FTB tax is shorthand for the state taxes collected by the California Franchise Tax Board, the agency that administers California’s personal income tax, corporate franchise tax, and the annual tax and fee on limited liability companies. If you live in California, earn money from a California source, or run a business with a connection to the state, the FTB is the agency that processes your return, collects what you owe, and pays out refunds. Personal income tax rates run from 1 percent to 13.3 percent, and the filing deadline for most individuals is April 15.
What the Franchise Tax Board Is
The Franchise Tax Board is a California state agency within the Government Operations Agency. Its stated mission is to help taxpayers file timely, accurate returns and pay the correct amount to fund state services.1State of California Franchise Tax Board. About Us
The FTB does more than process returns. It audits individual and business accounts, and when a balance goes unpaid it can garnish wages, levy bank accounts, and record liens against property. It also runs dispute resolution, taxpayer education, and fraud investigation programs.
Taxes the FTB Collects
Personal Income Tax
Personal income tax is the FTB’s largest category. California taxes residents on all of their income no matter where it was earned, and taxes nonresidents on income from California sources. The tax is governed by California’s Personal Income Tax Law, beginning at Revenue and Taxation Code Section 17001.2Justia Law. California Revenue and Taxation Code 17001-17039.1 – General Provisions and Definitions
Corporate Franchise Tax
Corporations doing business in California pay a franchise tax, which is a charge for the privilege of operating in the state. “Doing business” covers any transaction for profit and also captures entities that meet certain thresholds for California employees, property, or sales.3California Legislative Information. California Revenue and Taxation Code 23101 (2025) The general corporate rate is 8.84 percent of net income. Banks and financial corporations pay 10.84 percent. S corporations pay 1.5 percent, or 3.5 percent for S corporation banks.4State of California Franchise Tax Board. Business Tax Rates
LLC Annual Tax and Fee
Every LLC organized in California or doing business in the state owes an annual tax of $800. The $800 is due even in years with no income or activity and continues until the LLC is formally canceled with the Secretary of State.5State of California Franchise Tax Board. Limited Liability Company A first-year exemption for LLCs formed between January 1, 2021, and December 31, 2023, has expired; LLCs formed in 2024 or later owe the $800 starting in their first year.
LLCs with higher California-source income owe an additional fee on top of the $800:6California Legislative Information. California Revenue and Taxation Code 17942
- $900 on total California income of $250,000 to $499,999
- $2,500 on $500,000 to $999,999
- $6,000 on $1,000,000 to $4,999,999
- $11,790 on $5,000,000 or more
Partnerships and trusts also file with the FTB, with obligations that vary by entity type.
California Personal Income Tax Rates
California uses a graduated structure, so higher portions of your income are taxed at higher rates. For 2026, single filers face these brackets:
- 1% on taxable income up to $11,079
- 2% on $11,080 to $26,264
- 4% on $26,265 to $41,452
- 6% on $41,453 to $57,542
- 8% on $57,543 to $72,724
- 9.3% on $72,725 to $371,479
- 10.3% on $371,480 to $445,771
- 11.3% on $445,772 to $742,953
- 12.3% on $742,954 to $1,000,000
- 13.3% on income over $1,000,000
The top rate includes a 1 percent surcharge on taxable income above $1 million, originally enacted under the Mental Health Services Act (Proposition 63) to fund behavioral health programs. Married couples filing jointly have wider brackets at each level. Thresholds are adjusted periodically but are not fully indexed to inflation each year.
California also offers a standard deduction. For 2025, the most recently published amounts were $5,706 for single filers and $11,412 for married couples filing jointly; 2026 amounts are expected to be similar or slightly higher once the FTB publishes them.7State of California Franchise Tax Board. Deductions
Who Owes FTB Tax
Residents
California defines a resident as anyone in the state for other than a temporary or transitory purpose, or anyone domiciled in California who is living elsewhere temporarily.8California Legislative Information. California Revenue and Taxation Code 17014 A full-year resident is taxed on wages, investment income, rental income, and everything else, no matter where it was earned.
Part-Year Residents and Nonresidents
If you moved into or out of California during the year, you file as a part-year resident. You owe tax on all income earned while living in the state, plus any income from California sources during the months you lived elsewhere. Nonresidents who never lived in California owe tax only on California-source income: wages for work performed in the state, rental income from California property, or profits from a California-based business.
