Instructions For Form 100-Es - Corporation Estimated Tax

G Exceptions to the Estimated

Overpayments From Prior Year Returns

Line 1 – Annualization periods

The overpayment from a prior year return is credited

Enter the number of months that the corporation

Tax Penalty

as of the first estimate installment due date or the

is using in the annualization period based on the

date of payment, whichever is later.

options listed in the table in the next column. For

If the estimated tax paid is equal to or greater

example, if the corporation elects Option 1, enter the

For more information, get federal Rev. Rul. 99 -40,

than the amount defined in General Information E,

annualization periods 2, 4, 7, and 10 in column (1)

IRC Section 6513(b) (1) and (2), and the IRS Internal

Underpayment or Late Payment, the FTB will not

through column (4).

Revenue Manual 20.2.4.3 (03-01-2002).

assess an estimated tax penalty. If an underpayment

Annualization Periods

exists, the FTB will not assess the estimated tax

Corporations may pay any estimated tax installment

penalty if the corporation meets any one of the

Installment

1st

2nd

3rd

4th

before the due date.

exceptions listed below.

Standard Option

E Underpayment or Late

The following exceptions do not apply if the

Option 1

estimated tax installments due are not paid on or

Payment

Option 2

before the installment due date.

Generally, an underpayment of estimated tax is the

Corporations may use the Standard Option or must

Worksheet I — Exception A – Prior Year’s Tax

difference between (1) the amount that would be due

make an election to use Option 1 or Option 2. Exempt

This exception applies if the amount paid or credited

for each installment of estimated tax if the estimated

organizations may use Option 1 (the standard option

on or before the installment due date equals or

tax was equal to 100% of the tax shown on the

for exempt organizations) or must make an election

exceeds the tax shown on the preceding year’s return

return, prorated to each installment, and (2) the

to use Option 2. The election must be made on or

for a 12-month period, prorated to each installment.

amount actually paid or credited on or before the due

before the due date of the first required installment

date of that installment.

Newly Formed or Qualified Corporations

payment. The corporation must make a timely

Since the minimum franchise tax is no longer

election to use an expanded option even if it uses

Underpayment or late payment of estimated tax

prepaid to the California Secretary of State, the

another method, such as Exception A, for its first

installments will result in an estimated tax penalty

prior year’s tax exception does not apply for the first

installment. To make a California election, file federal

calculated from the due date of each installment until

taxable year. For the second taxable year, the prior

Form 8842, Election To Use Different Annualization

paid, or until the original due date of the tax return,

year tax exception does not apply if no tax liability

Periods for Corporate Estimated Tax, or if a timely

whichever is earlier. See General Information G,

existed in the first taxable year, or the business

election was made for federal purposes by filing

Exceptions to the Estimated Tax Penalty, and use

operated for less than twelve full months.

the federal Form 8842, and the corporation is using

form FTB 5806, Underpayment of Estimated Tax

the same option for state purposes, attach a copy

by Corporations, to determine if an exception to a

If the corporation uses the annualized current year

of the federal form to the corporation’s tax return

penalty exists and to figure the penalty.

income method or the annualized seasonal income

when filed. Once made, an election is irrevocable for

method, see Worksheets II, III, and IV.

California does not conform to federal law regarding

the taxable year. The corporation should file federal

the application of the underpayment penalty. For

Line 1 – Taxable income

Form 8842 with its first installment payment. If the

federal purposes, the application of the penalty is

Enter the amount of taxable income expected for the

corporation must pay its tax liability using EFT, file

based on the lesser of prior year or current year tax;

current taxable year.

federal Form 8842 on or before the due date of the

while for California purposes, the application of the

first installment payment by mailing to:

Line 7 – Other taxes

penalty is based on current year tax only.

R&TC Section 19023 defines tax, for purposes

FRANCHISE TAX BOARD

F Minimum Franchise Tax

of California estimate payments, to include

PO BOX 942857

alternative minimum tax, S corporation taxes from

SACRAMENTO CA 94257-0531

To avoid the imposition of an estimated tax penalty, a

Schedule D (100S) and from the excess net passive

Line 3 – Annualization amounts

corporation subject to franchise tax must pay at least

income, the QSub annual tax, credit recapture, and

Enter the annualization amounts from the table below

the minimum franchise tax shown below, whether

the minimum franchise tax. Enter applicable amounts

for the elected option. For example, if the corporation

the corporation is active, inactive, operates at a loss,

for each payment period.

elects Option 1, enter on line 3 the annualization

or files a tax return for a short period.

