What California Form 100 Is For
California Form 100 (2019) is the state’s corporate franchise or income tax return used by C corporations and certain other entities that operate in California or earn income from California sources. It functions as the state counterpart to the federal corporate income tax return and determines a corporation’s state tax liability for the 2019 tax year.
Corporations incorporated, registered, doing business, or receiving income from California generally must file this form. The 2019 tax year also reflects California’s continued non-conformity with many federal tax changes, which means corporations must adjust federal figures before determining California taxable income.
When You’d Use California Form 100
You must use Form 100 when your corporation is required to file an individual income tax return at the state level because it conducts business in California or has California-source income. This includes traditional C corporations, banks, financial institutions, REITs, RICs, and LLCs electing corporate treatment.
Corporations file Form 100 for original, late, or amended returns. For calendar-year filers, the original 2019 due date was April 15, 2020. California grants an automatic seven-month extension to file (not to pay), giving corporations until November 15, 2020, if they were in good standing. Amendments to correct errors or report federal changes are filed on Form 100X.
Key Rules or Details for 2019
Minimum Franchise Tax and Rates
Most corporations owe an annual $800 minimum franchise tax, even with losses or inactivity. The standard tax rate is 8.84%, and banks and financial corporations pay 10.84%. Newly incorporated or newly qualified corporations are exempt from the minimum tax in their first taxable year.
“Doing Business” Thresholds
A corporation is considered doing business in California if it is organized or domiciled in the state or meets one of the 2019 economic thresholds:
- California sales over $601,967 or 25% of total sales
- California property over $60,197 or 25% of total property
- California payroll over $60,197 or 25% of total compensation
Filing and Payment Requirements
California requires electronic filing when using tax software and electronic payment when liability exceeds $80,000 or any one payment exceeds $20,000. Once triggered, electronic payments are required for all future filings.
Federal and State Differences
California conforms to the Internal Revenue Code as of January 1, 2015, so many federal provisions—including bonus depreciation, GILTI, Section 965 inclusions, and business interest limitations—require adjustments. These differences must be reflected on Schedule F or in the reconciliation process.
Step-by-Step (High Level)
Step 1: Gather Required Records
Collect your federal Form 1120, financial statements, FEIN, California corporation number, estimated tax payment records, and documentation for credits or foreign reporting forms.
Step 2: Complete Your Federal Return First
Start with your federal income tax return because Form 100 relies heavily on federal figures. Review areas where California does not conform to federal rules.
Step 3: Select a Computation Method
Choose the Federal Reconciliation Method or the California Computation Method. Most corporations use the reconciliation method to adjust federal taxable income to California rules.
Step 4: Determine California Net Income
Start with federal ordinary income and make necessary additions and subtractions. Apply state-specific adjustments and compute net income subject to California rules.
Step 5: Apportion or Allocate Income
If business is conducted inside and outside California, complete Schedule R. California generally uses a single-sales factor formula to apportion income.
Step 6: Calculate Tax, Apply Credits, and Finalize
Apply the correct tax rate, compare it to the $800 minimum franchise tax, and apply allowable credits. Total payments and determine whether you owe additional tax or qualify for a refund.
Common Mistakes and How to Avoid Them
- Incorrect identification numbers — Verify FEIN, California corporation number, and legal name.
- Ignoring state non-conformity — Adjust for items like bonus depreciation or GILTI.
- Assuming the extension applies to payments — The seven-month extension applies to filing only.
- Missing required federal attachments — Forms 5471, 5472, 8975, and others must be included.
- Using the wrong entity form — For example, S corporations should use Form 100S.
- Improper assembly or submission — Do not staple forms; follow FTB mailing and e-file rules.
What Happens After You File
The Franchise Tax Board reviews your return and processes payments, refunds, and any required corrections. Refunds are issued most quickly through direct deposit. If tax remains unpaid, interest accrues from the original due date, regardless of extensions.
The FTB may request additional documents or clarification. If an adjustment is made, you will receive a notice explaining the change and the steps to protest if you disagree. Corporations are generally subject to a four-year assessment period, extended for substantial understatements. Penalties for late filing, late payment, or underpayment can reach 25% of the unpaid tax.
If an overpayment is credited to the next year, it appears automatically on the 2020 Form 100 and reduces estimated tax payment needs.
FAQs
What is the minimum franchise tax for 2019?
Most corporations owe an annual $800 minimum franchise tax, even if they operated at a loss or were inactive. Newly incorporated or newly qualified corporations do not owe the minimum in their first taxable year.
How long is the extension to file a 2019 Form 100 return?
California provides an automatic seven-month extension to file for 2019. This extends the filing deadline but not the time to pay. Payments were still due April 15, 2020, for calendar-year corporations.
What counts as “doing business” in California for 2019?
A corporation is doing business if it is organized in California or meets any of the 2019 economic thresholds for sales, property, or payroll. These thresholds determine whether a corporation must file and pay the minimum franchise tax.
How does California tax law differ from federal rules in 2019?
California conforms to the IRC as of January 1, 2015. Many federal items—such as bonus depreciation, GILTI, and opportunity zone gains—require adjustments on Form 100.
What happens if I file or pay late?
Late filing and late payment each trigger separate penalties, generally capped at 25% of unpaid tax. Interest accrues from the original due date until the balance is paid.
Do I need to include my federal tax return with Form 100?
If using the federal reconciliation method, attach federal forms required by California, especially Forms 5471, 5472, and 8975. Not all federal schedules must be included unless requested.
For the official IRS form reference page, visit the California Form 100 page.
