May I use a NOL Carryback from 2016 to reduce the tax liability owed in 2015?

[MargaretL · Accepted solution]

Yes, you may, although you have to also include it on your 2014 tax return. Per IRS, you can carryback your NOL to the 2 tax years before NOL year. You can't just pick which year, you must first apply NOL to 2014, then - if there's anything else left- you would apply it to your 2015 tax return.  You would have to amend your 2014 and 2015 tax return to do so; when amending enter your respective NOL amounts as negative amount on line 21 Form 1040 for each year.

Otherwise, you can carryforward the NOL to future tax years.