California Form 568, the Limited Liability Company Return of Income, is the annual return every LLC organized in or doing business in California must file with the Franchise Tax Board. It reports the LLC’s income, deductions, and losses, and it is where you calculate the mandatory $800 annual tax and a separate income-based fee that can reach $11,790. The obligation applies to multi-member LLCs taxed as partnerships and to single-member LLCs treated as disregarded entities, and it applies whether or not the LLC earned a dollar during the year.
Who Must File
Two categories of LLC owe a Form 568 each year, provided the LLC is classified as a partnership or a disregarded entity for federal tax purposes.1Franchise Tax Board. Limited Liability Company
- Domestic LLCs formed by filing articles of organization with the California Secretary of State. The filing requirement runs every year the LLC exists, regardless of income or activity.
- Foreign LLCs organized in another state but registered with the California Secretary of State or otherwise considered to be doing business in California.
A single-member LLC treated as a disregarded entity still files its own Form 568, separate from the owner’s personal return. The owner reports the LLC’s income on their individual return, but California requires the stand-alone Form 568 to calculate the annual tax and fee.1Franchise Tax Board. Limited Liability Company
Profitability is irrelevant. An LLC that lost money or sat dormant all year still owes the return and the $800 tax until it formally cancels with the Secretary of State.2California Legislative Information. California Revenue and Taxation Code 17941
One important exclusion: if your LLC elected to be taxed as a C corporation or S corporation for federal purposes, you file California Form 100 or Form 100S instead of Form 568.3Franchise Tax Board. 2025 Instructions for Form 100 Corporation Tax Booklet The federal election changes your entire state filing track.
When a Foreign LLC Is “Doing Business” in California
A foreign LLC that never registered with the Secretary of State can still owe Form 568 if it meets the FTB’s economic thresholds. For 2025, any one of these triggers the requirement: $757,070 in California sales, $75,707 in California property, or $75,707 in California payroll.4Franchise Tax Board. Doing Business in California The FTB adjusts these figures annually. If your LLC holds an interest in another partnership, LLC, or S corporation, your distributive share of that entity’s California property, payroll, and sales counts toward your own thresholds.
The $800 Annual Tax
Every LLC that files Form 568 owes a flat $800 annual tax for the privilege of operating as an LLC in California.1Franchise Tax Board. Limited Liability Company Income, activity, and tax classification make no difference. The tax runs from formation until you file a certificate of cancellation with the Secretary of State.2California Legislative Information. California Revenue and Taxation Code 17941
The $800 is not prorated. An LLC formed in November owes the full amount for that year. A first-year exemption existed for LLCs formed between January 1, 2021 and January 1, 2024, but it has expired.1Franchise Tax Board. Limited Liability Company
One narrow exception: an LLC whose tax year was 15 days or fewer, and that conducted no business in California during that period, avoids the annual tax for that year.5Franchise Tax Board. Limited Liability Company Filing Information That mainly helps LLCs dissolving right at the start of a new tax year.
The Income-Based LLC Fee
If your LLC’s total California-source income reaches $250,000 or more, you owe an additional fee on top of the $800. The fee is calculated on total income attributable to California, not net profit. That catches owners off guard. An LLC with $600,000 in revenue and $500,000 in expenses still owes the fee based on the $600,000 figure.6California Legislative Information. California Revenue and Taxation Code 17942
The tiers:
- $250,000 to $499,999: $900
- $500,000 to $999,999: $2,500
- $1,000,000 to $4,999,999: $6,000
- $5,000,000 or more: $11,790
These amounts have not changed since 2001.5Franchise Tax Board. Limited Liability Company Filing Information If your LLC received income from another LLC that already paid the fee, that income is excluded from your calculation to avoid double-counting.7Franchise Tax Board. 2025 Instructions for Form 568 Limited Liability Company Tax Booklet
Deadlines: Three Different Dates
The return, the annual tax, and the LLC fee each have their own due date. Missing any of them triggers a separate penalty, so treat them as three deadlines rather than one.
