Retained Earnings Reconciliation - not previously a C corporation

Nickford0074 — Tue, 10 Feb 2026 09:38:59 GMT

In TurboTax business corporate edition I am being asked to complete the retained earnings reconciliation because it says we "were once a c corporation," but I checked that our company was not a c corporation during the early interview questions as I always have. We were not once a c corporation. Why am I getting this requirement now and can I disable it or is it a bug or what? I have not ran into this problem in previous years.

Re: Retained Earnings Reconciliation - not previously a C corporation

PatriciaV — Wed, 24 Jan 2024 19:39:59 GMT

You may wish to return to the Business Info tab of TurboTax Business and review your answers to the Former C Corporation questions.

Open your return and go to the Business Info tab.
Click on About Your Business and page through the questions until you see "Former C Corporation Questions."
Be sure you checked "No" for both questions.

Alternatively, go to Forms, open Form 1120S p1-2, scroll down to the bottom and review the box on Line 8 (should be blank).

Also check the options for Schedule M-2 found on Form 1120S p3-5 under the Schedule M-2 header. You can uncheck those boxes if you don't need to include this schedule to reconcile retained earnings.

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Retained Earnings Reconciliation - not previously a C corporation

Re: Retained Earnings Reconciliation - not previously a C corporation