New! Information on Net Operating Loss Carryback
Information has just been added to the Tax Provisions in the American Recovery and Reinvestment Act of 2009 web page on the Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Information on the carryback and other business-related provisions is now available.
For more information on the net operating loss carryback, see the following links and pages:
New Law Extends Net Operating Loss Carryback for Small Businesses; IRS to Ensure Refunds Paid Timely
http://www.irs.gov/newsroom/article/0,,id=205329,00.html
Small businesses with deductions exceeding their income in 2008 can use a new net operating loss tax provision to get a refund of taxes paid in prior years. To accommodate the change in tax law, the IRS has updated the instructions for two key forms — Forms 1045 and 1139 — that small businesses can use to make use of the special carryback provision for tax year 2008. These forms are used to accelerate the payment of refunds.
The new provision, enacted as part of the American Recovery and Reinvestment Act of 2009, enables small businesses with a net operating loss (NOL) in 2008 to elect to offset this loss against income earned in up to five prior years. Typically, an NOL can be carried back for only two years. The IRS released legal guidance in Revenue Procedure 2009-19 outlining specific details. Some taxpayers must make the election to use this special carryback by April 17, 2009.
Small businesses with large losses in 2008 may be able to benefit fully from those losses now, rather than waiting until claiming them on future tax returns.
Questions and Answers for ARRA - Section 1211 5-year Net Operating Loss Carryback Election for Small Businesses
http://www.irs.gov/newsroom/article/0,,id=205331,00.html
Revenue Procedure 2009-19 (Net Operating Loss Carryback for Small Businesses)
http://www.irs.gov/pub/irs-drop/rp-09-19.pdf
There are several methods that a small business uses to elect the new provision as detailed in the Revenue Procedure. If a small business previously elected to waive the carryback of 2008 NOL but now wants to elect this special carryback, the small business may revoke its previous election to waive the carryback. The election revocation must be made on or before April 17, 2009.
Primary web page for updates to Tax Provisions in the American Recovery and Reinvestment Act of 2009:
http://www.irs.gov/newsroom/article/0,,id=204335,00.html?portlet=6
The Recovery web page is also available in Spanish: Información en Español -- http://www.irs.gov/newsroom/article/0,,id=205057,00.html
To see basic information on the Net Operating Loss Carryback and other ARRA Business Provisions, go here: http://www.irs.gov/newsroom/article/0,,id=205330,00.html
