What Is the California Franchise Tax Board (FTB)?

The California Franchise Tax Board, commonly called the FTB, is the state tax agency that administers California personal income tax and corporation franchise and income tax. It processes returns and payments, issues refunds and notices, conducts audits, assesses penalties and interest, and collects eligible debts.

What taxes and returns does the FTB handle?

For individuals, the FTB administers California resident and nonresident income-tax returns, including Forms 540 and 540NR. It also administers estimated personal income-tax payments, withholding credits, many California credits, amended returns, and fiduciary income tax for estates and trusts on Form 541.

For businesses, the FTB handles corporation franchise and income tax, S-corporation returns, partnership and LLC returns, California LLC annual tax and fees, and related pass-through entity items. Common forms include Form 100, Form 100S, Form 565, and Form 568.

The word "franchise" in the agency's name does not mean it serves only franchised businesses. The FTB handles personal income taxes for millions of Californians as well as business entity taxes.

What the FTB does not administer

The IRS administers federal income, employment, estate, gift, and excise taxes. The California Department of Tax and Fee Administration generally handles sales and use taxes and many special taxes and fees. The Employment Development Department administers California payroll taxes, unemployment insurance, and state disability insurance. The Secretary of State handles business formation filings and statements of information.

One business event can involve several agencies. Forming an LLC with the Secretary of State does not file Form 568 with the FTB. Registering payroll with EDD does not pay federal payroll taxes to the IRS. A seller's permit from CDTFA does not replace income-tax returns.

California FTB vs. IRS

Common FTB notices

The FTB may contact a taxpayer about a missing return, proposed income adjustment, payment mismatch, identity verification, estimated-tax issue, withholding credit, entity status, penalty, collection balance, or information request. The notice number, tax year, taxpayer identification information, deadline, and explanation determine the response.

An FTB notice is not automatically correct, but it should not be ignored. A mismatch can result from an omitted form, processing delay, payment posted to the wrong year, California adjustment, duplicate entity account, federal change, or taxpayer error.

What to do after receiving an FTB notice

1. Verify that the notice is authentic by comparing its contact information and notice number with FTB.gov.
2. Read the tax year, proposed change, deadline, and appeal or protest rights.
3. Compare the notice with the filed California return, federal return, source documents, payments, and prior correspondence.
4. Respond through the method stated on the notice and include the notice copy or reference number.
5. Keep proof of submission, payment confirmation, and a complete copy of the response.
6. Continue monitoring the account; a response does not always pause interest or every collection action.

Avoid sending Social Security numbers or full tax documents to an unverified email address. The FTB offers official online, mail, phone, and in-person channels. Use the address or channel specified for the exact notice rather than a generic mailing address.

MyFTB and online services

MyFTB allows eligible individuals, business representatives, and tax professionals to view account information, notices, balances, payments, and other records. Some services, such as making a payment or checking a refund, may be available without a full account.

Payments, extensions, and penalties

California generally provides an automatic filing extension for many income-tax returns, but an extension to file is not an extension to pay. Tax due should generally be paid by the original deadline to reduce late-payment penalties and interest.

The FTB can assess penalties for late filing, late payment, underpayment of estimated tax, dishonored payments, and entity noncompliance. Reasonable-cause relief, first-time abatement for certain individual penalties, statutory exceptions, or correction procedures may apply depending on the penalty. A request should address the actual legal standard and include supporting records.

Payments must be designated to the correct taxpayer, entity, form, and tax year. A valid payment sent under a spouse's Social Security number, old LLC number, or wrong year can appear missing until transferred.

FTB audits and federal changes

The FTB may examine California-source income, residency, deductions, credits, entity classification, apportionment, basis, or conformity adjustments. California generally begins with federal tax concepts but does not conform to every federal law.

If the IRS changes a federal return, the taxpayer may have to report the federal change to California within the applicable period even when the IRS says it will notify the state. An amended federal return can also require a California amended return. The deadline depends on the type and date of federal change.

Collections and suspended entities

A California business entity can be suspended or forfeited for tax or filing failures. A suspended entity can lose the ability to exercise business powers, defend litigation, or obtain contracts. Revivor commonly requires filing missing returns, paying or arranging liabilities, and completing FTB procedures; Secretary of State issues may also need separate correction.

Common mistakes

• Assuming the FTB is a division of the IRS
• Sending sales-tax or payroll-tax questions to the FTB
• Treating a filing extension as a payment extension
• Paying under the wrong year or identification number
• Ignoring a notice because the federal return was accepted
• Assuming California conforms to a new federal deduction
• Forgetting Form 568 after forming or closing an LLC
• Responding without proof of delivery
• Calling an unverified number from a suspicious message

Records to keep

Retain federal and California returns, e-file acknowledgments, source documents, California Schedules K-1, basis and residency records, payment confirmations, notices, response packages, mailing proof, entity documents, and records of federal changes.

Frequently asked questions

Related terms

• California Form 540
• California Form 540NR
• California Form 568
• California Estimated Tax
• California LLC Annual Tax
• Minimum Franchise Tax
• California Resident
• California-Source Income

Official sources

• California FTB — Official homepage
• CA.gov — Franchise Tax Board
• California FTB — Contact us
• California FTB — Notices and letters
• California FTB — Make a payment

The definitions and examples on this page are for informational purposes only and do not constitute tax advice. Tax laws change frequently and individual circumstances vary. Consult a qualified tax professional before making decisions based on this content.