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**The information below has not been verified for the 2020 tax year as the IRS Schedule M-3 (Form 1120) instructions have not yet been released by the IRS.**

Per IRS Instructions for Schedule M-3 (Form 1120) Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More, on page 1:

Who Must File

Generally, the following apply.

  • A domestic corporation or group of corporations required to file Form 1120, U.S. Corporation Income Tax Return, that reports on Form 1120, Schedule L, Balance Sheets per Books, total assets at the end of the corporation's tax year that equal or exceed $10 million must file Schedule M-3 instead of Schedule M-1, Reconciliation of Income (Loss) per Books With Income per Return.
  • A corporation filing a non-consolidated Form 1120 that reports on Schedule L total assets that equal or exceed $10 million must complete and file Schedule M-3 and must check box (1) Non-consolidated return, at the top of page 1 of Schedule M-3.
  • Any U.S. consolidated tax group consisting of a U.S. parent corporation and additional includible corporations listed on Form 851, Affiliations Schedule, required to file Form 1120, that reports on Schedule L total consolidated assets at the end of the tax year that equal or exceed $10 million must file Schedule M-3 and must check box (2) Consolidated return (Form 1120 only), or box (3) Mixed 1120/L/PC group, as applicable, at the top of page 1 of Schedule M-3.
  • Cooperatives filing Form 1120-C, U.S. Income Tax Return for Cooperative Associations, that report total assets at tax year end that equal or exceed $10 million must file Schedule M-3 (Form 1120).
  • A corporation filing Form 1120 (or Form 1120-C) that is not required to file Schedule M-3 may voluntarily file Schedule M-3.
  • If a corporation was required to file Schedule M-3 for the preceding tax year, but reports on Form 1120, page 1, Item D, and on Form 1120, Schedule L, total consolidated assets at the end of the current tax year of less than $10 million, the corporation is not required to file Schedule M-3 for the current tax year.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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