Deal alert! Northwest will form your LLC for $39 (60% discount). See details.
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 (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:
California LLC Statement of Information (Form LLC-12)
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 to save time? Hire a company to form your LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)
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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:
- Go to the FTB Forms page
- Click “Online”
- Select the appropriate tax year
- Select “Limited Liability Companies”
- Click “Get Forms”
- Look for Form 3522 and click the link to download
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:
| LLC estimated income | Fee |
|---|---|
| $0 - $249,999 | $0 |
| $250,000 - $499,999 | $900 |
| $500,000 - $999,999 | $2,500 |
| $1,000,000 - $4,999,999 | $6,000 |
| $5,000,000 or more | $11,790 |
(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:
- Go to the FTB Forms page
- Click “Online”
- Select the appropriate tax year
- Select “Limited Liability Companies”
- Click “Get Forms”
- Look for Form 3536 and click the link to download
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:
- Go to the FTB Forms page
- Click “Online”
- Select the appropriate tax year
- Select “Limited Liability Companies”
- Click “Get Forms”
- Look for “568 Form” and click the link to download
- Also download the “Booklet” for instructions and 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, 8am – 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 8:00am.
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 holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.
hi Matt,
I have real estate in CA that fetches about 36k rent annually.
thinking of forming LLC sole – proprietor and moving the real estate under it.
1. do i have to file tax return fed & state separately for this llc ? or schedule c on my personal tax return is enough?
2. What kind of expenses i can deduct for real estate business? 800$ CA tax is fixed so, wondering if it is worth forming llc ? Currently with my personal tax return I am showing it as rental income and able to deduct routine expenses of managing property.
3. Can this llc own rental property internationally? ( i have family property rented in Singapore )
Hi Jaymin, federally, you’d file the income under Schedule E. For the state, there is a dedicated LLC return (Form 568, LLC Return of Income). With an LLC, you should be able to deduct everything you’re currently deducting, but we do recommend speaking to an accountant. And yes, the CA LLC can own property abroad. Hope that helps.
Thanks so much for the I formation. My LLC was approved November 2020, but I haven’t generated any income as my product isn’t in the market yet. Do I still have to pay the first $800 annual fee?
Hi Sergio, you’re very welcome. Unfortunately, your LLC owes a franchise tax payment for 2020 (due February 15th, 2021) and a franchise tax payment for 2021 (due April 15th, 2021). Your LLC also needs to file Form 568. We recommend working with an accountant to make sure everything gets filed.
Thank you for your response, I literally subscribed to your YouTube Channel 30 min ago!
Do I need to file Form 568 even if I didn’t earn any income? If so, would it be under my personal SSN or EIN? Lastly, do I have to complete Schedule C 1040 Form as a single-member LLC?
I really appreciate your help!
Hi Sergio, awesome! Yes, Form 568 needs to be filed regardless of income. Form 568 will use the LLC’s EIN. Federally, you don’t have to file if there was no income. However, if you have expenses, credits, or deductions, then you can file the Schedule C. Hope that helps :)
Last question, is the schedule c filed under the LLC’s EIN also or my SSN?
I really appreciate your help! Good to know there’s someone out there for us small business owners 🙂
Hi Sergio, the Schedule C will have your name, your SSN, the LLC name, and the LLC’s EIN. Thank you! And you’re very welcome :)
Hi. Thanks for helping everyone like you do. Would it be of any benefit to file a LLC for a small vegetable farm, selling from a farm stand on our property?
Hi Kelli, it depends on what your needs are. You are not required to form an LLC. You can operate as a Sole Proprietorship if it’s just you or a General Partnerships if it’s you plus another person or persons. If you are concerned about liability, an LLC will offer personal liability protection. However, if you’re just starting out, an LLC in California is expensive (you’d pay $800 per year franchise tax starting in 2022) and there is administrative work/paperwork. It’s challenging to say exactly when someone should or shouldn’t form an LLC. Typically, it’s recommended to just form an LLC. However, because California is more expensive, some people wait until their business has traction. Please see LLC vs Sole Proprietorship for more information. I hope that helps.
Absolutely wonderful site! This one page clarified so many things for me. Great work keep it up!
You’re very welcome Sudha! Thank you :)
This is a very helpful article. I searched for a long time before finding it. I would have thought a simple step-by-step list of this stuff would be more prevalent on the Web, so thanks for providing it.
Hi Jadie, thank you for the kind words :) We’re glad it was helpful!
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!
Kent, thanks so much!! Your comment means a lot! Very happy to hear that we were able to help!!
Will my California LLC automatically be taxed as a disregarded entity if I don’t make an election?
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!
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
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.
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!
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.
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
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.
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.
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 :)
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
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. We recommend having an accountant help with this. You can also find more information about the LLC Estimated Fee here: FTB 3556 LLC MEO.
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…
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.
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!
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!
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
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?