California Corporation Tax Booklet - Form 100 Forms & Instructions

Corporation Tax Booklet - Form 100 Forms & Instructions
Form 100 Booklet
100
California

Forms & Instructions

2023

Corporation
Tax Booklet

This booklet contains:
Form 100, California Corporation
Franchise or Income Tax Return
Schedule H (100), Dividend Income
Deduction
Schedule P (100), Alternative Minimum
Tax and Credit Limitations — Corporations
FTB 3539, Payment for Automatic
Extension for Corporations and Exempt
Organizations
FTB 3805Q, Net Operating Loss (NOL)
Computation and NOL and Disaster Loss
Limitations — Corporations
FTB 3885, Corporation Depreciation and
Amortization

Members of the Franchise Tax Board
Malia M. Cohen, Chair
Antonio Vazquez, Member
Joe Stephenshaw, Member

For more information regarding business e-file, see
page 2 or go to ftb.ca.gov and search for business efile.

Table of Contents
Instructions for Form 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
What’s New/Tax Law Changes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
R&TC Section 41 Reporting Requirements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
General Information A, Franchise or Income Tax  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
General Information C, Minimum Franchise Tax  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
Form 100, California Corporation Franchise or Income Tax Return  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
Schedule H (100), Dividend Income Deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
Instructions for Schedule H (100)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
Schedule P (100), Alternative Minimum Tax and Credit Limitations — Corporations . . . . . . . . . . . . . . . . . . . .  31
Instructions for Schedule P (100)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
FTB 3539, Payment for Automatic Extension for Corporations and Exempt Organizations  . . . . . . . . . . . . . . .  43
Credit Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46
FTB 3805Q, Net Operating Loss (NOL) Computation and NOL and
  Disaster Loss Limitations — Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
Instructions for form FTB 3805Q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
FTB 3885, Corporation Depreciation and Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
Instructions for form FTB 3885  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
Principal Business Activity Codes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  59
How to Get California Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  63

Business e-file
Business e-file is available for the following returns:
•	 Form 100, California Corporation Franchise or Income Tax Return, including
combined reports
•	 Form 100S, California S Corporation Franchise or Income Tax Return
•	 Form 100W, California Corporation Franchise or Income Tax Return –
Water’s-Edge Filers, including combined reports
•	 Form 100X, Amended Corporation Franchise or Income Tax Return
•	 Form 109, California Exempt Organization Business Income Tax Return
•	 Form 199, California Exempt Organization Annual Information Return
•	 Form 565, Partnership Return of Income
•	 Form 568, Limited Liability Company Return of Income

For more information, go to ftb.ca.gov and search for business efile.

Page 2  Form 100 Booklet  2023

2023 Instructions for Form 100

California Corporation Franchise or Income Tax Return
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and to the C
­ alifornia Revenue and Taxation Code (R&TC).

Differences between California
and Federal Law
In general, for taxable years beginning on or
after January 1, 2015, California law conforms
to the Internal Revenue Code (IRC) as of
January 1, 2015. However, there are continuing
differences between California and federal
law. When California conforms to federal tax
law changes, we do not always adopt all of
the changes made at the federal level. For
more information, go to ftb.ca.gov and search
for conformity. Additional information can
be found in FTB Pub. 1001, Supplemental
Guidelines to California Adjustments, the
instructions for California Schedule CA (540),
California Adjustments – Residents, or
Schedule CA (540NR), California Adjustments –
Nonresidents or Part-Year Residents, and the
Business Entity tax booklets.
The instructions provided with California tax
forms are a summary of California tax law
and are only intended to aid taxpayers in
preparing their state income tax returns. We
include information that is most useful to the
greatest number of taxpayers in the limited
space available. It is not possible to include
all requirements of the California Revenue
and Taxation Code (R&TC) in the instructions.
Taxpayers should not consider the instructions
as authoritative law.

What’s New/Tax Law Changes
Reporting Requirements – Taxpayers may
need to file form FTB 4197, Information on
Tax Expenditure Items, with the tax return to
report tax expenditure items as part of the
Franchise Tax Board’s (FTB’s) annual reporting
requirements under R&TC Section 41. To
determine if you have an R&TC Section 41
reporting requirement, see the R&TC
Section 41 Reporting Requirements section or
get form FTB 4197.
e-file Form 109 – For taxable years beginning
on or after January 1, 2023, the FTB offers
e-file for exempt organizations filing Form 109,
California Exempt Organization Business
Income Tax Return. Check with your software
provider to see if they support exempt
organization e-file.
Use Tax – For taxable years beginning
on or after January 1, 2023, and before
January 1, 2029, you may not report business
purchases subject to use tax on your income
tax return if you make more than $10,000 in
purchases subject to use tax per calendar year
and have not paid use tax on those purchases
to a retailer engaged in business in California
or to a retailer authorized by the California
Department of Tax and Fee Administration to
collect the tax. For other use tax requirements,
see Specific Line Instructions and R&TC
Section 6225.

Governor Declared Disaster Extension – The
sunset date for the deduction for disaster
losses sustained in Governor declared disaster
areas is extended until taxable years beginning
before January 1, 2029. For more information,
see form FTB 3805Q, Net Operating
Loss (NOL) Computation and NOL and Disaster
Loss Limitations – Corporations, and see
R&TC Section 24347.14.
Low-Income Housing Credit – For taxable
years beginning on or after January 1, 2023,
California law allows a taxpayer to claim the
Low-Income Housing Credit in the taxable
year the building is placed in service and the
federal credit period commences, based upon
taxpayer certification, even if the California
Tax Credit Allocation Committee (CTCAC)
has not yet issued a certificate. If the CTCAC
issues a certificate with a credit amount that is
inconsistent with the taxpayer’s certification,
upon which a credit has been claimed, the
taxpayer is required to amend any previously
filed tax returns to reflect the credit amount
certified by the CTCAC. For more information,
get form FTB 3521, Low-Income Housing
Credit and see R&TC Section 23610.5.
Program 3.0 California Motion Picture and
Television Production Credit – For taxable
years beginning on or after January 1, 2020,
California law allows the Program 3.0
California Motion Picture and Television
Production Credit to reduce tax below tentative
minimum tax (TMT). For more information, get
form FTB 3541, California Motion Picture and
Television Production Credit, and see R&TC
Section 23036.
Soundstage Filming Tax Credit – For taxable
years beginning on or after January 1, 2022,
California law allows the Soundstage Filming
Tax Credit to reduce tax below the TMT. For
more information, get form FTB 3541 and see
R&TC Section 23036.
New Employment Credit Expansion –
For taxable years beginning on or after
January 1, 2023, and before January 1, 2026,
the New Employment Credit is expanded for
qualified taxpayers engaged in semiconductor
manufacturing or semiconductor research
and development, lithium production,
manufacturing of lithium batteries, or electric
airplane manufacturing. For more information,
get FTB 3554, New Employment Credit Booklet,
and see R&TC Section 23626.
High-Road Cannabis Tax Credit – For taxable
years beginning on or after January 1, 2023,
and before January 1, 2028, the High-Road
Cannabis Tax Credit (HRCTC) will be available
to licensed commercial cannabis businesses
that meet the qualifications. The credit is
allowed to a qualified taxpayer in an amount
equal to 25% of qualified expenditures in the
taxable year. The credit amount cannot exceed
$250,000. Unused credit may be carried
forward up to eight years. All types of entities,

