Al Reid, CPA Vice President

Yes, and there are some new options for net operating losses (NOL) for 2008 & 2009. Almost every business is allowed to carry back an applicable NOL and generate additional tax savings.

For many years, NOL’s were only allowed to be carried back 2 years. In early 2009, Congress allowed 2008 losses for small businesses to be carried back 2, 3, 4 or 5 years. On November 6, 2009, Congress changed the law to allow 2009 losses to also be carried back 2, 3, 4 or 5 years (with limitations).

They also allowed most large businesses to use this same option. An applicable NOL for the new law is a NOL for any tax year ending after 12/31/07 and beginning before 1/1/10. Any unused carry back is still allowed a 20 year carry forward, and a taxpayer can also still elect to not carry any of the NOL back and just carry the NOL forward to offset future income.

The new law also affords an opportunity to undo a previously filed election to waive the carry back period that was made for an applicable tax year ending before 11/6/09. This needs to be done before the extended due date for filing the 2009 tax return.

These rules are very complicated and professional advice should be sought. (The above information is only a summary and should not be considered tax advice.)

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