What California Form 100 (2012) Is For
California Form 100 (2012) is the state’s annual corporate franchise or income tax return used by C corporations operating in or earning income from California. It reports taxable income, calculates tax liability, and determines whether the corporation owes the standard tax rate or the minimum franchise tax. Most C corporations—including banks, financial corporations, REITs, and LLCs taxed as corporations—must file it.
Form 100 captures both the franchise tax for entities doing business in the state and the income tax for corporations with California-source income that do not meet doing-business thresholds. For 2012, most corporations paid an 8.84% rate on net income, while banks and financial corporations paid 10.84%. A key feature for this year was the $800 minimum franchise tax for corporations subject to franchise tax, with a first-year exemption for newly incorporated or qualified entities.
When You’d Use California Form 100
Corporations file Form 100 for any taxable year beginning before January 1, 2016, including the 2012 tax year. Calendar-year filers had a March 15, 2013 deadline. An automatic seven-month extension moved the filing due date to October 15, 2013, but taxes owed—including the $800 minimum—were still due by the original March date.
You must file if you were incorporated or qualified in California, met the doing-business test, or had California-source income. Corporations file even if they had losses or minimal activity. Late filing occurs when both the original and extended deadlines are missed, triggering penalties. If a corporation later discovers errors or must report IRS adjustments, it files an amended return using Form 100X.
Key Rules or Details for 2012
Minimum Franchise Tax
Most corporations owe at least the $800 minimum franchise tax, even with zero income. Exceptions include first-year corporations, certain nonprofits, credit unions, and narrow special-case filers.
Doing Business Definition
Beginning in 2011 and applicable to 2012 returns, California expanded doing-business standards. A corporation meets the test if it:
- Engages in transactions for financial gain in California
- Is organized or domiciled in California
- Exceeds sales, property, or payroll thresholds or 25% of total amounts
These thresholds adjust annually for inflation.
Estimated Tax Requirements
Corporations make quarterly estimated payments using Form 100-ES. The first installment includes the minimum tax for ongoing corporations. Underpayment triggers penalties based on each installment date.
Federal–California Differences
California conforms to the Internal Revenue Code as of January 1, 2012, but not to several federal deductions and accelerated depreciation rules. Taxpayers must adjust federal taxable income to compute California net income accurately.
Combined Reporting
Unitary business groups must file a combined report. Each member subject to franchise tax owes at least the $800 minimum, even if the group shows an overall loss.
Step-by-Step (High Level)
Step 1: Confirm Filing Requirement
Determine whether your corporation is incorporated, qualified, doing business in California, or has California-source income. Identify whether franchise tax or income tax applies and whether the minimum tax is required.
Step 2: Gather Records
Collect your federal Form 1120, financial statements, apportionment documentation, withholding forms, and records of estimated payments. These are essential for calculating California taxable income.
Step 3: Complete Identification Sections
Enter the legal name, Secretary of State file number, FEIN, business address, and accounting period. Use the correct Principal Business Activity Code.
Step 4: Calculate California Net Income
Start with federal taxable income. Add or subtract items based on California rules, then apportion income using Schedule R if operating inside and outside the state.
Step 5: Compute Tax Liability
Multiply taxable income by the applicable rate and compare the result to the $800 minimum franchise tax. First-year corporations calculate tax based solely on net income.
Step 6: Apply Credits and Payments
Subtract estimated payments, credit carryovers, and withholding credits. Most credits cannot create a refund but may carry forward.
Step 7: File the Return and Pay
Sign under penalty of perjury, assemble schedules in the proper order, and mail to the Franchise Tax Board. Pay any balance due by check or electronically.
For official instructions, see the California Form 100 page.
Common Mistakes and How to Avoid Them
- Not paying the minimum franchise tax
Review whether your corporation is incorporated, qualified, or doing business. Most owe $800 annually. - Confusing filing extensions with payment extensions
The extension only covers filing. Pay the tax by the original due date. - Misunderstanding doing-business thresholds
Check sales, property, and payroll annually to avoid unexpected liability. - Ignoring federal–state differences
Adjust federal income for California rules to avoid miscalculations. - Failing to file while inactive
As long as the entity remains registered, it must file and pay until formally dissolved. - Skipping estimated tax payments
Use Form 100-ES to avoid underpayment penalties.
What Happens After You File
The Franchise Tax Board processes the return and verifies it against prior filings, payments, and federal records. Paper returns typically take several weeks. You may receive a notice confirming processing, a balance due, or a refund.
California generally has four years from the later of the filing date or due date to assess additional tax. During this period, the FTB may request documents or initiate an audit. Corporations must keep records for at least four years, longer if under federal examination.
If the IRS adjusts the federal return, the corporation must notify the FTB within six months and file Form 100X if the changes affect California tax. Ongoing compliance continues each year until the entity formally dissolves or surrenders its registration.
FAQs
Does my corporation owe the $800 minimum even with no income?
Usually yes. Corporations incorporated, qualified, or doing business in California must pay the minimum tax unless in their first taxable year or exempt under special rules.
How do I know whether franchise tax or income tax applies?
Franchise tax applies if you are incorporated, qualified, or doing business in California. Income tax applies only when you have California-source income without otherwise doing business in the state.
Does the seven-month extension also extend the time to pay?
No. The extension applies to filing only. Taxes must be paid by the original due date to avoid penalties and interest.
Is a December 2012 incorporator subject to the minimum tax that year?
No. First-year corporations are exempt from the $800 minimum but must still file Form 100 and pay tax based on net income, if any.
What penalties apply for filing or paying late?
Penalties may include a delinquent filing penalty of up to 25%, underpayment penalties, and interest. Estimated tax penalties may also apply.
Should an LLC taxed as a corporation file Form 100?
Yes. LLCs electing corporate taxation file Form 100. LLCs taxed as partnerships or disregarded entities generally file Form 568 or report income through their owner.