except for exempt organizations, are eligible to
claim this credit.
A qualified taxpayer must request a tentative
credit reservation from the FTB during the
month of July for each taxable year or within
30 days of the start of their taxable year if the
qualified taxpayer’s taxable year begins from
August 1st through December 31st. For more
information, get form FTB 3820, High-Road
Cannabis Tax Credit, see R&TC Section 23664,
or go to ftb.ca.gov and search hrctc.
Cannabis Equity Tax Credit – For taxable years
beginning on or after January 1, 2023, and
before January 1, 2028, a Cannabis Equity Tax
Credit (CETC) is available to equity licensees
that have received approval, including
approval contingent upon the availability of
funds, for the fee waiver and deferral program
administered by the Department of Cannabis
Control (DCC). The allowable credit is $10,000
per taxable year for each qualified taxpayer.
Unused credit may be carried forward up
to eight years. All types of entities, except
for exempt organizations, are eligible to
claim this credit. For more information, get
form FTB 3821, Cannabis Equity Tax Credit,
see R&TC Section 23682, or go to ftb.ca.gov
and search for cetc.
California Microbusiness COVID-19 Relief
Grant – The gross income exclusion for the
California Microbusiness COVID-19 Relief
Grant is extended until taxable years beginning
before January 1, 2025. For more information,
see Specific Line Instructions and R&TC
Section 24311.
Kincade Wildfire Exclusion – For taxable years
beginning on or after January 1, 2020, and
before January 1, 2028, California law allows
a qualified taxpayer an exclusion from gross
income for any qualified amount received in
a settlement from Pacific Gas and Electric
(PG&E) Company or its subsidiary relating to
the 2019 Kincade Fire. If a qualified taxpayer
included income for a qualified amount
received from this settlement in a prior taxable
year, the taxpayer can file an amended tax
return for that year within the normal statute of
limitations. For more information, see Specific
Line Instructions and R&TC Section 24309.6.
Zogg Wildfire Exclusion – For taxable years
beginning on or after January 1, 2020, and
before January 1, 2028, California law allows
a qualified taxpayer an exclusion from gross
income for any qualified amount received
in a settlement from PG&E Company or its
subsidiary relating to the 2020 Zogg Fire. If
a qualified taxpayer included income for a
qualified amount received from this settlement
in a prior taxable year, the taxpayer can file
an amended tax return for that year within
the normal statute of limitations. For more
information, see Specific Line Instructions and
R&TC Section 24309.7.

Form 100 Booklet  2023  Page 3

Conformity – For updates regarding the
federal acts, go to ftb.ca.gov and search for
conformity.

R&TC Section 41 Reporting
Requirements
Taxpayers should file form FTB 4197 with the
tax return to report tax expenditure items as
part of the FTB’s annual reporting requirements
under R&TC Section 41. “Tax expenditure”
means a credit, deduction, exclusion,
exemption, or any other tax benefit provided
for by the state. The FTB uses information from
form FTB 4197 for reports required by the
California Legislature. Taxpayers that have a
reporting requirement for any of the following
should file form FTB 4197:
•	 For taxable years beginning on or after
January 1, 2020, and before January 1,
2028, qualified taxpayers who benefited
from the exclusion from gross income
for any qualified amount received in a
settlement from PG&E Company or its
subsidiary relating to the 2019 Kincade Fire.
•	 For taxable years beginning on or after
January 1, 2020, and before January 1,
2028, qualified taxpayers who benefited
from the exclusion from gross income
for any qualified amount received in a
settlement from PG&E Company or its
subsidiary relating to the 2020 Zogg Fire.
•	 For taxable years beginning before
January 1, 2027, qualified taxpayers who
benefited from the exclusion from gross
income for any amount received in a
settlement from Southern California Edison
for claims relating to the 2017 Thomas Fire
or the 2018 Woolsey Fire.
•	 For taxable years beginning before
January 1, 2030, a corporation that is a
small business solely owned by a deployed
member of the United States Armed Forces
that meet the requirements to be exempted
from the minimum franchise tax.
•	 For taxable years beginning on
January 1, 2022, and before
January 1, 2027, taxpayers who benefited
from the exclusion of gross income for any
amount received as a rebate, voucher, or
other financial incentive issued by a public
water system, as defined, local government,
or state agency for participation in a turf
replacement water conservation program.
•	 For taxable years beginning on or after
January 1, 2021, taxpayers who benefited
from the exclusion from gross income for
the Paycheck Protection Program (PPP)
loans forgiveness, other loan forgiveness,
the Economic Injury Disaster Loan (EIDL)
advance grant, restaurant revitalization
grant, or shuttered venue operator grant,
and related eligible expense deductions.
•	 Beginning on or after January 1, 2020,
C corporation partners (including
corporation filing a combined report)
and S corporation partners that received
Schedule K-1 from a partnership that is

Page 4  Form 100 Booklet  2023

operating a commercial cannabis activity
licensed under California Medicinal and
Adult-Use Cannabis Regulation and
Safety Act (MAUCRSA).
For more information, get form FTB 4197.

•	

Important Information
•	 The FTB offers e-filing for the following
entities:
•	 Corporations filing Form 100, California
Corporation Franchise or Income Tax
Return, including combined reports
and certain accompanying forms and
schedules.
•	 Corporations filing Form 100X,
Amended Corporation Franchise or
Income Tax Return.
•	 Exempt homeowners associations and
exempt political organizations filing
Form 100.
•	 Exempt organizations filing Form 199,
California Exempt Organization Annual
Information Return.
Check with the software providers to see if
they support business e-filing.
•	 California law requires business entities that
file an original or amended tax return that
is prepared using tax preparation software
to electronically file (e-file) their tax return
with the FTB. For more information, go to
ftb.ca.gov and search for business efile.
•	 Corporations can make payments
online using Web Pay for Businesses.
Corporations can make an immediate
payment or schedule payments up to a
year in advance. Go to ftb.ca.gov/pay.
•	 Corporations can use a Discover,
MasterCard, Visa, or American Express
Card to pay business taxes. Go to
officialpayments.com. ACI Payments, Inc.
(formerly Official Payments) charges a
convenience fee for using this service.
•	 Corporations can make an estimated tax or
extension payment using tax preparation
software. Check with the software provider
to determine if they support Electronic
Funds Withdrawal (EFW) for estimated tax
or extension payments.
•	 The Internal Revenue Service (IRS) requires
certain corporations to file Schedule UTP
(Form 1120), Uncertain Tax Position
Statement, with their income tax returns.
For California purposes, if a corporation is
required to file Schedule UTP (Form 1120)
with their federal tax return, the corporation
must attach a copy of federal Schedule UTP
(Form 1120) to the California tax return.
•	 California Microbusiness COVID-19 Relief
Grant – For taxable years beginning on
or after September 1, 2020, and before
January 1, 2025, California law allows an
exclusion from gross income for grant
allocations received by a taxpayer pursuant
to the California Microbusiness COVID-19
Relief Program that is administered by

