What California Form 3522 Is For
California Form 3522 (2023) is the official payment voucher LLCs use to pay the $800 annual LLC tax. This tax is not based on income—it’s a flat charge for the privilege of doing business or remaining registered in California. Once an LLC exists on California’s records, the annual tax applies whether or not the company earned revenue, operated, or remained active during the year.
Form 3522 covers only this annual tax. It does not pay the LLC fee based on income, and it is not used for paying any balance due on the LLC’s return. Sending the wrong payment with the wrong form often delays processing and may trigger penalties, so keeping these distinctions clear is essential.
When You’d Use California Form 3522
LLCs use Form 3522 to pay the annual LLC tax by the 15th day of the fourth month after the beginning of the tax year. For calendar-year LLCs, the 2023 payment was due April 15, 2023, but the deadline shifted to April 18, 2023 because of the Emancipation Day holiday. Fiscal-year LLCs count four months from their start date.
Foreign LLCs that register mid-year must pay immediately if the normal due date has already passed. Missing a prior year’s payment requires using that year’s voucher—late payments must be made using the correct year’s form. Because the annual tax is not tied to the income tax return, amended filings do not change this obligation. The $800 is due once per year for every year the LLC legally exists unless a qualifying exemption applies.
Key Rules or Details for 2023
Annual Tax vs. LLC Fee
California imposes two separate charges:
- $800 annual tax (Form 3522): flat fee, due early in the LLC’s tax year
- LLC fee (Form 3536): income-based fee that applies only when California-source income is $250,000 or more
LLCs with sufficient income will owe both payments, but they must be paid on different vouchers and on different deadlines.
First-Year Exemption
For tax years beginning January 1, 2021 through January 1, 2024, new LLCs are exempt from the $800 annual tax for their first taxable year only. The exemption disappears in the second year. LLCs formed outside this window do not qualify.
Deployed Military Exemption
Small business LLCs owned solely by a deployed member of the U.S. Armed Forces may qualify for an exemption if total income is $250,000 or less and the business ceases operations or operates at a loss. Qualifying LLCs must note “Deployed Military” on their return.
Tax-Exempt Entities
Certain title-holding entities under IRC §§ 501(c)(2), 501(c)(25) and California §§ 23701h or 23701x do not owe the annual tax.
Obligation Until Cancellation
The annual tax continues until the LLC is formally cancelled with the Secretary of State. Merely ceasing operations or filing a final return is not enough; the state must recognize an official cancellation before the obligation ends.
Step-by-Step (High Level)
Step 1: Determine Whether You Owe the Tax
Confirm whether your LLC qualifies for any exemption. If not exempt, the $800 tax must be paid by the deadline each year until cancellation.
Step 2: Choose a Payment Method
California offers several options:
- Web Pay for Businesses (recommended and free)
- Credit card through ACI Payments
- Paper check or money order mailed with Form 3522
If you pay electronically, do not mail the voucher.
Step 3: Download the Correct Form
Obtain the 2023 Form 3522 from ftb.ca.gov/forms. Using the wrong year’s form often results in misapplied payments.
Step 4: Complete the Voucher
Use black or blue ink and list:
- LLC name (as registered)
- SOS file number
- FEIN
- Mailing address
- Phone number
- $800 payment
Series LLCs should label each series clearly in the margin.
Step 5: Prepare Your Payment
If paying by check or money order:
- Make it payable to Franchise Tax Board
- Use U.S. funds from a U.S. bank
- Write your SOS number, FEIN, and “2023 FTB 3522” on the memo line
Do not staple the check to the voucher.
Step 6: Mail the Payment
Mail only the voucher and payment to:
Franchise Tax Board
PO Box 942857
Sacramento CA 94257-0531
Do not include Form 568 or any other documents.
Step 7: Keep Records
Store copies of the voucher, canceled check, and confirmation for at least four years.
Common Mistakes and How to Avoid Them
- Sending the $800 payment with Form 568 – The annual tax must be paid separately; combining payments causes misapplication.
- Using the wrong year’s voucher – Always use the Form 3522 for the specific year you are paying.
- Mailing the voucher after paying electronically – This creates duplicate entries and processing confusion.
- Confusing the annual tax with the LLC fee – The $800 fee is separate from the income-based LLC fee.
- Missing the early-year payment deadline – The annual tax is due months before Form 568.
- Using colored ink – Only black or blue ink scans correctly.
- Assuming inactivity ends the obligation – You owe tax until the LLC is officially cancelled.
- Misunderstanding the first-year exemption – It applies once, and only for LLCs formed during the 2021–2024 window.
What Happens After You File
The FTB processes your Form 3522 payment and posts the $800 to your LLC’s account for the correct year. Processing usually takes a few weeks. You can verify posting online through MyFTB or by calling the FTB with your SOS number or FEIN.
If you paid late, the FTB automatically assesses penalties and daily-compounding interest. Penalties include 5% of the unpaid tax plus 0.5% for each month late, up to 25%. You can request a penalty waiver if you had reasonable cause and paid at least 90% of the tax on time, but interest is never waivable.
Returned checks trigger additional fees and may require future payments by certified funds. If annual tax or required returns remain unpaid, the LLC can be suspended or forfeited, losing legal rights and liability protections. To stop owing the annual tax going forward, you must file a Certificate of Cancellation with the Secretary of State.
FAQs
Do I owe the $800 tax even if my LLC made no income?
Yes. The annual tax applies to every LLC that exists or is registered in California, even if inactive. Only qualifying exemptions eliminate the obligation.
When is the annual tax due?
For calendar-year LLCs, the 2023 payment was due April 15, 2023 (extended to April 18). Fiscal-year LLCs count four months from their start date.
Can I pay electronically?
Yes. Web Pay is the fastest and most reliable method. If you pay electronically, do not mail Form 3522.
How is the annual tax different from the LLC fee?
The annual tax is a flat $800 due early in the year. The LLC fee is income-based and due mid-year if total California income exceeds $250,000.
Does the first-year exemption apply to my LLC?
It applies only if your LLC formed or registered between January 1, 2021 and January 1, 2024, and only for your first taxable year.
Do I still owe the annual tax after closing my business?
Yes—until you cancel the LLC with the Secretary of State. Ending operations or filing a final return is not enough.
Can I send Form 3522 with my Form 568?
No. The annual tax must be paid separately. Mailing the two together causes delays and possible penalties.
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