When Is the California LLC Tax Due Date? (The Guide)

Businesses in California are required to pay taxes annually. Companies must pay an annual tax known as the Franchise Tax Board (FTB).

Drawing from my extensive experience as a tax consultant specializing in California tax regulations, I have conducted thorough research on the deadline for the California tax in 2024.

I have also sought advice from tax experts and carefully examined the state's tax laws to provide the most up-to-date information on when the California tax is due.

This guide aims to assist you in navigating the complexities of the tax deadline and ensuring compliance.

Quick Summary

• The California LLC tax due date is the deadline by which California LLCs must submit their tax returns and typically falls on or before the 15th day of the fourth month.
• California LLCs must file Form FTB 3537 to request an extension for filing their tax returns.
• According to the SBA data, 7.5 million small business employees represent 47.6% of California's workforce, underscoring the significant impact of LLC tax compliance on the state's economy.
• In my view, diligent compliance with California's LLC tax deadlines is essential for maintaining a business's good legal standing and avoiding unnecessary financial penalties.

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The California LLC Tax Due Date

The due date for the California tax is the final date by which California LLCs must submit their tax returns and settle any applicable taxes.

Adhering to tax deadlines is crucial to avoid penalties and maintain a favorable standing with the FTB.

The tax due date is determined based on the fiscal year-end of the entity. By default, the tax year for California LLCs follows the calendar year, concluding on December 31st.

For entities with a calendar year-end, the tax due date typically falls on or before the 15th day of the fourth month following the end of the tax year.

Hence, for the tax year 2023, the due date for filing California LLCs taxes with a calendar year-end will be April 15, 2024.

Factors that may affect the deadline may include:

• Fiscal year-end: While the default tax year for California LLCs is the calendar year-end, some LLCs may choose a different fiscal year-end.
• Extensions: California LLCs can request an extension to file their tax returns.

To request an extension, California LLCs must file Form FTB 3537, the Application for Automatic Extension for LLCs.

Having had to file Form FTB 3537 for an extension on behalf of my client, I learned that this form must be filed on or before the original due date of the tax return.

Generally, the granted extension is for six months, which moves the filing deadline to October 15th for most California LLCs with a calendar year-end.

In light of economic uncertainties, it's worth noting the recent forecasts suggesting significant fluctuations in state revenue collections, with potential variations that could be $10 billion higher or lower than estimates for 2023–24, as per the LAO report [1].

How Can I Determine the California LLC Tax Due Date?

You can determine the Tax Due Date by referring to official sources and utilizing online resources.

Here is a step-by-step guide to determining the due date of your tax payments:

1. Visit the FTB Website: Navigate to the official website of the California Franchise Tax Board using a web browser [2].

2. Access LLC Tax Information: Locate the section dedicated to LLC taxes on the FTB's website. This section may be labeled "LLC Tax Information" or similar.

3. Find the Due Date: Look for the relevant due date information within the LLC tax information section. The FTB typically provides a calendar or a table displaying the due dates for various tax obligations. Identify the due date corresponding to the LLC tax payment.

4. Confirm the Due Date: Double-check that you’re looking at the current year's information while verifying the due date. The FTB may update due dates annually, so ensure you have the correct calendar year.

California Annual Franchise Tax

If you have just created a limited liability company, your first tax filing due date will be after the third month of the current tax year. This means that if you just formed an LLC on January 10, your subsequent filing due date will be April 10.

After that initial three-month period, the California FTB requires LLCs to file an annual corporate tax return.

The FTB's focus on this area is critical as small business activities form a significant part of the state's economy; for instance, 7.5 million small business employees represent 47.6 percent of California employees, as per 2023 SBA data [3].

If your company was formed on January 10, your due date to file taxes is April 10, and every annual LLC tax is due after that until you decide to dissolve. The due date for the return is April 15, even if it falls on a weekend.

"Typically, an entity is required to pay a franchise tax regardless of its operational status—whether fully active, inactive, operating at a loss, or submitting a return for less than a year. This applies to all business entities liable for the franchise tax, rendering this fiscal obligation virtually inescapable."

- Delina Yasmeh, J.D./Tax LL.M, Distinguished Expert in Mergers & Acquisitions

Does My California LLC Need to File Form 3522 (Limited Liability)?