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the Office of Small Business Advocate
(CalOSBA). For more information, see
R&TC Section 24311 and Specific Line
Instructions.
Gross Income Exclusion for Bruce’s
Beach – Effective September 30, 2021,
California law allows an exclusion from
gross income for the first time sale in
the taxable year in which the land within
Manhattan State Beach, known as “Peck’s
Manhattan Beach Tract Block 5” and
commonly referred to as “Bruce’s Beach”
is sold, transferred, or encumbered. A
recipient’s gross income does not include
the following:
•	 Any sale, transfer, or encumbrance of
Bruce’s Beach;
•	 Any gain, income, or proceeds received
that is directly derived from the sale,
transfer, or encumbrance of Bruce’s
Beach.
For taxable years beginning on or after
July 1, 2019, California requires taxpayers
to use their federal IRC Section 338 election
treatment for certain stock purchases treated
as asset acquisitions or deemed election
where purchasing corporation acquires
asset of target corporation. If an election
has not been made by a taxpayer under IRC
Section 338, the taxpayer shall not make a
separate state election for California.
Under IRC Section 951A, if the corporation
is a U.S. shareholder of a controlled foreign
corporation, the corporation must include
global intangible low-taxed income (GILTI)
in its income. California does not conform.
The federal Tax Cuts and Jobs Act (TCJA)
signed into law on December 22, 2017,
made changes to the IRC. The R&TC
does not conform to all of the changes. In
general, for taxable years beginning on or
after January 1, 2019, California conforms
to the following TCJA provisions:
•	 Federal Deposit Insurance Corporation
(FDIC) Premiums
•	 Excess employee compensation
The TCJA amended IRC Section 1031
limiting the nonrecognition of gain or loss
on like-kind exchanges to real property held
for productive use or investment. California
conforms to this change under the TCJA for
exchanges initiated after January 10, 2019.
For taxable years beginning on or after
January 1, 2019, California conforms to
certain provisions of the TCJA relating to
changes to accounting methods for small
businesses.
If the corporation was involved in a
reportable transaction, including a listed
transaction, that corporation may have
a disclosure requirement. Attach federal
Form 8886, Reportable Transaction
Disclosure Statement, to the back of the
California return along with any other
supporting schedules. If this is the first
time the reportable transaction is disclosed

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on the return, send a duplicate copy of
federal Form 8886 to the address below.
TAX SHELTER FILING
ABS 389 MS F340
FRANCHISE TAX BOARD
PO BOX 1673
SACRAMENTO CA 95812-9900
The FTB may impose penalties if the
corporation fails to file federal Form 8886,
Form 8918, Material Advisor Disclosure
Statement, or any other required
information. A material advisor is required
to provide a reportable transaction number
to all taxpayers and material advisors
for whom the material advisor acts as a
material advisor. For more information, go
to ftb.ca.gov and search for disclosure
obligation.
The IRS allows corporations with at least
$10 million but less than $50 million in
total assets at tax year end to file Schedule
M-1 (Form 1120/1120‑F), Reconciliation
of Income (Loss) per Books With Income
per Return, in place of Schedule M-3
(Form 1120/1120‑F), Net Income (Loss)
Reconciliation for Corporations With
Total Assets of $10 Million or More,
Parts II and III. However, Schedule M-3
(Form 1120/1120-F), Part I, is required for
these corporations. For California purposes,
the corporation must complete the California
Schedule M-1. For more information,
see the instructions for Schedule M-1 –
Reconciliation of Income (Loss) per Books
With Income (Loss) per Return, in this
booklet.
R&TC Section 25128.7 requires all
business income of an apportioning trade
or business, other than an apportioning
trade or business under R&TC
Section 25128(b), to apportion its business
income to California using the single-sales
factor formula. For more information, get
Schedule R, Apportionment and Allocation
of Income, or go to ftb.ca.gov and search
for single sales factor.
R&TC Section 25136 requires all taxpayers
to assign sales, other than sales of
tangible personal property, using market
assignment. For more information, get
Schedule R or go to ftb.ca.gov and search
for market assignment.
R&TC Section 25120 was amended to
add the definition of gross receipts. For
a complete definition of “gross receipts,”
refer to R&TC Section 25120(f), or go to
ftb.ca.gov and search for 25120.
R&TC Section 25135(b) adopts the
­Finnigan rule in assigning sales from
tangible personal property.
For more information regarding
“gross receipts” or “Finnigan rule,” get
Schedule R, or go to ftb.ca.gov and search
for corporation law changes.

•	 Beginning on or after January 1, 2012,
a type of corporation called a “benefit
corporation” can be formed with the
purpose of creating general public
benefit, provided certain requirements
are met. An existing corporation can
become a “benefit corporation,” if certain
procedures are followed. In addition, a
“benefit corporation,” can be created
through a merger or reorganization, if
certain requirements are met. For more
information, see the Corporations Code,
commencing with Section 14600.
•	 Beginning on or after January 1, 2012,
a type of corporation called a “flexible
purpose corporation” could be formed,
provided certain requirements were met. An
existing corporation could merge or convert
into a “flexible purpose corporation,” upon
completion of certain requirements. A
“flexible purpose corporation” must have
a special purpose which may include but
is not limited to, charitable and public
purpose activities that could be carried out
by a nonprofit public benefit corporation.
For more information, see the Corporations
Code, commencing with Section 2500.
•	 Effective January 1, 2015, all references
to “flexible purpose corporations” in
the Corporations Code are changed to
“social purpose corporations,” although
the requirements are substantially
the same as prior law. Any flexible
purpose corporation formed before
January 1, 2015, may elect to amend its
articles of incorporation to change its
status to a “social purpose corporation.”
If a flexible purpose corporation formed
prior to January 1, 2015, does not amend
its articles of incorporation to change its
status, any reference to “social purpose
corporation” in the Corporations Code is
deemed a reference to a “flexible purpose
corporation.” For more information, see
the Corporations Code, commencing with
Section 2500.
•	 R&TC Section 24343.2 disallows the
deduction for payments made to a club
that restricts membership or the use of
its services or facilities on the basis of
ancestry or any characteristic listed or
defined in Section 11135 of the Government
Code, except for genetic information.
•	 For taxable years beginning on or after
January 1, 2007, interest and dividends
from intangible assets held in connection
with a treasury function of the taxpayer’s
unitary business, as well as the gross
receipts and any overall net gain from
the maturity, redemption, sale, exchange,
or other disposition of these assets,
are excluded from the sales factor. This
exclusion encompasses the use of futures
contracts and options contracts to hedge
foreign currency fluctuations. See Cal.
Code Regs., tit. 18 section 25137(c)(1)(D)
for more information. For taxable years
beginning on or after January 1, 2011, see
R&TC Section 25120(f).

