What California Form 100 (2016) Is For
California Form 100 (2016) is the main California corporation franchise or income tax return for entities doing business in the state or earning California-source income. Corporations use it to report income and calculate their California tax liability for the 2016 tax year.
The form applies to C corporations, banks and financial corporations, REITs, RICs, and LLCs taxed as corporations. Most pay 8.84% of net income or the $800 minimum franchise tax, whichever is higher, while banks and financial corporations pay 10.84%. S corporations instead file Form 100S, and corporations using the water’s-edge method file California Form 100W (2016), so it is important to confirm which filing requirements apply to your entity.
When You’d Use California Form 100 (2016)
File California Form 100 (2016) if your corporation is incorporated or qualified in California, or meets the state’s “doing business” test for 2016. Some non-California corporations with California-source income must also file a tax return, even without a physical location in the state.
For taxable years beginning in 2016, the return is due by the fifteenth day of the fourth month after the close of your tax year. For calendar-year corporations, that is generally April 15, 2017, or the next business day if the date falls on a weekend or legal holiday.
California grants an automatic six-month extension to file, but this does not extend the time to pay what you owe. If you later discover errors, you amend the year using Form 100X.
Key Rules or Details for 2016
Doing Business and Minimum Tax
A corporation is “doing business” in California for 2016 if it actively conducts transactions for financial gain in the state or exceeds California sales, property, or payroll thresholds. Corporations doing business in California generally owe at least the $800 minimum franchise tax each year, even with losses or inactivity, with limited exceptions such as first-year or exempt entities.
Electronic Filing and Payment
Any business entity that prepares its return using tax software must e-file with the Franchise Tax Board. If a single estimated or extension payment is $20,000 or more, or total tax liability exceeds $80,000, all payments must be electronic and non-electronic payments after crossing that threshold can be hit with a 10% penalty.
Attachments and Federal Conformity
Some corporations must attach federal forms such as Schedule UTP, Form 8886, Form 5471, and Form 5472, and missing Form 5472 can trigger a $10,000 penalty per form. California generally conforms to the Internal Revenue Code as of January 1, 2015, but it disallows the domestic production activities deduction, bonus depreciation, and enhanced Section 179 expensing, so these federal deductions often must be added back on Form 100 (2016).
Step-by-Step (High Level)
Step 1: Gather Records
Collect your federal Form 1120 with schedules, your California corporation number, FEIN, and Secretary of State file number. Pull records of 2016 estimated tax payments, prior year credits, and any California withholding.
Step 2: Compute California Net Income
Choose either the federal reconciliation method or the California computation method. Most corporations start with federal taxable income, then adjust for California-specific additions, subtractions, and apportionment.
Step 3: Complete Form 100 and Schedules
Enter identification information, answer all required questions, and round amounts to whole dollars. Complete Schedule R if you operate inside and outside California and attach any required federal forms.
Step 4: Figure Tax, Credits, and Penalties and File
Apply the 8.84% or 10.84% rate and confirm you meet or exceed the $800 minimum franchise tax. Subtract allowable credits, compute any underpayment penalty on Form FTB 5806 if needed, have an authorized officer sign, and then e-file or mail the return with any payment due.
Common Mistakes and How to Avoid Them
- Leaving off key identifiers such as the California corporation number, FEIN, or Secretary of State file number
- Using Form 100W or Form 100S instead of California Form 100 (2016) for a regular C corporation
- Miscalculating estimated tax and ignoring the 30%-40%-0%-30% installment pattern or the $800 minimum first payment
- Claiming federal deductions California does not conform to, like bonus depreciation or the domestic production activities deduction, without adding them back
- Paying large balances by check or money order after crossing the electronic payment thresholds, which can trigger a 10% penalty
What Happens After You File
After you file California Form 100 (2016), the Franchise Tax Board checks the return for completeness and required attachments. If something is missing or does not match their records, you may receive a notice asking for clarification, documentation, or payment.
The FTB generally has four years from the original due date to assess additional tax, so you should keep records for at least that long. If you are due a refund, the FTB issues it after verifying your tax liability and credits, and if you owe more, you will receive a bill showing additional tax, penalties, and interest from the original due date.
FAQs
Do I have to file Form 100 (2016) if my corporation had no income?
Yes; if your corporation is incorporated, qualified, or doing business in California, you must usually file California Form 100 (2016) and pay the $800 minimum franchise tax unless you qualify for the first-year exemption.
What is the difference between franchise tax and income tax on Form 100?
Franchise tax is imposed on corporations doing business in California, while income tax applies when a corporation has California-source income but is not doing business in the state.
Does the automatic extension also extend time to pay?
No; the six-month automatic extension only extends the filing deadline, so you still need to pay your expected tax by the original due date to limit penalties and interest.
What happens if I miss an estimated tax installment?
Missing or underpaying an installment can lead to an underpayment penalty calculated on Form FTB 5806 based on the amount and length of the underpayment.
