Florida corporate income tax is 5.5% of a C corporation’s adjusted federal taxable income, and the first $50,000 is exempt. So a corporation that earns $50,000 or less in Florida taxable income owes nothing. Florida has no personal income tax, but that doesn’t extend to C corporations, and the return is due earlier than many owners expect.
Florida corporate income tax at a glance
| Item | Details |
|---|---|
| Rate | 5.5% of adjusted federal taxable income |
| Exemption | First $50,000 of taxable income |
| Who pays | C corporations, and LLCs taxed as C corporations, with Florida nexus |
| Return | Form F-1120 |
| Due date (calendar year) | May 1 |
| Extension | Form F-7004, six more months to file (not to pay) |
| Estimated payments | Required if you expect more than $2,500 in tax |
| Agency | Florida Department of Revenue |
Who has to pay it?
C corporations that do business in Florida. That covers corporations formed in Florida and out-of-state corporations with a taxable connection (nexus) here. An LLC that has elected C corporation tax treatment with the IRS is in the same position.
Pass-through businesses generally don’t pay it. That includes partnerships, sole proprietorships and single-member LLCs that haven’t elected corporate taxation, because their income flows to the owners’ personal returns, and Florida doesn’t tax personal income.
S corporations are also generally exempt because their income passes through to shareholders. They may still have a Florida filing requirement, such as Form F-1120A, so check the Department of Revenue’s current instructions before you assume you can skip the return.
How does the $50,000 exemption work?
You subtract $50,000 from your Florida taxable income and pay 5.5% on what’s left. If you’re at or under $50,000, you owe zero.
| Florida taxable income | Less exemption | Taxed amount | Tax at 5.5% |
|---|---|---|---|
| $50,000 | $50,000 | $0 | $0 |
| $75,000 | $50,000 | $25,000 | $1,375 |
| $100,000 | $50,000 | $50,000 | $2,750 |
The exemption is applied after Florida’s adjustments and, for multi-state companies, after apportionment. For a small C corporation, that makes the Florida bill modest. A company earning $100,000 pays $2,750, not $5,500.
How is the taxable amount calculated?
You start with federal taxable income from IRS Form 1120 and then make Florida adjustments.
Add-backs. State and local income taxes you deducted on the federal return go back in. So does interest from non-Florida state or local bonds that was exempt federally. Florida also doesn’t allow the federal net operating loss deduction, so that’s added back too.
Subtractions. Interest on U.S. government obligations, such as Treasury securities, comes out. Florida then lets you take its own net operating loss deduction, calculated under Florida rules. Some industries also have special provisions.
The NOL difference trips people up. Your federal loss carryforward doesn’t simply flow through. You track a separate Florida figure.
What if you operate in more than one state?
You don’t pay Florida’s 5.5% on all of your income. Florida uses an apportionment formula to work out what share of your income belongs to Florida, takes the $50,000 exemption off that share, and applies the rate to what’s left.
If you have property, payroll or sales in several states, we’d have a CPA run the apportionment. It’s where most of the room for error sits on a multi-state return.
What do you file, and when?
Corporations that owe the tax file Form F-1120, Florida Corporate Income/Franchise Tax Return. It reports your federal taxable income, the Florida additions and subtractions, any apportionment, credits, and the estimated payments you made during the year. Attach a complete copy of your federal Form 1120, your apportionment schedules, and support for any credits you claim.
Calendar-year corporations file by May 1. Florida’s rule is the first day of the fifth month after your tax year ends, or 15 days after the federal due date, whichever is later. Corporations with a fiscal year ending June 30 file by the first day of the fourth month.
Electronic filing is mandatory if your corporation paid $20,000 or more in Florida tax during the prior state fiscal year (July 1 to June 30). Below that, it’s optional, but we’d still file online. You get faster processing and proof that the return arrived.
Can you get an extension?
Yes. File Form F-7004, Florida Tentative Income/Franchise Tax Return and Application for Extension of Time to File Return, and you get six more months to file.
