California’s $800 Franchise Tax for S-Corps: What You Need to Know

If you operate an S-Corporation in California, you’re required to pay an $800 annual franchise tax—whether or not your business makes a profit. This tax often catches new business owners off guard, so let’s break it down.

Who Has to Pay?

All S-Corporations in California must pay a minimum $800 franchise tax each year. The only exception is for new S-Corps in their first year of incorporation, which are temporarily exempt.

When Is the $800 Tax Due?

For calendar-year S-Corps, the franchise tax is due by March 15 (the 15th day of the 3rd month of the tax year). If your business operates on a fiscal year, adjust accordingly (Due dates: businesses | FTB.ca.gov).

How Much Will You Owe?

California S-Corps must pay the greater of:

• $800 minimum tax or

• 1.5% of net income

Examples:

• If your net income is $53,333 or less, you’ll still pay the minimum $800.

• If your net income is $100,000, your tax would be $1,500 (1.5% of $100,000).

How to Pay the California Franchise Tax

You can submit your payment using:

• FTB Web Pay (online payment through the Franchise Tax Board (Pay | FTB.ca.gov))

• Form 3539 (for extension payments)

• Form 100S (when filing your annual tax return)

Avoid Late Fees and Penalties

If you miss the March 15 deadline, you may face penalties and interest on your unpaid balance.

Need Help?

Navigating S-Corp taxes can be complex. If you have questions about compliance, deductions, or tax planning, Apricity Law is here to help. Contact us to ensure your business stays on track.