California Form 568 Instructions: Deadlines, Fees, and Penalties

California Form 568, the Limited Liability Company Return of Income, is filed annually with the Franchise Tax Board by every LLC organized in, registered in, or doing business in California. These instructions for California Form 568 walk through who must file, the separate deadlines for the return and its two payment vouchers, the schedules the form pulls together, and how to submit it. The return itself reports income and each member’s share, but two payments sit outside it: the $800 annual franchise tax on Form FTB 3522 and the tiered LLC fee estimated on Form FTB 3536. Missing any one of the three deadlines carries its own penalty.

Which LLCs Have to File

Any LLC organized in California, registered with the California Secretary of State, or doing business in the state must file Form 568 every year, even with zero income.1Franchise Tax Board. Limited Liability Company That applies whether the LLC is treated as a partnership or a disregarded entity federally.

“Doing business” is broad. It covers any transaction for financial gain in the state, and it also covers LLCs organized elsewhere once their California sales, property, or payroll cross annually adjusted thresholds. For 2025 those thresholds are $757,070 in sales or $75,707 in property or payroll.2Franchise Tax Board. Doing Business in California Clear any one and California considers the LLC to be doing business in the state.

Filing Deadlines by LLC Type

The Form 568 due date depends on classification and ownership.

  • Multi-member LLCs (taxed as partnerships): 15th day of the third month after year-end. March 15 for calendar-year filers, with an automatic extension to October 15.3Franchise Tax Board. Due Dates for Businesses
  • Single-member LLC owned by an individual: April 15, extension to October 15.
  • Single-member LLC owned by a pass-through entity: March 15, extension to October 15.
  • Single-member LLC owned by an S corporation: March 15, extension to September 15.3Franchise Tax Board. Due Dates for Businesses

An extension buys time to file, not time to pay. All taxes and fees are still due on their original deadlines.

The $800 Annual Franchise Tax

Every California LLC owes an $800 annual tax under Revenue and Taxation Code Section 17941, whether or not it earned income.4California Legislative Information. California Revenue and Taxation Code RTC – Chapter 10.6 It is due by the 15th day of the fourth month of the taxable year (April 15 for calendar-year LLCs) and is paid using Form FTB 3522, a separate voucher from Form 568.5Franchise Tax Board. 2025 Instructions for Form FTB 3522 LLC Tax Voucher Web Pay and credit card payments are accepted; if you pay electronically, you do not mail the voucher.

The first-year $800 exemption that applied to LLCs organized between January 1, 2021, and January 1, 2024, has ended. LLCs formed in 2024 or later owe the full $800 in their first taxable year.1Franchise Tax Board. Limited Liability Company One narrow exception remains: if the LLC’s first taxable year is 15 days or fewer and it conducted no business during that period, the $800 does not apply for that short year.

The Tiered LLC Fee

On top of the $800, LLCs with California total income of $250,000 or more owe an additional annual fee. The tiers under Revenue and Taxation Code Section 17942 have not changed since 2001:6California Legislative Information. California Revenue and Taxation Code RTC 17942

  • $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

“Total income” here is not net profit. It is gross income plus cost of goods sold, attributable to California sources.7Franchise Tax Board. FTB Pub. 3556 – Limited Liability Company Filing Information An LLC with $1.2 million in California gross receipts and $50,000 in profit still owes $6,000. You compute the figure on Schedule IW (LLC Income Worksheet) on Side 7 of Form 568.8Franchise Tax Board. California Form 568 – Limited Liability Company Return of Income

You must estimate the fee and pay it by the 15th day of the sixth month of the current taxable year (June 15 for calendar-year filers) using Form FTB 3536.9Franchise Tax Board. 2025 Instructions for Form FTB 3536 If California total income will stay below $250,000, no FTB 3536 is required. Underestimating triggers a 10 percent penalty on the underpaid amount, but you avoid that penalty if your current-year estimated payment equals or exceeds the total fee owed for the prior year.7Franchise Tax Board. FTB Pub. 3556 – Limited Liability Company Filing Information

What Goes on the Return

Before you start, pull together total gross receipts, cost of goods sold, deductible expenses, and any guaranteed payments to members. California figures start from federal amounts but require adjustments; the most common is adding back any state income tax deduction claimed federally.

