What California Form 100S Is For
California Form 100S is the annual income tax return S corporations must file when they do business in the state or earn California-source income. The form reports the corporation’s income, computes the applicable franchise tax, and passes through taxable items to shareholders. Although S corporations avoid federal entity-level income tax, California still imposes its own franchise tax structure.
For 2011, filing obligations applied to any corporation that elected S status federally and with California. The form determines the corporation’s California-apportioned income, calculates the 1.5% tax (or 3.5% for financial S corporations), and ensures the corporation pays no less than the state’s minimum franchise tax of $800 unless qualifying for the first-year waiver.
When You’d Use California Form 100S
You must file Form 100S for the 2011 tax year if your S corporation was incorporated, qualified, registered, or doing business in California. This includes corporations with no income or activity, since the state still imposes filing requirements and the minimum tax. Corporations with California-source income—such as rental property or sales into the state—also must file.
You would also use this form to file a late return if the original due date passed. California grants an automatic six-month extension to file, but any tax owed must be paid by the original deadline. If you need to correct a previously filed return, you’d submit an amended return using Form 100X after the original filing has posted.
Key Rules or Details for Tax Year 2011
Deadlines and Extensions
Calendar-year S corporations had to file by March 15, 2012. Fiscal-year filers counted 3½ months after their year-end. The automatic extension moved only the filing deadline—not the payment deadline—to September 15, 2012. Corporations expecting to owe tax were required to submit payment with Form FTB 3539 by the original due date.
Tax Rates and Minimum Tax
For 2011, the entity-level tax was the greater of:
- 1.5% of California-apportioned net income (3.5% for financial S corporations)
- The $800 minimum franchise tax
Newly formed corporations in 2011 could claim a one-year waiver of the minimum tax if all eligibility requirements were met.
“Doing Business” Standards
A corporation was considered “doing business” in California if it exceeded any of the following thresholds:
- California sales over $500,000 or 25% of total sales
- California payroll over $50,000 or 25% of total payroll
- California property over $50,000 or 25% of total property
Income Adjustments and Credits
California begins with federal taxable income but requires adjustments for items such as state income taxes deducted on the federal return, non-California municipal bond interest, and depreciation differences. Credits available in 2011 included research credits, certain hiring credits, and the low-income housing credit, with many amounts flowing through to shareholders.
Net Operating Loss Rules
For 2011, California allowed only NOL carryforwards; carrybacks were suspended. This meant corporations could not use current-year losses to obtain refunds from prior years.
Step-by-Step (High Level)
Step 1: Complete Your Federal Form 1120S
Because California starts with federal numbers, finish your federal return first. You’ll rely on it throughout Form 100S.
Step 2: Gather All Required Documents
Collect your FEIN, Secretary of State file number, federal return, prior-year information, estimated tax payment records, and apportionment data if you operate in multiple states.
Step 3: Fill Out Form 100S
Provide identification details, answer Schedule Q questions, and complete the state-adjusted income lines. Apply California-specific add-backs and adjustments as required.
Step 4: Calculate Tax and Payments
Compute the 1.5% (or 3.5%) tax on apportioned income and compare it to the $800 minimum. Apply credits, then add any Q-Sub taxes or alternative minimum tax. Enter estimated payments or withholding to determine your balance due or refund.
Step 5: Assemble and Attach Schedules
Include Schedule R (if applicable), California K-1s, and at minimum page 1 of your federal Form 1120S. Keep documents clipped rather than stapled or bound.
Step 6: File and Submit Any Payment
You may mail the return or submit payment electronically through the Franchise Tax Board. Ensure the officer signature and preparer information, if any, are complete—unsigned returns are rejected.
Common Mistakes and How to Avoid Them
- Ignoring the $800 minimum tax
Always enter at least $800 unless you qualify for the first-year waiver. - Not attaching the federal 1120S
California requires it for processing. Include a clean copy of page 1. - Incorrect shareholder wage reporting
Compensation paid to shareholder-employees must run through payroll, not draws. - Skipping apportionment schedules
If business occurs in multiple states, complete Schedule R to avoid overstating California income. - Using federal depreciation without adjustments
California does not match federal bonus depreciation rules; complete Schedule B to fix differences.
What Happens After You File
The Franchise Tax Board processes most e-filed returns within 4–6 weeks and paper filings within about eight weeks. Refunds may be direct-deposited if you include accurate bank information. Incorrect routing or account numbers delay refunds and may require manual correction.
If you owe tax and missed the original payment deadline, interest begins accruing the day after the due date. California will send a bill if additional amounts are due. Late filings or missing schedules may trigger an information notice, which you must respond to within 60 days. Corporations with large depreciation deductions, research credits, or intercompany fees may face increased audit attention, so maintain thorough records.
FAQs
Do new S corporations automatically get a waiver of the $800 minimum tax?
Only corporations that incorporated or first qualified in California during 2011 qualify. The waiver applies to the first taxable year only.
Must an S corporation file Form 100S even with no income?
Yes. Registration with the Secretary of State or doing business in California requires filing the return and paying the minimum tax unless the first-year waiver applies.
What is the deadline for a fiscal year ending June 30, 2011?
The filing deadline was September 15, 2011, with an automatic extension to March 15, 2012. Any tax owed still had to be paid by September 15.
Can shareholders deduct 2011 S corporation losses on their personal California returns?
Only up to their California stock and debt basis. California requires maintaining a separate basis schedule from federal.
Is the California Q-Sub election the same as the federal election?
Generally yes, but California imposes an additional $800 tax per Q-Sub and requires specific reporting on Schedule Q.
For the official Form 100S (2011), visit the California FTB form page.
