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Common questions about individual CA LLC Income Worksheet (Form 568)

Filing Form 568

Limited liability companies file Form 568: Limited Liability Company Return of Income.

Extension: An automatic six-month extension is granted to file Form 568, but this is not an extension to pay the tax.
Disregarded Single Member LLCs: These entities still must file Form 568, although they only need to complete a small portion of it. They are still subject to the annual tax and the fee.

For California LLCs, there are two main payments to consider:

This is a fixed amount of $800.
An LLC is subject to this tax if it is doing business in California or is registered with the California Secretary of State.
- "Doing Business" means actively engaging in any transaction for financial gain or profit.
The $800 tax is considered prepaid for the privilege of doing business in California. It is not deductible.
The annual tax is due and payable on or before the 15th day of the 4th month after the beginning of the taxable year.
How to Pay:
- Don't pay the annual tax with Form 568.
- Use Form 3522, Limited Liability Company Tax Voucher, to pay the annual tax by its original due date.
- If requesting an extension to file Form 568, use Form 3537, Payment Voucher for Automatic Extension for Limited Liability Company, with your payment.
- An extension to file Form 568 does not extend the time to pay the annual tax.

This is an additional payment required only if the LLC's total California annual income is equal to or greater than $250,000.
The fee amount varies based on income levels.
Total income is defined as the sum of worldwide gross income plus cost of goods sold. The fee is based on total income from all sources derived from or attributable to California.
Generally, the LLC fee is considered a deductible ordinary and necessary business expense.
The LLC fee remains due and payable by the due date of the LLC's return (Form 568). The fee must be paid by the original return due date of the partnership return.
How to Pay: LLCs use Form FTB 3536 to pay any amount of the LLC fee owed that wasn't paid as a timely estimated fee payment.

Automatic Inclusion of $800 CA Franchise LLC Tax:
- Lacerte automatically includes the $800 CA Franchise LLC tax on Form 568, Line 6 (or Line 8 in prior Lacerte contexts mentioned).
- This is because the tax is due by the 15th day of the 4th month and is assumed paid for the next year.
- You can suppress this by entering -1 in the Form 568 20YY FTB 3522 payment [O] field on Screen 37.
Entering the LLC Fee paid with Form FTB 3536:
- Go to Screen 37 and enter the amount in the 20YY LLC Fee paid with Form FTB 3536 field.
Entering Overpayments from a Prior Year:
- Go to Screen 37.
- Enter the amount in Overpayment from a prior year credited to tax or Overpayment from a prior year credited to fee.
Entering Withholding (e.g., from Form 592-B or 593):
- Go to Screen 37 and select the relevant form from the left panel.
- Enter the tax withheld in the appropriate field.
- An LLC can allocate withholding credit to members or claim a portion on Form 568 (up to the tax and fee due), attaching the form (592-B or 593) if claiming it on Form 568.

Form 568, Line 2 (LLC fee) is blank:
- This is most likely because Line 1 (Total Income from the LLC Income Worksheet) is below $250,000. The fee only applies at or above this income threshold.
Single Member LLC generates only pages 1, 2, and 3 of Form 568 (Partnership Module):
- Disregarded single-member LLCs only need to complete a small portion of the form.
- If you need to generate all pages in the Partnership module, go to Screen 37, Single Member LLC Information section, and check the box for Force complete Form.

Lacerte Tax

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