'm thinking of filing this waiver request again and either checking the "other" box and explaining this or having my client pay a Q4 payment of $10 and then checking the box for timely estimates again. I tried calling and the rep said both of those options are possible but could not confirm whether or not it would be approved. 

Note: my client cannot use exemption A because she has not filed in CA for 2 years. She would need to wait until this time next year to use that reason code.

Has anyone taken the approach of paying $10 estimates each quarter rather than thousands for the year? A free $40 loan from my client to CA seems like a better option than a few thousand.

Can we check two boxes at the same time?

Any other suggestions?

Thank you!

Dan