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SCHR-020 e-file error

Error

Schedule R, Line 1c [CombinedOffsetAndNetIncomeLoss] must equal Line 1a [NetIncomeLossAfterAdjustments] + Line 1b [WatersEdgeOffset] (SCHR-020)

Cause

Schedule R only applies to LLCs that have schedule K-1. There is no apportionment (or K-1) for SMLLCs. Whatever is entered in the organizer for California sourced income is what transfers to the form, so apportionment may be calculating incorrectly.

Solution

  1. In the Organizer, go to
    States
     and select
    California
    .
  2. Complete one of the following options:
    • Uncheck the
      Corporation apportioning income using Schedule R
       checkbox.
      This is located in the
      General Information
       screen in the Additional Information section.
    • Check the
      Schedule R Three-factor apportionment is used as this corporation falls under RTC Section 25128(b)
       checkbox.
      This is located in the
      Allocation and Apportionment
       screen in the Compute and Print Options section.
    • Uncheck the
      LLC is apportioning income to California using Schedule R
       checkbox.
      This is located in the Disregarded Entity folder on the
      General Information
       screen.
  3. Once you've completed one of these options, do a full recompute, recreate the electronic file, and resubmit the return.
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