Where can I enter prior year net operating losses? Where do I elect to carry back a net operating loss?
Use the LOSS screen to enter any prior year NOL amounts that carried forward from a prior year at the top of the screen. Any amount applied in the current year appears on line 29a of Form 1120. Any amount calculated for the current year NOL that can be carried forward and any other NOL amounts not applied in the current year are reflected on the Attachment NOL.
Note: The "Expiring This Year" indicator only applies to any unused NOL that is approaching the 20 year carryover limit. If "Expiring This Year" is not listed next to the year, the NOL is not expiring.
An NOL election to carry back a current year NOL is made on Form 1139 - Corporation Application for Tentative Refund. Complete screen 1139 on the first Other Forms tab. See the IRS FAQ for procedure changes for filing Form 1139 during the COVID-19 pandemic.
According to the Form 1139 Instructions, for tax years starting after December 31, 2017, "the carryback period for NOLs incurred in tax years beginning after December 31, 2017, and before January 1, 2021, is now 5 years. See section 172(b)(1)(D)(i). Repeal of the NOL carryback. For losses incurred in tax years beginning after December 31, 2020, a 2-year NOL carryback applies, but only for farming losses and losses from insurance companies, other than life insurance companies." In addition, "For tax
years beginning after December 31,
2020, the deduction of NOLs arising
in tax years beginning after December
31, 2017, is limited. See the
instructions for Line 14."
Important: If you want to forgo the carryback, go to screen K and check line 11. If there is an election to forego a current-year NOL carryback, this election is irrevocable.