California S Corp Estimated Tax Payments: Schedule and Penalties

A California S corporation makes estimated tax payments to the Franchise Tax Board on an uneven 30/40/0/30 schedule: 30% of the year’s estimated tax on April 15, 40% on June 15, nothing in September, and the final 30% on December 15. The first payment must also include the full $800 minimum franchise tax. Each installment is measured against 100% of the current year’s tax, not the prior year’s, unless you qualify for one of three exceptions.

What You’re Actually Estimating

Every S corporation incorporated, registered, or doing business in California owes two things: an $800 annual minimum franchise tax and a 1.5% tax on net income apportioned to California.¹ The annual tax is whichever number is larger.²

An S corporation with $40,000 of California net income owes $800, because 1.5% of $40,000 is only $600. One with $200,000 of net income owes $3,000. The $800 floor applies whether the business made money, broke even, or lost money for the year, and it applies to an inactive corporation filing a short-period return too.

Multistate S corporations apportion income to California using Schedule R before applying the 1.5% rate.¹ The 1.5% is an entity-level tax the corporation pays itself, separate from what shareholders owe on their pass-through income.

The 30/40/0/30 Installment Schedule

Calendar-year filers pay on this schedule:³

April 15 — 30% of estimated annual tax, but never less than the full $800 minimum
June 15 — 40% of estimated annual tax
September 15 — no payment
December 15 — 30% of estimated annual tax

Fiscal-year filers use the 15th day of the 4th, 6th, 9th, and 12th months of their fiscal year.⁴

Two features of this schedule catch owners off guard. First, 70% of the year’s liability is due before the halfway mark. Second, the third installment is zero, which is easy to misread as an even quarterly system until December arrives with 30% still owed two weeks before year-end.

If total estimated tax for the year won’t exceed $800, the single April 15 payment satisfies the obligation for the entire year and no further installments are required.³

First-Year and Short-Year Relief

Newly formed or newly qualified S corporations don’t owe the $800 minimum franchise tax for the first taxable year. The same waiver applies to a taxable year of 15 days or fewer during which the corporation conducted no business in California. Any net income earned in that first year is still subject to the 1.5% entity-level tax.¹

How to Make the Payments

Payments use Form 100-ES.³ The FTB accepts three methods:

Web Pay for Business, the FTB’s free online bank-account system, which returns an immediate confirmation.⁵
Electronic funds transfer initiated through your bank.
A check or money order payable to Franchise Tax Board, mailed with the Form 100-ES voucher. Write the California corporation number, FEIN, and tax year on the check.⁶

If you pay electronically, don’t also mail the paper voucher. Duplicate processing is a common cause of misapplied payments.

Underpayment Penalties

Underpayment penalties accrue on each short installment from its due date until the payment posts or the return is filed. The rate is set by the FTB and adjusts periodically; from July 2025 through June 2026 it is 7%.⁷

California does not follow the federal rule that lets you base payments on the lesser of prior-year or current-year tax. The FTB measures underpayments against 100% of the current year’s tax, prorated across the 30/40/0/30 schedule.³ Assuming California works like the federal system is a common and expensive mistake.

The Three Exceptions

Even if an installment falls short under the current-year measure, meeting any of these exceptions eliminates the penalty for that installment:⁸

Exception A, prior year’s tax. Each installment equals or exceeds the tax on the prior year’s return, prorated across the installment schedule. The prior year must have covered a full 12 months. This is the closest California analog to a safe harbor and the simplest to apply.
Exception B, annualized current-year income. Each installment equals or exceeds 100% of the tax on income annualized through the months preceding that installment. Useful when income ramps up later in the year.
Exception C, annualized seasonal income. Available only if at least 70% of gross receipts fall within any six consecutive months of the year.

If Exception A covers all four installments, you don’t need to file anything extra. If you’re using Exception B or C for any installment, attach Form FTB 5806 to the back of Form 100S.⁹ The FTB can also waive the penalty for a disaster or other extraordinary circumstance.⁸

Reconciling at Filing Time

California S corporations file Form 100S. For calendar-year filers, it is due by March 15 following the close of the tax year, with an automatic extension to September 15. Any tax owed beyond what estimated payments already covered is still due by the original March 15 date.¹⁰

The FTB reconciles the four installments against actual liability when the return is filed. Overpayments can be applied to next year’s estimated tax or refunded. Shortfalls are due with the return, and the underpayment penalty applies retroactively to each installment period that came up short.

1
State of California Franchise Tax Board. S Corporations
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Taxes – State of California. Estimate Business Taxes and Prepayments
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State of California Franchise Tax Board. 2025 Instructions for Form 100-ES Corporation Estimated Tax
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California Franchise Tax Board. Form 100, 100S, 100W, or 100X
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State of California Franchise Tax Board. Pay by Bank Account (Web Pay)
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California Franchise Tax Board. California Form 100-ES – Corporation Estimated Tax
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State of California Franchise Tax Board. Interest and Estimate Penalty Rates
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State of California Franchise Tax Board. 2024 Instructions for Form FTB 5806 – Underpayment of Estimated Tax by Corporations
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Franchise Tax Board. Underpayment of Estimated Tax by Corporations
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State of California Franchise Tax Board. Due Dates: Businesses