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Corporation |
LLC |
| Filing Status |
As a C corporation. |
An LLC must have the same classification for both California and Federal tax purposes:
* Disregarded entity: Single member LLC can be classified as disregarded entity.
* Partnership: LLC can be classified as a partnership (more than one member).
* Corporation: LLC can elect to be classified as an association and taxable as a corporation. |
| Franchise Tax V.S. Annual Tax |
You must pay minimum franchise tax $800 whether your corporation is active, inactive, operates at a loss, or files a return for a short period (less than 12 months)
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* Taxed as Disregarded Entity or Partnership: LLC classified as a disregarded entity or as a partnership is subject to an $800 annual tax, even if it conducts no business in California.
* Taxed as Corporation: You do not need to pay annual tax, but you are subject to franchise tax. |
Exception
For Franchise Tax or Annual Tax |
?Newly incorporated or qualified corporation is not required to pay the minimum franchise tax in first year.
?Corporation is not subject to the franchise tax for a tax year if both of the following is true:tax year is 15 days or less; and you did not conduct any business in California during the 15 days. |
* Taxed as Disregarded Entity or Partnership: LLC classified as a disregarded entity or as a partnership is not subject to the annual tax and fee if both of the following are true: tax year was 15 days or fewer; and you did not conduct any business in California during the tax year.
* Taxed as Corporation: Follow the Corporation rule. |
| California Corporate Income Tax |
?The income tax for C corporations is the greater of 8.84% of the corporation’s net income or $800 (Franchise tax).
?Any first-year net income is still subject to the 8.84% tax rate. |
* Taxed as Disregarded Entity or Partnership: LLC classified as a disregarded entity or as a partnership is not subject to the California Corporate Income Tax, you should report California income, deductions, and credits on your personal income tax return.
* Taxed as Corporation: Follow the Corporation rule. |
| LLC Fee |
N/A |
LLC classified as a disregarded entity or as a partnership is subject to an LLC fee, if its total income exceeds $250,000 "from all sources derived from or attributable to California" . |
| Forms |
California Corporation Franchise or Income Tax Return (Form 100) |
* Taxed as Disregarded Entity or Partnership: California Limited Liability Company Return of Income (Form 568).
* Taxed as Corporation: Follow the Corporation rule. |
| Due Dates |
Your minimum franchise tax ($800) is due on 15th day of the 4th month after the close of your tax year. |
* Taxed as Disregarded Entity or Partnership:
(1) Form 568: 15th day of the 3rd month after the close of your tax year.
(2) Annual Tax: You have until the 15th day of the 4th month from the date you file with the SOS to pay your first-year annual tax. For the subsequent years, the due date is 15th day of the 4th month after the beginning of your tax year.
(3) LLC Fee: you must estimate and pay the annual fee by the 15th day of the 6th month, of the current tax year.
* Taxed as Corporation: Follow the Corporation rule. |