•	 Credit earned by members of a combined
reporting group may be assigned to an
affiliated corporation that is an eligible
member of the same combined reporting
group. A credit assigned may only be
claimed by the affiliated corporation against
its tax liability. For more information, get
form FTB 3544 or go to ftb.ca.gov and
search for credit assignment.
•	 Group nonresident returns may include:
•	 Less than two nonresident individuals.
•	 Nonresident individuals with more than
$1 million of California taxable income.
An additional 1% tax will be assessed on
nonresident individuals who have California
taxable income over $1 million.
Get FTB Pub. 1067, Guidelines for Filing a
Group Form 540NR, for more information.
•	 An S corporation must elect to be treated
as an S corporation. The S corporation
pays a reduced tax rate of 1.5% on
its net income. The profits and losses
from the S corporation pass through
to each shareholder through the
Schedule K-1 (100S), Shareholder’s Share
of Income, Deductions, Credits, etc., and
each shareholder is responsible for paying
taxes on the distributive share. California
taxpayers that would like to elect to be
treated as an S corporation should get the
Form 100S, S Corporation Tax Booklet, for
more information.
•	 Use form FTB 3725, Assets Transferred
from Corporation to Insurance Company, to
report assets transferred from a corporation
to an insurance company. Get form
FTB 3725 for more information.
•	 Use form FTB 3726, Deferred Intercompany
Stock Account (DISA) and Capital Gains
Information, to meet the annual disclosure
requirements of the combined reporting
group of each DISA balance. Make sure to
answer Question S on Form 100, Side 3.
Get form FTB 3726 for more information.
•	 In general, R&TC Sections 17024.5 and
23051.5 state that federal elections made
before a taxpayer becomes a California
taxpayer are binding for California tax
purposes.
California law conforms to federal law for the
following:
•	 Reducing the compensation deduction
for certain employers from $1 million to
$500,000; and making certain parachute
payments nondeductible.
•	 IRC Section 1245(b)(8) relating to
amortizable IRC Section 197 intangibles
property disposed on or after
January 1, 2010.
•	 Corporations may elect to expense, under
IRC Section 179, part or all of the cost of
certain properties placed in service during
the taxable year and used in the trade or
business. For more information, see form
FTB 3885 included in this booklet.

Form 100 Booklet  2023  Page 5

•	 Large banks’ bad-debt losses deduction,
which is limited to the actual losses rather
than contributions to a reserve for bad
debts.
•	 Disallowing the deduction for club
membership fees and employee
remuneration in excess of $1 million.
•	 Disallowing the deduction for lobbying
expenses.
•	 For purposes of inventory accounting,
an adjustment for shrinkage, based on
an estimate, may be made. Taxpayers
can voluntarily change their method of
accounting if the method currently being
used does not utilize estimates of inventory
shrinkage and the taxpayer now would like
to use that method.
•	 Timeshare associations may qualify for
tax-exempt status like other homeowners’
associations.
•	 Required recognition of gain on certain
appreciated financial positions in personal
property.
•	 Securities traders and commodities traders
and dealers are allowed to elect to use
mark-to-market accounting similar to
what is currently required for securities
dealers. Commodities would include only
commodities of a kind that are dealt with
in the organized commodities exchange.
An election to use the mark-to-market
method for federal purposes is considered
an election for state purposes and a
separate election is not allowed.
•	 Limitation on exception for investment
companies under IRC Section 351.
•	 Expansion of deduction for certain interest
and premiums paid for company-owned life
insurance.
•	 Repeal of special installment sales rule
for manufacturers of tangible personal
property.
•	 Payment of estimated tax for closely held
real estate investment trusts (REITs) and
income and services provided by REIT
subsidiaries.
California law does not conform to federal
law for the following:
•	 In general, the American Rescue Plan Act
(ARPA) of 2021.
•	 In general, the Consolidated Appropriations
Act (CAA), 2021.
•	 The TCJA signed into law on
December 22, 2017, made changes to
the IRC. In general, California R&TC does
not conform to the changes. California
taxpayers continue to follow the IRC as of
the specified date of January 1, 2015, with
modifications. The following is a nonexhaustive list of the TCJA changes:
•	 The federal modifications to
amortization of research and
experimental expenditures (IRC Section
174).

Page 6  Form 100 Booklet  2023

•	
•	
•	
•	

•	
•	

•	
•	
•	
•	

•	

•	 The change in method of accounting
treatment of S corporation conversions
to C corporations.
•	 The application of Subchapter C rules to
S corporations.
•	 The expanded definition of IRC Section
179 property for certain depreciable
tangible personal property related to
furnishing lodging and for qualified
real property for improvements to
nonresidential real property.
•	 The change to IRC Section 163(j) which
limits the business interest deduction.
•	 The repeal of the corporate alternative
minimum tax (AMT).
•	 The modifications to the NOL provisions.
•	 The modifications to the AMT credit.
•	 The deferral and exclusion of capital
gains reinvested or invested in qualified
opportunity zone funds.
•	 The exclusion of a patent, invention,
model or design, and secret formula or
process from the definition of capital
asset.
•	 The federal modifications to depreciation
limitations on luxury automobiles (IRC
Section 280F).
•	 IRC Section 951A, relating to GILTI.
IRC Section 382(n) relating to special rule
for certain ownership changes.
The changes to the corporation in control
and the issue price for the limitation on
deduction of bond premium on repurchase.
The enhanced IRC Section 179 expensing
election.
The first-year depreciation deduction
allowed for new luxury autos or certain
passenger automobiles acquired and placed
in service in 2010 through 2023.
IRC Section 613A(d)(4) relating to the
exclusion of certain refiners.
The IRS Notice 2008-83 relating to
the treatment of deductions under IRC
Section 382(h) following an ownership
change.
IRC Section 168(k) relating to the bonus
depreciation deduction for certain assets.
The decreased estimated tax payments for
certain small businesses.
The treatment of the loss from the sale
or exchange of certain preferred stock (of
Fannie Mae or Freddie Mac).
The percentage depletion deduction, which
may not exceed 65% of the taxpayer’s
taxable income, is restricted to 100% of the
net income derived from the oil or gas well
property.
Exclusion from gross income of certain
federal subsidies for prescription drug
plans under IRC Section 139A.

