As a result of the CARES Act, net operating losses (NOLs) arising in 2018, 2019, and 2020 can be carried back for 5 years to offset 100% of taxable income. The can produce an immediate tax refund. The IRS has provided guidance on the new rules, including a waiver of the carryback period. The Service has also provided a 6-month extension to file Form 1045 (for individuals) or Form 1139 (for C corporations) with respect to a carryback of an NOL that arose in any taxable year that began during calendar year 2018 and ended on or before June 30, 2019, to obtain a quick refund in lieu of amended prior-year returns.
Alert: Follow coronavirus-related federal tax changes through the IRS’ Coronavirus Tax Relief center.