California LLC Taxes Explained: The $800 Tax, the LLC Fee, and the PTE Election
If you run an LLC in California, three state taxes shape your year: the $800 annual tax, the LLC fee, and — if you are set up as a partnership or S-corporation — the pass-through entity (PTE) elective tax. Here is how each one works, what it costs, and the deadlines that matter.
1. The $800 annual LLC tax
Every LLC doing business or organized in California owes a flat $800 annual tax, due the 15th day of the 4th month of your tax year — April 15 for calendar-year filers. It is owed even in a year with no activity, until you formally cancel the LLC. The first-year exemption people still ask about applied only to LLCs formed between 2021 and 2023; it has expired, so an LLC formed today owes the $800 in its first year.
2. The LLC fee (Form 568)
On top of the $800, LLCs with $250,000 or more of total California income owe an added fee on a tiered schedule. The fee is estimated and paid by the 15th day of the 6th month (Form 3536) and reported on Form 568, your LLC Return of Income.
| Total California income | Fee |
|---|---|
| $250,000 – $499,999 | $900 |
| $500,000 – $999,999 | $2,500 |
| $1,000,000 – $4,999,999 | $6,000 |
| $5,000,000 or more | $11,790 |
California LLC fee tiers, based on total California income (FTB).
3. The PTE elective tax (the SALT-cap workaround)
If your LLC is taxed as a partnership or S-corporation, this is the big one. The federal deduction for state and local taxes (SALT) is capped for individuals, but California lets the entity pay 9.3% of its qualified net income as a state tax and deduct it federally — then passes a credit to the owners against their California personal tax. For many owners, the result is a real federal deduction they would otherwise lose.
Two things to know for 2026 and beyond. California extended this election through tax year 2030 (SB 132, June 2025), so it is not going away. And it is time-sensitive: to make it, the entity pays the greater of $1,000 or 50% of the prior year’s PTE tax by June 15, then elects on a timely filed return (Form 3804). Starting in 2026, if you miss or underpay that June 15 payment you can still elect, but each owner’s credit is reduced by 12.5% of the unpaid amount. Miss the return deadline and the election is gone for the year — it cannot be made on an amended return.
The bottom line
The $800 tax and the LLC fee are unavoidable costs of operating a California LLC — budget for them. The PTE election is optional and genuinely valuable, but it lives or dies by the June 15 date. If you are a California pass-through owner, plan it before mid-year, not at filing.
Not sure which of these apply to your LLC? Email [email protected] or start with our pricing estimator. No pressure at all on our end.
Frequently asked questions
Do I owe the $800 if my LLC made no money?
Yes. It is owed every year until you cancel the LLC, regardless of activity.
Is the PTE election worth it?
For many profitable pass-throughs, yes — it converts capped SALT into a federal deduction. It adds a payment and a form, so it is worth running the numbers first.
What is the deadline I cannot miss?
June 15 for the PTE prepayment. Before 2026, missing it lost the election; for tax years 2026 through 2030 you can still elect, but the owner’s credit is reduced by 12.5% of the unpaid amount.
Related reading
- Oceanside Small-Business Accountant
- The Most Common Small-Business Tax Mistakes
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- Estimate your price in about a minute
Sources
Figures verified against primary California Franchise Tax Board sources:
- FTB — Pass-through entity (PTE) elective tax
- FTB — Limited liability company
- FTB — 2025 Form 568 Booklet