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Generating CA Form 568 in the partnership module of Lacerte

SOLVED•by Intuit•115•Updated August 22, 2023

This article will review options for generating the Form 568 and payment lines 6-8 on CA Form 568, Limited Liability Company Return of Income.

Before you begin

  • Lacerte automatically includes CA Franchise LLC tax of $800 on line 6. For information on why this is automatic and how to suppress it, see below.
  • Line 6 also includes payments made with Form 3537 (Extension) and Form 3536 (Estimated Fee for LLCs).

To generate the CA 568 instead of the CA 565:

  1. Go to Screen 1 Client Information.
  2. Scroll down to Miscellaneous Info.
  3. Under Type of Entity make sure Limited Liability Company is selected.
  4. If this is a California Single Member LLC:
    1. Go to Screen 37.011 California Miscellaneous Information.
    2. Scroll down to Single Member LLC Information.
    3. Check the box for Single member LLC.
  1. Go to Screen 37, Miscellaneous Information.
  2. Select California from the top-left panel St. Misc. Info.
  3. Scroll to the Limited Partnership Tax/LLC Annual Tax/Administrative Adjustment section.
  4. Enter the amount in 20YY LLC Fee paid with Form FTB 3536.
  1. Go to Screen 37, Miscellaneous Information.
  2. Select California from the top-left panel St. Misc. Info.
  3. Scroll to the Limited Partnership Tax/LLC Annual Tax/Administrative Adjustment section.
  4. Enter the amount in either:
    • Overpayment from a prior year credited to tax, or
    • Overpayment from a prior year credited to fee
  1. Go to Screen 37, Miscellaneous Information.
  2. Select California Form 592-B from the top-left panel St. Misc. Info.
  3. Enter the Withholding Agent information from Form 592-B received by the partnership.
  4. Enter the tax withheld in Tax Withheld > Total California tax withheld (excluding backup withholding).
  1. Go to Screen 37, Miscellaneous Information.
  2. Select California Form 593 from the top-left panel St. Misc. Info.
  3. Enter the Withholding Agent information from Form 593 received by the partnership.
  4. Enter the tax withheld in Escrow or Exchange Information > Amount withheld.
  • If the LLC was withheld upon by another entity, it can allocate the entire withholding credit to all of its members or claim a portion on line 8 (not exceeding the total tax and fee due) and allocate the remaining portion to its members.
  • If the LLC claims any of the amount withheld, attach Form 592-B or Form 593, Real Estate Withholding Tax Statement to the LLC return. The LLC must file Form 592 or 592-F and Form 592-B to allocate any remaining withholding credit to its members. For additional information, refer to FTB Pub 1017.
  • Lacerte doesn’t currently support a special allocation function to reduce the credit and allocate the remaining amount to the partners. The amount reported on Form 568 must be manually adjusted, while the amount of credit can be entered on Screen 38, California Schedule K under Credits > Total withholding [O] which will be allocated according to the partner percentages entered in Screen 8, Partner Percentages.
  1. Go to Screen 37, Miscellaneous Information.
  2. Scroll to the Limited Partnership Tax/LLC Annual Tax section.
  3. Enter a -1 in Form 568 20YY FTB 3522 payment [O].

Why is this tax automatically generated?

The CA Franchise Tax is due by the 15th day of the 4th month after the beginning of the taxable year, or April 15, 20YY, so it’s always paid for the next tax year. Because Lacerte assumes the payment was paid, it automatically generates the payment on CA Form 568, Line 6.

For example, if you're in Lacerte 2019, the Franchise Tax payment paid with Form 3522 is due April 15, 2019, but it’s paying for the 2020 tax year. The following year, in the 2020 program, line 6, Lacerte will enter "Amount paid with Form 3537 and 2020 Form 3522 and Form FTB 3536." Lacerte will assume that payment was made back on April 15, 2019 and will automatically apply $800 to line 6. But if the partnership didn't pay the Franchise Tax, you'll have to override line 6.

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