When are Corporation Estimated State Taxes Due?

When you organize your business as a corporation, your calendar or fiscal year may not coincide with the normal January to December calendar tax year and the dates you pay estimated state income taxes may be askew from the dates you typically pay taxes on.

Tax Laws vary from state to state; however, in California, estimated taxes are due by the 15th day of the fourth, sixth, ninth and twelfth month of the taxable year.  For example, if you designated your corporation taxable year from June 1 to May 31 on the following year, your estimated taxes are due on September, November, and February and May of the following year.

Even though your taxable year may close in the following year, the tax forms that you will use are for the start of the corporation’s fiscal year.  In the case above, where the taxable year ends on May 31, 2011, the taxable year is 2010.

On the 15th day of the third month of your fiscal year, you are required to file both State and Federal Income Tax Returns.  The State Return is different for each state, but in California, you are required to file the California Corporation Franchise or Income Tax Return Form 100.

On the 15th day of the fourth month, you are required to file Form 100-ES with a partial payment of your estimated taxes for the year.  Since the minimum California Corporate tax is $800, one-half of this amount is due regardless of your estimated loss or income.  The remainder of the Franchise Fee (i.e. $400) is due on the sixth month.

But if your estimated income exceeds the minimum tax, you will pay them quarterly as required.  Usually you will pay one-quarter of your estimated tax for the year; however, this may change from quarter to quarter due to poor or favorable business conditions.  In this case your accountant should re-estimate your tax liabilities so that you do not under or overpay your quarterly taxes.