It’s an extension to file, not to pay. Estimate what you owe and pay it by the original due date, or you’ll owe penalties and interest on the unpaid amount. Filing a federal extension doesn’t take care of this, so file the Florida form separately.
Do you need to make estimated payments?
Only if you expect your Florida tax, after credits, to be more than $2,500 for the year. Use Form F-1120ES.
The four payments are due on the first day of these months:
- The 4th month of the tax year (April 1 for calendar-year corporations)
- The 6th month (June 1)
- The 9th month (September 1)
- The 1st month of the following tax year (January 1)
To avoid underpayment penalties, pay either 90% of the tax you expect to owe this year or 100% of the tax on last year’s return (if last year was a full 12 months). The penalty is figured quarter by quarter on the amount you underpaid, at a rate tied to the interest rate on late tax.
The prior-year method is the easier one for most small corporations. You know the number in January, and you’re covered even if this year turns out better than expected.
Does your corporation have nexus in Florida?
Nexus is the connection that gives Florida the right to tax your income. Occasional business here doesn’t automatically create it. These do:
- An office or other property you own or lease in Florida
- Employees, agents or contractors working in Florida
- Inventory stored in a Florida warehouse
- Regularly providing services or doing business in Florida
Since the Supreme Court’s South Dakota v. Wayfair decision, states have moved toward economic nexus, which is based on sales volume rather than physical presence. In Florida that mostly affects sales tax, but if your Florida sales are large, look at whether they create an income tax obligation too.
One federal protection applies. Under Public Law 86-272, a corporation whose only Florida activity is soliciting orders for tangible goods, with orders approved and shipped from outside Florida, doesn’t have income tax nexus. It doesn’t cover services, and it doesn’t cover anything beyond solicitation. If your sales reps also install, repair or train customers in Florida, it likely doesn’t protect you.
How does Florida compare with other states?
| State | Corporate tax |
|---|---|
| Florida | 5.5%, first $50,000 exempt |
| California | 8.84% |
| New York | 6.5% (plus local taxes in NYC) |
| New Jersey | 9.0% (on income over $1 million) |
| Texas | No income tax, 0.75% margin tax |
| Nevada | No corporate income tax |
Florida’s real draw for owners is on the personal side. There’s no personal income tax, and no estate, inheritance or wealth tax. Dividends your C corporation pays you aren’t taxed by the state, though federal tax still applies.
That double layer (corporate tax, then tax on dividends) is the reason many small Florida businesses choose an S corporation or LLC instead. If you plan to take most of the profit out each year, pass-through taxation usually costs less. A C corporation makes more sense when you’ll keep earnings in the business or plan to raise outside investment.
Frequently asked questions
Do S corporations pay Florida corporate income tax?
Generally no, because their income passes through to shareholders, and Florida has no personal income tax. You may still need to file Form F-1120A, so check the Department of Revenue’s instructions.
When is the Florida corporate tax return due?
For a calendar-year corporation, May 1. That’s about two weeks after the federal April 15 deadline for C corporations.
Can I deduct federal income tax on my Florida return?
No. Federal income tax isn’t deductible for Florida purposes, and any state and local income taxes you deducted federally have to be added back.
Is Florida’s franchise tax a separate tax?
Not for most corporations. The return is called the Corporate Income/Franchise Tax Return, but for a typical corporation it’s one tax, calculated on net income at 5.5%.
What if I overpay?
You can ask for a refund or apply the overpayment to next year’s estimated tax. The Department of Revenue reviews the return before it issues a refund.
Does Florida offer tax credits for corporations?
Yes. They include the Research and Development Tax Credit, Rural Job Tax Credit, New Markets Development Tax Credit, Entertainment Industry Tax Credit and Capital Investment Tax Credit. Each has its own qualifications and limits.
Before your first return
Put May 1 on the calendar now, along with April 1, June 1, September 1 and January 1 if you expect more than $2,500 in tax. Then decide who’s preparing the F-1120. If your corporation only operates in Florida and earns under $50,000, the return is short and the tax is zero. Once you sell into other states or claim credits, it’s worth paying a CPA who files Florida returns every year.