Form 3522: Everything You Need to Know
Form 3522 is a form used by LLCs in California to pay a business's annual tax of $800.6 min read updated on February 01, 2023
Updated October 9,2020:
What Is Form 3522?
Form 3522 is a form used by LLCs in California to pay a business's annual tax of $800. All LLCs in the state are required to pay this annual tax to stay compliant and in good standing. When a new LLC is formed in California, it has four months from the date of its formation to pay this fee.
An LLC can use a tax voucher or Form 3522 to pay its required annual tax. This form is filed with the California Franchise Tax Board annually for all registered LLCs in the state. Besides the annual tax of $800, a business will have to file Form 568 if it has grossed $250,000 or more during the year.
If a company has members who are not residents of California, it files Form FTB 3832.
An LLC in California uses Form 3522 if the following applies:
- The Secretary of State has accepted the LLC's Articles of Organization
- The company does business in the state
- The Secretary of State has issued a Certificate of Registration to the business
Who Must Pay the Annual Tax?
All companies that do business in California and has its Articles of Organization on file with the office of the Secretary of State must pay an $800 annual tax. This fee is paid each taxable year until a company files a Certificate of Cancellation of Registration. This certificate is filed with California's Secretary of State. The Franchise Tax Board makes a distinction between an LLC fee and an annual tax.
Line 3 on Form 568 includes the $800 annual tax, and a company can get a credit for it on line 6 of the same form. A business only incurs fees in addition to this annual tax when it grosses $250,000 or higher for the year.
When Does an LLC Pay the Annual Tax?
The annual tax due date for payment is April 15 of every taxable year. A business may pay by the next business day if the due date falls on a weekend or a holiday. The LLC won't be penalized for a late payment in this case. Payments that are postmarked or submitted by and tax returns filed by April 18 are considered to be on time.
When an LLC files its Articles of Organization with the state, that's when the first taxable year begins. If a foreign LLC does business in California, that company's first taxable year was when the LLC was formed in another state. An LLC should pay the annual tax immediately if it's an existing foreign company that's registered with the California Secretary of State or it begins doing business in the state after the 15th day of the fourth month of its taxable year.
How to Fill Out Form 3522
Provide the following information on Form 3522:
- Term of fiscal year
- Name of LLC
- DBA
- Address
- Contact number
- SOS file number
- EIN
- Amount of payment
Filing Form 3522
- Make out a money order or check to the Franchise Tax Board.
- Write down the SOS file number and your Employer Identification Number (EIN), plus the words "2017 [or current year] FTB 3522" on your form of payment.
- Separate the voucher from the lower part of the page. Do not staple the voucher and your payment.
- Insert your payment and the voucher into an envelope, and send it to:
Franchise Tax Board
P.O. Box 942857
Sacramento, CA 94257-0531
If you make a payment online, or if you have no payment due, you don't need to send in Form 3522. You also don't need to file the form if you pay with a credit card. To make an online payment, you can use:
- Discover
- MasterCard
- Visa
- American Express
Knowing the rules for keeping your LLC in good standing with the state ensures that your company stays compliant. With so many convenient ways to file Form 3522, it's easy for businesses to provide the necessary information and fees to the state. For more information, refer to the California Secretary of State website, where you'll find answers to many common questions related to the formation of LLCs in the state.
General LLC Information
Fees related to operating a Limited Liability Company can be found and calculated on form FTB 3536. Unlike form FTB 3522, which offers a flat rate, the fees calculated on form FTB 3536 are based on the company's annual income. Annual incomes that can have an effect on LLC fees will range between $0 and $11,790 a year on form FTB 3536. This form will also include relevant details pertaining to additional required forms and filing requirements for limited liability companies.
Relevant forms and specific information pertaining to your LLC will depend largely on the attributes of your specific company. In the state of California, LLCs are typically split into three categories for the purpose of taxation:
- Single-Member LLCs are classified as what can also be referred to as a "disregarded entity." If your company is classified as a disregarded entity, the company's income is not considered to be separate from your own personal income.
- Partnerships are LLCs that have more than a single member. When a company is considered a partnership in the state of California, the members are given the ability to keep their personal income separate from the limited liability companies, income, deductions, and credits.
- The third category is a limited liability company that has elected to be considered as a corporation for tax purposes.
In simple terms, this means that corporate tax laws control the taxation of the company's income. Required forms, any relevant penalties, and estimated fees will all need to be mailed to the Franchise Tax Board. The mailing address for these is PO Box 942857, Sacramento, CA, 94527-0651.
Return of Income Forms
The Return of Income Form for limited liabilities is officially known as Form 568. This form is due on the 15th day every fourth quarter in a taxable year. Limited liability companies should use Form 568 to pay applicable taxes for deficits, penalties, and non-consenting members. Any time a company submits a limited liability company tax voucher, it needs to be sent in along with either a Partnership Return of Income, or Form 565, or a limited liability company return of income, otherwise known as a Form 568.
Tax payments can be sent via mail to the Franchise Tax Board or electronically through the Board's online Web Pay service. Additionally, payments can be made by submitting a form FTB 3588 to the Franchise Tax Board office.
Limited liability companies that choose to be taxed as a corporation are not required to submit a Form 568. Instead, the company will need to file a Form 100 before the 15th day of the third month that occurs after the company's tax year has ended. This is the same form that actual corporations are required to file. As with the other forms listed here, Form 100 can be filed by mailing it into the Franchise Tax Board or online through the state's electronic filing services.
Disregarded entities and partnerships, however, are required to file this form with the Franchise Tax Board as outlined above. This form should be filed even if the limited liability company in question is not actively doing business in the state of California.
Additional Forms and Filing Provisions
If you ever need a bit of extra time to file, you can submit a form FTB 3537. This will provide a six-month extension, beginning with the date of your company's original tax return filing. Keep in mind, however, that this should only be done if you're unable to complete and submit a form 568 before April 15. In addition, the limited liability company must still owe taxes related to non-consenting and non-resident members.
These extensions can only be granted if the limited liability company in question has sufficiently filed required taxes by the October 15 deadline. In addition, if you are granted a filing extension, that's not the same thing as being given a payment extension. Your tax payments will likely still be due on their original due date. Completed FTB 3537 forms, as with all other required forms, should be mailed to the Franchise Tax Board at PO Box 942857, Sacramento, CA, 94257-06051.
There are countless additional forms that may pertain to specific, specialized circumstances. If you find yourself facing a scenario that you're not sure how to tackle, don't try to handle it alone. It's always a good idea to get help from a legal professional when you're not sure how to proceed.
If you need help or more information about Form 3522, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.