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Entering a net operating loss (NOL) carryback by using Form 1040-X

by Intuit• Updated 6 months ago

You can use Form 1040-X to enter a net operating loss (NOL) carryback in ProSeries.

Before making any changes, you should consult the Instructions for Form 1040-X for more specific information about NOL carrybacks.

For most taxpayers, NOLs arising in tax years ending after 2020 can only be carried forward. See Net operating losses for more information.

If you're amending multiple years, you should start with the tax year that's the furthest back.

Follow these steps to enter an NOL carryback using the 1040-X:

  1. Open the return that you want to amend.
  2. Create a copy of the return with a new name.
    • For example, CLIENT-amended.YYi.
    • This keeps the original file intact.
    • Refer to this article for instructions on making a copy of a client return.
  3. Press F6 to bring up Open Forms.
  4. Type X in the Find box to highlight Form 1040-X.
  5. Click OK or press Enter to open the form.
  6. Check the applicable year box next to This is for calendar year....
    • Checking the box for the calendar year activates Form 1040-X. The figures flow from the 1040 to the appropriate fields in the 1040-X. The figures "freeze" in Column A, and Column C reflects what is currently on the return.

If you're also amending a state return, activate the amended state return form before making changes to the federal return. You can do this by going to the state return, selecting the amended return, marking the appropriate calendar year, and going back to the federal return.

  1. Make the appropriate changes as specific in IRS Pub. 536.
    • On the Other Income Statement, line 21 (Other taxable income) allows for manual entry of positive or negative entries.
    • Save and print the return.

Follow these steps to continue with amending the next tax year's return:

  1. Complete steps 1 through 6 for the previous set of instructions for last year's return.
  2. Press F6 to bring up Open Forms.
  3. Type CO in the Find box to highlight the Carryover Worksheet.
  4. Click OK or press Enter to open the Federal Carryover Worksheet.
    • The first column will display the previous year carryovers, so make sure it matches the Federal Carryover Worksheet that you printed from the previous return.
  5. Make the appropriate changes as specific in IRS Pub. 536.
    • On the Other Income Statement, line 21 (Other taxable income) allows for manual entry of positive or negative entries.
    • Save and print the return.
  6. Save and print the return.
  7. Continue this process until you reach the current year return.

As an alternative to Form 1040X, complete form 1045 in the current year return. See Generating Form 1045 in ProSeries

ProSeries Basic 2019ProSeries Basic 2020ProSeries Basic 2021ProSeries Professional 2019ProSeries Professional 2020ProSeries Professional 2021

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