What California Form 100 (2022) Is For
California Form 100 (2022) is the main income tax return for corporations operating in the state or earning California-source income. It applies to C corporations, banks, financial corporations, REMICs, RICs, REITs, business trusts, FASITs, homeowners associations, political organizations, and LLCs or partnerships that elect corporate tax treatment. The form determines whether a corporation owes franchise tax for doing business in California or income tax on California-source income.
For 2022, corporations doing business in California owe franchise tax at 8.84% (10.84% for banks and financial corporations), with most required to pay at least the $800 minimum franchise tax. Corporations merely earning income from California sources owe income tax at the same rate but without the minimum tax. The “doing business” thresholds for 2022 include sales exceeding $690,144 or 25% of total sales; property over $69,015 or 25% of total property; or payroll over $69,015 or 25% of total compensation.
When You’d Use California Form 100 (2022)
Corporations must file California Form 100 if they are incorporated, qualified, registered, or doing business in the state, or if they earn California-source income. Calendar-year corporations must file by the 15th day of the fourth month after year-end—April 18, 2023, for 2022 returns. An automatic six-month extension applies to filing, not payment, so all estimated tax liability must be paid by April 18 to avoid penalties.
Corporations needing to amend their return must submit Form 100X within six months of amending their federal return or receiving an IRS determination. The 2022 late-filing penalty is 5% per month up to 25%, while late-payment penalties include 5% of unpaid tax plus 0.5% per month, also up to 25%.
Key Rules or Details for 2022
Net Operating Losses and Credit Limitations
Two major restrictions were lifted for 2022: the NOL suspension and the credit limitation that previously capped credits at $5 million annually. Corporations may fully deduct NOLs following standard carryforward rules and apply all eligible credits without limitation.
California–Federal Nonconformity
California conforms to the Internal Revenue Code as of January 1, 2015. It does not follow many federal changes enacted by the TCJA, including bonus depreciation, expanded Section 179 expensing, GILTI, business interest limitations, and Opportunity Zone deferral rules. Corporations must adjust federal amounts to compute California taxable income accurately.
Electronic Filing and Payment Requirements
If any estimated tax or extension payment exceeded $20,000 or total tax liability exceeded $80,000, the corporation must pay all future taxes electronically. Corporations using software must file electronically. Paying by check when electronic payment is required triggers a 10% penalty.
International Reporting
Corporations filing federal Forms 5471, 5472, or 8975/Schedule A must attach copies to their California return. Penalties range from $1,000 to $10,000 per missing form each year.
Step-by-Step (High Level)
Step 1: Confirm the Correct Filing Form
Use Form 100 unless you qualify for Form 100W (water’s-edge filers) or Form 100S (S corporations). Ensure you have your California corporation number, FEIN, and Secretary of State file number.
Step 2: Gather Federal Return Information
Form 100 begins with federal net income. Collect federal Form 1120 and relevant schedules such as Schedule D, Form 4797, Forms 1125-A/E, and any required international forms.
Step 3: Complete State Adjustments
Use Schedule F to compute net income and apply California-specific adjustments. Add back items California disallows—such as foreign taxes, GILTI, and excess federal depreciation—and subtract items California allows, including state-specific depreciation and California's dividends received deduction.
Step 4: Determine California-Source or Apportioned Income
Use Schedule R if operating in multiple states. California uses a single-sales factor formula and market-based sourcing, assigning sales to the location where customers receive the benefit.
Step 5: Apply NOLs and Tax Credits
Compute NOL deductions using Form FTB 3805Q when applicable. List eligible credits on Form 100 and attach schedules for more than two credits.
Step 6: Calculate Tax and Payments
Apply the correct tax rate, ensure the $800 minimum tax is met if required, and enter all estimated payments, withholding, and extension payments.
Common Mistakes and How to Avoid Them
- Missing federal-to-state adjustments
Track all nonconformity items to avoid audit adjustments. - Ignoring the 2022 NOL and credit rule changes
Many corporations overlook these repeals and overpay. - Not complying with electronic filing rules
Once triggered, electronic payment obligations are permanent. - Failing to attach required international forms
Missing Forms 5471, 5472, or 8975 results in automatic penalties. - Incorrect combined reporting
Ensure all unitary group members are identified and included properly.
What Happens After You File
The Franchise Tax Board (FTB) processes returns through its Business Entities Tax System. If direct deposit is elected, refunds generally arrive sooner than paper checks, provided banking details are correct. The FTB may request additional information for missing schedules, inconsistent apportionment calculations, or incomplete Schedule Q responses.
Returns may be selected for audit within four years. Audits focus on apportionment, California adjustments, NOL use, credit calculations, and combined reporting accuracy. Maintain detailed records supporting all items reported. If the FTB issues an assessment, corporations can protest within 60 days or pursue formal appeal routes. Failure to file or pay can result in suspension, preventing the corporation from legally conducting business in California.
FAQs
What counts as “doing business” for 2022?
You are doing business in California if you engage in transactions for financial gain in the state or meet thresholds for sales, property, or payroll. These thresholds apply if either the dollar amount or 25% percentage test is met. Being incorporated or registered in California automatically subjects you to franchise tax.
How do the NOL and credit changes affect 2022 filings?
For 2022, corporations may deduct all eligible NOLs and use credits without the prior $5 million cap. Those who filed before using these benefits should consider filing Form 100X to claim refunds.
How should I handle federal GILTI and bonus depreciation differences?
California does not conform to these federal provisions. Subtract GILTI from federal income and recalculate depreciation using Form FTB 3885 to remove federal bonus depreciation. Maintain detailed schedules to support these calculations.
How does California’s single-sales factor formula work?
Only sales are used to determine the apportionment percentage. Under market-based sourcing, sales are assigned to California when the customer receives the benefit there, not necessarily where goods are shipped from.
Where can I find California Form 100?
You can find Form 100 and instructions on the official Franchise Tax Board website: https://www.ftb.ca.gov/forms/.
