California LLC Annual Fee

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Your California LLC has to pay annual fees to the state to remain in good standing and be able to do business in California.

The fees include the following items:

  • Statement of Information Filing Fee (every 2 years)
  • Annual LLC Franchise Tax (every year)
  • Estimated Fee for LLCS (every year)
  • LLC Return of Income (every year)

Important: The state will suspend or shut down your California LLC if you don’t comply with these legal requirements. To avoid this, submit the necessary fees and documents. It’s the only way your LLC can keep doing business in California.

Statement of Information Filing Fee ($20)

The Statement of Information updates the state with your LLC’s contact details.

The filing fee is $20 for every year you submit your Statement of Information. The fee is payable to the “Secretary of State” with a check or money order.

You’ll need to submit your first Statement of Information within 90 days after the state approves your LLC.

Afterwards, you must submit it every 2 years. Each submission must be made before your LLC’s approval date (the date your Articles of Organization were stamped and approved by the state).

You can download the California LLC Statement of Information here:
https://bpd.cdn.sos.ca.gov/llc/forms/llc-12.pdf

You can then mail it with the filing fee to this address:

Secretary of State
Statement of Information Unit
PO Box 944230
Sacramento, CA 94244-2300

(For more help on submitting your Statement of Information, you can watch this video)

Need help with your California LLC?
Have a professional LLC service file for you:

Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

(check out Northwest vs LegalZoom)

Annual LLC Franchise Tax ($800)

California charges your business an Annual LLC Franchise Tax of $800. It is filed with Form 3522 (LLC Tax Voucher).

The Franchise Tax must be paid by all California LLCs regardless of how much they earn.

You must submit your first Form 3522 by the 15th day of the 4th month after you filed your LLC.

(The count starts from the month you filed your LLC regardless of the day of the month you actually filed your paperwork.)

After that, you’ll have to submit Form 3522 by April 15th every year.

Avoiding the $1,600 franchise tax: If you’re forming your CA LLC later in the year (October through December), you’ll end up owing two $800 payments to the state within a few months. You can avoid this by using a future file date (making your LLC go into existence in January). For more information, please see avoiding $1,600 LLC franchise tax.

Download Form 3522:
FTB Forms page > Tax year: select the appropriate year > Taxpayer type: “Limited Liability Companies” > Form type: “Income Tax Forms” > click “Get forms” button. Look for Form 3522 and click the download link.

Estimated Fee for LLCs ($900 – $11,790)

The Estimated Fee for LLCs only applies to LLCs that make $250,000 or more during a taxable year. This is filed on Form 3536 and is calculated based on your California LLC’s gross receipts (total revenue). The larger the gross receipts, the higher the fee.

Here is the fee table from the CA Franchise Tax Board:

[table id=8 /]

(Source: Section 17942, Revenue and Taxation Code)

You must first submit Form 3536 by the 15th day of the 6th month after you filed your LLC.

(The count starts from the month you filed your LLC regardless of the day of the month you actually filed your paperwork.)

After that, you’ll have to submit it by June 15th every year.

Download Form 3536:
FTB Forms page > Tax year: select the appropriate year > Taxpayer type: “Limited Liability Companies” > Form type: “Income Tax Forms” > click “Get forms” button. Look for Form 3536 and click the download link.

LLC Return of Income (Fee Varies)

Each year, all LLCs must also file Form 568, called the LLC Return of Income. It summarizes your California LLC’s financial activity during a taxable year.

In this form, you’ll report the:

  • $800 Annual Franchise Tax
  • Estimated Fees (if applicable)
  • LLC’s income, deductions, gains, losses, etc.
  • Other taxes paid, including use taxes related to real estate sales

You’ll also have to report and pay:

  • Any deficits and penalties after you filed Form 3536 (if applicable)
  • The taxes of any non-resident member of your LLC

Form 568 is due each year, usually by March 15th or April 15th.

If your LLC is taxed as Sole Proprietorship, the due date for most filers will be April 15th.

If your LLC is taxed as Partnership, the due date for most filers will be March 15th.

If your LLC is taxed as an S-Corp or C-Corp, you shouldn’t file Form 568, but instead file Form 100S (S-Corporations) or Form 100 (C-Corporations). In this case, Form 100S or Form 100 must be filed by March 15th.

Download Form 568:
FTB Forms page > Tax year: select the appropriate year > Taxpayer type: “Limited Liability Companies” > Form type: “Income Tax Forms” > click the “Get forms” button. Look for Form 568 and click the download link. Also download the “Booklet” for instructions and more details as well as any applicable 568 schedules.

Get a Good CPA/accountant

Paying the correct fees and filing taxes for your California LLC can be complicated. If done incorrectly, it might even harm your business.

For this reason, we recommend you get a qualified California CPA/accountant to help you file your taxes.

