The annual tax for S-Corporations in California is the greater of 1.5% of the corporation's net income or $800. As of January 1, 2000, newly incorporated or qualified corporations are exempt from the annual minimum franchise tax and tax is computed by multiplying the net income by 1.5%.
If an S-Corporation has $0 income, or incurred a loss, the required minimum franchise tax of $800 will be calculated. The minimum franchise tax is waived for first year CA filers. To designate the California S-Corporation return as a first year return, from the main menu of the California return select:
- Heading Information
- Additional Information
- First Year Filer? - Change to YES