Solved

California is waiving the $800 annual fee for LLC's that began in 2021. My Form 568 shows $800 due. When I try to change from $800 to 0, Turbotax won't accept the change?

Forum|Forum|4 years ago
March 15, 2022
1 reply
0 views

I can delete the $800 due (in various places), and change that to 0, but when I re-access the form, TT has reinserted the $800's and generated a 2021 3588 to pay that $800 (that the FTB board has confirmed does not need to be paid)

TurboTax Self Employed Online

Best answer by DaveF1006

The $800 fee is correct. In reading this Turbo Tax post written by GeorgeM777, you would have been required to pay a LLC franchise fee in 2021 within 2-3 months after you formed your LLC. You would need to pay again on April 15, 2022. This resulted in back-to-back payments, which provided a hardship for LLC business owners that formed their LLC in the last quarter of the tax year. Assembly Bill 85. corrected this.

So to avoid this double payment, California waived the first year fee that was to be paid in 2021. You are still expected to pay this $800 because this will apply to the 2022 tax year and not for 2021. After this, the $800 franchise fee will be due every year by the tax filing deadline.

[ Edited 03/16/22|08:35 PM PST]

@05joshtaxes93

DaveF1006

It depends. What version of Turbo Tax are you using? Is it a 1065 business product or an individual 1040 return?

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

0

05joshtaxes93Author

I am using online Turbo Tax - self-employed. I think it generates a 1040 and Schedule C for the Federal. I automatically generates the Form 568 with the California State Returns. That Form 568 however, prefills the $800 annual tax due for 2021. If I try to change that to $0, it continually reverts back to the $800. I had a recent chat with the FTB and they confirmed that any LLC formed on or after 01/01/2021 is exempt for the first year from paying the 800.00. How can I get Turbo Tax to accept this change?