What Form 100S (2019) Is For
Form 100S (2019) is the annual business tax return required for S corporations that operate, incorporate, or earn income in California. Although S corporations are pass-through entities for federal tax purposes, California imposes a separate franchise or income tax on these entities. The form calculates taxable income at the entity level and distributes income or deductions to shareholders through Schedule K-1. It also incorporates state-specific tax adjustments that differ from the federal return, including items affected by nonconformity to recent federal tax reforms.
When You’d Use Form 100S (2019)
Form 100S (2019) applies in several distinct situations for California S corporations:
- Regular Tax Year Filing: The form is filed annually by the 15th day of the third month following the close of the taxable year; for calendar-year entities, this means March 15, 2020.
- Automatic Extension: California provides a six-month automatic extension to file the return; however, full payment of taxes owed must still be made by the original due date to avoid penalties and interest.
- Amended Return Filing: Corporations needing to correct errors or reflect federal adjustments must file Form 100X within the standard statute of limitations.
- Short-Period Returns: Entities with tax years of less than 12 months, due to mergers, dissolution, or reorganization, must file a return consistent with their federal filing period.
- Reorganized Entities or QSubs: Corporations that convert to Qualified Subchapter S Subsidiaries or restructure their filing status mid-year must submit a separate Form 100S (2019) to reflect those changes.
Key Rules or Details for Tax Year 2019
Several vital rules and distinctions apply specifically to Form 100S (2019) for California’s 2019 tax year:
- Entity-Level Tax: All S corporations are subject to a 1.5% tax on their California net income; financial S corporations, such as banks, are taxed at a higher rate of 3.5%.
- Minimum Franchise Tax: An annual minimum franchise tax of $800 applies, regardless of activity or income, unless the corporation qualifies for the first-year exemption through the Secretary of State.
- Nonconformity with TCJA: California does not conform to several provisions of the Tax Cuts and Jobs Act, including Section 965 Deferred Foreign Income, bonus depreciation, and expanded Section 179 expensing.
- NOL Carrybacks Eliminated: Starting in 2019, California disallows net operating loss carrybacks and only permits NOLs to be carried forward for future tax years.
- Apportionment Rule: Corporations with multistate operations must use Schedule R and apply California’s single-sales factor formula to determine the share of income taxable in the state.
- Electronic Filing Requirement: Any corporation that uses tax preparation software must file Form 100S electronically as required by California law.
- Doing Business Thresholds: Corporations must file and pay taxes if their California sales, property, or payroll exceed statutory thresholds, even if they show no taxable income on the return.
Step-by-Step (High Level)
- Gather Financials and Documents: Collect the corporation’s federal Form 1120, financial statements, shareholder information, and records of estimated tax benefits, withholding, or prior-year overpayments.
- Enter Entity Information: Accurately input the legal name, seven-digit California Corporation Number, twelve-digit Secretary of State file number, and nine-digit FEIN; these identifiers must match government registration records.
- Calculate Net Income: Use ordinary business owner income from Form 1120 and adjust it using California-specific rules as outlined in Schedule F and Schedule B.
- Make State Adjustments: Report state adjustments on lines 2 through 13 using applicable schedules such as Schedule H (dividends), Schedule G (other deductions), and Schedule C (tax credits).
- Apply Deductions and Credits: Claim allowable deductions for disaster losses, NOLs, or special incentives, and complete Schedule D if reporting built-in gains or passive income.
- Calculate Final Tax: Multiply the adjusted net income by 1.5% or 3.5%, depending on your classification, and confirm that it meets or exceeds the $800 minimum requirement.
- Include Attachments: Attach all required forms, including Schedule K and K-1s, Schedule R for apportionment, FTB 3544 for credit assignments, and any applicable forms such as FTB 3805Q or FTB 3807.
- Submit: Mail the completed Form 100S to the correct Franchise Tax Board address or e-file using tax software; if paying by check, enclose the payment coupon without stapling.
Common Mistakes and How to Avoid Them
Several common filing errors can delay processing or result in penalties: below are the most frequent mistakes and how to avoid them.
- Incorrect entity numbers: Always verify the FEIN, Secretary of State file number, and California corporation number against your official documents before submitting Form 100S (2019).
- Using the wrong name format: Use the exact legal name filed with the California Secretary of State, and list your “doing business as” (DBA) name separately on Schedule Q to avoid mismatches.
- Not rounding to whole dollars: Round all figures up or down to the nearest dollar throughout the return, as California does not accept fractional amounts.
- Forgetting required attachments: Confirm that all necessary schedules, including Schedule R, Schedule K-1 (Form 100S), and a copy of the federal return, are included in the correct order before filing.
- Sending a payment voucher with an electronic payment: Do not mail the payment voucher if you paid using Web Pay, EFT, or another electronic method; it is not necessary and may be confusing.
- Using federal schedules instead of California versions: Complete and attach California-specific Schedule K and K-1 forms, as the Internal Revenue Service equivalents are not accepted for state filing.
What Happens After You File
Once Form 100S (2019) is submitted, the California Franchise Tax Board (FTB) will review it for accuracy, required schedules, and compliance with tax law. If the return is incomplete or discrepancies are found, the FTB may contact the corporation for clarification, often by mail or phone. Refunds requested by direct deposit will generally be processed faster, while underpayments will trigger a Notice of Proposed Assessment.
FAQs
What schedules must be included when filing Form 100S (2019)?
You must include California-specific schedules such as Schedule B, Schedule C, Schedule F, Schedule G, Schedule H, and Schedule R when applicable.
Are payment coupons required for electronic payments?
No, if you pay electronically, a payment coupon is not required and should not be submitted with your business tax return.
Does Form 100S (2019) address issues like tax-related identity theft or refund fraud?
While Form 100S (2019) itself does not directly address tax-related identity theft or refund fraud, the Franchise Tax Board utilizes data analytics to monitor these risks.
How does Form 100S (2019) differ from tax forms used by C corporations?
Form 100S (2019) is used by S corporations, which generally follow pass-through taxation for federal purposes, while C corporations file different tax forms and are subject to full entity-level corporate income tax in California.
Does pass-through taxation eliminate all California taxes for S corporations?
No, although S corporations use pass-through taxation at the federal level, California still imposes a franchise or income tax at the entity level, which is calculated and reported on this tax form.
Does a change in business name require filing Form 568 instead of Form 100S (2019)?
No, a change in business name does not alter the filing requirement, and an S corporation must continue using Form 100S rather than Form 568, which applies to limited liability companies.
