Net Operating Losses (NOL)
The CARES Act allows for a five-year carryback of net operating losses arising in 2018, 2019, or 2020 by a business. Businesses will be able to amend or modify tax returns for tax years dating back to 2013 in order to take advantage of the carryback.
The Act also eliminates loss limitation rules applicable to sole proprietors and passthrough entities to allow them to take advantage of the NOL carryback.
Additionally, the Act allows for NOLs arising before January 1, 2021, to fully offset income. Under the current law, NOLs are limited to 80% of taxable income.
NOL Resources:
Updates and C&A Postings: