Schedule E: Reconciliation and Information (2025)
Massachusetts · Massachusetts DOR · Used for tax years 2025
Massachusetts Schedule E Reconciliation is a summary sheet for supplemental income and losses reported on separate Schedules E-1, E-2 and E-3. It combines amounts from rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs and farm rentals, along wit
Who files this form
Form 1, Form 1-NR/PY and Form NRCR filers must use Schedule E to report income or losses from rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs and farm rentals, as applicable.
Schedule E Reconciliation is a summary sheet only. Complete the applicable Schedules E-1, E-2 and E-3 for the income you report.
- Nonresidents must report Massachusetts-source income or losses from these sources.
- Part-year residents must report income or losses received while they were Massachusetts residents, whether the sources were inside or outside Massachusetts.
What you'll need
Have your name, Social Security number and the applicable completed schedules ready:
- Schedule E-1: Rental real estate and royalties.
- Schedule E-2: Partnerships and S corporations.
- Schedule E-3: Estates, trusts, REMICs and farms.
Form 1 and Form 1-NR/PY filers must file a separate applicable schedule for each individual entity.
Depending on your entries, you may also need:
- Your U.S. return to identify Massachusetts differences on line 56, plus an enclosed statement explaining those differences.
- A pro forma U.S. Form 8582 to calculate allowable passive losses when applicable Massachusetts adjustments exist.
- Schedules SK-1, 3K-1 or 2K-1 showing a PTE Excise Credit, and Schedule CMS to claim that credit.
How to file
Complete the applicable Schedules E-1, E-2 and E-3, then transfer the totals from their corresponding lines to Schedule E Reconciliation.
Enter the total from Schedule E, line 58, on:
- Form 1, line 7;
- Form 1-NR/PY, line 9; or
- Form NRCR, line 1.
The printed instructions require taxpayers reporting Schedule E income or losses to use computer-generated tax return forms produced by third-party software. You or a tax professional may generate the return. Electronic filing is encouraged but not required. Software-generated paper forms with a two-dimensional (2D) bar code are also accepted.
If you do not have access to a software package, the instructions allow you to file Schedule E on paper. If you hire a tax preparer, the preparer must follow the Commissioner's electronic filing rules.
Common mistakes
- Using the reconciliation sheet alone. It is a summary only. Complete the applicable Schedules E-1, E-2 and E-3.
- Including losses on line 22. This line is for positive amounts from line 20 only.
- Using the wrong sign. Follow each line's directions. Some loss and deduction lines require positive amounts, while total-loss lines require negative amounts. Fill in the loss oval where indicated.
- Leaving out the line 56 statement. Enclose an explanation of Massachusetts differences and enter losses as negative amounts.
- Using federal deduction rules without Massachusetts adjustments. For 2025, the instructions warn that Massachusetts does not follow the federal business-interest limit changes, the IRC § 174A research expense deduction, the federal IRC § 179 maximum limits or the IRC § 168(n) special depreciation allowance.
- Omitting Schedule CMS when claiming a PTE Excise Credit. The credit must be reported on the separate Schedule E-2 or E-3 for each entity and reported and submitted on Schedule CMS.
Questions people ask
Is Schedule E Reconciliation a replacement for Schedules E-1, E-2 and E-3?
No. It is a summary sheet only. You must complete the applicable separate schedules for the types of income you report.
Do I have to file electronically?
Electronic filing is encouraged but not required. The instructions also accept software-generated paper returns with a 2D bar code and allow a paper Schedule E if you do not have access to software. Hired preparers must follow the Commissioner's electronic filing rules.
Where does the Schedule E total go on my return?
Transfer line 58 to Form 1, line 7; Form 1-NR/PY, line 9; or Form NRCR, line 1.
What should I report on line 56?
Enter and explain differences between total rental, royalty and REMIC income on your U.S. return and the same types of income on your Massachusetts return. Enclose a statement explaining the differences and enter losses as negative amounts.