California LLC tax and fee calculation for Form 568 in Lacerte

What is the annual Limited Liability Company tax? 

LLCs are subject to an $800 annual tax if they are doing business in California or have articles of organization accepted, or a certificate of registration issued by the California SOS. The annual tax is prepaid for the privilege of doing business in California, and is due and payable on or before the 15^th day of the 4^th month after the beginning of the taxable year.

What is the Limited Liability Company fee?

In addition to the annual tax, every LLC must pay a fee if the total California annual income is equal to or greater than $250,000. The LLC fee remains due and payable by the due date of the LLC's return. LLCs will use Form FTB 3536 to pay by the due date of the LLC’s return, any amount of the LLC fee owed that wasn't paid as a timely estimated fee payment.

The LLC annual fee is based on the total income reportable to California. Under R&TC Section 24271, total income is defined as the sum of worldwide gross income plus cost of goods sold.

Why is Form 568, Line 2, LLC fee blank?

If Line 2 of Form 568 is blank, it’s most likely because Line 1 is below $250,000. For amounts over $250,000 refer to the CA Franchise Tax Board LLC Fee section.

The calculation of Line 1 can be found on the LLC Income Worksheet in Lacerte:

• For Form 568 in the Partnership module, go to Screen 43.012, California Form 568, Total Income Worksheet for additional input that might be required for this calculation. 
• For Form 568 for a Single Member LLC in the Individual module, go to screen 54.013, Single Member LLC. 

For more information on California Limited Liability Companies visit the California Tax Service Center.