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How to resolve Lacerte diagnostic ref 38754 - CA NOL make the election to waive the carryback

by Lacerte Tax 2023 Updated 7 months ago

This article will help resolve the following diagnostic:

  • California NOL generated in the current year. Make the election to waive the carry back or enter CA taxable income for the prior year and second prior year. If you wish to elect to waive the carry back, make the election in the Current Year NOL section of the California NOL screen. (ref. #38754)

Suspension of NOL carryover deduction

Per changes by the CA Franchise Tax Board, California has suspended the NOL carryover deduction for taxable years 2020, 2021, and 2022.

  • For tax years 2019 and after, NOL can no longer be carried back to the past 2 years.
  • For tax years 2013 through 2018, NOL can be carried back to each of the past 2 years.

For additional information, refer to this CA FTB article on Net operating loss.

To resolve the diagnostic for 2018 and prior, or to forgo the carryback of the NOL:

  1. Go to Screen 15, Net Operating Loss.
  2. Select California Net Operating Loss from the top-left panel.
  3. Select Miscellaneous Info in the Loss box of the left panel.
  4. Select the Forgo carryback of 20XX NOL box.
Lacerte Tax

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