The return uses several schedules:

  • Schedule IW calculates California total income for the LLC fee.8Franchise Tax Board. California Form 568 – Limited Liability Company Return of Income
  • Schedule B computes overall income or loss.
  • Schedule K-1 (568) reports each member’s share of income, deductions, and credits. Multi-member LLCs must attach a California K-1 for every member.
  • Schedule T reports tax on nonconsenting nonresident members.

You will need the full legal name, address, and federal identification number for each member, on both Form 568 and the K-1s. Members use their California K-1 to prepare their own state returns, so errors here propagate.

The return itself credits the $800 already paid via FTB 3522 and the estimated fee paid via FTB 3536 against total liability. Any balance is due by the original filing deadline even if you file on extension, and interest accrues on unpaid balances from that original date.

Nonresident Members

If any member is a nonresident who has not signed a consent to California’s tax jurisdiction, the LLC pays tax on that member’s share of California-source income at the member’s highest marginal rate, reduced by any nonresident withholding already paid on their behalf.7Franchise Tax Board. FTB Pub. 3556 – Limited Liability Company Filing Information You report it on Schedule T, and it is due by the original return date, not the extension. If you have out-of-state members, secure their consent forms early or budget for the tax.

Penalties for Late Filing and Late Payment

California’s late-filing penalty for Form 568 is $18 per member for each month or partial month the return is late, up to 12 months.10Franchise Tax Board. FTB 1024 – Penalty Reference Chart A five-member LLC that files six months late owes $540. The penalty applies even when no tax is due, though a waiver is available for reasonable cause.

Late payment of the $800 tax or the estimated fee brings its own interest and penalties, separate from the filing penalty. The 10 percent underpayment penalty on the LLC fee applies specifically to a shortfall on the June 15 estimated payment.7Franchise Tax Board. FTB Pub. 3556 – Limited Liability Company Filing Information Filing an extension costs nothing, so filing nothing at all is rarely worth the penalty.

How to Submit Form 568

California law requires any business entity that prepares its return with tax preparation software to e-file, which covers most LLCs.11Franchise Tax Board. e-file for Business You can request a waiver for a qualifying reason.12Franchise Tax Board. Business Entity e-file Waiver Request E-filing lets you pay any balance due through Web Pay or credit card at the same time.

If you paper file, the address depends on whether a payment is enclosed:13Franchise Tax Board. Mailing Addresses

  • With payment: Franchise Tax Board, PO Box 942857, Sacramento, CA 94257-0501
  • Without payment: Franchise Tax Board, PO Box 942857, Sacramento, CA 94257-0500

Make checks payable to the Franchise Tax Board and write your California Secretary of State file number and federal EIN on the check. If you e-file but cannot pay electronically, use Form FTB 3588 to mail the payment separately.14Franchise Tax Board. Instructions for Form FTB 3588 Payment Voucher for LLC e-filed Returns

Filing a Final Return When You Cancel the LLC

Dissolving the LLC does not skip the $800. The final Form 568 still owes the annual tax for the taxable year of the final return. To cancel properly:15Franchise Tax Board. 2025 Instructions for Form 568 – Limited Liability Company Return of Income

  • File a final Form 568 marked as the final return, and pay the $800 for that year.
  • File Form LLC-4/7 (Certificate of Cancellation) with the California Secretary of State. Domestic LLCs also file Form LLC-3 (Certificate of Dissolution).

Timing is where owners lose money. If you file LLC-4/7 after the taxable year’s ending date, you may owe another year’s $800. To avoid that, file a timely final return (including any extension), stop doing business in California after the final taxable year, and file the cancellation paperwork with the Secretary of State within 12 months of that timely filed final return.15Franchise Tax Board. 2025 Instructions for Form 568 – Limited Liability Company Return of Income

Domestic LLCs that never actually conducted business may qualify for short-form cancellation on Form LLC-4/8, available only if filed within 12 months of the original Articles of Organization, with no debts other than tax liability and no assets remaining to distribute.