Your California LLC will need to file Form 3522 (LLC Tax Voucher) with the California Secretary of State to pay the California Franchise Tax [4]. This form is a Tax Voucher that includes information on your liability for this tax year.

If your business did not make any profits or had losses in a tax year, you must indicate it in Box 9 of Form 3522.

There are also different Tax Credit options available on the form, which you can file as long as they apply to your business.

If you do not wish to use Tax Credit options for this Tax Return, write “0” in Box 9 of your voucher.

You need to submit Form 3522 with the California FTB yearly, but you can also do it any time before the June 30 due date.

If you are self-employed, this Tax Voucher must be mailed to FTB with your Tax Return form (Form 568) and the Tax Penalty due.

You will receive a copy of Form 3522 if you wish to use it for Tax Credit purposes or Tax Penalty payments.

So does your California LLC need to file Form 3522? Yes, it is required by the California Tax Board every Tax Season.

Does My California LLC Need To File Form 3536 (Estimated Fee For LLCs)?

Your California LLC will need to file Form 3536 if your LLCs make more than $250,000 in annual gross receipts. This form is used to estimate and pay the annual LLC tax. This form is due by the “15th day of the 6th month” after your LLC is approved.

After the first due date, any future Estimated Fee due date is June 15 of each tax year.

The Franchise Tax Board (FTB) recommends filing and paying this form as soon as possible because:

• Penalties and interest will accrue after the due date if you pay it late
• Estimated Fee Payments are not deductible for State Income Tax purposes (though the LLC may pay franchise tax in installments)
• There is no minimum Franchise Tax payment while your LLC's estimated fee payments are current

What is Form 568?

Form 568 is a California tax return form, and its typical due date is March 15 or April 15 each tax year. All California LLCs must file Form 568.

Filing a Limited Liability Company Return of Income (Form 568) with the California Franchise Tax Board registers your California LLC with California.

California collects LLC fees, California taxes, California LLC fees, California LLC taxes, California Secretary of State filing fees, and more.

What Happens if You Don’t Pay $800 California LLC Tax?

If you don’t pay the $800 California LLC tax, you’ll be subjected to penalties, interest charges, and the potential suspension or forfeiture of your LLC's rights and privileges.

The 800 Franchise annual tax in California's due date is on or before January 1 of each tax year. There are serious consequences if the $800 annual tax is not paid before the tax extension due date. This happens four months after the original due date.

Skipping the $800 California LLC tax might seem like a minor oversight, but I learned it can lead to major headaches. A friend's LLC faced penalties and interest that quickly added up, not to mention the stress of getting back into compliance.

Penalties for not paying the $800 annual fees of an LLC in California include:

• A penalty of 10% of the $800 annual income tax is due. This penalty will accrue every month until $800 is paid in full.
• An LLC fee of $800. This fee is due immediately upon the $800 annual tax not being paid by April 15, the extended due date for the $800 LLC tax.
• As of May 1, unpaid 800 fees are subject to an additional 10% monthly penalty on the unpaid 800 balance.
• You’ll not also be given the FEIN number until you fully pay the $800 for your LLC.
• The Franchise Tax Board may even dissolve your LLC without your knowledge, and they will report this to the California Secretary of State.

SOS Penalty

If you open an LLC in California, you must meet the requirements of The Franchise Tax Board. It applies even to quarterly estimated tax payments like payroll taxes.

Form 565-B-S, or The Business Entity Annual Information Return, will be sent to all business entities every tax year after April 15.

If this form was not filed on time, or if it was filed but incomplete, then a penalty fee might be issued within 90 days from the date this form was due.

This statement is usually referred to as the SOS Penalty. You can check your eligibility for the SOS Penalty by requesting an Email from the Business Office of FTB and by looking at your Form 565-B-S through their website.

To avoid paying extra bucks for filing tax forms late, it is always better to do it months before the tax filing due date.

All California businesses must file their first Statement of Information with the Secretary of State within 90 days of filing the original Articles of Organization [6].

The penalty for a late filing due date is $250 per month, with a maximum penalty of $7500. Late income tax filings may have additional penalties from the Franchise Tax Board.

The FTB will then assess a penalty for the late filing due date or failure to file tax forms. The penalty amount varies depending on the entity.

