What California Form 100 (2024) Is For
California Form 100 (2024) is the state corporate franchise or income tax return for C corporations and certain other entities with a California connection. It is similar in structure to federal Form 1120, but California applies its own rules, so state tax liability can differ significantly from the federal individual income tax return or corporate return.
Corporations “doing business” in California use Form 100 to pay franchise tax, which is essentially a fee for the privilege of operating as a corporation in the state. Corporations that are not doing business in California but earn California-source income—such as sales, property income, or investments—use the form to report and pay income tax on those California earnings.
When You’d Use California Form 100 (2024)
You use California Form 100 when your corporation is incorporated in California, registered with the Secretary of State, meets the “doing business” thresholds, or earns California-source income. These filing requirements apply even if the corporation has a loss, is inactive, or files a short-period return.
For calendar-year corporations, the original due date for the 2024 return is April 15, 2025, with an automatic seven-month extension to November 15, 2025, if you are in good standing. The extension lets you file a tax return later, but it does not extend time to pay; tax must still be paid by April 15 to avoid penalties and interest. Amended returns are filed on Form 100X, generally within four years of the original due date or filing date, and you must report IRS audit changes to California within six months or risk an unlimited assessment period.
Key Rules or Details for 2024
For 2024, California still conforms to the Internal Revenue Code as of January 1, 2015. That means many federal changes after that date do not apply for California income tax, and you must adjust for items like bonus depreciation, GILTI, and opportunity zones. Tax rates remain 8.84% for most corporations and 10.84% for banks and financial corporations, with tax liability equal to the greater of calculated tax or the $800 minimum franchise tax.
“Doing business” thresholds for 2024 are inflation-adjusted. You are doing business in California if you are organized or commercially domiciled in the state, or if you exceed the lesser of $735,019 or 25% of total sales, $73,502 or 25% of total property, or $73,502 or 25% of total payroll in California. Include your pro rata share from pass-through entities when testing these thresholds.
NOL Suspension and Credit Limitation
For taxable years 2024–2026, California suspends most net operating loss (NOL) deductions. Corporations may still compute and carry over NOLs, but generally may not use them unless taxable income is under $1 million or the NOL is from disaster losses. To compensate, carryover periods are extended by up to three years depending on when the loss was generated.
California also imposes a $5 million limitation on total credits (including carryovers) for 2024–2026. Credits cannot reduce tax by more than $5 million in a year, with exceptions for the Low-Income Housing Credit and certain AMT credits. Excess credits may be carried forward, and you may elect refundable treatment for some disallowed credits by filing Form FTB 3870 with a timely original return.
Industry and Disaster-Relief Changes
Beginning in 2024, California repeals several oil and gas tax benefits. Intangible drilling and development costs are no longer deductible, percentage depletion is disallowed for certain natural resources, and the Enhanced Oil Recovery Credit is repealed except for existing carryovers.
For 2024–2029, qualified wildfire loss mitigation payments from the California Wildfire Mitigation Financial Assistance Program are excluded from gross income. Taxpayers receiving these payments must file Form FTB 4197 to report the tax expenditure. New disaster-relief rules also allow the Director of Finance to apply federal postponement rules (IRC Section 7508A) and permit additional relief through Form FTB 3872 when state and federal postponement periods differ.
Step-by-Step (High Level)
Step 1: Gather Your Information
Collect federal Form 1120, financial statements, California corporation number, FEIN, records of estimated tax and extension payments, and documentation supporting deductions and credits. If you have foreign ownership or foreign subsidiaries, include copies of federal Forms 5471, 5472, and other required forms.
Step 2: Start from the Federal Return
Complete your federal return first, then transfer key figures to Form 100 and Schedule F. Identify items where California does not conform, such as bonus depreciation or post-2015 Section 179 limits, and prepare to adjust those amounts.
Step 3: Make California Adjustments
On Schedule F, begin with federal ordinary income and work through the California adjustments. Add back disallowed items and subtract income or deductions treated differently for state purposes. For 2024, confirm you are not improperly claiming NOL deductions or exceeding the $5 million credit limitation.
