I'm in CA, work as a writer, and California tax board has put a lien against a company that they think is my employer, it's actually a payroll company, one of several that companies use to pay freelance writers and who get their money from my actual employer, say a production company who doesn't want the hassle of payrolls. But the question is; the payroll companies mainly track and pay royalties, it's not actual income that I have earned, rather money paid by producers based on showings of my work. Is this really income, or are royalties/residuals, "other" income.
Yes, for both Federal and CA income tax purposes, royalties and residuals are considered earned income and must be reported as such. Dependent and Income Definitions