Line 11 – A large corporation is any corporation,

amounts 6, 3, 1.71429, and 1.2, in column (1)

• Corporations subject to franchise tax . . . . . . .$800

including a predecessor corporation, that had

through column (4), respectively.

• Qualified inactive gold or

California net income (computed without regard to

quicksilver mining corporations . . . . . . . . . . . .$25

Annualization Amounts

the net operating loss deduction) of $1 million or

A combined group filing a single tax return must

Installment

1st 2nd

3rd

4th

more for any taxable year during the three taxable

pay at least the minimum franchise tax for each

years immediately preceding the current taxable year.

Standard Option

1.33333

corporation in the group that is subject to franchise

Large corporations may use this exception for only

Option 1

1.71429

1.2

tax.

the first estimated tax installment and must add any

Option 2

2.4

1.5

1.09091

Newly Formed or Qualified Corporations

reduction in the first estimated tax installment to the

For the first taxable year, calculate the estimate

Line 8 – Other taxes

second installment.

installments based on annualized current year

R&TC Section 19023 defines tax, for purposes

If the annualized current year income method or

income to avoid an estimated tax penalty.

of California estimate payments, to include

annualized seasonal income method is not used for

alternative minimum tax, S corporation taxes from

There is no minimum franchise tax for:

the third or fourth installment, follow the instructions

Schedule D (100S) and from the excess net passive

• Corporations that are subject only to income tax

below to figure the amounts to enter on line 11 of

income, the QSub annual tax, credit recapture, and

if they are not “doing business” in California, and

Worksheet I.

the minimum franchise tax. Enter applicable amounts

are not incorporated or qualified under the laws

• If line 8 is smaller than line 9, multiply line 8 (total

for each payment period.

of California, but derive income from sources

tax) by the applicable percentage (30%, 70%,

within California. Get FTB Pub. 1050, Application

Line 12 – Total payment

70%, or 100%) shown for each quarter at the top

and Interpretation of Public Law 86-272; or

Enter the total payments of estimated tax for

of column (1) through column (4). Enter the result

FTB Pub. 1060, Guide for Corporations Starting

the taxable year paid prior to the due date of the

for each quarter on line 11.

Business in California.

installment. Include any overpayments from 2012 tax

• If line 9 is smaller than line 8, determine the

• Credit unions.

that were credited to 2013 estimated tax.

amount to enter as follows:

• Exempt organizations.

(a) Enter 30% of line 9 in column (1) of line 11.

Worksheet III — Exception C – Annualized

• Corporations that are not incorporated under the

(b) Enter 70% of line 8 in column (2) of line 11.

Seasonal Income

laws of California and whose sole activities in

This exception applies if the estimated tax paid on

California are engaging in convention and trade

(d) Enter 100% of line 8 in column (4) of line 11.

or before the installment due date equals or exceeds

show activities for seven or fewer days during

100% of the amount the corporation would owe

Line 12 – Total payment

a taxable year and that do not derive more than

if its estimated tax was computed on annualized

Enter the total payments of estimated tax for

$10,000 of gross income reportable to California

seasonal net income for tax purposes for the months

the taxable year paid prior to the due date of the

during a taxable year. Get FTB Pub. 1060 for more

preceding the installment due date. Use Exception C

installment. Include any overpayments from 2012 tax

information.

only if the corporation’s base period percentage

that were credited to 2013 estimated tax.

A corporation that is a small business solely owned

for any six consecutive months of the taxable year

Worksheet II — Exception B – Annualized Current

by a deployed member of the United States Armed

equals or exceeds 70%. Get the instructions for

Year Income

Forces shall not be subject to the minimum franchise

federal Form 1120-W, Part I, Adjusted Seasonal

This exception applies if the estimated tax paid on

tax if the owner is deployed during the taxable year

Installment Method, for an explanation on how to

or before the installment due date equals or exceeds

and the corporation operates at a loss or ceases

compute the base period percentage.

100% of the amount the corporation would owe

operation for taxable years beginning on or after

if its estimated tax was computed on annualized

January 1, 2010, and before January 1, 2018.

current net income for tax purposes for the months

preceding the installment due date.

Page 2 Form 100-ES Instructions 2012

Instructions For Form 100-Es - Corporation Estimated Tax - 2013 Page 2

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