How do I access Schedule 1 to manually adjust Line 8a to reflect the correct 2021 NOL 80% limit ? TurboTax is not limiting the 2021 deduction to 80% and is takng 100%.

[DianeW777]

The rules are as follows from IRS Publication 536:

Page 1 ...... NOL deduction limitation. In general, the NOL deduction for tax years beginning after December 31, 2020, cannot exceed the sum of the NOLs carried to the year from tax years beginning before January 1, 2018, plus the lesser of

• (i) the NOLs carried to the year from tax years beginning after December 31, 2017, or
• (ii) 80% of the excess (if any) of taxable income computed without regard to deductions for NOLs, Qualified Business Income (QBI), and section 250 over the total NOL deduction from carryforward amounts from NOLs arising in tax years ending before January 1, 2018.

Page 5 .....Further, when carryforwards can be used, they can only offset 80% of taxable income in future years. While the limitation for excess business loss applies to calculate the amount to deduct as an NOL in the loss year, the deduction is not limited to 80% of modified adjusted gross income in the previous (carryback) year(s). So the full amount of modified adjusted gross income in previous years is used to absorb the loss.

Keep in mind that TurboTax does not calculate the NOL and you must do that manually using the worksheets in the publication.

Please update if you have more questions. 

[alisonlee2021ret]

Thank you very much. I know how to calculate my NOL. My question was: I need to know how I can manually change the NOL amount to the amount I am taking for 2021 on Sch 1 Line 8. 

The problem I have is that TTO asks what my full carryover balance is from the prior year ($100,000), then enters that amount ($100,000) on Sch. 1 Line 8a, which results in taking a 100% deduction which is not allowed in 2021.

In an attempt to fix that, if I tell TTO that my full carryover from the prior year is only the amount of NOL I am taking in 2021 ($5,000) then the correct amount of ($5,000) ends up on Sch. 1 Line 8a, but no Carryover Worksheet gets generated showing ($5,000) taken in 2021 and ($95,000) balance being carried to 2022. In order for my return to show the proper amount of tax due in 2021, no Carryover Worksheet is generated because TTO thinks I used all I had. I believe IRS would want the carryover worksheet with the return. Is this the only way TTO can address NOLs? I could manually adjust numbers so it was all done correctly and generated a carryover worksheet with the desktop version. Thank you.

[DavidD66]

You cannot make the kind of changes you want to make in TurboTax Online.  As you mentioned, you can do so in TurboTax Desktop.  You can switch to the desktop version and transfer your online data so that you don't lose anything.  To do so, see the following TurboTax Help article:

How do I switch from TurboTax Online to TurboTax CD/Download?

[Anantara]

I am not sure if this question got answered. My nol carryforward from 2022 is larger than my 2023 income but it is not clear how to enter that as my carryforward dedcution can only be limited to 80%. Do I need to just enter that amount. Is there a carryforward sheet which tracks the history.

Apparently there is one in the State return it seems but not in the Federal

[MonikaK1]

Use the following steps to enter your NOL Carryover once you have calculated it:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner) 
• This opens a box where you can type in “NOL” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to NOL”
• Click on the blue “Jump to NOL” link and enter your information

Net Operating Losses are among the limited list of calculations that are not supported by TurboTax.

If after completing your tax return you have a negative amount on Form 1040, line 15, and you had a loss from a business activity such as those reported on Schedules C, E, F, or resulting from dispositions on Form 4797, or sustained a casualty loss, you may have a Net Operating Loss (NOL). The program does not calculate the amount of NOL to be carried back or forward to another year. To determine your NOL, if any, refer to Form 1045, Schedule A (not included with this program). You will probably also benefit by reviewing IRS Publication 536 for details about the NOL calculation.