CA form 100 (stock corporation) first year $800 franchise fee

[ptax255]

Hi, this is the first year filing form 100 for CA stock corporation. The software is calculating $800 fee for this first year. I thought based on the link below this fee is waived for the first year. How can I mark it as such in Proseries?

https://www.ftb.ca.gov/file/business/types/corporations/index.html

[Just-Lisa-Now-]

Did you mark it as an Initial Return?   First page of the 1120, Line E.

[ptax255]

Yes, it's marked as Initial on form 1120 and question J on schedule Q of the CA return

[Just-Lisa-Now-]

weird, I dont have any corporations, but the CA SMLLCs that I prepare I just mark that Initial Return box and it waives the first year 800 fee.

[ptax255]

Right, it works for LLCs and Scorps. Wasn't sure if I'm missing something with Ccorps, but reading the FTB website it should be exempt the first year as well.

[joshuabarksatlcs]

1.  Is it for a prior year return (when $800 was not waived)?

2.  If you're using Lacerte, did you enter something in the Min Tax override in CA Misc Screen 45?

3.  Was there taxable income on line 22, Net income, of Form 100?  Did it happen to be 9,050, triggering a tax of $800?

[ptax255]

1. It's for 2023

2. Proseries 

3. Taxable income is $0

[joshuabarksatlcs · Accepted solution]

Perhaps a Proseries user could help by doing a dummy run of an initial year CA corp to see if the $800 pops up.  If so, software problem.  If NOT, there may be an override field (like for Lacerte) and you had an entry there.

Another possibility: Check the incorporation date.  Perhaps a year before 2023 was entered and Proseries ignored the entry (check box??) for "initial year" and used the incorporation year as entered.  Lacerte goes by the check box and ignores the incorporation year. Just a thought. 

Computer software generally behaves predictably.  That said, the above is all I could think of. 

When all fails, override the tax with zero.  CA has indeed waived the $800 min tax for a corporation's initial year..   

[ptax255]

I did an override. All else checks out. Thank you.