How do I enter an NOL so that the Pre-CARES Act law can be used for certain states?
Some states, including New York and North Carolina, decoupled from the CARES Act and require the federal return to be calculated using the pre-CARES Act law. In Drake Tax, a link is available on the LOSS screen to allow you to enter the federal NOL carryforward amounts that would have existed had the CARES Act not been passed. The program will use values from this screen to compute the federal return under pre-CARES Act guidelines when required for decoupled states.
To access this screen, on the LOSS screen, click the link New York and certain other decoupled states near the top of the screen.
If the return was updated from Drake19, amounts will be updated to the LOSS screen, and the decoupled states sub-screen, where necessary.
Be sure to review and verify (F4) that the updated net operating loss amount(s) are accurate. The CARES Act Comparison worksheet produces in view mode to summarize Pre-CARES Act amounts, Post-CARES Act amounts, and the differences. This worksheet is for informational purposes and is only for use by the states that decoupled.
The following note will be generated in view when an amount is updated. You should review the return to determine if it is needed. If the amount is not needed, remove the entry. Note 698 states:
DECOUPLED STATES NOL AMOUNT: There is an amount present on the LOSS screen, "New York and Other Decoupled states" tab. Drake Tax strongly recommends that you review this amount and remove it if it isn't required for this tax return.