California franchise board form 568, which year am I paying?

[chihchao-yang]

I'm confused-- when I file 2015 form 568 this year (2016), when I pay the 800 dollars franchise fee, am I paying the 2015 fee or 2016? Thanks!

[ChelsiE2 · Accepted solution]

If this is the first year that you had this LLC, and you have not paid the $800 for your first year, you will need to pay that now as well as the $800 for next year.

If this is not the first year that you had this LLC, then the $800 payment you're making now is the estimated payment for 2016.

[TaxNovice1]

I have a similar question which the above answer is not clear on:

If my LLC was formed AFTER Dec.16th 2015, I know I have to pay the FTB3522 fee of $800 now (April 2016) for FY 2016.

QUESTION: But do I also need to file a form 568? My understanding is that 568 looks at last year. Since My LLC was opened less than 14 days before end of 2015, I know I do not owe tax for 2015. But do I still need to file 568 for 2015?

Thanks.

[ChelsiE2]

@TaxNovice Here are the exceptions for filing Form 568:
An LLC is not required to file a tax return and is not subject to the annual taxes and LLC fees 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.

If you do not meet both of these requirements, the FTB will be looking for a Form 568 from you.

[B2016]

Hi my question is very similar to the original one, but I'm not sure how I would be making an "estimated" payment for 2016, because in TT for CA Form 568 it clearly states it is Taxable year 2015.  I formed a single member LLC in CA in July 2015.  I paid $800 to the FTB in Nov 2015 using the voucher in Form 2015 FTB 3522.  It is now April 2016 and I'm filing my taxes which include the LLC.  TT is asking me to fill out what appears to be a 2015 Form 568.  Haven't I already paid for taxable year 2015?  And if so, would a payment now sent with this 2015 Form 568 be applied to taxable year 2016 as "estimated"?  Can I not just wait until April 2017 to file the 2016 Form 568?  (the LLC will not be generating over 250K annual revenue).  Thank you for your assistance.

[dale-pitman7]

Your $800 is due with a separate voucher by April 15 2016 because it is only an estimated fee for 2016. It is not related to filing the 568 for 2015. The $800 minimum franchise tax for 2015 needed to be paid by October 15 for any LLC opened in July 2015, or penalty of 1/2 percent per month plus $40 will be charged. I found this out after hours waiting to speak with someone at ftb.

[B2016]

Thanks @dale.pitman7 for putting in time at the FTB.  Still seems strange to me that the 568 form says taxable year 2015 but it is an estimate for 2016.  But I guess I will file it before April 15, 2016.

[dale-pitman7]

I believe you misunderstood, -your estimated payment and  voucher for 2016 is not related to the 568 for 2015 from what I understand.
I also opened my LLC in July 2015, so I owed $800 as of October 15.  I  paid it via a 3522 voucher online this month with late fees and listed it on my 568 for 2015. If I were to keep my LLC open, I would also need to go on line by 4/15/16 and pay an estimated 2016 payment of $800. This amount would then be referenced when you complete the 568 for 2016. The voucher number is different I believe. Hope this helps. Please check with the SOS since this is so confusing.

[B2016]

OK that probably makes more sense.  I'm guessing that TT is just offering me the opportunity to create/print a 2015 Form 568, it is not part of my 2015 tax filing.  And TT would not be aware of the $800 payment I made in Nov 2015 for taxable year 2015.  I just tried to read thru the instructions on both form 568 and 3522 and I *think* what I'm supposed to do is file a 2015 Form 568 as kind of an LLC 'return' but do not include any payment, and in addition file a 2016 Form 3522 and include the $800 payment by April 15, 2016.  I may try to call the FTB to make sure.  I wonder if they can make it any more confusing.  thanks

[dale-pitman7]

In case you didn't see all the talk about the waiver, you will need a waiver in order to send in your 568 manually. If you want to efile it, TT Home and Business won't accomodate you and you have to use another software or upgrade to TT Business. Getting the waiver is quick, once you remove all punctuation in your brief request.

[B2016]

I was able to talk to someone at FTB.  He confirmed that each year the single member LLC needs to file 2 things:  1) a form 568 for the prior tax year and 2) a form 3522 for the current tax year's $800 tax.  If revenue is above 250k then a third form (3536) is required in order to pay the estimated "LLC Fee" which is on top of the mandatory $800 "LLC Tax".  So for example what is due by April 18, 2016 is a 2015 form 568 and a 2016 form 3522.  The waiver you mention is apparently intended to encourage commercial tax preparers to integrate with CalFile.  He said that individual taxpayers can print and mail the 568 form without penalty and without waiver.  It seems to me to be easier to just efile the 568 if possible.  Does anyone know, can Turbo Tax Business State (for CA) be used if I already have a personal and Single Member LLC return ready and prepared by using Turbo Tax Home & Business (including CA state return)?  Disappointing that TT Home & Business does not actually efile this "business" form for you.

[schunacher]

Are you saying that TT Home & Business has not been filing my Form 568 or paying my $800 Annual Tax !?!

I have been depending on TT to do that for the last 4 years.  There is not a peep from the application informing me that I have to do that on my own.  That is a little disconcerting since it is called TT Home AND BUSINESS.

Can someone confirm that I am understanding this correctly please?

[VolvoGirl]

Look in your pdf file and see if 568 is there.

Here an old note I have..........TT/Calif has the 568 in it. If it is associated with a Schedule C then you need to check the box on the Calif Schedule C for "Single member LLC". A 568 will then be generated, pulling as much information from that Schedule C as is available.

If your LLC is associated with rental property(ies) then there is a link field on the Calif Sch E Wks that behaves similarly to the one for the Sch C above.

In either case the 568 has no effect whatsoever on your Calif individual return and it must be paper-filed.