What Form 100 (2016) Is For
Form 100 (2016) is the state income tax return used by corporations to report California income and calculate franchise tax or income taxes. It is required for C corporations, financial institutions, foreign corporations, limited liability companies that elect corporate taxation, and other qualified corporations operating in California.
The California Franchise Tax Board uses this form to determine tax obligations and verify tax credits, payments, and deductions. S corporations use Form 100S instead, and corporations filing on a water’s edge basis must use Form 100W.
When You’d Use Form 100 (2016)
Corporations must file Form 100 (2016) when engaging in business or earning income in California. Situations where the form is required include:
- Regular Filing Obligation: Corporations conducting business within California or receiving income from California sources are required to file this tax return annually with the Tax Board.
- First-Year Exemption: Newly formed or qualified corporations must still file Form 100, though they may be exempt from the $800 franchise tax during their first taxable year.
- Late Filing Situations: Corporations that miss the original due date, which is the 15th day of the 4th month after the tax year ends, receive an automatic six-month extension for filing only—not for tax payments.
- Amending a Return: Corporations that need to correct previously reported income, deductions, or tax credits must use Form 100X to amend the original Form 100.
- Electronic Filing Mandate: Businesses that use tax preparation software are required to file Form 100 electronically, as mandated by the California Franchise Tax Board since 2014.
Key Rules or Details for 2016
- Franchise Tax Threshold: Corporations must pay the greater of $800 or 8.84% of their California net income; banks and financial institutions are subject to a higher tax rate of 10.84%.
- Doing Business Criteria: A corporation is considered to be doing business in California if it meets specific thresholds in California sales and use tax, payroll, or property, even if it does not have a physical location in the state.
- Federal Nonconformity: California does not adopt several federal tax provisions, such as the domestic production activities deduction and bonus depreciation, which must be adjusted on the tax return.
- Estimated Tax Payment Rules: Corporations must make estimated tax payments in four installments with fixed percentages: 30% by month four, 40% by month six, 0% by month nine, and 30% by month twelve.
- Electronic Payment Mandates: If a corporation’s estimated payments exceed $20,000 or its total tax liability exceeds $80,000, all tax payments in current and future years must be made electronically.
- Required Attachments: Corporations must include relevant federal forms, such as Form 1120, Form 5471, Form 5472, Schedule UTP, and Form 8886 (if applicable), to comply with tax reporting rules.
Step-by-Step (High Level)
- Gather Supporting Documentation: Collect Federal Form 1120, the Secretary of State registration number, the Federal EIN, and records of all tax payments, including estimated payments or credits.
- Choose a Computation Method: Decide between the Federal Reconciliation Method (starting from federal taxable income) or the California Computation Method (using California-specific tax code directly).
- Complete the Form Accurately: Use black or blue ink if tax filing on paper; print names and addresses in capital letters, round amounts to the nearest whole dollar, and answer all required questions on Side 3.
- Calculate Franchise or Income Tax: Apply the 8.84% tax rate to net income (or 10.84% for banks); ensure you meet the $800 minimum franchise tax and properly apply any allowed tax credits.
- Assemble in Correct Order: Place Form 100 on top, followed by Schedule R (if applicable), related schedules, Form 1120, and any applicable Form FTB 5806 used to calculate underpayment penalties.
- Sign and Submit: An authorized corporate officer must sign and date the form, including their title and phone number, and submit it by mail or file it electronically in accordance with the California Franchise Tax Board's rules.
Common Mistakes and How to Avoid Them
Errors on Form 100 (2016) can result in delayed refunds, penalties, or audit triggers; here’s how to avoid the most common issues:
- Missing Identification Numbers: Always include the California corporation number, Federal EIN, and Secretary of State file number to avoid processing delays.
- Wrong Form Used: Corporations that file as S corporations must use Form 100S, and those electing water’s-edge reporting must use Form 100W instead of the standard Form 100.
- Improper Assembly: Arrange documents in the exact order prescribed and avoid stapling, clipping, or binding pages to prevent rejection or processing issues.
- Nonconforming Deductions: Do not claim deductions such as bonus depreciation or the domestic production activities deduction, which are disallowed under California law.
- Estimated Tax Errors: Missing or miscalculating required installments leads to underpayment penalties; use Form FTB 5806 to verify the amounts owed.
- Omitted Federal Attachments: Failing to attach forms like 5471 or 5472 when required can result in penalties of $1,000 or $10,000 per missing form, depending on the form.
- Electronic Payment Violations: Corporations that meet electronic payment thresholds and fail to comply may incur a 10% penalty on future non-electronic payments.
What Happens After You File
Once Form 100 (2016) is submitted, the California Franchise Tax Board in the United States processes the return by checking for completeness, arithmetic accuracy, and required attachments. If information is missing or incorrect, the corporation will be contacted via mail, phone, or email. The refund status may be tracked using real-time confirmation tools. Processing times vary, but errors or missing data can significantly delay the processing of refunds.
FAQs
Do I need to file Form 100 (2016) if my corporation had no income or was inactive during the year?
Yes, all corporations registered or doing business in California are required to file the form and pay the $800 franchise tax, unless they qualify as a first-year corporation or are exempt under the California tax code.
Are limited partnerships required to file Form 100 (2016)?
No, limited partnerships generally do not file Form 100; however, they may have other filing requirements through the California Department of Tax and Fee Administration.
How do I check my refund status or tax account information after filing?
You can check your refund status and access your tax account information through the California Franchise Tax Board’s online services, which provide real-time confirmation.
Does Form 100 (2016) apply to taxes like payroll tax or cigarette excise tax?
No, this form only addresses franchise and income taxes; other taxes, such as payroll tax, gas tax, or cigarette excise tax, are administered under different state programs and require separate tax forms.
How does Form 100 (2016) handle current-year income if estimates were incorrect?
Form 100 (2016) requires corporations to report their actual current-year income, even if estimated payments made during the year were inaccurate. Any difference between estimated payments and the final tax liability is reconciled on the return, which may result in a balance due or an overpayment applied to future periods.
Where can I find instructions forms for the quarterly form requirements?
The California Franchise Tax Board publishes official instructions and forms that provide detailed explanations of the form number, filing period, and payment requirements.
