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TaxSlayer Reject Code F1120-260-01
TaxSlayer Reject Code F1120-260-01
Angelica Acebes avatar
Written by Angelica Acebes
Updated over 3 weeks ago

Reject Code F1120-260-01 occurs when Schedule K, Line 13 is marked "No", indicating that the corporation's total receipts and total assets are not less than $250,000, but Schedule M-2 has not been completed.

Understanding the Requirement:

  • If a corporation's total receipts and total assets at the end of the tax year are $250,000 or greater, it is required to complete Schedules L, M-1, and M-2 along with Form 1120.

  • This error happens when Schedule M-2, Line 8 is left blank, even though the corporation's receipts and assets meet the reporting threshold.

How to Fix This Rejection:

Option 1: If the corporation's receipts and assets are LESS than $250,000

  • Answer "Yes" to the question on Schedule K, Line 13 to confirm that reporting is not required.

  • In TaxSlayer, go to:

    • Schedule K - Other Information

    • Receipts and Assets at Year End Less Than $250,000? → Change "No" to "Yes".

  • Save and retransmit the return.

Option 2: If the corporation's receipts and assets are $250,000 or MORE

  • Complete Schedule M-2 as required.

  • In TaxSlayer, go to:

    • Schedule M-2 - Unappropriated Retained Earnings

    • Enter the appropriate values.

  • Save and retransmit the return.

Following these steps will ensure compliance with IRS filing requirements and prevent further rejections.

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