For most taxpayers, NOLs arising in tax years ending after 2020 can only be carried forward. See Net operating losses for more information.
For tax year 2020 and prior the taxpayer may elect to apply a Net Operating Loss (NOL) incurred in the current year to a prior year. Follow these steps to enter a NOL carryback in an individual return:
- Open Lacerte for the year that you need to carry back to.
- Make a copy of the client file. For more information on how to do this, see How to make a copy of a client in Lacerte.
- Go to Screen 59, Amended Return (1040-X).
- Select the Federal/state return(s) to amend from the dropdown menu.
- Go to Screen 15, Net Operating Loss.
- Enter the original year of loss in the field Year of loss (e.g., 2014) (MANDATORY).
- Enter amount of loss being carried back in the field Initial loss.
- Enter the amount of AMT loss being carried back in AMT initial loss. Not all NOL's will have an accompanying AMT NOL.
- Enter the amount of Carryover available in 20XX (same as Initial loss).
- Enter the amount of AMT carryover available in 20XX (same as AMT Initial loss).
If the year entered in Year of loss is a future year this will indicate that an amount has been carried back from a future year, rather than forward from a prior year. NOL Worksheets will generate, specifically, Net Operating Loss Carrybacks Used in 20XX.
- The amount remaining to be utilized in the next year, if any, appears in the Forms tab, in the General Info page, in the Carryovers to 20XX section.
Per the 1045 form instructions:
- "Individuals can get a refund by filing Form 1040X, Amended U.S. Individual Income Tax Return, instead of Form 1045. An estate or trust can file an amended Form 1041, U.S. Income Tax Return for Estates and Trusts. In most cases, you must file an amended return no later than 3 years after the due date of the return for the applicable tax year. If you use Form 1040X or other amended return, follow the instructions for that return. Attach to the amended return a copy of Schedule A of Form 1045 showing the computation of the NOL and, if applicable, a copy of Schedule B of Form 1045 showing the computation of the NOL carryover. Complete a separate Form 1040X or other amended return for each year for which you request an adjustment."
Per Publication 536:
- "You must use a separate Form 1040X for each carryback year to which you apply the NOL." For more information, refer to IRS Pub. 536.