LLC Changing to a Corporation? Here’s What You Need to Know About Identification Numbers in California

If you own an LLC and recently elected to be taxed as a corporation, you might be wondering which identification number to use on your taxes and payments. This can get confusing, but it’s important to get it right to avoid delays, misapplied payments, or notices from the California Franchise Tax Board (FTB).

Federal Rules: Use Your LLC’s EIN

When your LLC changes from being a single-owner business or partnership to a corporation:

• If your LLC already has an EIN (Employer Identification Number): continue using it.
• If your LLC doesn’t have an EIN: you need to apply for one. You cannot use your personal Social Security Number once your LLC is taxed as a corporation.

Example: A freelancer who runs a single-member LLC and elects to be taxed as a corporation must use their LLC’s EIN. If the LLC does not have one yet, they must obtain a new EIN before filing taxes.

California Rules: You’ll Get a Corporate Number

California handles things a little differently:

• The FTB does not automatically get your federal election form.
• After you make your first estimated tax payment or file your first corporate tax return, the FTB will assign a California corporate number.
• The FTB will send you a letter with this number — you’ll need to use it on all future California filings.

Example: A Shopify store owner’s LLC elects S-corporation treatment. They make their first estimated payment using their EIN. A few weeks later, the FTB sends a corporate number. From now on, that number must be used on all California tax forms.

Estimated Tax Payments

• If you made payments before getting your FTB corporate number, you may need to check with the FTB to ensure the payments are posted to your account.
• The FTB allows e-filed returns without a corporate number, but you should include a note: “First corporate return for LLC electing to be taxed as a corporation.”
• Forward the FTB-issued corporate number to your accountant or tax preparer as soon as you receive it.

Tax Implications for Your LLC

• If your corporation election happens in the first year of your LLC, you are not required to pay the $800 minimum franchise tax.
• You are still responsible for income tax on net profits:
  • C corporations: 8.84%
  • S corporations: 1.5%

Example: A dental practice LLC elects S-corporation treatment and earns $50,000 in its first year. The LLC does not pay the $800 minimum tax but owes $50,000 × 1.5% = $750 in income tax.

Why This Matters

Using the wrong identification number or missing the FTB corporate number can lead to:

• Delayed processing of tax returns
• Misapplied payments
• IRS or FTB notices requesting missing information or money

Tip: Keep your EIN, FTB corporate number, and all tax correspondence in one place to make filings and payments easier.

Bottom Line

When your LLC changes tax classification, the right identification numbers are essential. Use your federal EIN, watch for your FTB corporate number, and track payments carefully. Doing so ensures smoother tax filings and avoids unnecessary notices or penalties.

Need Help With Your LLC Taxes?

At Velin & Associates, Inc., we help small business owners, freelancers, creators, and local businesses navigate LLC elections, tax filings, and California requirements. We can make sure your payments and returns are correct and help you stay compliant.

Velin & Associates, Inc

8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org