Harper Tax CPA

Scenario (typical)

You formed a California LLC (or you’re “doing business” in California). The LLC may be small, new, or even have minimal activity—but California often still expects annual compliance. For many LLCs, that means FTB Form 568 plus required payments.

What is California Form 568?

Form 568 (Limited Liability Company Return of Income) is the Franchise Tax Board’s return used by many LLCs that are NOT taxed as corporations to report and reconcile key California items, including:

  • the $800 annual tax,
  • the LLC fee (if applicable),
  • the LLC’s income/deductions (especially when taxed as a partnership),
  • Schedule K-1 (568) information for members (multi-member LLCs), and
  • items like nonconsenting nonresident members (NCNR) tax (when applicable).

Important: If your LLC elected to be taxed as a corporation (C-corp or S-corp) for tax purposes, California generally expects Form 100 or 100S, not Form 568.

Why is Form 568 required?

FTB Publication 3556 and the Form 568 instructions explain the compliance framework for many LLCs:

  • File Form 568 (for LLCs taxed as partnerships or disregarded entities),
  • Pay the $800 annual tax, and
  • Pay the LLC fee if total CA income exceeds the threshold.

The two big California LLC money items

1) The $800 annual tax (and how to pay it)

Many California LLCs owe a flat $800 annual tax each year, generally due the 15th day of the 4th month after the beginning of the taxable year (calendar-year LLCs: typically April 15). FTB commonly has you pay this using FTB 3522 (LLC Tax Voucher).

First-year exemption (critical caveat):
California provided a first-year exemption from the $800 annual tax for LLCs that organized/registered/filed to do business in CA on or after January 1, 2021 and before January 1, 2024 (AB 85).

2) The LLC fee (income-based) + what “total income” means

If your LLC’s total income from all sources derived from or attributable to California exceeds $250,000, you generally owe an LLC fee.

Key definition: California defines “total income” for the LLC fee as gross income plus cost of goods sold (not net profit).

Estimated LLC fee payment: If you expect to owe the fee, you generally estimate and pay it by the 15th day of the 6th month of the taxable year (calendar-year: typically June 15) using FTB 3536 (Estimated Fee for LLCs).

California LLC fee chart (when total CA income is $250,000+)

Total California income

LLC fee

$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

(FTB publishes these brackets; also reflected in CA rules on assigning “total income” to CA for fee purposes.)

SPECIAL NOTE: While California says income, this is actually revenue amount. If your business operates outside and inside California, this will require addtional analysis.

Form 568 due date (the part most people get wrong)

The original due date depends on whether the LLC is partnership-classified / pass-through owned or an SMLLC owned by an individual/non-pass-through:

  • LLCs classified as partnerships and SMLLCs owned by pass-through entities: due the 15th day of the 3rd month after the close of the tax year.
  • SMLLCs not owned by a pass-through entity: due the 15th day of the 4th month after the close of the owner’s tax year (often the individual owner’s year).

Extensions: California may provide an extension to file, but it does not extend time to pay.

Penalties: why skipping Form 568 gets expensive

Two common penalty buckets show up in Form 568 problems:

  • Failure-to-file / failure-to-pay penalties tied to the tax/fee balance and timing (see the Form 568 booklet).
  • Per-member, per-month penalties that can apply in pass-through contexts (often referenced as $18 per member per month, up to a limit), which can snowball for multi-member LLCs.

10 FAQs on California Form 568

1) Which California LLCs must file Form 568?

Generally, LLCs organized in CA or doing business in CA that are taxed as partnerships or disregarded entities file Form 568.

2) Does a single-member LLC (SMLLC) file Form 568?

Often yes—California treats many SMLLCs as having the same filing requirements as an LLC, and the due date depends on ownership (pass-through vs not).

3) Does a multi-member LLC taxed as a partnership file Form 568?

Yes. Partnership-classified LLCs report activity on Form 568 and provide K-1 (568) information to members.

4) Do LLCs taxed as S corporations or C corporations file Form 568?

Typically no—LLCs taxed as corporations generally file Form 100S (S-corp) or Form 100 (C-corp) instead.

5) Is the $800 annual tax due even if the LLC has no profit?

Often yes, but check the first-year exemption window (1/1/2021–12/31/2023 formation/registration) because that changed the first-year $800 rules for certain LLCs.

6) What’s the difference between the $800 annual tax and the LLC fee?

The $800 is a flat annual tax; the LLC fee applies when total CA income exceeds $250,000 and is based on gross income + COGS (not net profit).

7) When do I pay the $800 and what form do I use?

Generally by the 15th day of the 4th month after the beginning of the tax year, using FTB 3522.

8) When do I pay the estimated LLC fee and what form do I use?

If you expect to owe the fee, estimate/pay by the 15th day of the 6th month using FTB 3536.

9) If I extend Form 568, do I also extend the time to pay?

No. California is explicit: an extension to file is not an extension to pay.

10) Do members “file” the K-1 (568) with their personal return?

Members use the K-1 (568) amounts to prepare their CA return; the LLC transmits the K-1 information with the Form 568 filing through FTB’s business e-file process.

Quick compliance checklist (for a CA-based LLC)

  1. Confirm tax classification: disregarded vs partnership vs corporate election.
  2. Calendar payments
    • FTB 3522: $800 annual tax (generally 15th day of 4th month of tax year).
    • FTB 3536: estimated LLC fee (if total CA income will exceed $250k; generally 15th day of 6th month).
  3. Calendar the Form 568 filing due date (varies by ownership/classification).
  4. If multi-member: prepare member K-1 (568) information and deliver it on time.
  5. If formed 2021–2023: confirm whether the first-year $800 exemption applies.

 

 

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