•	 Certain environmental remediation
expenditures that would otherwise be
chargeable to capital accounts may be
expensed and taken as a deduction in the
year the expense was paid or incurred.
•	 Deduction for corporate donation
of scientific property and computer
­technology.
•	 Decreased capital gains tax rate.
•	 The treatment of Subpart F income.
•	 The IRC passive activity loss rules for real
estate activities.
The above lists are not intended to be
all‑inclusive of the federal and state
conformities and differences. For more
information, refer to the R&TC.
Records Maintenance Requirements
Any taxpayer subject to the apportionment and
allocation provisions of the Corporation Tax
Law is required to keep and maintain records
and make the following available upon request:
•	 Any records needed to determine the
correct treatment of items reported on
the combined report for purposes of
determining the income attributable to
­California.
•	 Any records needed to determine the
treatment of items as nonbusiness or
business income.
•	 Any records needed to determine the
apportionment factors.
See R&TC Section 19141.6 and the related
regulations, for more information. A
corporation may be required to authorize an
agent, through a Power of Attorney (POA),
to act on its behalf in response to requests
for information or records pursuant to R&TC
Section 19504. For more information, go to
ftb.ca.gov/poa.
The penalty for not maintaining the required
records is $10,000 for each taxable year for
which the failure applies. In addition, if the
failure continues for more than 90 days after
the FTB notifies the corporation of the failure,
a penalty of $10,000 may be assessed for each
additional 30-day period of continued failure.
See General Information M, Penalties, for more
information.
Publicly Traded Partnerships
California publicly traded partnerships that
are not eligible to make the special federal
election under IRC Section 7704(g)(2), and
that do not qualify for the exception for
partnerships with passive-type income under
IRC Section 7704(c), must file Form 100. A
federal election under IRC Section 7704(g)(2)
is considered an election for state purposes. A
separate election is not allowed.
Financial Asset Securitization Investment
Trusts (FASITs)
The provisions of the IRC relating to FASITs
apply for ­California with certain modifications.
The FASIT is subject to the $800 minimum
franchise tax. File a separate Form 100 to
report the $800 minimum franchise tax.
Write “FASIT” in black or blue ink in the top

margin of the return. If a corporation holds an
ownership interest in a FASIT, it should report
all the items of income, gains, deductions,
losses, and credits on the corporation’s return
and attach a schedule showing the breakdown
of items from the FASIT.
Classification of Certain Business Trusts
and Certain Foreign Single Member Limited
Liability Companies (SMLLCs)
In general, the classification of a business
entity should be the same for ­California
purposes as it is for federal purposes.
However, an exception may apply for certain
eligible business entities. A business trust
or a previously existing foreign SMLLC may
make an irrevocable election to be classified
the same as federal for California purposes.
To make the election, the business trust
or the SMLLC must have been classified
as a corporation under California law, but
classified as a partnership (for a business
trust) or elected to be treated as a disregarded
entity (for a foreign SMLLC) for federal
tax purposes for taxable years beginning
before January 1, 1997. If this election is not
made, the existing eligible business entity
will continue to be classified and taxed as a
corporation for C
­ alifornia purposes. Get form
FTB 3574, Special Election for Business Trusts
and Certain Foreign Single Member LLCs, for
more information.

General Information
Form 100 is ­California’s tax return for
corporations, banks, financial corporations,
real estate mortgage investment conduits
(REMICs), regulated investment companies
(RICs), real estate investment trusts
(REITs), Massachusetts or business trusts,
publicly traded partnerships (PTPs), exempt
homeowners’ associations (HOAs), political
action committees (PACs), FASITs, and LLCs
or partnerships taxed as corporations.
Corporations Filing on a Water’s-Edge Basis
In general, water’s‑edge rules provide for an
election out of worldwide combined reporting.
By electing water’s‑edge, a California taxpayer
elects into a complex blend of state and federal
tax concepts. See R&TC Sections 25110 and
25113.
If the corporation elects to file on a
water’s‑edge basis, use Form 100W, California
Corporation Franchise or Income Tax Return –
Water’s-Edge Filers. Form 100 is not the form
prescribed by the FTB for corporations filing on
a water’s-edge basis. Get the Form 100W Tax
Booklet for more information.
REMICs that are partnerships must file
Form 565, Partnership Return of Income.
S corporations must file Form 100S, ­California
S Corporation Franchise or Income Tax Return.
An LLC classified as a partnership for federal
purposes should generally file Form 568,
Limited Liability Company Return of Income.
A limited partnership (LP) or limited liability
partnership (LLP) classified as a partnership

for federal purposes should generally file
Form 565.
When Completing the Form 100:
•	 Use black or blue ink on the tax return sent
to the FTB.
•	 Print name and address (in CAPITAL
LETTERS).
•	 When a domestic corporation files the
first California tax return, the fiscal year
beginning date must be the date the
corporation is incorporated.
•	 Round cents to the nearest whole dollar.
For example, round $50.50 up to $51 or
round $25.49 down to $25.
•	 Send a clean legible copy.
•	 Enter all types of payments (overpayment
from prior year, estimated tax, nonresident
tax, etc.) made for the 2023 taxable year on
the applicable line.
•	 When making a payment with a check or
money order, enclose, but do not staple the
payment to the face of the tax return.
•	 Assemble the corporation return in the
following order: Form 100, Schedule R (if
required), supporting schedules, a copy
of federal return (if required) and form
FTB 5806, Underpayment of Estimated Tax
by Corporations, (if required). Do not use
staples or other permanent bindings to
assemble the tax return.

A	 Franchise or Income Tax
Corporation Franchise Tax
Entities subject to the corporation minimum
franchise tax include all corporations
(e.g., LLCs electing to be taxed as
corporations) that meet any of the following:
•	 Incorporated or organized in California.
•	 Qualified or registered to do business in
California.
•	 Doing business in California, whether or
not incorporated, organized, qualified, or
registered under California law.
The minimum franchise tax must be paid by
corporations incorporated in California or
qualified or registered under California law
whether the corporation is active, inactive,
not doing business, or operates at a loss. See
General Information C, Minimum Franchise
Tax, for more information.
The measured franchise tax is imposed on
corporations doing business in California and
is measured by the income of the current
taxable year for the privilege of doing business
in that taxable year.
A taxpayer is “doing business” if it actively
engages in any transaction for the purpose of
financial or pecuniary gain or profit in California
or if any of the following conditions is satisfied:
•	 The taxpayer is organized or commercially
domiciled in California.
•	 The sales, as defined in R&TC
Section 25120(e) or (f), of the taxpayer in
California, including sales by the taxpayer’s
agents and independent contractors,