• Domestic and foreign corporations - $250 penalty; applies for any domestic and foreign-based corporation that has never filed a return before or has been out of business for more than five tax years
• Domestic nonprofit corporations - $50 penalty; applies if the corporation is tax-exempt and did not hold membership meetings during the tax year
• Domestic and foreign limited liability companies - $250 penalty

Suspended LLCs

A suspended LLC is also referred to as an "Out of Business LLC."

A suspended LLC results from a founder who has neglected to file Statements of Information with the Secretary of State or file returns with or pay amounts due to the Franchise Tax Board, or both of the previous.

The status “suspended” only means they can no longer operate in California, but it does not mean the state has canceled their business license.

If an entity has never filed a return in California before, then FTB will notify it after five tax years have passed since its formation due date.

Finding an Accountant

One can find an accountant by visiting legal advice sites. If legal matters concern you, you should visit legal websites or legal services that provide lawyers and support staff.

This account’s assets can range from $100,000 to $10 million and has information on state taxes, international taxation, and other legal issues.

It is good for finding legal representation and backgrounds specializing in accounting and taxes.

One can also ask their legal adviser or lawyer for an accountant in the area who has experience with legal matters related to quarterly estimated tax payments.

A website called FindLaw allows users to search for legal assistance via geographic location.

This site offers legal help in 140 areas, including accountants, legal aid options, and legal issues concerning legal professionals.

How to Pay LLC Fee Online

If you want to pay the LLC fee on your own, then you should visit the official website of the California Secretary of State.

There is a link on their homepage for this very purpose. First, click on the link and be directed to another page to review the payment options.

These are three methods that allow you to pay your LLC fee online:

1. You can use your checking account (ACH) or savings account (ACH). It is one of the easiest ways to make estimated tax payments. The advantage of this method is that it is faster, and you will receive a payment confirmation from the state of California.
2. You can use a debit or credit card. This method is only applicable if there are no errors on your California LLC formation documents, which you have submitted to the Office of the Secretary of State. Your debit or credit card will be used instead if any error is found during submission.
3. You can also use a payment plan to speed up the payment process and save on interest rates. It is just like a loan, but you have to repay it with an extra fee of $15. This way, you don’t have to collect money from different sources and can pay it all in one go.

After you choose the method of payment, enter your details, like name and address, along with your LLC number (located on the top right-hand corner of your formation document), and click on Continue.

Then you will be asked to provide more personal information, like phone number, email address, etc. You can save your credit or debit card details and use them to pay LLC formation fees online.

After submitting the information, click Continue to print a payment confirmation page.

Take note of its number and keep the confirmation page safe until your status is updated as “approved” by the state of California.

Strategies to Avoid Late Payments

I found that these strategies work best for avoiding late payments:

• Calendar Alerts: Set up reminders for all tax-due dates well in advance to ensure timely filings and payments.
• Electronic Payments: Utilize the FTB's Web Pay service for businesses to make payments online, reducing the risk of delays associated with mailing checks.
• Installment Agreements: If unable to pay in full by the due date, contact the FTB as soon as possible to discuss setting up a payment plan to avoid further penalties and interest.
• Consult a Tax Professional: Engaging with a tax advisor can help navigate the complexities of tax planning and compliance, ensuring that all obligations are met promptly.

Related Articles:

• What Tax Forms Do I File for a California LLC
• Cost To Start An LLC In California
• Top Registered Agent Services in CA

FAQs

Understanding the California LLC Tax Due Date

The California LLC tax due date is an important deadline for limited liability companies operating in California.

It typically falls on the 15th day of the 4th month after the close of the taxable year.

To ensure timely submission, LLCs should keep track of the due date and plan accordingly to meet their tax obligations legitimately.

Using professional accounting software like QuickBooks or seeking assistance from a qualified tax advisor can provide further guidance and aid in navigating the complexities of California LLC taxation.

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References

1. https://lao.ca.gov/LAOEconTax
2. https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html
3. https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-CA.pdf
4. https://www.sos.ca.gov/
5. https://proconnect.intuit.com/support/en-us/help-article/partnership/california-llc-tax-fee-calculation-form-568/L2QBxqtqp_US_en_US
6. https://www.dir.ca.gov/dlse/regulation_detail/FnLC/llc-12.pdf