California Form 3805Q Error

[nabujbara]

I transferred last year's return info to this year's Business TurboTax. I keep getting an error "You have a prior year NOL listed on Form 3805Q Part II, Line 2. Please review Form 3805Q and remove any prior year net operating losses that have expired". How do I fix this error.

We are a small business ant I thought NOL can be carried forward for 20 years. The first NOL was reported in 2011.

Thanks for your help.

[PatriciaV]

Please clarify if you have reviewed this form using Forms Mode to see what errors are shown on the form.

[nabujbara]

Hi Patricia,

The error message is telling me to delete expired previous years' NOL's from form 3805Q. Even in form mode it does not tell me which entries to delete. I also thought that NOL's for ESBs can be forwarded for 20 years.

I am still stuck.

Nabil

[PatriciaV]

For an experience like this, it would be helpful to have a TurboTax ".tax2022" file to test further.

If you would be willing to send us a “diagnostic” file that has your “numbers” but not your personal information, please follow these instructions: 

Open your return and go to Online in the TurboTax header. 

1. Choose Send Tax File to Agent.
2. You will see a message explaining what the diagnostic copy is.  Click Send on this screen and wait for the Token number to appear. 
3. Reply to this thread with your Token number and tag (@) the agent requesting the token from you.  

We will then be able to see the same experience you are having. If we are able to determine the cause, we'll reply here and provide you with a resolution. 

[Cloud91]

Unfortunately, we experience the same CA Form 3805Q error in 2025. Would anyone share how to resolve this issue?

[MonikaK1]

@JotikaT2 previously posted the following in another thread as to how to resolve this issue:

It sounds like the net operating loss was correctly transferred to your K-1 when you completed your 2021 tax returns.  There should not be any amounts listed on your California S-corporation return as it no longer exists at the corporate level... Any net operating losses from 2021 would be reflected on your individual return unless they were utilized in 2021 or 2022.  California conforms to this treatment.   Please see section E from form 3805q instructions for more details.

To remove the error, you will need to go back into the interview section for California and remove the NOL amount listed for 2021.  This should remove the error and allow you to proceed.

@Cloud91