Try using our “knights of the roundtable” strategy to find a good accountant:
How to find an accountant for your LLC

You can also contact the California Franchise Tax Board for further questions:

Hours:
Monday – Friday, 7am – 5pm PT

Phone:
888-635-0494 Collections (option 3, option 3, option 0)
800-852-5711 Main (taxpayer service center, general questions)

Wait Times:
Wait times can be quite long if you call during the middle of the day. We recommend getting up early and calling them at 7:00am.

Live chat: https://www.ftb.ca.gov/aboutFTB/Live_Chat.shtml
Main Website: https://www.ftb.ca.gov/

If you need more help on filing your California LLC taxes, you can watch this video.

If you want to form your California LLC, then watch LLC University’s step-by-step video course.

Matt Horwitz
Founder & Educator, LLC University®
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! LLC University® teaches people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your business journey.
Leave a Comment (22) ↓
Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

22 Comments

  1. Jim B November 28, 2016

    What fees do you have to pay if you are forming an LLC in Illinois but reside in California? For the purchase renovation and sale of real estate

    reply
    • Matt Horwitz November 29, 2016

      Hey Jim, it depends on where the real estate is located. The state where the real estate is located is technically where you are “doing business”, and will be the best state to form your LLC. What state are you investing in real estate?

      reply
  2. Scott May 23, 2017

    Thanks for the info! I just set up my LLC and while a bit overwhelming at first, I am starting to get everything in order. I have a question though – my LLC was formed on April 11th of this year, with my fiscal year ending on Dec 31st. When exactly do I pay my LLC annual fee of $800 for the state of California?

    I am thinking August, because it says “15th day of the 4th month after you filed your LLC.”

    But I’m reading a lot of other things that says it’s due on April 15th…

    reply
    • Matt Horwitz May 24, 2017

      Hi Scott, the language regarding the first payment is a bit strange. April is actually considered “month 1”, so your first $800 payment (paying for the 2017 tax year) will be due by July 15th. Then, in 2018, your $800 payment will be due by April 15th. The same goes for 2019 and onwards; the payment will always be due by April 15th. It’s just the first payment that is a little quirky to figure out.

      reply
      • Scott May 25, 2017

        Thanks Matt! Yeah, I’ve had a heck of a time trying to decipher that language – so this really helps. It makes sense too considering that I figured that I must owe some sort of tax for 2017 (as opposed to making the first payment in 2018).

        Thank you!

        reply
        • Matt Horwitz May 25, 2017

          Don’t feel to bad, everyone does lol! At least you had the proper thinking in place ;) Let us know if you need anything else, Scott!

          reply
  3. John June 22, 2017

    Matt,

    Thanks for the education. I have began working with an LLC. I have a few questions based on the information above.

    1. If we are working on a calendar year, our Annual LLC tax for January 1, 2017-December 31, 2017 should be paid by April 15, 2018. Is this correct?

    2. With the same information as above, our LLC fee should paid for January 1, 2017-December 31, 2017 by June 15, 2017. Is this correct?

    Thank you in advanced for your help!

    -John

    reply
    • Matt Horwitz June 23, 2017

      Hi John, you are quite welcome :) And apologies that CA’s filing times and due dates are so strange!

      1. Regarding the Annual Franchise Tax (Form 3522), the 1st payment will have weird due date, and then it’ll be April 15th every year after that. For example, if you formed your LLC this month (on June 22nd), your 1st payment (paying for the 2017 tax year) is due the 15th day of the 4th month after your LLC is formed. June counts as “month 1” (don’t ask me why), so your 1st $800 will need to be paid by September 15th 2017. The next payment will be due by April 15th 2018… then April 15th 2019, and so on.

      2. Your LLC’s Estimated Fee (Form 3536) only needs to be filed if your LLC’s income is expected to be greater than $250,000 for a taxable year. This due date is also counted in the same fashion (with that weird initial payment). It is first due the 15th day of the 6th month after your LLC is formed. So let’s take June again being “month 1”. That means the first due date is November 15th 2017. Next year, it’ll be June 15th 2018… then June 15th 2019, and so on.

      Hope that helps a bit. I recommend having your accountant deal with this stuff. If you need help finding one, we have a short guide here. You can also find more details about the LLC Estimated Fee here.

      reply
  4. Donna Monti September 25, 2017

    Hi Matt,
    Very good website and very clear.
    I formed an LLC this year. I already filed FTB 3522 on the 4th month.
    My estimate is way below the 250,000 mark so I concluded that I did not have to pay estimated annual fee on form 3536.
    Next is File 568. It says I’m supposed to file it by the original return due date. What does this mean exactly? Is it before April 15th like the rest of my regular income returns every year?
    Thanks in advance for the clarification.

    reply
    • Matt Horwitz September 26, 2017

      Thanks for the kind words Donna! Yes, 568 will be filed by April 15th 2018, along with the rest of your taxes. I’d recommend working with an accountant to make sure you cross all t’s and dot all i’s. Hope that helps :)

      reply
  5. Rudy November 7, 2017

    So if I formed an LLC in November “17, in the state of Ca, I will have to pay $800 in March? Then the following year in April?