Form 568 Return
For LLCs classified as partnerships, the return is due by the 15th day of the third month after the close of the tax year. Calendar-year filers file by March 15.7Franchise Tax Board. 2025 Instructions for Form 568 Limited Liability Company Tax Booklet Single-member LLCs owned by an individual have an original due date of April 15. LLCs in good standing get an automatic seven-month extension without filing a separate request, moving the deadline to October 15 for calendar-year filers.8Franchise Tax Board. Due Dates – Businesses
The extension covers filing only, not payment. Any tax or fee still owed must be paid by the original due date to avoid penalties.
$800 Annual Tax
The annual tax is due by the 15th day of the fourth month after the beginning of the current tax year. Calendar-year LLCs pay by April 15 of the year the tax covers, not after the year ends. You submit it on Form FTB 3522, the LLC Tax Voucher.9California Franchise Tax Board. 2025 Instructions for Form FTB 3522 LLC Tax Voucher
Estimated LLC Fee
If you expect California income of $250,000 or more, you must estimate and pay the fee by the 15th day of the sixth month of the current tax year. For calendar-year filers, that is June 15, using Form FTB 3536.10Franchise Tax Board. 2026 Instructions for Form FTB 3536 Estimated Fee for LLCs There is a safe harbor: pay at least the prior year’s fee amount by the deadline and the FTB will not impose the 10% underpayment penalty even if the actual fee turns out higher.
When any due date falls on a weekend or holiday, it moves to the next business day. Form 568 can be filed electronically through the FTB’s e-file system or mailed as a paper return.
Withholding on Nonresident Members
If any of your members live outside California, the LLC acts as a withholding agent. California requires you to withhold 7% of California-source income distributed to nonresident members once total payments to that member exceed $1,500 for the calendar year.11Franchise Tax Board. Withholding on Nonresidents
A nonresident member can request a waiver by filing Form 588 with the FTB at least 21 business days before the payment date. The FTB reviews the request and issues a Waiver Determination Notice; you cannot stop withholding until that notice is in hand.12State of California Franchise Tax Board. 2025 Instructions for Form 588 Nonresident Withholding Waiver Request Waivers last up to 24 months and expire on December 31 of the year following the grant. Foreign (non-U.S.) members cannot use Form 588; they file Form 589 to request reduced withholding.
A granted waiver does not remove the member’s own obligation to file a California return and pay any tax due. It only excuses the LLC from withholding.
Penalties and Interest
California penalizes the return, the annual tax, and the LLC fee separately, so a single missed cycle can produce several bills at once.
- Late filing penalty: $18 per member for each month or partial month the return is late, up to 12 months. A five-member LLC that files six months late owes $540.13Franchise Tax Board. Common Penalties and Fees
- Late payment penalty: 5% of the unpaid tax upfront, plus 0.5% of the unpaid balance for each month it remains outstanding, up to 40 months. It applies to the annual tax, the LLC fee, and any non-consenting nonresident member tax.13Franchise Tax Board. Common Penalties and Fees
- Estimated fee underpayment penalty: 10% of the difference between the fee actually owed and the amount paid by the June 15 estimated fee deadline, subject to the prior-year safe harbor described above.10Franchise Tax Board. 2026 Instructions for Form FTB 3536 Estimated Fee for LLCs
Interest accrues on top of penalties. From July 2025 through June 2026, the FTB charges 7% interest on underpayments.14State of California Franchise Tax Board. Interest and Estimate Penalty Rates
Filing a Final Return When You Close the LLC
Ending your LLC does not end your Form 568 obligation. The wind-down involves two agencies: a final Form 568 with the FTB, and a Certificate of Cancellation (Form LLC-4/7) with the Secretary of State. Domestic LLCs must also file Form LLC-3, Certificate of Dissolution, with the Secretary of State before cancellation.7Franchise Tax Board. 2025 Instructions for Form 568 Limited Liability Company Tax Booklet
On the final Form 568, check the “Final Return” box on Side 1, Item H(2), and mark each member’s Schedule K-1 (568) as final. You still owe the $800 for that final year.
You can avoid a $800 charge for the year after your final return if you meet three conditions: you file a timely final return (extension included), the LLC conducts no California business after that final tax year, and you file the cancellation documents with the Secretary of State within 12 months of the timely filed final return.7Franchise Tax Board. 2025 Instructions for Form 568 Limited Liability Company Tax Booklet Miss the 12-month window and the FTB assesses another $800.