I have NOLs from 2014 & 2015. I am about to file these returns. I filed extensions & was told I have 3 years to file from extension date. Can I carryover NOLs to 2016?

[ashley3]

I am only filing my 2014 and 2015 tax returns now/first time and want to carryover the 2014 NOL into 2015. I also had an NOL in 2015, and so then want to carry over both NOLs from 2015 into 2016. Can I do this since I still am within the time frame to file my tax return and not forfeit any refunds? (The IRS told me I have three years from the deadline of the extension I filed.)

[TaxGuyBill]

If you have not yet filed your 2014 and 2015 tax returns, it is too late to "waive the carryback" to carry the NOL to 2015 and 2016.  You must now amend your 2012 and 2013 tax returns to claim the NOLs.

Yes, you can still amend your 2012 and 2013 tax returns to claim the NOLs.  Because the 2014 and 2015 tax returns (the years of the NOLs) are still within the 3-year window, you can still amend 2012 and 2013 to claim the NOLs.

You probably already know this, but some people misunderstand what a Net Operating Loss (NOL) means.  It does not just mean your business had a loss, but your total income on your tax return is negative (Line 41 of your Form 1040 is negative) due to the business loss.  If your business had a loss but you still had positive income on the tax return (Line 41 is a positive number), you would not have a NOL.

[ashley3]

Thank you so much for such a helpful response!!

This is much different than I understood things. I had thought it was too late to do the carryback. But
carryback is preferable because I paid taxes in 2012 and 2013, but have had NOLs for the last few years.  

- Is there a time limit for when I can amend the 2012 return to apply the NOL, or is the time limit just on when I file the return in which the NOL occurred?  (e.g., 2014).  Also, I am not sure if this affects things but I filed my 2012 return late (April 2016) -- but it *was* within the window to receive back an overpayment I'd made. However I thought the deadline to receive back a tax return overpayment was 3 years after the deadline (so I think 3 years from the 6-month extension I filed initially).  But perhaps since I filed the return within the 3 year time frame, I'm "safe" and can still amend it to request an additional refund.  I also filed my 2013 tax return late, but I believe with in the refund deadline (10/14/2017 - 3 years from original extension). Is this correct?

- How would I receive the refund and is there a limit on the size?  I had a big NOL in 2014 due to business losses - around $15k including the standard deduction.  I'm a bit worried this will "upset" the IRS, too, or that there's a limitation on this.

[ashley3]

Some additional questions (thank you again for the help!):

- If there is unused NOL after carrying back to 2012 and 2013, can I carry that forward to the current year?
- Also, I believe I had and NOL in 2016. Would I carry that back to 2014? If so, once it's carried back to 2014, can I carry the 2014 total NOL back 2012, or is that not allowed since some of that NOL is from 2016?

[TaxGuyBill]

By default, it is carried BACK.  If you make an election on time, you can make an election to "waive" the carryback to carry it forward, but that time frame is past, so your only option is the 'default' to carry it BACK.


The 'regular' deadline to amend your 2014 tax return is April 15th, 2018, and the 'regular' deadline to amend your 2015 tax return is April 15th, 2019.  As long as you do it by then, you can claim the NOL carryback on an amended 2012 and 2013 tax return.

No, there is no limit to how much you can carry back.

Yes, if the NOL can not be fully used on the 2012 and 2013 tax returns, the unused amount is then carried forward until it can be used.   For example, the 2014 NOL would be carried to 2012, then the unused amount would be carried to 2013, then the unused amount would be carried to 2015, then 2016, etc..

Yes, a 2016 NOL would be carried to 2014, but then the unused amount would be carried to 2017.


Multiple year NOLs can be quite complicated to calculate and TurboTax does not do that for you.  Unless you REALLY know what you are doing I would recommend a tax professional.

[ashley3]

Ok, so regarding 2012 - in order to carryback the 2014 NOL, wouldn't I still have to submit a form to amend my 2012 tax return to request the refund? Aka form 1040x?  If so, doesn't the 3 year rule still apply, thus making it too late to get any $ back from the IRS for 2012? (and for 2013, too).   Or is the 3 years related to when I filed the 2012 return - which was April 15 2016 (I was late...)?

Also, you say "regular deadline" to amend the 2014 tax return is April 15 2018. If I filed a 6 month extension, would that mean that the deadline to amend is now October 15 2018?

I suppose if it is too late to get the 2012 or 2013 refund, I could still basically take the NOLs I carried back to those years and carry them forward to the current year, so that I at least wouldn't forfeit the NOL. Is that correct/an option?

Thanks for your help! It is starting to seem like I'll need an account or to do the paperwork manually. I'm on a budget though which is why I'm trying to figure this out myself. 😕

[TaxGuyBill]

Yes, you would file 1040X for 2012 (and 2013).

It is not too late to do amend 2012 because of the 2014 NOL.  You have until October 15th, 2018 to do that (the due date of your 2014 tax return).

[PatriciaV]

Yes, if you have Net Operating Losses to carry forward from 2015, you may file an amended return for 2016 to include those NOLs.

According to IRS Tax Topic 308: Generally, to claim a refund, you must file Form 1040X within 3 years after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. Returns filed before the due date (without regard to extensions) are considered filed on the due date. 

[ashley3]

Another person who responded to my original question said it's too late to waive the carryback period for 2015.  (I have not yet filed 2015 but am ready too once I sort out handling the NOL.) Can you clarify/confirm?

[PatriciaV]

Yes, @TaxGuyBill provided very complete and accurate answers to your questions. I suggest you follow his advice.