California Form FTB 3560 is a notification filed with the Franchise Tax Board to report that a corporation’s federal S election has been voluntarily revoked. It is not an election form, and it does not create or maintain S corporation status in California. The state recognizes your S status automatically once the IRS does, and it ends your S status automatically when the federal election ends. Form 3560 simply tells the FTB that the revocation happened.
What Form 3560 Does and Does Not Do
A lot of business owners find this form while searching for how to “elect” S corporation status in California and assume it is the state equivalent of IRS Form 2553. It isn’t. Under Revenue and Taxation Code Section 23801, a corporation with a valid federal S election under IRC Section 1362(a) “shall be an ‘S’ corporation” for California purposes, with no separate state election required.1California Legislative Information. California Code Revenue and Taxation Code 23801 The FTB confirms the same thing in its public guidance: electing federal S status automatically makes the corporation an S corporation for California.2Franchise Tax Board. S Corporations
So Form 3560 has only one job. It reports that the federal election was voluntarily revoked, so the FTB’s records reflect the change. It does not elect S status, does not maintain S status, does not revoke S status on its own, and does not reinstate S status.
When You Need to File Form 3560
You file Form 3560 after a voluntary revocation of the federal S election. Under R&TC Section 23801(e)(2), when shareholders holding more than 50 percent of the corporation’s stock consent to revoke the federal election, the corporation must notify the FTB on Form 3560. The California deadline mirrors the federal deadline for reporting the revocation under IRC Section 1362(d).3California Franchise Tax Board. S Corporation Manual – Chapter 4
At the federal level, a voluntary revocation needs the consent of shareholders owning more than 50 percent of all issued and outstanding stock, voting or non-voting. A revocation statement filed with the IRS by the 15th day of the third month of the tax year is retroactive to the first day of that year; filed later, it takes effect on the first day of the following year unless a future effective date is specified.4Internal Revenue Service. Revoking a Subchapter S Election For calendar-year corporations, that federal date is March 15, and the Form 3560 filing follows the same timing.
When You Do Not File Form 3560
Several situations look like they might call for Form 3560 but don’t.
Electing S corporation status. There is no California election to file. Submit Form 2553 to the IRS, and California picks up the status automatically once the federal election is valid.
Involuntary terminations. If your S election ends because the corporation stops meeting the eligibility rules, such as exceeding the shareholder limit or issuing a second class of stock, R&TC Section 23801(e)(1) terminates the California S status at the same moment the federal status terminates. No Form 3560 is required.1California Legislative Information. California Code Revenue and Taxation Code 23801
Passive investment income terminations. If a former C corporation with accumulated earnings and profits has passive investment income over 25 percent of gross receipts for three consecutive years, the S election terminates automatically on the first day of the fourth year at both the federal and California levels. This is treated as an involuntary termination, so no Form 3560 is required.
How to Get a Copy of Form 3560
Form 3560 is not listed on the FTB’s main forms index page and does not appear in the standard searchable forms library. To obtain the current version, call the FTB at 800-852-5711 and request a copy, and confirm the current mailing address at the same time.
How to Complete Form 3560
Because the form is a notification rather than an election, the information it asks for is basic identifying data plus the revocation effective date:
- Corporation name, exactly as it appears on the articles of incorporation filed with the California Secretary of State
- California corporation number, the seven-digit number assigned when the entity was registered or qualified
- Federal Employer Identification Number
- Effective date of the federal S election revocation
- Tax year-end, typically December 31 for calendar-year filers
Attach a copy of the revocation statement you filed with the IRS. That lets the FTB cross-reference the federal action and avoids follow-up correspondence asking for proof. Mail the completed form to the Franchise Tax Board at its Sacramento processing center; confirm the current address when you call for the form.
What Happens If You Don’t File
This is the part most practitioners miss. The FTB’s own S Corporation Manual states that “failure to notify FTB has no impact on whether the corporation retains its California S election — it is automatically terminated with or without such notification.”3California Franchise Tax Board. S Corporation Manual – Chapter 4
In other words, the California termination follows the federal revocation whether or not you file Form 3560. Missing it will not cause the FTB to treat your corporation as an S corporation for a year the federal election was already dead, and it will not reinstate S status for a year you didn’t want it. What filing Form 3560 does accomplish is keeping the FTB’s records aligned with your federal filings, which reduces the chance of notices, mismatched returns, or questions about why your Form 100S filings stopped. File it as part of closing out the S status cleanly, not because the status itself depends on it.
After the Revocation
Once the federal revocation is effective and Form 3560 has been filed, the corporation reverts to C corporation treatment in California starting on the effective date. The $800 minimum franchise tax still applies to the entity as a C corporation, and the switch in tax regime affects everything from the applicable tax rate to how distributions are taxed to shareholders. Coordinate the effective date of the revocation with your tax year and your accountant so the transition lands cleanly rather than mid-year, which complicates both federal and California short-period returns.