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Level 3
posted Feb 27, 2023 5:30:16 PM

California Annual Franchise Tax

OK LLC with an S-Corp election filed as a CA Foreign LLC on Dec 17, 2021.  No business in 2021, in 2022 the only revenue transaction was a single CA transaction and the entity ended 2022 with a loss.  Using TurboTax Business I prepared and filed my CA 100S form.  There was no tax liability shown on the 100S so I assumed the $800 would show up on my personal CA state return (540NR).  I haven't filed the 540NR but there is no mention of the $800 franchise tax/fee so I contacted the CA Franchise Tax Board and they told me I should have paid my $800 annual Franchise Tax with the 100S filing.  Where did I or TurboTax go wrong? 

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1 Best answer
Expert Alumni
Mar 1, 2023 1:14:54 PM

it might be simpler to pay California directly on its website, at least for this year. Turbo Tax may think this is the first year the LLC is in existence.

 

  1. Go to www.ftb.ca.gov/pay.
  2. Choose “Bank Account”
  3. Choose Web Pay Business or Web Pay Personal, depending on the entity type. ...
  4. Follow the prompts to provide the requested information and pay the tax.

 

 

3 Replies
Expert Alumni
Feb 28, 2023 1:37:59 PM

It depends. According to this State of California source, A corporation that incorporates or qualifies to do business in California is exempt from paying the minimum franchise tax in its first taxable year.

 

If your first taxable year for your LLC is for the 2022 tax year, then the $800 is exempt.

 

 

Level 3
Feb 28, 2023 1:54:30 PM

I was told my 2021 was exempt but 2022 would be taxed

Expert Alumni
Mar 1, 2023 1:14:54 PM

it might be simpler to pay California directly on its website, at least for this year. Turbo Tax may think this is the first year the LLC is in existence.

 

  1. Go to www.ftb.ca.gov/pay.
  2. Choose “Bank Account”
  3. Choose Web Pay Business or Web Pay Personal, depending on the entity type. ...
  4. Follow the prompts to provide the requested information and pay the tax.