exceed the lesser of $711,538 or 25% of
the taxpayer’s total sales.
•	 The real property and tangible personal
property of the taxpayer in California
exceed the lesser of $71,154 or 25% of the
taxpayer’s total real property and tangible
personal property.
•	 The amount paid in California by the
taxpayer for compensation, as defined
in R&TC Section 25120(c), exceeds the
lesser of $71,154 or 25% of the total
compensation paid by the taxpayer.
In determining the amount of the taxpayer’s
sales, property, and payroll for doing business
purposes, include the taxpayer’s pro rata
share of amounts from partnerships and
S corporations.
For more information, see R&TC
Section 23101 or go to ftb.ca.gov and search
for doing business.
A corporation qualified with the California
Secretary of State (SOS) might not be
considered to be “doing business” in California.
However, careful attention should be given to
the term “doing business.” It is not necessary
that the corporation conduct business or
engages in transactions within the state on
a regular basis. Even an isolated transaction
during the taxable year may be enough to cause
the corporation to be “doing business.”
Also, when a corporation is either a general
partner of a partnership or a member of an
LLC that is “doing business” in California,
the corporation is considered to be “doing
business” in California.
Corporation Income Tax
The corporation income tax is imposed on all
corporations that derive income from sources
within ­California but are not doing business in
­California.
For purposes of the corporation income tax, the
term “corporation” is not limited to incorporated
entities but also includes the following:
•	 Associations.
•	 Massachusetts or business trusts.
•	 REITs.
•	 LLCs electing to be taxed as corporations
other than those subject to the corporate
franchise tax.
•	 Other business entities, including
partnerships, electing to be taxed as
corporations.
Political organizations that are exempt under
R&TC Section 23701r and have political
taxable income in excess of $100 must file
Form 100. Political organization taxable
income is the amount by which gross income
(other than exempt function income) less
deductions directly connected with production
of such gross income exceeds $100. See the
instructions for Schedule F, Computation of
Net Income, included in this booklet. Exempt
function income includes amounts received as:
•	 Contributions of money or property.
•	 Membership fees, dues, or assessments.

Form 100 Booklet  2023  Page 7

•	 Proceeds from the sale of political
campaign material that are not received
in the ordinary course of any trade or
business.
Get FTB Pub. 1075, Exempt Organizations –
Guide for Political Organizations, for more
information.
Homeowners’ associations that are exempt
under R&TC Section 23701t, including
unincorporated homeowners’ associations,
and have h­ omeowners’ association taxable
income in excess of $100 must file Form 100.
Homeowners’ association taxable income is
the amount by which gross income (other
than exempt function income) less deductions
directly connected with the production of
such gross income exceeds $100. See the
instructions for Schedule F, included in this
booklet.
Exempt function income means amounts
received as membership fees, dues, and
assessments. Nonexempt gross income of
a homeowners’ association is defined as all
income other than amounts received from
membership fees, dues, or assessments.
An exempt homeowners’ association may
also be required to file Form 199, ­or form
FTB 199N, California e-Postcard. Get
FTB Pub. 1028, Guidelines for Homeowners’
Associations, for more information.

B	 Tax Rates
The following tax rates apply to corporations
subject to either the corporation franchise tax
or the corporation income tax.
•	 Corporations other than banks and
financial corporations. . . . . . . . . . . . . 8.84%
•	 Banks and financial corporations. . . 10.84%

C	 Minimum Franchise Tax
All corporations subject to the franchise tax,
including banks, financial corporations, RICs,
REITs, FASITs, corporate general partners
of partnerships, and corporate members
of LLCs doing business in ­California, must
file Form 100 and pay at least the minimum
franchise tax as required by law. The minimum
franchise tax, as indicated below, must be paid
whether the corporation is active, inactive,
operates at a loss, or files a return for a short
period of less than 12 months.
•	 Domestic qualified inactive gold or
quicksilver mining corporations. . . . . . . $25
•	 All other corporations subject to
franchise tax (see General
Information A, Franchise or
Income Tax, for definitions) . . . . . . . . . $800
A combined group filing a single return must
pay at least the minimum franchise tax for
each corporation in the group that is subject to
franchise tax.
A corporation that incorporated or qualified
through the California SOS to do business
in California, is not subject to the minimum
franchise tax for its first taxable year and will
compute its tax liability by multiplying its state
net income by the appropriate tax rate. The

Page 8  Form 100 Booklet  2023

corporation will become subject to minimum
franchise tax beginning in its second taxable
year. This does not apply to corporations that
are not qualified by the California SOS, or
reorganize solely to avoid payment of their
minimum franchise tax.
There is no minimum franchise tax for the
following entities:
•	 Corporations that are not incorporated in
California, not qualified under the laws of
California, and are not doing business in
California even though they derive income
from California sources. However, if
corporations meet the sale, property, or
payroll threshold for “doing business” under
R&TC Section 23101(b), corporations may
be subject to the minimum franchise tax.
For more information regarding “doing
business,” see General Information A,
Franchise or Income Tax; refer to R&TC
Section 23101(b); get FTB Pub. 1050,
Application and Interpretation of Public
Law 86-272; or FTB Pub. 1060, Guide for
Corporations Starting Business in California.
•	 Corporations that are not incorporated
under the laws of ­California; whose sole
activities in this state are engaging in
convention and trade show activities for
seven or fewer days during the taxable year;
and that do not derive more than $10,000
of gross income reportable to California
during the taxable year. These corporations
are not “doing business” in ­California. For
more information, get FTB Pub. 1060.
•	 Newly formed or qualified corporations
filing an initial return.
•	 Qualified non-profit farm cooperative
associations.
•	 Credit unions.
•	 Unincorporated homeowners’ associations.
•	 Exempt homeowners’ associations.
•	 Exempt political organizations.
•	 Exempt organizations.
Deployed Military Exemption
For taxable years beginning on or after
January 1, 2020, and before January 1, 2030,
a corporation that is a small business solely
owned by a deployed member of the United
States Armed Forces shall not be subject
to the minimum franchise tax if the owner
is deployed during the taxable year and the
corporation operates at a loss or ceases
operation. Corporations exempt from the
minimum franchise tax should write “Deployed
Military” in black or blue ink in the top margin
of the tax return.
For the purposes of this exemption:
(A) “Deployed” means being called to active
duty or active service during a period when
the United States is engaged in combat or
homeland defense. “Deployed” does not
include either of the following:
•	 Temporary duty for the sole purpose of
training or processing.
•	 A permanent change of station.

(B) “Operates at a loss” means negative net
income as defined in R&TC Section 24341.
(C) “Small business” means a corporation with
two hundred fifty thousand dollars ($250,000)
or less of total income from all sources derived
from or attributable to California.
Taxable Year of 15 Days or Less
A corporation is not subject to the $800
minimum franchise tax if the corporation did
no business in this state during the taxable
year and the taxable year was 15 days or
less. See R&TC Section 23114(a) for more
information.

D	 Accounting Period/Method
The taxable year of a corporation must not be
different from the taxable year used for federal
purposes, unless initiated or approved by the
FTB (R&TC Section 24632).
A change in accounting method requires
consent from the FTB. However, a corporation
that obtains federal approval to change its
accounting method, or that is permitted
or required by federal law to change its
accounting method without prior approval
and does so, is deemed to have the FTB’s
approval if: (1) the corporation files a timely
Form 100 consistent with the change for the
first taxable year the change becomes effective
for federal purposes; and (2) the change
is consistent with ­California law. A copy of
federal Form 3115, Application for Change in
Accounting Method, and a copy of the federal
consent to the change must be attached to
Form 100 for the first taxable year the change
becomes effective. Get FTB Notice 2020-04
for more information. The FTB may modify a
requested change if the change would distort
income for ­California purposes.
California follows the provisions of Revenue
Procedure 2016-29 which updates the
procedures for a change of accounting method
involving previously unclaimed, but allowable
depreciation or amortization deductions.