    And if I filled in December ’17, $800 would be due in April ’18?

    Thanks,

    Rudy

    reply
    • Matt Horwitz November 8, 2017

      Hi Rudy, if the LLC exists in 2017, then it must pay $800 for the 2017 tax year. The first payment is due the 15th day of the 4th month after the LLC is formed. So if your LLC is stamp-approved in November 2017, November is counted as “month 1”, meaning the 2017 $800 payment is due by February 15th, 2018. Then the 2018 $800 payment is due by April 15th, 2018. Best thing to do is file your LLC in January of 2018 if you don’t need to open on November or December of 2017 in order to avoid the dreaded “back to back payments”. Hope that helps.

      reply
  6. Anuj March 5, 2018

    Thanks for great work. I might have overlooked my first payment of $800. My LLC was stamped in August and SOI was done in October. If we haven’t paid the $800 first year fees, what’s my re-course? Thank you!

    reply
    • Matt Horwitz March 10, 2018

      Hey Anuj, please give a call to the California Franchise Tax Board and ask them to review your account. They’ll let you know exactly what needs to be paid and/or filed. Hope that helps.

      reply
  7. Punam June 6, 2018

    Hello Matt,

    I had formed an LLC in February 2018. I howver overlooked my payment $800 fee.

    Also I would not make more than $20,000 – $25000 this tax year of 2018. Do I still need to pay theestimated annual fees

    Thanks

    reply
    • Matt Horwitz June 17, 2018

      Hi Punam, yes, the annual franchise tax is due regardless of business activity or income. You’ll also want to call the CA Franchise Tax Board and see what is outstanding. Hope that helps.

      reply
  8. Aneesah S July 3, 2018

    Will my California LLC automatically be taxed as a disregarded entity if I don’t make an election?

    reply
    • Matt Horwitz August 3, 2018

      Hi Aneesah, yes, a Single-Member LLC is automatically considered a Disregarded Entity LLC by the IRS (unless an election to be taxed as an S-Corp or taxed as a C-Corp is made). The Disregarded Entity means that if the LLC Member is an individual, the LLC will be taxed like a Sole Proprietorship. And if the LLC Member is another company, the LLC will be taxed like a branch/division of the parent company. I also recommend reading how are LLCs taxed. Hope that helps!

      reply
  9. Kent C October 10, 2018

    This website is off the charts. You put a tremendous effort into this Matt. Can’t tell you how much your well written and concisely written requirements, particularly for CA has meant to getting my LLC up and running. Thanks!

    reply
    • Matt Horwitz October 25, 2018

      Kent, thanks so much!! Your comment means a lot! Very happy to hear that we were able to help!!

      reply
  10. Marc Dash November 29, 2018

    Throughout the information you have provided, the word “income” is used. My understanding is that “income” is equal to revenue minus expenses. Thus, if the LLC of which am a member has revenue of $1,000,000 and expenses of $900,000 then there is no “fee” payable. Is that correct?

    reply
    • Matt Horwitz December 4, 2018

      Hi Marc, great question. We used that term “income” loosely (to mean total revenue/sales), not as an official tax/bookkeeping term. So we don’t mean gross income/gross profit (sales of the goods or services minus COGS). We updated the page and now use the terms “gross receipts” and “total revenue”. Thanks for bringing this to our attention.

      The California LLC Estimated Fee (“LLC fee”) is based off of total California annual income. As per the CA FTB, “total income” means gross income, plus the cost of goods sold that are paid or incurred in connection with the trade or business of the taxpayer attributed to California”. The word “plus” may be confusing at first read. It’s basically a funny way to get back around to gross receipt [(sales – COGS) + COGS]. So in your case, the LLC Estimated Fee would be based off your gross receipts of $1M. Hope that helps!

      Here’s some more technical info taken from the FTB’s 3556 CA LLC Filing Info:

      • LLCs are subject to an annual fee based on their total income “from all sources derived from or attributable to California” (R&TC Section 17942). Total income for LLC fee purposes is “gross income, as defined in R&TC Section 24271 [references 26 US Code § 61], plus the cost of goods sold, paid, or incurred in connection with the trade or business of the taxpayer.”

      • LLCs determine total income from California sources by using the rules for sales assignment under R&TC Sections 25135 and 25136 and the related regulations, as modified by regulations under R&TC Section 25137, other than those provisions that exclude receipts from the sales factor (R&TC Section 17942(b)(1)).

      reply

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