CA Form 568: Filing Rules, $800 Tax, and LLC Fee

California Form 568 is the Limited Liability Company Return of Income, the annual return every LLC organized in California or doing business in the state must file with the Franchise Tax Board. It’s where you report the LLC’s income, calculate the mandatory $800 annual tax, and figure any additional income-based fee that can reach $11,790. The return is due by the 15th day of the third month after your tax year closes, which is March 15 for calendar-year LLCs taxed as partnerships.¹

Who Has to File

The filing requirement applies to any LLC classified as a partnership or disregarded entity for federal tax purposes that is either organized in California or doing business there.² That means:

Domestic LLCs formed by filing articles of organization with the California Secretary of State. The obligation runs every year the LLC exists, whether or not it earned anything or did any business.
Foreign LLCs registered with the California Secretary of State, or otherwise doing business in the state.
Single-member LLCs treated as disregarded entities. The owner still reports the income on their personal return, but California requires a stand-alone Form 568 to calculate the annual tax and fee.²

Profitability doesn’t matter. A dormant or money-losing LLC still owes the return and the $800 annual tax until it formally cancels with the Secretary of State.³

One important boundary: if your LLC has elected to be taxed as a C corporation or S corporation federally, you file California Form 100 or Form 100S instead. Form 568 doesn’t apply to you.⁴

The “Doing Business” Thresholds for Out-of-State LLCs

A foreign LLC that never registered with the Secretary of State can still owe Form 568 if it meets the FTB’s doing-business thresholds. For 2025, those are $757,070 in California sales, $75,707 in California property, or $75,707 in California payroll. Hitting any one of them triggers the obligation.⁵ If your LLC owns an interest in another partnership, LLC, or S corporation, your distributive share of that entity’s California property, payroll, and sales counts toward your totals.

What You Actually Owe: The $800 Tax and the LLC Fee

Every LLC that files Form 568 owes a flat $800 annual tax, period. Income, activity, and classification don’t change it. The tax is owed each year from formation until you file a certificate of cancellation.³ It isn’t prorated: an LLC formed in November still owes the full $800 for that year.

On top of that, LLCs with total California-source income of $250,000 or more owe an additional fee. The fee is based on total income, not net profit, so an LLC with $600,000 in revenue and $500,000 in expenses still pays based on the $600,000.⁶ 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 2001.⁷ Income you received from another LLC that already paid the fee is excluded, so the same dollars aren’t counted twice.¹

Three Deadlines, Not One

This is where filers get burned. The return, the annual tax, and the LLC fee each have their own due date, and each carries its own penalty for missing it.

The Return

For LLCs taxed as partnerships, Form 568 is due the 15th day of the third month after the tax year closes: March 15 for calendar-year filers.¹ Single-member LLCs owned by an individual have an April 15 original due date. LLCs in good standing get an automatic seven-month extension without filing anything, pushing the deadline to October 15 for calendar-year filers.⁸ That extension covers filing only. Anything you owe still has to be paid by the original due date.

The $800 Annual Tax

The annual tax is due by the 15th day of the fourth month after the beginning of the current tax year, which is April 15 for calendar-year LLCs. Note the timing: you’re paying for the current year, not the prior one. Submit it with Form FTB 3522, the LLC Tax Voucher.⁹

The 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, which is June 15 for calendar-year filers. Use Form FTB 3536.¹⁰ A safe harbor applies: pay at least the prior year’s fee amount by June 15 and the FTB won’t impose the 10% underpayment penalty, even if the actual fee turns out to be higher.

If any due date lands on a weekend or holiday, it shifts to the next business day. You can file Form 568 through the FTB’s e-file system or by mail.

Schedules You’ll Need to Prepare

Form 568 pulls in several supporting schedules. Knowing what each one does helps you gather the right records before you start.

Schedule K-1 (568) reports each member’s share of income, deductions, and credits. Every member gets a copy, and the LLC files copies with the FTB.¹
Schedule IW, the LLC Income Worksheet, calculates total California income to set the fee tier. “Total income” here means gross income plus cost of goods sold attributable to California, not net profit.¹
Schedule R, Apportionment and Allocation of Income, is required when the LLC operates both inside and outside California. It determines how much income is attributable to the state, typically using a single-sales-factor formula.¹

You’ll also need identifying information for every member: names, addresses, and taxpayer identification numbers.

Withholding on Nonresident Members

If any of your members live outside California, the LLC itself is the withholding agent. You must withhold 7% of California-source income distributed to a nonresident member once total payments exceed $1,500 for the calendar year.¹¹

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.¹² Waivers last up to 24 months and expire December 31 of the year following the grant. A waiver doesn’t eliminate the member’s own obligation to file a California return and pay any tax owed; it only relieves the LLC of withholding.

What Happens If You Miss a Deadline

Because there are three separate obligations, California can stack three separate penalties.

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 $540.¹³
Late payment penalty: 5% of the unpaid tax upfront, plus 0.5% per month the balance remains unpaid, for up to 40 months. This applies to the annual tax, the LLC fee, and any non-consenting nonresident member tax.¹³
Estimated fee underpayment penalty: 10% of the difference between what you owed and what you paid by June 15. The prior-year safe harbor avoids this one.¹⁰

Interest accrues on top. From July 2025 through June 2026, the FTB charges 7% interest on underpayments.¹⁴

The Final Return When You Close the LLC

Shutting down doesn’t end the Form 568 obligation. You file 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, before canceling.¹

On the final Form 568, check the “Final Return” box on Side 1, Item H(2), and mark each Schedule K-1 (568) as final. You still owe the $800 annual tax for that final year.

You can skip the $800 for the year after your final return if three things are true: you filed a timely final return (extensions count), the LLC did no business in California after that final year, and you filed cancellation documents with the Secretary of State within 12 months of the timely filed final return.¹ Miss the 12-month window and the FTB assesses another $800.

1
Franchise Tax Board. 2025 Instructions for Form 568 Limited Liability Company Tax Booklet
2
Franchise Tax Board. Limited Liability Company
3
California Legislative Information. California Revenue and Taxation Code 17941
4
Franchise Tax Board. 2025 Instructions for Form 100 Corporation Tax Booklet
5
Franchise Tax Board. Doing Business in California
6
California Legislative Information. California Revenue and Taxation Code 17942
7
Franchise Tax Board. Limited Liability Company Filing Information
8
Franchise Tax Board. Due Dates – Businesses
9
California Franchise Tax Board. 2025 Instructions for Form FTB 3522 LLC Tax Voucher
10
Franchise Tax Board. 2026 Instructions for Form FTB 3536 Estimated Fee for LLCs
11
Franchise Tax Board. Withholding on Nonresidents
12
State of California Franchise Tax Board. 2025 Instructions for Form 588 Nonresident Withholding Waiver Request
13
Franchise Tax Board. Common Penalties and Fees
14
State of California Franchise Tax Board. Interest and Estimate Penalty Rates