E-File California Form 109 for Unrelated Business Income
Have more than $1,000 in gross unrelated business income (UBI)?
Form 109 is the California tax return used to report and pay tax on that income. Prepare, review, and securely e-file your return online with TaxZerone.
FTB - Authorized
99% Acceptance rate
Completely secure
Receive instant update
File California Form 109 online for just $69.99
TaxZerone delivers a secure, affordable, and hassle-free way to prepare and e-file FTB Form 109 online.
What Is California Form 109?
CA Form 109 (Exempt Organization Business Income Tax Return) is a California Franchise Tax Board (FTB) tax return used by eligible tax-exempt organizations to report unrelated business income (UBI) and calculate any California tax due on that income.
- Official Purpose – Reports UBI and calculates the tax on that income under applicable California FTB rules.
- Filed With – California Franchise Tax Board(FTB).
- Income Reported – Business income from activities that are not substantially related to an organization's tax-exempt purpose.
- Tax Calculation – Calculates any applicable California tax on unrelated business income.
- Return Type – A California state business income tax return for qualifying exempt organizations and certain nonexempt charitable trusts.
What Is Unrelated Business Income (UBI) and How Is UBTI Calculated?
Form 109 for CA is based on the concept of Unrelated Business Taxable Income (UBTI), which is derived from your Unrelated Business Income (UBI) by deducting allowable deductions. This will help you to know when you have to file Form 109.
UBI
Income earned from a trade or business that is regularly carried on and not substantially related to your organization's exempt purpose.
- Subject to taxation in California.
- Serves as the basis for computing the UBTI.
- UBI gross greater than $1,000 can give rise to a Form 109 reporting requirement.
Gross UBI
Allowable Deductions
UBTI
California Form 109
UBTI
The taxable amount calculated from UBI after allowable deductions. Form 109 uses UBTI to determine any tax due.
- Subject to taxation in California.
- Serves as the basis for computing the UBTI.
- UBI gross greater than $1,000 can give rise to a Form 109 reporting requirement.
When Does Your Organization Need to File California Form 109?
Your organization may need to file CA Form 109 if it has more than $1,000 in gross unrelated business income (UBI) from activities conducted in California. The return is generally required for tax-exempt organizations and certain nonexempt charitable trusts with California unrelated business taxable income (UBTI).
Key Filing Requirements
- Gross UBI Requirement – More than $1,000 in gross unrelated business income (UBI) during the taxable year.
- Eligible Organizations - Organizations such as 501(c)(3) public charities, private foundations, trade and professional associations, employee trusts, and other tax-exempt organizations fall in this category.
- Non-exempt Charitable Trusts – Some charitable trusts as per IRC Section 4947(a)(1) may require filing as well.
- Multi-state Operations – Organizations engaged in unrelated business activities both within and outside California need to apportion their income.
Should Your Organization File California Form 109 or Form 199?
Form 109 and Form 199 serve different filing purposes. Form 109 is used to report and pay tax on unrelated business taxable income (UBTI), while Form 199 is the annual information return for California tax-exempt organizations. Depending on your organization's activities and filing requirements, you may need to file one or both returns.
| California Form 109 | California Form 199 | |
|---|---|---|
| Purpose | Reports unrelated business taxable income (UBTI) and calculates applicable California tax | Reports annual information for California tax-exempt organizations |
| Who May Need to File? | Organizations with more than $1,000 in gross unrelated business income (UBI), subject to California filing requirements | Organizations required to file an annual California exempt organization information return |
| Taxable Income | Reports UBTI after allowable deductions | Does not report UBTI |
| Tax Payment | May require payment of California tax | Informational return; generally does not require tax payment |
| Federal Equivalent | IRS Form 990-T | IRS Form 990, Form 990-EZ, or Form 990-N |
What Information Do You Need to File Form 109?
Before filing California Form 109, gather your organization's financial, tax, and unrelated business income (UBI) information.
