New Legislation Provides Extended Net Operating Loss Carryback Period
Highlights
Under the Worker, Homeownership, and Business Assistance Act of 2009 signed into law by President Obama on November 6, 2009, taxpayers may elect to carry back net operating losses arising in a 2008 or 2009 tax year for up to 5 years. A similar election was created for certain small business taxpayers as part of the Emergency Economic Stabilization Act of 2008 but was only available to a limited number of taxpayers.
Now, any business (with limited exceptions) regardless of its size qualifies for an extended carryback period of 5 years. The new legislation applies to net operating losses of a taxpayer for any taxable year ending after December 31, 2007, and beginning before January 1, 2010. The carryback election, however, may be made only with respect to one taxable year within such period.