Step 4: Apportion Income to California
If you operate in multiple states, complete Schedule R to apportion income using California’s single-sales-factor formula. Assign sales to California using market-based sourcing rules, focusing on where customers receive the benefit of services or intangibles.
Step 5: Compute Tax and Apply Credits
Multiply California taxable income by 8.84% (or 10.84% for banks), then compare the result to the $800 minimum franchise tax and use the larger amount. Apply allowable credits, keeping the 2024 limitation and exceptions in mind, and record any amounts carried forward or eligible for a refundable election on Form FTB 3870.
Step 6: Reconcile, Review, and File
Reconcile book and tax income on Schedule M-1, complete Schedule L, and attach all required federal forms. Subtract estimated payments and withholding to determine balance due or refund. File electronically if required, pay any remaining balance by the original due date, and keep detailed records in case of audit or a past due return situation.
Common Mistakes and How to Avoid Them
- Claiming NOL deductions despite the 2024–2026 suspension
- Misapplying the $5 million credit limitation or forgetting the combined-group rule
- Failing to pay the $800 minimum franchise tax when doing business in California
- Using outdated “doing business” thresholds instead of the 2024 amounts
- Ignoring California’s non-conformity to federal provisions enacted after January 1, 2015
- Missing the six-month deadline to report federal audit changes to California
- Keeping inadequate records for apportionment and California adjustments
What Happens After You File
After you file California Form 100 (2024), the Franchise Tax Board processes your return and payments. If you overpaid, you may receive a refund or credit the overpayment to a future year; if you underpaid, you will receive a notice showing additional income tax, penalties, and interest.
Returns may be selected for review or audit based on filing patterns, discrepancies, or random selection. If audited, you will receive written requests for information and have the right to representation. California generally has four years to assess additional tax, extended in cases of substantial understatement or when federal changes are not reported within six months.
For corporations with large understatements, the Large Corporate Understatement of Tax Penalty may apply, equal to 20% of certain significant understatements. Given the NOL suspension and credit limitations, it is especially important in 2024 to review calculations carefully before you file a tax return.
FAQs
Can we use prior-year NOLs to offset 2024 income?
Generally, no—NOL deductions are suspended for 2024–2026 if your taxable income before NOLs is $1 million or more, unless you have eligible disaster-loss carryovers. You should still compute NOLs and track them, because carryover periods are extended under the 2024 rules.
How does the $5 million credit limitation work for 2024?
Total credits (including carryovers) cannot reduce your 2024 tax by more than $5 million, applied at the combined group level. Exemptions include the Low-Income Housing Credit and certain AMT credits, and excess credits may be carried forward or, if you make a timely election on Form FTB 3870, potentially treated as refundable in future years.
Do we owe the $800 minimum franchise tax if we had no profit?
Yes. If your corporation is incorporated, qualified, or doing business in California, you owe at least $800 regardless of profit, loss, or inactivity, except during the first taxable year for newly incorporated or newly qualified corporations. This minimum applies even for short-period returns.
What are the 2024 “doing business” thresholds?
For 2024, you are doing business in California if your California sales, property, or payroll exceed the lesser of $735,019 (sales) or $73,502 (property or payroll), or 25% of the corresponding totals everywhere. These thresholds are adjusted annually for inflation and must include your share of amounts from pass-through entities.
What should we do if the IRS changes our federal return?
You must notify the Franchise Tax Board within six months of the final federal determination, typically by filing Form 100X for the affected year and including all IRS adjustment details. Missing this deadline removes the normal statute of limitations and lets California assess additional tax at any time.
How are California wildfire mitigation payments treated in 2024?
Qualified wildfire loss mitigation payments received through the California Wildfire Mitigation Financial Assistance Program for 2024–2029 are excluded from California gross income. However, you must still report the exclusion on Form FTB 4197, which the state uses to track tax expenditure items.
