Independent form guide. BrieflyGo is not affiliated with or endorsed by IRS, USCIS, SSA, DOL, or any U.S. government agency. Official forms are sourced from public government websites.
Official form guide
Form 1120SS3: 1120-S (Schedule M-3)
Treasury Internal Revenue Service Form 1120-S (Schedule M-3) is used for Net Income (Loss) Reconciliation for S Corporations With Total Assets of $10 Million or More. If required to file, the corporation must submit this form.
Need help with Form 1120SS3?
Open it in the AI Editor for field guidance, checks, and PDF export.
Need help? AI Editor guides you through every field of Form 1120SS3.
Start filling →Form Overview
IRS Form 1120SS3 - 1120-S (Schedule M-3)
Treasury Internal Revenue Service Form 1120-S (Schedule M-3) is used for Net Income (Loss) Reconciliation for S Corporations With Total Assets of $10 Million or More. If required to file, the corporation must submit this form.
Risk Radar
Scan points- 1Ensure line 1 of Form 1120-S, Schedule M-1 equals line 11 of Part I if Parts II/III are omitted.
- 2Omitting Part II/III when electing to use Schedule M-1 instead of completing them.
- 3Failing to ensure line 1 of Form 1120-S, Schedule M-1 matches line 11 of Part I.
- 4Not including all income and expense amounts attributable to a reportable transaction on Part II, line 10.
- 5Forgetting to provide detailed supporting information for adjustments reported in columns (b) and (c).
Plain English
This form helps an S Corporation reconcile its financial books with its official tax return. It shows how the company's net income or loss changed between what is reported in its accounting records and what is calculated for tax purposes. The reconciliation details these differences, ensuring accuracy when filing taxes.
Submission Date
- Filing date: 2019-11-22 22:10:27
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
AI co-pilot
Fill it faster. Catch mistakes before you file.
What this form is for
- Use this form when a corporation is required to file Form 1120-S and has total assets equal to or exceeding $10 million at the end of its tax year.
- Do not use it when a corporation completes Parts II and III of Schedule M-3, but is not required to complete Form 1120-S, Schedule M-1.
- Check Form 1120-S instead when the corporation is filing the primary U.S. Income Tax Return for an S Corporation.
Form selector
Use this form or another form?
Electing to file Schedule M-3 instead of completing Schedule M-1
If electing to file M-3 entirely, all columns of Parts II and III must be completed.
✓ Check line 8 of Part I.
Completing only through Part I of Schedule M-3
If this path is taken, line 11 of Part I of Schedule M-3 must equal line 1 of Schedule M-1.
✓ Check the relationship between Part I and Schedule M-1.
Reporting QEF income amounts
The total reported on all Forms 8621 corresponds to the amount entered on line 3 of Schedule M-3 (Form 1120-S).
✓ Verify entries against all supporting Form 8621s.
Deadline or filing window
Filing is required based on the corporation's tax year end. If a corporation elects to file Schedule M-3 entirely, it must complete all columns of Parts II and III by that tax year end. No specific extension period is detailed in these instructions.
Checklist
What you need before filling it out
Total Assets Threshold
Total assets at end of tax year · Part I/General Info
Line 3 (PFIC)
Amounts from all Forms 8621 and Section 1296 mark-to-market gains/losses · Part I
Line 4(a) (Gross Foreign Distributions Previously Taxed)
Distributions from foreign corporations included in Part I, line 11, that were previously taxed for U.S. income tax purposes · Part I
Line 6a (Nonincludible U.S. Entity Income/Loss)
Financial net income or loss of each separate nonincludible U.S. legal entity · Part I / Supporting Statement
Part II & III Completion
All columns within Parts II and III · Parts II & III
Before you submit
- 1Confirm the Name of corporation is accurately entered.
- 2Verify the Employer identification number matches the official records.
- 3Check line 1a to confirm if a certified audited non-tax-basis income statement was prepared (Yes/No).
- 4If 'No' on line 1a, ensure lines 2 through 11 are completed using the non-tax-basis income statement.
- 5Ensure that for foreign entities reported in Part I, supporting statements detail separate net income/loss amounts.
- 6Verify that if electing to file M-3 entirely, all columns of Parts II and III are populated.
- 7Confirm line 11 of Part I equals line 1 of Schedule M-1 (if completing M-3 through Part I).
How to file this form
- 1Complete the Name of corporation and Employer identification number fields on Form 1120-S (Schedule M-3).
- 2Fill out all applicable lines in Part I, including confirming whether a certified audited non-tax-basis income statement was prepared.
- 3If required or electing to file entirely, complete all columns within Parts II and III of the form.
- 4Attach any necessary supporting statements detailing entity breakdowns (e.g., for foreign entities on line 5a/6a).
- 5Mail the completed Form 1120-S (Schedule M-3) to Center Ogden, UT 84201-0013.
Known limitations
- 1A corporation that completes Parts II and III of Schedule M-3 (Form 1120-S) is not required to complete Form 1120-S, Schedule M-1.
- 2If a corporation does not file Schedule M-3 (Form 1120-S), it must file Schedule M-1 instead.
- 3A U.S. corporation that completes Parts II and III of Schedule M-3 (Form 1120-S) must either complete the form entirely or complete through Part I and use Schedule M-1 instead of completing Parts II and III.
