Corporation

Filing guidelines in California

C Corporation

  • Corporations taxable as a C corporation that have California source income, doing business in California, or organized in California, or registered with the California Secretary of State, must file Form 100, California Corporation Franchise or Income Tax Return. Furthermore, every corporation that is doing business in California, or incorporated in California, or registered to do business in California with the Secretary of State, must pay the annual minimum franchise tax of $800.
  • The return due date is the 15th day of the 3rd month after the close of the taxable year.
  • The minimum franchise tax ($800) is due the first quarter of each accounting period and must be paid whether the corporation is active, inactive, operates at a loss, or files a return for a short period of less than 12 months. The minimum tax is waived on newly formed or qualified corporations filing an initial return for their first taxable year. However, any first-year net income is still subject to the 8.84 percent tax rate.
  • Every corporation that is doing business in California or has California source income is taxed on its net income at a rate of 8.84 percent.

 

S Corporation:

  • S corporations that are incorporated in California, or registered to do business in California with the Secretary of State, or doing business in California, or receive California source income, must file Form 100S, California S Corporation Franchise or Income Tax Return Furthermore, every corporation that is incorporated, registered or doing business in California must pay the $800 minimum franchise tax.
  • The return due date is the 15th day of the 3rd month after the close of the taxable year.
  • The S corporation must provide each shareholder with a California Schedule K-1 that states the shareholder’s pro rata share of the S corporation’s items of income, deductions, and credits.

 

LLCs Treated As Partnerships

  • All LLCs (not classified as a corporation) that are doing business in California, or file an article of organization or certificate of registration with the Secretary of State must file Form 568, Limited Liability Company Return of Income, pay the annual minimum franchise tax of $800, and LLC fee (if applicable).
  • LLCs that have to file in California to report California source income but are not subject to the minimum franchise tax of $800 and the LLC fee (see above rules), must file Form 565, Partnership Return of Income, instead of Form 568, Limited Liability Company Return of Income.
  • An LLC treated as a partnership provides each member with a California Schedule K-1 that states the member’s distributive share of the LLC’s items of income, deductions, credits, property, payroll and sales.

LLCs Treated As Disregarded Entities

  • If the LLC is owned by one member (an individual), it will be treated as a disregarded entity and all income and expenses of the LLC will be reported on the member’s tax return as a sole proprietorship, i.e. Schedule C business.
  • If the LLC is owned by one member (corporation or other business entities), it will be treated as a disregarded entity and all income and expenses of the LLC will be reported on the member’s tax return as a division of the company.

LLCs Treated As Corporations

  • All LLCs classified as corporations that organize, register, or doing business in California, or receive California source income must file Form 100, Corporation Franchise or Income Tax Return, or Form 100S, S Corporation Franchise or Income Tax Return.
  • The Form 100 or Form 100S must be filed by the 15th day of the 3rd month after the close of the LLC’s taxable year.  The LLC classified as a corporation is taxed at the corporation rate, and it is not subject to the fee or filing of the Schedule K-1, Schedule T, Schedule EO either. Also, follow C Corporation Filing Guidelines or S Corporation Filing Guidelines.