What Form 8453-LLC (2020) Is For
Form 8453-LLC (2020) is used to authorize the electronic filing of an LLC’s income tax return with the California Franchise Tax Board. Specifically, it serves as the signature authorization for Form 568, the Limited Liability Company Return of Income, when filed electronically. This form also permits the transmission of banking information to allow electronic funds withdrawal for tax liability payments and optional estimated tax payment scheduling for the following year.
It must be signed by an authorized member or manager of the LLC and retained by the Electronic Return Originator (ERO); it is not submitted directly to the state.
When You’d Use Form 8453-LLC (2020)
Form 8453-LLC (2020) is required in several everyday filing situations involving limited liability companies:
- Regular e-filing for Form 568: Use this form when electronically filing Form 568, which is mandatory for most LLCs under California law if prepared with tax software.
- Amended returns: A new Form 8453-LLC must be completed and signed for each amended Form 568 submitted electronically to the California Franchise Tax Board.
- Extension returns: The form is required when the LLC files its actual return after making an extension payment using Form FTB 3537.
- Multiple LLCs under a single signer: Tax professionals may use one form to authorize e-filing for multiple LLCs with a shared managing member by attaching a detailed list of entities.
- Not used for paper filing: Form 8453-LLC is not needed when Form 568 is filed on paper, although such filings are now rare due to California’s e-filing mandates.
Key Rules or Details for 2020
To ensure compliance with California tax regulations for the 2020 tax year, LLCs and tax preparers must follow several key requirements when using Form 8453-LLC (2020):
- Mandatory e-filing for software-prepared returns: Under California law, all LLCs that prepare their returns using tax software are required to e-file, unless they have obtained an approved waiver from the California Franchise Tax Board.
- Signature timing and order matter: The LLC’s authorized member or manager must sign Form 8453-LLC after reviewing the completed return and before the ERO transmits it.
- Form retention requirements: The ERO is required to retain the signed form for at least four years from the filing date or return due date; it must not be mailed to the Franchise Tax Board.
- Banking details must be accurate: Incorrect routing or account numbers may result in payment rejection, leading to penalties and interest from the Franchise Tax Board.
- Multiple payment options are available: LLCs may use electronic funds withdrawal, Web Pay, credit card, or check with Form FTB 3588 to pay their tax liability.
Step-by-Step (High Level)
Form 8453-LLC (2020) must be completed after Form 568 has been prepared and reviewed. Below is a high-level breakdown of the required steps:
- Prepare Form 568 first: The Limited Liability Company Return of Income and its supporting schedules, including Schedule C and Schedule K, must be completed using approved e-file software before starting Form 8453-LLC.
- Fill out Part I with tax return data: Enter the LLC’s name and identification number, and transfer income tax figures from Form 568 to the appropriate lines in Part I.
- Part II for current year payments: If authorizing electronic funds withdrawal, check Box 6 and provide the amount of the 2020 tax liability and the withdrawal date.
- Part III for next year’s prepayments: Enter any estimated tax payment amounts for 2021 and the requested withdrawal dates for advance payment scheduling.
- Enter accurate banking info in Part IV: Include the correct nine-digit routing number and account number from a check or bank statement, and select the account type.
- Authorized signer completes Part V: The LLC’s authorized member or manager must review the declaration, sign, date, and indicate their title.
- ERO signs Part VI: The Electronic Return Originator must sign after confirming the LLC’s signature has been obtained and all return information has been reviewed.
- Transmit and retain documentation: The ERO transmits the e-filed return and retains Form 8453-LLC; it should not be submitted to the Franchise Tax Board.
Common Mistakes and How to Avoid Them
To avoid filing errors, penalties, or processing delays, LLCs and tax professionals should watch for these common mistakes when completing Form 8453-LLC (2020):
- Mailing Form 8453-LLC to the FTB: This form must be retained by the ERO and should never be mailed to the California Franchise Tax Board.
- Signing before Form 568 is complete: The authorized signer must review and sign Form 8453-LLC only after the final Limited Liability Company Return of Income is completed.
- Incorrect bank information: Routing and account numbers must be verified from checks or official statements, as mistakes may result in rejected electronic funds withdrawals.
- Mixing up payment methods: If Box 6 is checked for electronic funds withdrawal, the LLC should not also send Form FTB 3588 with a manual check.
- Late withdrawal scheduling: Payment dates should be scheduled on or before the deadline to prevent interest or penalties from being assessed.
- Missing signatures: The form is not valid unless signed by the authorized LLC representative, the ERO, and the paid preparer if different from the ERO.
- Mixing current and future payments: Payments for 2020 should be entered in Part II, while estimated payments for 2021 must be listed in Part III to avoid confusion.
What Happens After You File
Once Form 568 has been electronically filed using Form 8453-LLC (2020), the California Franchise Tax Board will send an electronic acknowledgment to the ERO. This confirmation, not the form itself, serves as proof of filing. If an electronic funds withdrawal was authorized, the payment will be processed on the selected date.
The LLC and ERO must retain the signed form and all supporting documentation, including schedules, banking records, and the federal return, for at least four years in case of future audit or review by the Franchise Tax Board or Internal Revenue Service.
FAQs
Do I send Form 8453-LLC (2020) to the California Franchise Tax Board?
No, the form must be retained by the Electronic Return Originator (ERO) and should not be mailed to the California Franchise Tax Board under any circumstances.
Can I schedule estimated tax payments for the next year using Form 8453-LLC (2020)?
Yes, you may authorize an estimated tax payment for the following year’s LLC fee or annual tax by completing Part III of the form.
What if my payment fails due to incorrect banking information?
If your bank rejects the transaction, the Franchise Tax Board may assess penalties and interest on your tax liability and require prompt payment through another method.
Does this form apply to pass-through entities like S corporations or Subchapter K entities?
No, Form 8453-LLC (2020) is specific to limited liability companies filing Form 568 and does not apply to S corporations, Subchapter K entities, or filers of Form 20S or Form 65.
Can I use this form if I am filing Form PTE-E or Schedule EPT-C for an electing pass-through entity?
No, electing pass-through entities filing Form PTE-E, Schedule EPT-C, Form PTE-C, or Form PTE-V must follow a separate filing process and use the correct designated forms.