- 4If a corporation is required to file Schedule M-3 (Form 1120-S) and has at least $50 million in total assets, it must complete Schedule M-3 (Form 1120-S) entirely.
Field map
Compact field-by-field guide
Entity Info
2 items
Full legal name of the corporation and its Employer Identification Number.
Current mailing address and date of incorporation.
Income
3 items
Total revenue from business operations before deducting costs.
Direct costs attributable to producing goods sold by the corporation.
Gross receipts minus cost of goods sold and returns/allowances.
Deductions
1 items
Sum of all business expenses including compensation, rent, interest, taxes, and depreciation.
Tax
2 items
Total income minus total deductions.
Tax calculated on taxable income using the applicable corporate tax rate, minus any credits.
Signatures
1 items
An authorized corporate officer must sign and date the return.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is Revision December 2019, and readers should check IRS.gov/Form1120S for the latest information regarding developments related to Schedule M-3 (Form 1120-S).
What changed or needs a fresh check
- Edition date — confirm the revision reads December 2019.
- Mailing address — verify the destination is Center Ogden, UT 84201-0013.
- Form Number — confirm the title includes Form 1120-S (Schedule M-3).
- Tax Year Requirement — confirm total assets for the year equal or exceed $10 million.
Quick Facts
Downloads
After you file
- 1Keep a copy of the filed Form 1120-S (Schedule M-3) and all attachments.
- 2Ensure all columns are completed for any part of Schedule M-3 (Form 1120-S) that is completed.
- 3Confirm all applicable questions on Schedule M-3 (Form 1120-S) have been answered.
- 4Verify the revision date reads December 2019 on Form 1120-S (Schedule M-3).
Sources
- SRCInstructions p.1 — The purpose of Schedule M-3 is Net Income (Loss) Reconciliation for S Corporations With Total Assets of $10 Million or More.
- SRCInstructions p.1 — Part I reconciles financial statement worldwide net income (loss) reported on Part I, line 4a to the corporation's income statement for U.S. tax purposes on Part I, line 11.
- SRCInstructions p.1 — Parts II and III reconcile financial statement net income (loss) for the U.S. tax return (per Schedule M-3, Part I, line 11) to total income (loss) on Form 1120-S, Schedule K, line 18.
- SRCInstructions p.1 — A corporation must file Schedule M-3 (Form 1120-S) if it is required to file or voluntarily files and reports total assets of $10 million or more at year-end.
- SRCInstructions p.1 — If a corporation is required to file Schedule M-3 (Form 1120-S) with $\ge$ $50 million in assets, it must complete Schedule M-3 entirely.
- SRCInstructions p.10 — The amount of QEF income corresponds to the total reported on all Forms 8621.
Common confusion points
When do I need to file this form?
Any corporation required to file Form 1120-S that reports total assets of $10 million or more at the end of its tax year must file Schedule M-3 (Form 1120-S).
What happens if my company has less than $50 million in total assets but is required to file?
The corporation must either complete Schedule M-3 entirely, OR complete through Part I and use Schedule M-1 instead of Parts II and III.
Where do the QEF income amounts come from?
QEF income corresponds to the total reported on all Forms 8621.
Workflow map
Related forms and next steps
Current
Often used with
⚠ If something goes wrong
Questions about IRS Form 1120SS3
What is IRS Form 1120SS3 used for?
This form helps an S Corporation reconcile its financial books with its official tax return. It shows how the company's net income or loss changed between what is reported in its accounting records and what is calculated for tax purposes. The reconciliation details these differences, ensuring accuracy when filing taxes.
Who must file IRS Form 1120SS3?
Any U.S. corporation required to file Form 1120-S that reports on Schedule L of Form 1120-S must file Schedule M-3 (Form 1120-S) if its total assets equal or exceed $10 million at the end of the tax year.
What information does IRS Form 1120SS3 require?
The form collects details in various parts, including Part I and Parts II and III. Specifically, it tracks adjustments relating to reportable transactions on Part II, line 10, and records items like goodwill impairment on Part III, line 19.
When is IRS Form 1120SS3 due?
The instructions do not state a specific due date; rather, they describe the filing requirement based on the corporation's tax year end. The general instruction applies to the applicable tax year.
Where do I file IRS Form 1120SS3?
If the corporation is required to file Form 1120-S, it must mail all attachments and schedules, including Schedule M-3 (Form 1120-S), to the IRS Center in Ogden, UT 84201-0013.
How do I complete IRS Form 1120SS3?
A corporation must complete all required parts of Schedule M-3 (Form 1120-S) entirely. If it chooses to file Form 1120-S, Schedule M-1 instead of completing Parts II and III, line 1 of Form 1120-S, Schedule M-1 must equal line 11 of Part I of Schedule M-3 (Form 1120-S). All applicable questions must be answered for the part(s) completed.
What happens if IRS Form 1120SS3 is filed incorrectly?
The instructions do not specify a penalty for incorrect filing of Form 1120-S and Schedule M-3, but they mandate that all columns must be completed and all applicable questions answered for any part completed.
Source transparency
Copyright & Licensing - US Government Forms
BrieflyGo links to and explains official public form sources. We are not a government agency, and this page is for general form guidance, not legal advice.
Understand the agreement before you sign it.
Review risky clauses in plain English, fix the document, and keep it moving toward signature.