December 4, 2009
President Obama signed H.R. 3548, The Worker, Homeownership, and Business Assistance Act of 2009 into law. One of the provisions of the act is the extension of a Five Year NOL Carry Back to most businesses for 2008 or 2009. Previously, under the American Recovery and Reinvestment Act of 2009, eligible small businesses (with average gross receipts of $15 Million or less) were allowed to carry back Net Operating Losses (NOLs) from 2008 for three, four or five years rather than the standard two years.
The new act expands the election to allow most businesses (large and small) to carry back NOLs incurred in 2008 or 2009 (typically not both) to the previous five years. Under the new act, an NOL carried back to the fifth year before the loss is limited to 50% of the available taxable income for that year. Any remaining NOL can then be applied in remaining four carry back years.
BENEFIT: A business can carry back an NOL to a [Read more…]