Having these details ready helps you complete the return accurately and efficiently.
- Organization Information
- Unrelated Business Income (UBI) Details
- Allowable Deductions
- California Apportionment Details
- Supporting Forms & Schedules
Supporting Forms & Schedules for CA Form 109
Depending on your organization's activities, | Form 109 mayrequire additional forms and schedules. TaxZerone supports the key California forms commonly associated with Form 109 filing.
- FTB Form 3885F - Report California depreciation and amortization adjustments for exempt organizations and trusts.
- Schedule D (541) - Reports capital gains and losses for applicable trusts.
- Schedule P (100) - Calculates alternative minimum tax (AMT) and credit limitations for applicable organizations.
Looking for additional guidance? Explore our FTB CA Form 109 instructions and resources to learn about filing requirements, eligibility, deadlines, extensions, and step-by-step filing guidance.
When Is California Form 109 Due?
Know your filing deadline based on your organization's type and stay compliant with California FTB requirements.
- Public Charities (501(c)(3))
- Private Foundations
- Trade Associations
- Employee Trusts (except pension trusts)
- Other Exempt Organizations
Return due date
May 15
- Pension Trusts (IRC Section 401(a))
- Individual Retirement Arrangements (IRAs)
Filing Deadline
Most exempt organizations must file FTB Form 109 by the 15th day of the 5th month after the close of their taxable year. Pension trusts and IRAs generally file by the 15th day of the 4th month.
Extension Available
An automatic 6-month extension is available if your organization is in good standing. If tax is due, pay 100% of the tax by the original due date using FTB Form 3539 to avoid late payment penalties.
Late Filing & Payment
File and pay by the original due date to avoid penalties and interest. Late-filing and late-payment penalties may apply, with the combined penalties not exceeding 25% of the unpaid tax.
Why Choose TaxZerone?
Prepare, review, and securely e-file California Form 109 with features specifically
created to streamline your state tax filing for nonprofits.
FTB-Authorized E-Filing
TaxZerone is a certified FTB e-filer, which means that you get a secure and trusted portal to file your FTB Form 109.
Free Retransmission
In case your FTB Form 109 is rejected due to any correctable problem, you can amend your form and send it again free of charge.
24/7 Customer Support
Live chat and email customer support available to help you with any questions related to filing or technical problems with your account.
Guided Filing Experience
With our guided filing service, you will go through the steps of filling out your California Form 109 smoothly and with ease.
Unparalleled Security
Your organization's information is protected with industry-standard encryption and secure technology, ensuring your California Form 109 data remains safe throughout the filing process.
Built for Accuracy & Compliance
Built-in validations help identify common filing errors and support compliance with California Franchise Tax Board (FTB) filing requirements.
From preparing your return to secure electronic filing, TaxZerone helps you complete FTB CA Form 109 with confidence.
E-File NowSimplified e-filing process
Hear What Our Clients Say About Us
- Shawn Garner
- Susan Carlson
- Edward Pleasant
Ready to E-File California Form 109?
Report your California unrelated business income with confidence. TaxZerone simplifies
CA Form 109 filing with a secure, guided e-filing experience designed for exempt organizations.
Frequently Asked Questions
1. How is California Form 109 different from IRS Form 990-T?
- CA Form 109 and IRS Form 990-T both report unrelated business taxable income (UBTI), but they are filed with different tax authorities.
- Form 990-T is the federal return filed with the IRS, while CA Form 109 is the state return filed with the California Franchise Tax Board (FTB). Organizations with unrelated business income may need to file both returns if they meet the applicable federal and California filing requirements.
2. What are the common mistakes to avoid when filing California Form 109?
Common filing mistakes include reporting incorrect unrelated business income, overlooking allowable deductions, omitting required supporting forms or schedules, using incorrect California apportionment information for multi-state activities, and submitting incomplete organization details. Reviewing your return before filing can help reduce processing delays and notices from the FTB.
