If a return has generated a Net Operating Loss (NOL) in the current year, there will be a Green Alert in the return titled "Explanation: Net Operating Loss." The NOL amount will be reflected on Line 25 of Schedule A - NOL on page 3 of Form 1045 Application for Tentative Refund.

Instructions to review or modify the information and then print the schedule in the TaxAct^® program are provided below, followed by information on how to elect to carry forward that loss and how to enter that loss in the following year’s return.

Review or Modify Form 1045 Schedule A-NOL

Note. If there was any gain on the return excluded under section 1202 on the sale or exchange of qualified small business stock, that would need to be entered as a positive number on Line 17 of Schedule A-NOL.

Making the Election to Waive Carryback Period

To make the choice to only carry the loss forward you must attach a statement to the original return filed by the due date (including extensions) for the NOL year. This statement must show that you are choosing to waive the entire carryback period for the current year NOL under section 172(b)(3) of the Internal Revenue Code. With TaxAct you are able to electronically file your return and include this statement.

To make Election to Waive the Carryback Period and to include the NOL Election Explanation in your TaxAct return to be either paper filed or electronically filed:

1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
2. Click Miscellaneous Topics in the Federal Quick Q&A Topics menu to expand, then click Net Operating Loss (NOL).
3. Continue with the interview process to enter all of the appropriate information.
   

Entering the Loss on the Following Year's Return

As any NOL in the current year has the potential to be carried back or forward, depending on the choices made by the taxpayer, the TaxAct program does not automatically calculate the amount to be carried forward to the following year in an import situation. You will still be able to electronically file your tax return.

To enter the calculated amount of the carried forward loss on Federal Schedule 1 (Form 1040) Additional Income and Adjustments to Income, Line 8 in the TaxAct return:

1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
2. Click Other Income in the Federal Quick Q&A Topics menu to expand, then click Net Operating Loss (NOL) Carryforward.
3. Continue with the interview process to enter all of the appropriate information.
4. On the screen titled Net Operating Loss Deduction, enter the appropriate NOL deduction amount from your calculations on Form 1045 that is to be carried forward to the current year, then click Continue.

If the loss is not entirely used in the first year following the loss year, or if there are NOLs being carried forward from multiple years, to calculate the amount to enter on Federal Schedule 1 (Form 1040), Line 8, see IRS Publication 536 Net Operating Losses (NOLs) for Individuals, Estates and Trusts. Use the worksheet on page 8 (instructions on page 7) to calculate the amount to enter on Federal Schedule 1 (Form 1040), Line 8. If there are NOLs being carried forward from multiple years, you must calculate each amount separately and then add them together to enter on Line 8.

Note. If you import your information to the following year in the TaxAct program and do not enter an amount of carryforward loss, you will see a Green Alert "Error or Omission: NOL Carryforward" warning you that last year you indicated you were carrying forward the loss but there is no amount entered for Federal Schedule 1 (Form 1040), Line 8 in the current year.

Related Links

• Printing Your Return and Individual Forms
• Blue Fields are Calculated or Have Underlying Worksheets - Overrides
• Form 1045 Application for Tentative Refund
• Form 1045 Application for Tentative Refund Additional Forms
• Form 1045 Schedule A--NOL(form listed in the previous instructions)
• Form 1045 Schedule B--NOL Carryover
• Form 1045 Net Operating Loss Classification Worksheet
• Form 1045 Detail and Notes - Detail and Notes Worksheet

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.