Filed taxes but realized forgot form 568

[jackdee]

I have a question regarding the form 568. Does the form 568 is a California state tax return for an LLC? Or it is another separate form that we need to file in addition to a regular California state tax return when we file for our federal tax during April 15th? Thank you

[KathrynG3]

2020 FORM 568 Limited Liability Company Return of Income is for both reporting the LLC Fee and the business activity, but there are exceptions.

Your individual tax return is for paying the tax. Where it is reported on your tax return depends on how the LLC is classified. 

For more details, see: 2020 Instructions for Form 568, Limited Liability Company Return of Income which states:

C. Purpose

Use Form 568 to:

• Determine the amount of the LLC fee (including a disregarded entity’s fee) based on total California income.
• Report the LLC fee.
• Report the annual tax.
• Report and pay any nonconsenting nonresident members’ tax.
• Report income, deductions, gains, losses, etc., from the operation of a multiple member LLC that has elected to be classified as a partnership.

Use Form 568 as the return for calendar year 2020 or any fiscal year beginning in 2020.

D. Who Must File

An LLC may be classified for tax purposes as a partnership, a corporation, or a disregarded entity. The LLC should file the appropriate California return.

Form 568 must be filed by every LLC that is not taxable as a corporation if any of the following apply:

• The LLC is doing business in California.
• The LLC is organized in California.
• The LLC is organized in another state or foreign country, but registered with the California SOS.
• The LLC has income from California sources (Nonregistered foreign LLCs, see Exceptions to Filing Form 568, below).

An LLC is not required to file a tax return and is not subject to the annual tax and LLC fee if both the following are true:

• The LLC’s taxable year is 15 days or less.
• The LLC did not conduct business in the state during the 15 day period.

[jackdee]

Thank you for your reply. However, I'm still not so sure about this matter. So at the end of tax year do I need to file both forms 540 and 568 for my California state tax return? 

[JotikaT2]

Yes, you do need to file both forms.

Form 568 is a separate filing requirement specifically for your disregarded LLC and needs to be filed in California.  TurboTax does allow you to prepare this form within the state interview section when preparing your state individual return.  Make sure you print it out when you complete the section.  TurboTax will prompt you to print it out so you can file it by mail.

You will also file Form 540 as a part of your individual income tax filing along with your federal income taxes.  Your individual state return will be transmitted when electronically filing your federal individual income tax return.

@jackdee

[jackdee]

Thank you for your answer. However, I have 2 single member LLCS, but I recently terminate one of them. Does turbotax allows me to do two forms 568 on one tax return? the one LLC that I have just terminated did not make any transaction since I have formed it. Thank you

[symartinez]

If I filed a 1040 schedule C how do I convert it to print a 568 since I am now a LLC Single and my income taxes were already submitted efile before I realized I had to file a 568

[DaveF1006]

It depends.  I would print the form and mail it according to the instructions in this Turbo Tax link.  Here is a link to the form itself where you can fill out and send in to the State of California.  Send it with a letter stating you forgot to send in with your 2020 California State return and you are sending it now.

Once completed, send this form and make the payment to Franchise Tax Board, PO box 942857, Sacramento CA 94257-0501.

[emmaql]

Hi there, I just realized I forgot to file form 568 for my SMLLC (married couple) for both the 2018 and 2019 tax years... I know... I didn't realize it until when I filed the 2020 tax return... I think I must have skipped that section and never gone back to it in the software... I did receive a notice for my 2018 tax return from FTB saying they "cannot locate a tax return for the indicated tax year". So, I've mailed my 2018 tax return back to them. However, that was before I realized I failed to file form 568... Meanwhile, I haven't received any notices from FTB for 2019. I'm worried about what I should do next...

Should I just go ahead mail in two years 568 forms? Do I need to write a letter to explain anything to avoid the penalty? I'm embarrassed and also frustrated right now and would much appreciate it if I can get any advice on my next step. Thank you so much!!

[JotikaT2]

Yes, go ahead and print out and mail in both Form 568s for both tax years.  

Please see the link below for the address to mail your returns to.

CA LLC filing information

You can write a letter if you would like to explain what happened and let them know you are now filing to catch up on all past due returns as well as to stay current going forward.  There is no guarantee they will not access any penalties though.

@emmaql

[dkaufman]

TurboTax Premier and TurboTax Home & Business 2020 are not completing the 568 or associated forms for me. Any idea why?

[KathrynG3]

TurboTax will ask you questions in the California interview related to your LLC if the LLC details were already completed in the Federal interview.

Only one single member LLC will be included per tax return. Form 568 is available to print but cannot always be e-filed (multi-member LLC's).

For excellent, line-by-line instruction for completing Form 568, see:

How do I know if I should file California Form 568, LLC return of income for 2020?

If necessary, to request an e-file waiver, go to this link: CA E-file Waiver Request. Print and paper file Form 568 to:

FRANCHISE TAX BOARD 

PO BOX 942857 

SACRAMENTO CA 94257-0501

For more information go to: California e-file for business.

2020 Instructions for Form 568, Limited Liability Company Return of Income

For a list of state forms, see:

TurboTax state Individual forms availability 

TurboTax Business Forms Availability

[dkaufman]

I have filled in all the information about the business and the personal tax owed for both fed and state is just fine, but it did not add the 568 or the forms for the LLC tax and LLC fee. I spent over an hour on the phone with a TT expert to no avail. I am currently creating a new file from scratch to see if it does better this time. I even upgraded to home & business thinking maybe premier wasn't going to do 568 for me anymore, but that didn't help either.

[dkaufman]

I just completed the entire business tab in the new file and it still doesn't show the 568 in the California section.

[KathrynG3]

If the income is coming in from Schedule K-1 and/or there is more than one Schedule K-1 in the return, Form 568 will not be seen. Regarding finding directions for this filing, they would be included in the California Electronic Filing Instructions. To see these instructions, either download the PDF or navigate to the Forms mode to find these under the California forms.

Otherwise, for  more detailed directions, see the answer from awesome tax expert @JotikaT2 here: Filing Form 568 Support.

When I entered a Schedule C, even with Schedule K-1s in the practice return, I had the following screens appear sequentially for TurboTax Home & Business Windows, which included Form 568 and the payment voucher, Form 3522:

[dkaufman]

I'm on a Mac, and Schedule C only. I still can't get it to add the 568. I will look at that other page you linked, but I admit I'm getting extremely frustrated with TurboTax the last few years. It's just not as good as it used to be, and I've been using it since the mid-90s.