California - Paying Franchise Taxes for LLCs Taxed as S Corps

Overview

Different business structures in California are subject to different state-level taxes and fees. If your California LLC has elected to be taxed as an S Corporation by filing IRS Form 2553, you are required to pay state franchise taxes through the California Franchise Tax Board (FTB).

Generally, each year, California S Corps must pay whichever is greater of:

• Minimum Franchise Tax: $800 per year or
• Franchise Tax: 1.5% of net taxable income 

If your business exists in California, you will owe at least $800 each year until your S Corp is formally dissolved, even if your business is inactive or reports no income.

Due Dates

• The minimum $800 franchise tax or 1.5% of net income (whichever is greater) is due by the 15th day of the 4th month of your tax year. For most calendar-year filers, that’s April 15th.
• Additional estimated payments may be required if your business earns taxable profit during the year. Read more about quarterly estimated tax payments here. 

Franchise Tax Example

Here’s a simplified example of how this works:

Note: The California franchise tax for S Corps is based on net taxable income after business expenses, not total gross receipts. For more information, visit the FTB S Corporation Franchise Tax Overview.

How to Pay
The easiest way to pay your annual S Corp franchise tax is online. If it’s your first year operating as an S Corp in California, you may not have access to the Franchise Tax Board’s online system yet—and that’s okay. We’ve included Pay by Mail steps below to help you get it done either way.

Instructions for Making Payment to the FTB using Credit/Debit Card

Instructions for Making Payment to the FTB using Bank Account

Instructions on making a California Franchise Tax payment by Mail

Instructions for Making Payment to the FTB using Credit/Debit Card:

1. Visit https://www.ftb.ca.gov/pay/ and select the type of payment method being used. The process differs depending on the methods. We are covering Credit Card in these instructions.
    
2. Under “Business”, select “Pay now with ACI Payments” and click Continue to leave the site when prompted.
    
3. Select “Corporation Taxes”. Do NOT select “Limited Liability (LLC) Taxes”. Click “Make a Payment”.
    
4. Enter the amount of the payment you are making. Select from one of the Payment Options as appropriate. Click “Continue”.
5. Agree to the terms of the payment by selecting “Accept”.
6. Choose if you wish to make an account, create an account, or continue as a guest.
7. Select “Form 100, 100S, 100W, or 100X - Payments”
8. Complete the first half of the page that loads. Note that the “Entity ID (7 Digits)” is your California Corporation Number. The FEIN is your Federal Employer Identification Number.
    
9. Complete the remainder of the page. Under “Payment Types”, select one of the following:
   1. Original Return Payment – This is for your Balance Due (Form 3586) from your prior-year return
   2. Estimated Tax Payment – This is where you make all Estimated Tax Payments (Form 100-ES)
       
10. Be sure to enter the proper Account Period Beginning Date and Ending Date. Use the prior tax year for Original Return Payments and the current tax year for Estimated Tax Payments, with January 1 and December 31 as the start and end dates.
11. Click continue, confirm your information, and make the payment official!

Instructions for Making Payment to the FTB using Bank Account

1. Visit https://www.ftb.ca.gov/pay/ and select the type of payment method being used. The process differs depending on the methods. We are covering the Bank Account in these instructions.

   

    

2. Under “Business”, select “Use Web Pay business”

   

    

3. Select “Corporation” and NOT LLC. Enter your Entity ID (Your 7-digit California Corporation Number or 12-digit Secretary of State ID Number). Click “Login”.

   

    

4. Enter your First Name, Middle Initial, and Last Name. You will see your Entity ID that you entered and Entity Name filled in on this screen.

   

    

5. Select “Form 100, 100S, 100W, or 100X”

   

    

6. On this screen, this selection depends on the type of tax you are paying:
   1. 1. Select “Estimated Tax Payment (Form 100ES)” if you are making an estimated payment for the current year (to be credited on next year’s return)​
      2. Select “Original Return Payment (Form 100, 100S, 100W, or 3586)” if you are paying the balance due from the return being filed this year
7. Based on the type of tax you are paying, do the following:

   1. For Estimated Tax Payments: Be sure to enter the proper dates for the current tax year (e.g., January 1 through December 31).

      1. Click “Add an estimated tax payment”, and put the date and amount of the payment you wish to make. You can make up to 4 estimated tax payments on this screen.

         

          

   2. For Balance Due Payments: Enter the dates for the prior tax year (e.g., January 1 through December 31). Enter the payment amount and date.

      

       

8. Enter your payment details on this screen:

   

    

9. Review your details, enter your email address, confirm your email, enter your telephone number, and submit the form.

   

    

Instructions on making a California Franchise Tax payment by Mail:

1. Fill in Form 100-ES like so (using your own information of course):

   

   
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2. Make your check, money order, or cashier’s check payable to Franchise Tax Board

3. Write your business name, FTB ID/Entity ID, and tax year on your payment

4. Mail, using certified mail, to:

   1. Franchise Tax Board

   2. PO Box 942857

   3. Sacramento CA 94257-0501

Recording your payment to your Collective Dashboard

1. Submit your tax payment to your Collective Dashboard
   • From the Quarterly Estimates section of your Collective account
   • Select “Record payment”
   • Enter the tax type, amount, payment date, quarter, and tax year
   • Upload your payment receipt

Tip: Business-related taxes and fees, such as the California Franchise Tax, are generally deductible business expenses on your federal tax return. Be sure to keep proof of payment for your records and share it with your tax preparer.

Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as legal, financial, or tax advice. It is not intended to be a substitute for obtaining legal, accounting, or other financial advice from an appropriate and/or licensed  adviser, or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.