FTB Estimated Tax Payments: What, Why, and How for California Business Entities

Running a business in California comes with its fair share of tax obligations, and FTB Estimated Tax Payments are at the top of the list—especially if you’re familiar with the $800 minimum franchise tax. Whether you’re launching a new venture or managing an existing entity, understanding how and when to pay this required amount can keep you from unnecessary penalties and confusion.

This guide breaks down everything you need to know about FTB Estimated Tax Payments: who owes this tax, when it’s due, how to pay, and possible exemptions. From corporations to LLCs and partnerships, we’ll help you navigate California’s tax rules so you can stay focused on growing your business.

What Are FTB Estimated Tax Payments?

“FTB Estimated Tax Payments” refers to the payments you make throughout the year—or at specific deadlines—to cover your California tax liability. For many corporations, LLCs, and partnerships, this includes the annual $800 minimum franchise tax required by the Franchise Tax Board (FTB). While the concept may seem straightforward, the due dates and forms can vary depending on your entity type.

Why Does the FTB Charge an $800 Minimum Franchise Tax?

California’s Franchise Tax Board imposes this annual $800 minimum franchise tax to maintain your business entity status in the state. Even if you’re not turning a profit, you’re generally responsible for making FTB Estimated Tax Payments to meet the minimum requirement—unless you fit narrow exemptions like first-year waivers for certain corporations or a 15-day exception in limited scenarios.

Who Must Pay FTB Estimated Tax Payments (and Who Might Get a Pass)?

Not every California business entity faces the same rules. While most corporations, LLCs, and limited partnerships must pay the $800 minimum, a few get a break. Here’s the rundown:

1. Corporations (C or S)
   • S Corporations pay $800 plus 1.5% tax on net income.
   • C Corporations pay $800 or the higher corporate tax rate (8.84%) on net income.
   • First-year waiver: New corporations formed in 2025 get a break on the $800 for the first taxable year.
2. Limited Liability Companies (LLCs)
   • Every LLC registered or doing business in California owes $800, starting with the first taxable year.
   • Note: The first-year free perk ended for LLCs after January 1, 2024.
3. Limited Partnerships (LPs) & Limited Liability Partnerships (LLPs)
   • Also owe the $800 minimum.
   • Even if your partnership shows a loss, you typically must make FTB Estimated Tax Payments to cover the franchise tax.
4. General Partnerships
   • Not subject to the $800 franchise tax.
   • They file a return but don’t owe the minimum payment.

When Are FTB Estimated Tax Payments Due?

Staying on top of FTB Estimated Tax Payments deadlines is essential to avoid penalties and interest. The due dates differ by entity type:

• Corporations
  • Generally make estimated payments in quarterly installments using Form 100-ES.
  • The first installment—often including the $800 minimum—is due by the 15th day of the 4th month of the tax year (April 15 for calendar-year corporations).
• LLCs
  • The $800 is due by the 15th day of the 4th month of the LLC’s tax year (April 15 for calendar-year LLCs).
• LPs & LLPs
  • Payment is due with Form 565 (partnership return) by the 15th day of the 3rd month after year-end (March 15 for calendar-year filers).
  • If e-filing, you can pay online via Web Pay or mail in a voucher (Form 3587).

Important: An extension to file your return does not extend your deadline to pay. Late or missed FTB Estimated Tax Payments can trigger penalties and interest.

How to Make FTB Estimated Tax Payments

Confused by all the forms? You’re not alone. Here’s a simplified breakdown:

1. Corporations (C or S)
   • Use Form 100-ES to make estimated payments, including the $800.
   • If e-filing the corporate return but paying by mail, use Form 3586 (not 100-ES).
   • Online payments via the Franchise Tax Board’s Web Pay portal are encouraged.
2. LLCs
   • Use Form 3522 (Limited Liability Company Tax Voucher) for the $800 annual tax.
   • If you owe an additional LLC fee based on California-sourced income, use Form 3536.
   • Online payments can also be made through Web Pay.
3. LPs & LLPs
   • Paper filers typically attach a check for $800 with Form 565.
   • E-filers can mail Form 3587 or pay via Web Pay.
4. Mandatory e-Pay
   • If any single business tax payment exceeds $20,000 or your total tax due is more than $80,000 in a year, you must use electronic payment methods going forward.

Penalties for Late or Missed FTB Estimated Tax Payments

Paying late or skipping FTB Estimated Tax Payments can lead to hefty penalties. The FTB may assess 5% plus 0.5% per month on unpaid balances. Waivers are rare and generally require a strong “reasonable cause” argument. Simply not knowing the rules usually won’t cut it.

Key Takeaways: Staying Compliant with FTB Estimated Tax Payments

Compliance with California’s FTB estimated tax payments is key to avoiding penalties. Know your $800 minimum obligation, first-year waivers, and deadlines to stay on track. Here are the key takeaways.

1. Annual $800 Requirement
   • Most California business entities—C corporations, S corporations, LLCs, LPs, and LLPs—owe an $800 minimum each year.
2. First-Year Waivers & Exemptions
   • New Corporations in 2025 can skip the $800 for their first taxable year.
   • New LLCs no longer get this waiver.
   • General Partnerships remain exempt from the $800 payment.
3. Deadlines and Forms Matter
   • Corporations & LLCs typically pay by April 15.
   • LPs & LLPs generally pay by March 15.
   • Use the correct form (100-ES, 3522, 3587, etc.) to avoid confusion.
4. Online Payments Simplify the Process
   • The FTB’s Web Pay portal is the easiest way to handle FTB Estimated Tax Payments without dealing with paper vouchers.
5. Penalties Add Up Fast
   • Late or missed payments lead to penalties and interest.
   • Filing extensions do not extend payment deadlines.

Conclusion

In the grand scheme of running a California business, FTB Estimated Tax Payments and the $800 minimum franchise tax may seem like just another line item. Yet failing to plan for these obligations—or missing deadlines—can result in costly penalties. Take the time to confirm which rules apply to your entity type, gather the necessary forms, and pay on time.

If you’re unsure whether you qualify for an exemption or first-year waiver, consult a CPA or Enrolled Agent. They can confirm your eligibility and ensure you’re not caught off guard. Otherwise, consider this $800 minimum as part of the cost of doing business in the Golden State—and avoid letting confusion or procrastination inflate your tax bill.

Need expert guidance on FTB Estimated Tax Payments? At G&S Accountancy, we help California businesses stay compliant, avoid penalties, and maximize tax-saving opportunities. Contact us today for personalized tax planning and expert advice!