![]() We waive the minimum tax on newly formed or qualified S corporations filing an initial return for their first taxable year if the following is true:.You must pay the tax whether your corporation is active, inactive, operates at a loss, or files a return for a short period (less than 12 months).Your minimum franchise tax ($800) is due the first quarter of each accounting period.Visit our tax rates table for complete list of tax rates We tax every S corporation that has California source income 1.5%.You should use the below guidelines to file your state income taxes: Registered to do business in California with the Secretary of State (SOS).You must file California S Corporation Franchise or Income Tax Return (Form 100S) if the corporation is: S corporations are subject to the annual $800 minimum franchise tax.A separate bank account and separate records are required with this form of business.They’re limited by the types of owners (shareholders) and cannot exceed 100 shareholders.IRS approval is required for the S election status. They then report these items on their personal tax return. Income, losses, deductions, and credits flow through to the shareholders, partners or members. An S corporation is a corporation that elects to be taxed as a pass-through entity.
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