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imasapper
New Member

TurboTax not applying NOL to Indiana state return

I'm doing corporation's 2022 tax return. I have a $50K NOL on my Federal taxes, but it is not carrying over to my Indiana state taxes, thus my tax liability for Indiana is way overstated the state tax return. Turbotax is not creating Form IT-20NOL like it should. How do I fix that?

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1 Reply
maglib
Level 10

TurboTax not applying NOL to Indiana state return

After 2020, an Indiana net operating loss equals the sum of:

  • the federal NOL under IRC Sec. 172, as adjusted under Indiana law, and for individuals, reduced by any deductions allowed in determining the federal NOL for the tax year, but not allowed in determining federal adjusted gross income;

  • the excess business loss deduction; and

  • for tax years after beginning after December 31, 2020, a loss for a tax year disallowed under IRC Sec. 461(l).

Before 2021, an Indiana net operating loss is allowed for resident taxpayers equal to the taxpayer's federal NOL deduction:

The loss is adjusted for the addition modifications and subtraction modifications required under Indiana law ( IC 6-3-2-2.5(c) ) The modifications to be applied are those modifications required under IC 6-3-1-3.5 , for the same taxable year in which each NOL was incurred, and an Indiana NOL includes a loss incurred when the modifications required under IC 6-3-1-3.5 , exceed the taxpayer's federal adjusted gross income for the taxable year in which the Indiana NOL is determined. Except that the modifications do not include the modifications required under IC 6-3-1-3.5(a)(3), IC 6-3-1-3.5(a)(4), IC 6-3-1-3.5(a)(5), IC 6-3-1-3.5(a)(24), and IC 6-3-1-3.5(e)(10). ( IC 6-3-2-2.5(d) ) The amount of a deduction in a taxable year may not exceed the taxpayer's unused Indiana NOLs carried forward (or, prior to 2012, carried back) to that year.

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