Franchise Tax Fee - 2 states

[SuMo1]

Hello,

We are doing business in CA and have paid the CA Franchise Tax fee and inputted this into TurboTax Business.  But, we are not sure how to handle the $300 Franchise Tax Fee we paid to Delaware since we are a Delaware LLC.  I saw somewhere that "taxes paid to another state should be passed thru as a credit to members".  I am not sure if this is correct, and I do not know how to do this.  Is there an input needed someplace so it feeds the K1? Any ideas out there?  Thanks all.

[ZoltanB45 · Accepted solution]

It would show up on the state k-1 if it were an actual income tax paid to a state. This is a fee really and it sounds like you don't do business in Delaware.  Therefore you will not be preparing a Delaware return to enter taxes paid.

You could record the payment on the 1065 as a license and fee expense.

[SuMo1]

Thanks @ZoltanB45 - makes sense!