The Safe Harbor Rule
If you are domiciled in California but leave under an employment contract for at least 546 consecutive days, a safe harbor may treat you as a nonresident during that absence. You cannot have more than $200,000 in intangible income during any year the contract is in effect, and the primary reason for leaving cannot be to avoid California income tax. Brief return visits of no more than 45 days per year will not disqualify you.9State of California Franchise Tax Board. FTB Publication 1031 – Guidelines for Determining Resident Status
Business Nexus
A business owes California tax if it has a sufficient connection to the state. That includes having California employees or property, or exceeding economic thresholds for sales into California.3California Legislative Information. California Revenue and Taxation Code 23101 (2025)
Filing Deadlines
Annual Return
Your California personal income tax return and any balance due are due April 15, 2026, for the 2025 tax year.10State of California Franchise Tax Board. Due Dates – Personal California gives you an automatic six-month extension to October 15, 2026, with no form or application required.11Taxes (California Franchise Tax Board). Extension of Time to File for Individuals
The extension applies to filing, not to payment. If you owe, you still need to pay by April 15 to avoid penalties and interest. If you are living or traveling abroad on April 15, California adds two months on top of the six-month extension, pushing the final filing deadline to December 15.
Estimated Tax Payments
If you have income not subject to withholding, such as self-employment, rental, or investment income, you may need to make quarterly estimated payments. The 2026 due dates are:12State of California Franchise Tax Board. 2026 Instructions for Form 540-ES Estimated Tax for Individuals
- 1st payment: April 15, 2026
- 2nd payment: June 15, 2026
- 3rd payment: September 15, 2026
- 4th payment: January 15, 2027
You can skip the fourth installment if you file your 2026 return by January 31, 2027, and pay the full balance at that time.
How to File and Pay
California residents file Form 540, which starts from federal adjusted gross income and then applies California adjustments.13State of California Franchise Tax Board. 2025 Personal Income Tax Booklet – California Forms and Instructions 540 Part-year residents and nonresidents use Form 540NR. Corporations file Form 100, which also starts from federal taxable income with state-level adjustments.14State of California Franchise Tax Board. 2024 Instructions for Form 100 Corporation Tax Booklet You will need your Social Security Number or Employer Identification Number, W-2s, 1099s, and records of any California-specific adjustments.
CalFile, the FTB’s free online filing system, is available for original returns filed by full-year residents with 10 or fewer dependents and relatively straightforward situations. It does not support filers with business income, capital gains, rental income, or Health Savings Account activity.15State of California Franchise Tax Board. CalFile Qualifications 2025
Web Pay, the FTB’s online payment portal, accepts return payments, estimated payments, bill payments, extension payments, and payments on a Notice of Proposed Assessment.16State of California Franchise Tax Board. Web Pay – Payment Types Paper returns are also accepted by mail, with separate mailing addresses depending on whether you are including a payment. You can track a refund online using your Social Security Number, the numbers in your mailing address, your ZIP code, and the exact refund amount from your return.17State of California Franchise Tax Board. Check Your Refund Status
Penalties and Interest
Filing late carries a penalty of 5 percent of the unpaid tax for each month or partial month the return is late, up to 25 percent.18State of California Franchise Tax Board. Common Penalties and Fees If the FTB sends a formal demand letter and you still do not file, a separate 25 percent penalty applies to the full tax due.
Paying late triggers a penalty of 5 percent of the unpaid balance plus 0.5 percent for each month the balance remains unpaid, up to a combined 25 percent. When both a late filing penalty and a late payment penalty apply for the same year, the FTB applies the larger of the two rather than stacking them.
Interest accrues on any unpaid tax from the original due date until the balance is paid. For the period from July 1, 2025, through June 30, 2026, the interest rate for personal income tax and corporate underpayments is 7 percent, and the estimated tax penalty rate is 4 percent.19State of California Franchise Tax Board. Interest and Estimate Penalty Rates
If You Disagree With an FTB Bill
When the FTB decides you owe more after an audit or review, it issues a Notice of Proposed Assessment. You have 60 days from the date on the notice to file a written protest.20State of California Franchise Tax Board. Taxpayer Dispute Process – Notice of Proposed Assessment Miss that window and the proposed amount becomes final.
If the FTB reviews your protest and still upholds the assessment, it issues a Notice of Action. You then have 30 days to appeal to the Office of Tax Appeals, an independent body outside the FTB. The OTA runs an informal briefing process and, on request, an oral hearing before issuing a decision. You can petition for rehearing within 30 days. If administrative options are exhausted, you can pay the balance, file a claim for refund, and ultimately take the matter to Superior Court.
The FTB generally has four years from the date you filed your return, or from the original due date if later, to assess additional tax, penalties, or fees.21State of California Franchise Tax Board. Your Tax Audit If you never filed for a given year, there is no time limit. For abusive tax avoidance transactions, the window extends to 12 years.22State of California Franchise Tax Board. Keeping Your Tax Records Keep your returns and supporting records for at least that long.