What Form 3539 (2016) Is For
Form 3539 (2016) is a tax payment voucher used by corporations and exempt organizations in California that need additional time to file their tax returns but owe tax for the year. It is not an application for an extension, since the California Franchise Tax Board provides an automatic six-month filing extension to qualified entities. This form is only necessary when a business chooses to make a payment by check or money order rather than using an electronic payment method such as Web Pay or Electronic Funds Transfer.
When You’d Use Form 3539 (2016)
You should use Form 3539 (2016) only when specific conditions apply, and the payment cannot be made electronically.
You cannot file your original return by the due date
Entities such as C corporations, S Corporations, and limited liability companies that need more time to complete forms like Form 100 or CA Form 199 may use Form 3539 to submit tax payments in the interim.
You owe tax for the 2016 tax year
Form 3539 is only required if the business entity has a tax liability for the taxable year and needs to submit a payment with the extension.
You are not paying electronically
If you are not using Web Pay, EFT, or a credit card to make the payment, you must file Form 3539 along with a check or money order by the original deadline.
You are part of a combined reporting group filing separately
If your business operates as part of a unitary group and files separate returns, each member that owes tax must submit its own Form 3539.
Key Rules or Details for 2016
The 2016 tax year includes several rules that determine how and when to file Form 3539 (2016).
Automatic extensions require good standing
Corporations or exempt organizations must not be suspended or forfeited by the California Secretary of State as of the original due date to qualify for the automatic extension.
Original payments are due by the 15th day of the 3rd or 4th month
Most C corporations must pay by the 15th day of the 4th month (April for calendar-year filers), while S Corporations and partnerships follow the 3rd month deadline (March).
Electronic payment may be required for high tax amounts
If a business made an estimated tax or extension payment exceeding $20,000 or had total tax liabilities of $80,000 or more, all future payments must be made electronically.
Amended returns require different forms
If your business is amending a return after filing, you should use Form 100X or the appropriate form for your entity; Form 3539 is only for original return payments.
Step-by-Step (High Level)
Here’s how to properly complete and submit Form 3539 (2016) in a few key steps.
Determine if the form is required
You only need to file Form 3539 if your entity cannot meet the original return deadline, owes tax for the 2016 taxable year, and is not submitting payment electronically.
Calculate your tentative tax payment
Use the Tax Payment Worksheet included with the form’s instructions to estimate the total tax due, taking into account prior estimated payments, credits, and franchise tax minimums.
Fill in your identification details
Include your California corporation number, Federal Employer Identification Number, California Secretary of State file number (if applicable), and your complete mailing address.
Enter your payment amount clearly
Write the final tax due amount, as calculated from your worksheet, on the payment line and confirm that it matches the amount on your check or money order.
Prepare and label your payment
Write your check or money order payable to “Franchise Tax Board,” and include your identifying information and “2016 FTB 3539” on the memo line.
Mail the form and payment before the deadline
Ensure the form and payment are postmarked or received by the original due date to avoid penalties; late mailing could result in interest charges.
Retain copies for your records
Keep a full copy of Form 3539, your check or payment confirmation, and the worksheet as part of your permanent business tax documentation.
Common Mistakes and How to Avoid Them
Many taxpayers face preventable errors when filing Form 3539 (2016). Here are the most common ones and how to avoid them.
Using Form 3539 as an extension application
This form is not used to request an extension; instead, a six-month extension is automatically granted to entities in good standing with the California Franchise Tax Board and the California Secretary of State.
Missing the original tax payment deadline
The extension only applies to filing the return, not to paying the tax; payment must still be made by the original due date to avoid penalties.
Paying less than 90 percent of actual liability
If you underpay, the unpaid balance will be subject to penalties and interest; calculate your tentative tax carefully and pay at least 90 percent of what you expect to owe.
Filing the form when electronic payment is required
Entities meeting the electronic threshold must use Web Pay, EFT, or a credit card; mailing a check with Form 3539 in these cases will trigger a 10 percent non-compliance penalty.
Omitting required identification numbers
Failure to include your California corporation number, Federal Employer Identification Number, or Secretary of State file number may result in delayed processing or incorrect application of your payment.
What Happens After You File
Once the Franchise Tax Board receives your Form 3539 (2016) and processes the payment, your business’s account is credited accordingly. This credit will appear on your actual tax return for the 2016 tax year as a payment toward your total liability. If the fee exceeds your final tax due, you may request a refund or apply the overage to future estimated taxes. If your payment was late or insufficient, you may still be subject to penalties and interest.
FAQs
Do I need to file Form 3539 (2016) if my business has no tax due?
No; if your business has no tax liability for the taxable year and is in good standing, the six-month automatic extension still applies without needing to file Form 3539.
Can I use Form 3539 if my business files Form 1120-S for federal tax purposes?
Yes, California S Corporations that file Form 1120-S with the Internal Revenue Service may use Form 3539 to submit extension payments related to Form 100S.
Does Form 3539 apply to disregarded entities or sole proprietors?
No, Form 3539 is not used by sole proprietors or disregarded entities and is intended only for corporations and qualified limited liability entities with separate business tax forms.
Is Form 3539 required for the California Department of Tax and Fee Administration filings?
No, Form 3539 does not apply to returns handled by the California Department of Tax and Fee Administration, including excise tax forms and sales tax filings.
Can exempt organizations with Section 501(c) status use Form 3539?
Yes, tax-exempt organizations that file the California Exempt Organization Annual Information Return (Form 199) and owe a filing fee may use Form 3539 to submit payment.
