The magazine quoted minutes from a Los Angeles Superior Court mental health hearing held Wednesday as saying, "Defendant found mentally competent. Criminal proceedings are reinstated."
Since April 2012, Bynes, 27, has been arrested on charges of driving while intoxicated, hit-and-run, driving with a suspended license and tossing a marijuana pipe out of a Manhattan high-rise apartment building.
She was hospitalized for several weeks during the summer because of her erratic behavior and has been undergoing treatment at a rehab facility.
Bynes' mother, Lynn, has been granted indefinite legal control over her daughter's well-being and finances while she recovers.
Bynes is the former star of Nickelodeon sketch comedy series "The Amanda Show." Her film credits include "What a Girl Wants" and "Hairspray."