What California Form 568 (2012) Is For
California Form 568 (2012) is the Limited Liability Company Return of Income used by California limited liability companies to report income and fees for the taxable year. This form applies to pass-through entities such as multi-member LLCs and single-member LLCs classified as disregarded entities for federal income tax purposes. The California Franchise Tax Board requires this filing to document total income, member allocations, applicable franchise taxes, and related schedules.
The form supports LLCs that are required to report California income, business activity, and payments, including the minimum annual franchise tax. Business owners file this return when they meet the filing requirements established by California law or the California Secretary of State. Form 568 also coordinates with schedules like Schedule K-1, Schedule R, and Schedule T for member reporting.
When You’d Use California Form 568 (2012)
Business owners use Form 568 when their California LLC conducts business, earns California-source income, or maintains registration with the California Secretary of State. A California LLC must file even if there is no activity during the tax year unless properly dissolved through the required Secretary of State forms. This filing obligation applies whether the entity is treated as a partnership return or as a disregarded entity for federal purposes.
Use this form when your business entity must report franchise taxes, the LLC Fee, or tax liability owed for nonresident members. Single-member LLCs filing under Internal Revenue Service rules are still required to complete Form 568 for state reporting. The Franchise Tax Board uses this information to confirm income tax compliance and verify required payments.
For a clear explanation of what a bank levy is, how it works in California, and how it may affect estate assets, review our detailed Bank Levy guide.
Key Rules or Details for 2012
California LLCs owe an annual tax due through Form FTB 3522, which covers the Minimum Annual Franchise Tax for the taxable year. Entities with a California total income of $250,000 or more must also pay an LLC fee calculated using Form FTB 3536. These rules apply regardless of federal tax classification, including entities that file Form 1040, Form 1120, Schedule C, or C corporation returns, as well as S corporation forms.
California Form 568 requires accurate reporting of member allocations through Schedule K-1 and California Schedule K-1. LLCs with nonconsenting members must compute taxes using Schedule T under California law. Businesses must comply with the provisions of the Revenue and Taxation Code and follow the California LLC filing process to avoid late payment penalty assessments.
Step-by-Step (High Level)
- Step 1: The LLC should confirm the tax filing requirements for the taxable year under California law and review its formation documents, including the Articles of Organization and registration records.
- Step 2: The responsible parties should verify that the business address, registered agent, and Employer Identification Number are current and accurate.
- Step 3: The tax preparer should review the California LLC filing process instructions for CA Form 568 in detail.
- Step 4: The entity should calculate the California LLC filing fee using the Total Income rules in the Revenue and Taxation Code. The business must schedule required payments before the applicable due dates for the entity.
- Step 5: The filing team should complete the Limited Liability Company Return of Income and supporting schedules such as Schedule R. The filer must follow California SOS guidance, federal Form 1040 instructions, and all related tax filing requirements
For a clear explanation of filing requirements, eligibility criteria, and form-specific instructions, visit our IRS Form Help Center.
Common Mistakes and How to Avoid Them
Frequent filing errors create processing delays and prevent accurate evaluation of California LLC submissions for the taxable year. Identifying these issues enhances compliance with tax filing requirements and supports the creation of complete, reviewable records. Correct documentation also strengthens state reporting for the Limited Liability Company Return of Income.
- Omitted Signatures on Form 568: This mistake occurs when required signatures are not included, and the filer must review all signature lines before submitting the tax return.
- Mismatched Employer Identification Numbers: This mistake occurs when the EIN on the CA Form 568 differs from the records used by the California SOS, and the filer must confirm identifiers before filing.
- Missing Required Attachments: This mistake occurs when schedules such as Schedule R or California Schedule K-1 are not included, and the filer must attach all mandated documents.
- Incorrect Payment Timing: This mistake occurs when LLC tax payments or California LLC filing fee payments are transmitted late, and the filer must schedule remittances ahead of state deadlines.
What Happens After You File
The Franchise Tax Board reviews the tax return and verifies the annual tax, LLC fee, schedules, and member information. The agency compares reported information with Internal Revenue Service filings, as applicable, in accordance with federal income tax rules. Returns may also be reviewed for accuracy in apportionment or California Schedule K-1 reporting.
If adjustments are required, the Franchise Tax Board issues notices assessing tax liability, penalties, or interest. Failure to respond can result in suspension under California law until all obligations are met. Businesses should retain documentation supporting total income, expenses on Form 568, and payments made.
FAQs
When must a California LLC file Form 568?
A filing is required when the entity conducts business, remains registered with the California SOS, or earns California-source income during the taxable year. The tax return must reflect accurate classifications under state requirements.
Does a single-member LLC complete California Form 568?
A single-member entity submits Form 568 as required under state tax filing requirements. It includes supporting schedules, such as Schedule R, when reporting taxable income for the Limited Liability Company Return of Income.
How is the California LLC fee determined?
The calculation utilizes Total Income and applies the California LLC tax rate as established in the Revenue and Taxation Code. The filer then remits the California LLC filing fee according to the applicable bracket.
What occurs when nonresident members decline to provide consent?
The LLC computes tax using Schedule T based on California-source income, and the amount must be included in the Form 568 filing, following the procedures outlined in Revenue and Taxation Code (R&TC) Section 24271.
Can an LLC stop filing post-dissolution?
A final filing remains required under the California SOS.