E	 When to File
File Form 100 on or before the 15th day of
the 4th month after the close of the taxable
year unless the return is for a short-period as
required under R&TC Section 24634. Generally,
the due date of a short-period return is the
same as the due date of the federal short‑period
return. See R&TC Section 18601(c) for the
due date of a short-period return. Farmers’
cooperative associations must file Form 100 by
the 15th day of the 9th month after the close
of the taxable year. Get FTB Notice 2016-04 for
more information.
When the due date falls on a weekend or
holiday, the deadline to file and pay without
penalty is extended to the next business day.
See General Information O,
Dissolution/Withdrawal, and P, Ceasing
Business, for information on final returns.

If a corporation converts during its taxable
year to an LLC or LP under state law, then
generally two short-period California returns
must be filed (one short-period return for the
corporation and another short-period return for
the LLC or LP).
The corporate status and taxable year of the
LLC or LP will not terminate and only a single
return Form 100 is required if:
•	 the LLC or LP files a federal election to be
classified as an association taxable as a
corporation effective as of the conversion
date,
•	 the conversion otherwise qualifies
as a reorganization under IRC
Section 368(a)(1)(F), and
•	 the LLC or LP satisfies the statutory
requirements to be a corporation.

F	 Extension of Time to File
If the corporation cannot file its C
­ alifornia tax
return by the 15th day of the 4th month after
the close of the taxable year, it may file on or
before the 15th day of the 11th month without
filing a written request for an extension. Get
FTB Notice 2019-07 for more information.
There is no automatic extension period for
business entities suspended on or after the
original due date.
An automatic extension does not extend the
time for payment of tax; the full amount of
tax must be paid by the original due date of
Form 100. If there is an unpaid tax liability,
complete form FTB 3539, Payment for
Automatic Extension for Corporations and
Exempt Organizations, included in this booklet,
and send it with the payment by the original
due date of the Form 100.
When the due date falls on a weekend or
holiday, the deadline to file and pay without
penalty is extended to the next business day.
If the corporation must pay its tax liability
electronically, all payments must be remitted
by Electronic Fund Transfer (EFT), EFW, Web
Pay, or credit card to avoid the penalty. Do not
send form FTB 3539.

G	 Electronic Payments
Electronic Funds Transfer
Corporations remitting an estimated tax
payment or extension payment in excess of
$20,000 or having a total tax liability in excess
of $80,000 must remit all of their payments
through EFT. Once a corporation meets the
threshold, all subsequent payments regardless
of amount, tax type, or taxable year must
be remitted electronically to avoid the 10%
non‑compliance penalty. The first payment that
would trigger the mandatory EFT requirement
does not have to be made electronically.
Corporations required to remit payments
electronically may use EFW, Web Pay, or credit
card and be considered in compliance with that
requirement. The FTB notifies corporations that
are subject to this requirement. Those that do
not meet these requirements may participate

on a voluntary basis. If the corporation pays
electronically, complete the form FTB 3539
worksheet for its records. Do not mail the
payment voucher. For more information,
go to ftb.ca.gov and search for eft, or call
916.845.4025.
Electronic Funds Withdrawal
Corporations can make an estimated tax or
extension payment using tax preparation
software. Check with the software provider to
determine if they support EFW for estimated
tax or extension payments.
Web Pay
Corporations can make payments online
using Web Pay for Businesses. Corporations
can make an immediate payment or schedule
payments up to a year in advance. Go to
ftb.ca.gov/pay.
Credit Card
Corporations can use Discover, MasterCard,
Visa or American Express Card to pay business
taxes. Go to officialpayments.com. ACI
Payments, Inc. (formerly Official Payments)
charges a convenience fee for using this
service. Do not file form FTB 3539.

H	 Where to File
Payments
If a tax is due and the corporation is not
required to make the payment electronically
(by EFT, EFW, Web Pay, or credit card),
•	 Mail Form 100 with payment to:
FRANCHISE TAX BOARD
PO BOX 942857
SACRAMENTO CA 94257-0501
•	 e-filed returns: Mail form FTB 3586,
Payment Voucher for Corporations and
Exempt Organizations e-filed Returns, with
payment to:
FRANCHISE TAX BOARD
PO BOX 942857
SACRAMENTO CA 94257-0531
Using black or blue ink, make the check or
money order payable to the “Franchise Tax
Board.” Write the California corporation
number and “2023 Form 100” on the check or
money order.
Make all checks or money orders payable in
U.S. dollars and drawn against a U.S. financial
institution.
Do not attach a copy of the return with the
balance due payment if the corporation already
filed/e-filed a return for the same taxable year.
Refunds
•	 Mail Form 100 requesting a refund to:
FRANCHISE TAX BOARD
PO BOX 942857
SACRAMENTO CA 94257-0500
Return Without Payment or Paid
Electronically
•	 Mail Form 100 without a payment or paid
by EFT, EFW, Web Pay, or credit card to:
FRANCHISE TAX BOARD
PO BOX 942857
SACRAMENTO CA 94257-0500

Private Delivery Services
California law conforms to federal law
regarding the use of certain designated
private delivery services to meet the “timely
mailing as timely filing/paying” rule for tax
returns and payments. See the instructions for
federal Form 1120, U.S. Corporation Income
Tax Return, for a list of designated delivery
services. If a private delivery service is used,
address the return to:
FRANCHISE TAX BOARD
SACRAMENTO CA 95827
Private delivery services cannot deliver items
to PO boxes. If using one of these services to
mail any item to the FTB, do not use an FTB
PO box.

I	 Net Income Computation
The computation of net income from trade
or business activities generally follows the
determination of taxable income as provided
in the IRC. However, there are differences that
must be taken into account when completing
Form 100. There are two ways to complete
Form 100, the federal reconciliation method or
the ­California computation method:
1.	 Federal Reconciliation Method
a.	 Transfer the information from federal
Form 1120, Page 1 to Form 100,
Side 4, Schedule F, and attach a copy
of the federal return with all supporting
schedules.
b.	 Enter the amount of federal ordinary
income (loss) from trade or business
activities before any NOL and special
deductions on Form 100, Side 1, line 1.
c.	 Enter state adjustments on line 2
through line 16 to arrive at net income
(loss) after state adjustments, on
Form 100, Side 2, line 17.
2.	 Schedule F – ­California Computation
Method
If the corporation has no federal filing
requirement or if the corporation maintains
separate records for state purposes,
complete Form 100, Side 4, Schedule F, to
determine state ordinary income. If ordinary
income is computed under ­California
laws, generally no state adjustments are
necessary. Transfer the amount from
Schedule F, line 30, to Form 100, Side 1,
line 1. Complete Form 100, Side 1 and
Side 2, line 2 through line 16, only if
applicable.
For more information, see Specific Line
Instructions.
Regardless of the net income computation
method used, the corporation must attach
any form, schedule, or supporting document
referred to on the return, schedules, or forms
filed with the FTB.

