2019 Schedule C loss carry back to 2017 under the CARES Act how do I do this

[TomPemberton]

2019 Schedule C loss carry back to 2017 under the CARES Act how do I do thi

[Anonymous_]

First, you should review the following IRS web site and thoroughly read Rev. Proc. 2020-24 (which is linked to on the web site).

https://www.irs.gov/newsroom/irs-provides-guidance-under-the-cares-act-to-taxpayers-with-net-operati...

Note that TurboTax does not support Form 1045 nor does the program calculate an NOL (i.e. the NOL must be calculated manually). Further note that the carryback requires an NOL, not merely a Schedule C net loss.

[macuser_22]

The CARES act is provisions for the 2020 tax year, not 2019.

[TomPemberton]

The CARES Act permits individuals with NOLs generated in taxable years beginning after December 31, 2017, and before January 1, 2021, to carry back such NOLs five taxable years. Such NOLs not carried back may continue to be carried forward indefinitely. The CARES Act also eliminates the 80% taxable income limitation imposed by the TCJA for taxable years beginning before January 1, 2021.

Taxpayers with NOLs generated in 2018 and 2019 may find it advantageous to amend returns prior to those years to carryback NOLs to years with taxable income subject to a 39.6% tax rate.

[AmeliesUncle]

First, a Schedule C loss is different than an NOL.  An NOL means your entire net income on your entire tax return is negative.  Do you really have a NOL?

If so, as your citation points out, it is carried back FIVE years, not two years.  So a 2019 NOL is carried to 2014

Option #1:  File Form 1045 by the end of the year.   It effectively calculates things as if you amended 2014 (and if 2014 did not use up the entire NOL, then Form 1045 will calculate 2015, then 2016, then 2017, then  2018).

Option #2:  File the election to "Waive the Carryback".  Then the NOL can be used on your 2020 tax return.

Option #3:  Amend 2014 (and if 2014 does not use up the NOL, then 2015, then 2016, etc.).

As was noted above, TurboTax does NOT calculate NOLs and does not file Form 1045.  Because of this, you may want to use a tax professional.