What California Form 100 Is For

California Form 100 is the annual corporation franchise or income tax return used to report taxable income and compute the amount owed to the Franchise Tax Board for the 2023 tax year. It’s the state-level equivalent of a federal corporate income tax return and applies to entities organized or operating in California.

Corporations that file include C corporations, banks, financial corporations, REITs, RICs, LLCs taxed as corporations, business trusts, publicly traded partnerships, and certain exempt organizations with taxable income over $100. The 2023 form reflects the state’s unique tax rules, including California’s continued non-conformity with many federal tax law changes enacted after 2015.

When You’d Use California Form 100

Corporations must file Form 100 if they are incorporated in California, registered with the Secretary of State, actively doing business in the state, or earning California-sourced income. Calendar-year filers must submit the 2023 return by April 15, 2024, while fiscal-year filers count four months from their year-end. Farmers’ cooperative associations have a later due date—the 15th day of the 9th month after year-end.

California grants an automatic seven-month filing extension, available only to corporations in good standing. The extension moves the filing deadline—but not the payment deadline—to the 15th day of the 11th month (November 15, 2024, for calendar-year filers). If you owe tax, you must still pay by the original due date using Form FTB 3539 or an approved electronic method.

Corporations file an amended return using Form 100X when correcting income, deductions, credits, or reporting changes from a federal audit. Amended filings are generally allowed within four years of the original due date.

Key Rules or Details for 2023

Minimum Tax and Tax Rates

Most corporations owe an annual minimum franchise tax of $800, regardless of income or activity. First-year corporations are exempt from this minimum but must still pay tax on net income. Regular corporations pay 8.84% of California taxable income, and banks and financial corporations pay 10.84%. Your final tax liability is the greater of these calculated amounts or the $800 minimum.

“Doing Business” Thresholds

For 2023, a corporation is “doing business” in California if it is organized or domiciled in the state or meets any of these economic thresholds:

• California sales over $711,538 or 25% of total sales
• California property over $71,154 or 25% of total property
• California payroll over $71,154 or 25% of total compensation

Pro rata shares from partnerships or LLCs must be included.

Non-Conformity With Federal Law

California conforms to the Internal Revenue Code as of January 1, 2015. It does not conform to Global Intangible Low-Taxed Income rules, bonus depreciation under IRC 168(k), the limitation on business interest deductions, expanded Section 179 expensing, opportunity zone benefits, or the federal repeal of the corporate AMT. Corporations must adjust their California return to reflect these differences.

New Credits for 2023

New or expanded 2023 credits include cannabis-related business credits and enhancements to the New Employment Credit for semiconductor, lithium, and electric aircraft industries. Businesses with more than $10,000 in annual purchases subject to use tax must report use tax separately rather than on Form 100.

Step-by-Step (High Level)

Step 1: Gather Required Documents

Collect your federal Form 1120, FEIN, California corporation number, financial statements, payment records, and support for credits. Include federal informational forms such as 5471, 5472, 8975, or Schedule UTP if they apply.

Step 2: Complete Your Federal Return

Form 100 relies on figures from federal Form 1120. Finish the federal return first, then prepare California-specific adjustments for items where state and federal law differ.

Step 3: Choose a Computation Method

Most corporations use the Federal Reconciliation Method, starting with federal taxable income and making California adjustments. Alternatively, you may compute income directly under California rules using Schedule F.

Step 4: Determine California Net Income

Start with federal ordinary income and apply additions and subtractions for state differences. This yields California net income before apportionment.

Step 5: Apportion or Allocate Income

If you operate in multiple states, complete Schedule R. California generally uses a single-sales factor formula to assign taxable income to the state.

Step 6: Calculate Tax, Apply Credits, and Finalize

Apply the correct tax rate, compare to the $800 minimum, and subtract allowable credits. Add estimated payments and withholding, then determine whether you owe additional tax or qualify for a refund. Assemble the return in the proper order and e-file using approved software.

Common Mistakes and How to Avoid Them

• Incorrect identification numbers: Verify FEIN, California corporation number, and Secretary of State file number.
• Ignoring federal/state non-conformity: Adjust for bonus depreciation, GILTI, Section 179 differences, and opportunity zone rules.
• Underpaying the minimum franchise tax: Pay $800 unless you qualify for the first-year exemption.
• Missing federal attachments: Attach required copies of Forms 5471, 5472, 8975, or Schedule UTP to avoid penalties.
• Improper assembly or submission: Do not staple pages; follow e-file requirements.
• Using the wrong form: S corporations use Form 100S, and water’s-edge filers use Form 100W.

What Happens After You File

After you file Form 100, the Franchise Tax Board reviews the return for completeness and accuracy. If you request a refund, you may receive it by direct deposit or check, depending on the information you provide. If you owe tax, interest begins accruing from the original due date until paid in full.

The FTB may contact you for clarification, missing schedules, or supporting documentation. If you authorize your preparer on the return, the FTB may communicate with them directly. If the state adjusts your return, you will receive a notice explaining the change and how to respond.

Audits are possible, particularly for corporations with multistate operations or complex credits. California generally has four years from the original due date to assess additional tax. Penalties for late filing or payment can reach 25% of unpaid tax, though penalty relief may be available for reasonable cause.

FAQs

What is the minimum franchise tax for 2023?

Most corporations owe an annual minimum franchise tax of $800, even if they had no income or operated at a loss. First-year corporations incorporated or qualified in California are exempt from the minimum but still pay tax on net income.

What are the 2023 corporate tax rates?

Regular corporations pay 8.84% of California taxable income, and banks and financial corporations pay 10.84%. Your tax liability is the higher of this amount or the $800 minimum franchise tax.

When is California Form 100 due?

Form 100 is due on the 15th day of the 4th month after your taxable year ends. Calendar-year corporations must file by April 15, 2024. California provides an automatic seven-month extension to file, but not to pay.

How do I know if my corporation is doing business in California?

You are doing business in California if you are organized or domiciled in the state or exceed sales, property, or payroll thresholds for 2023. Include your share of partnership or LLC activity when calculating these amounts.

What if I file or pay late?

Late filing triggers a 5% monthly penalty, up to 25% of unpaid tax. Late payment adds another penalty and interest from the original due date. Both penalties may apply, but together they cannot exceed 25%.

Does California require electronic filing?

Yes. Corporations preparing their return with tax software must file electronically. E-filed returns are processed faster and reduce common errors. You can find Form 100 and e-file guidance at the IRS Form 100 page: https://www.ftb.ca.gov/forms/2023/2023-100.html

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