Form 100 Booklet  2023  Page 9

J	 Alternative Minimum Tax
(AMT)
Corporations that claim certain types of
deductions, exclusions, and credits may
be subject to ­California AMT. To compute
California AMT, corporations must complete
­California Schedule P (100), Alternative
Minimum Tax and Credit Limitations —
Corporations. See Schedule P (100), included
in this booklet, for more information.

K	 Estimated Tax
Use Form 100-ES, Corporation Estimated
Tax, to figure and pay estimated tax for a
corporation.
Corporations are required to pay the following
percentages of the estimated tax liability during
the taxable year:
•	 30% for the first required installment
•	 40% for the second required installment
•	 No estimated tax payment is required for
the third installment
•	 30% for the fourth required installment
For exceptions and prior year’s information, get
the instructions for Form 100-ES.
Estimated tax is generally due and payable in
four installments as follows:
•	 The 1st payment is due by the 15th day
of the 4th month of the taxable year (this
payment may not be less than the minimum
franchise tax, if applicable).
•	 The 2nd, 3rd, and 4th installments are due
and payable by the 15th day of the 6th,
9th, and 12th months respectively, of the
taxable year.
For purposes of determining the due date of any
required installment, a partial month is treated
as a full month.
If the corporation must pay its tax liability
electronically, all estimate payments due must
be remitted by EFT, EFW, Web Pay, or credit
card to avoid the EFT penalty. See General
Information G, Electronic Payments, for more
information.
If no amount is due, or if the corporation pays
electronically, do not mail Form 100-ES.

L	 New/Commencing
Corporations
A corporation is required to pay measured
tax instead of minimum tax for the first
taxable year if the corporation incorporated
or registered through the California SOS. For
more information, see General Information C,
Minimum Franchise Tax, or get FTB Pub. 1060.

M	 Penalties
Failure to File a Timely Return
Any corporation that fails to file Form 100 on
or before the extended due date is assessed a
delinquent filing penalty. The delinquent filing
penalty is computed at 5% of the tax due,
after allowing for timely payments, for every
month that the return is late, up to a maximum

Page 10  Form 100 Booklet  2023

of 25%. If a corporation does not file its
return by the extended due date, the automatic
extension will not apply and the late filing
penalty will be assessed from the original due
date of the return. See R&TC Sections 19131
and 23772 for more information.
Failure to Pay Total Tax by the Due Date
Any corporation that fails to pay the total tax
shown on Form 100 by the original due date
is assessed a penalty. The penalty is 5% of
the unpaid tax, plus 0.5% for each month, or
part of the month (not to exceed 40 months),
the tax remains unpaid. This penalty may not
exceed 25% of the unpaid tax. See R&TC
Section 19132 for more information.
The FTB may waive the late payment penalty
based on reasonable cause. Reasonable cause
is presumed when 90% of the tax shown
on the return, but not less than minimum
franchise tax if applicable, is paid by the
original due date of the return.
If a corporation is subject to both the penalty
for failure to file a timely return and the penalty
for failure to pay the total tax by the due date,
a combination of the two penalties may be
assessed, but the total penalty may not exceed
25% of the unpaid tax.
Underpayment of Estimated Tax
Any corporation that fails to pay, pays late, or
underpays an installment of estimated tax is
assessed a penalty. The penalty is a percentage
of the underpayment of estimated tax for the
period from the date the installment was due
until the date it is paid, or until the 15th day
of the 3rd month after the close of the taxable
year, whichever is earlier. Get form FTB 5806 to
determine both the amount of underpayment
and the amount of penalty.
The underpayment of estimated tax penalty
shall not apply to the extent the underpayment
of an installment was created or increased by
any provision of law that is chaptered during
and operative for the taxable year of the
underpayment.
See R&TC Sections 19142, 19144, 19145,
19147 through 19151, and 19161 for more
information.
If the corporation uses Exception B or
Exception C on form FTB 5806 to compute
or eliminate any of the required installments,
form FTB 5806 must be attached to the back of
Form 100 (after all schedules and federal
return) and the box on Form 100, Side 2,
line 43b should be checked.
Large Corporate Understatement Penalty
(LCUP)
Corporations are subject to the LCUP for the
understatement of tax if that understatement
exceeds the greater of:
•	 $1 million, or
•	 20% of the tax shown on an original or
amended return filed on or before the
original or extended due date of the return
for the taxable year.
The amount of the penalty is equal to 20% of the
understatement of tax. See R&TC Section 19138

for exceptions to the LCUP. For more information,
go to ftb.ca.gov and search for lcup.
EFT Penalty
If the corporation must pay its tax liability
electronically, all payments must be remitted
by EFT, EFW, Web Pay, or credit card to
avoid the penalty. The penalty is 10% of the
amount not paid electronically. See R&TC
Section 19011 and General Information G,
Electronic Payments, for more information.
Information Reporting Penalties
Federal Forms 5471 and 8975 – U.S.
corporations that have an ownership interest
(directly or indirectly) in a foreign corporation
and were required to file federal Form(s) 5471,
Information Return of U.S. Persons With
Respect to Certain Foreign Corporations;
or federal Form 8975, Country-by-Country
Report, and accompanying Schedule A (8975),
Tax Jurisdiction and Constituent Entity
Information with the federal return, must
attach a copy(ies) to the ­California return.
The penalty for failure to include a copy of
federal Form(s) 5471 or federal Form 8975
and accompanying Schedule A (8975), as
required, is $1,000 per required form for each
year the failure occurs. The penalty will not
be assessed if the copy of the information
required to be filed with the IRS was not
attached to the taxpayer’s original return and
the taxpayer provides a copy of the form(s)
within 90 days of request from the FTB and
the taxpayer agrees to attach a copy(ies)
of federal Form 5471 or federal Form 8975
and accompanying Schedule A (8975) to all
returns filed for subsequent years. See R&TC
Section 19141.2 for more information.
Note: Foreign insurance companies that file
as domestic companies are exempt from the
requirement of filing federal Form 8975 and
accompanying Schedule A (8975).
For additional information, refer to the federal
Form 8975 instructions.
Federal Form 5472 – Certain domestic
corporations that are 25% or more foreignowned and foreign corporations engaged in a
U.S. trade or business must attach a copy(ies)
of the federal Form(s) 5472, Information
Return of a 25% Foreign-Owned U.S.
Corporation or a Foreign Corporation Engaged
in a U.S. Trade or Business, to Form 100.
The penalty for failing to include a copy of
federal Form(s) 5472, as required, is $10,000
per required form for each year the failure
occurs. See R&TC Section 19141.5 for more
information.
If the corporation does not file its Form 100 by
the due date or extended due date, whichever
is later, copy(ies) of federal Form(s) 5472
must still be filed on time or the penalty
will be imposed. Attach a cover letter to the
copy(ies) indicating the taxpayer’s name,
­California corporation number, and taxable
year. Mail to the same address used for returns
without paym