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NOL Deduction Calculator80 Percent Taxable Income Limit

What does this come to under the current IRS rules?

Net operating loss deduction for pre-2018 and post-2017 losses under section 172, with taxable income after the deduction and the NOL left to carry forward.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Total NOL deduction
$410,000
Deduction taken against this year taxable income
Taxable income after NOL
$90,000
Pre-2018 NOL used
$50,000
Drawn to one scale
Total NOL deduction$410,000
Taxable income after NOL$90,000
Pre-2018 NOL used$50,000
Post-2017 NOL used$360,000
Pre-2018 NOL carried forward$0
Post-2017 NOL carried forward$240,000
All results
MeasureResult
Total NOL deduction$410,000
Taxable income after NOL$90,000
Pre-2018 NOL used$50,000
Post-2017 NOL used
Limited to 80% of taxable income left after the pre-2018 NOL
$360,000
Pre-2018 NOL carried forward$0
Post-2017 NOL carried forward$240,000
How this was worked out
Work shownrecomputed as you type
A = pre-2018 NOL carryforwards (no percentage limit, but cannot exceed taxable income)
B = lesser of post-2017 NOL carryforwards and 80% x (taxable income - pre-2018 NOLs)
NOL deduction = A + B

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • A = pre-2018 NOL carryforwards (no percentage limit, but cannot exceed taxable income)
  • B = lesser of post-2017 NOL carryforwards and 80% x (taxable income - pre-2018 NOLs)
  • NOL deduction = A + B

How it works

For tax years beginning after 2020, section 172(a) allows the pre-2018 NOLs in full against taxable income, then lets post-2017 NOLs offset only 80 percent of whatever taxable income is left. Taxable income for this test is figured without the NOL, section 199A and section 250 deductions.

Post-2017 losses carry forward with no time limit. Losses from tax years beginning before 2018 carry forward up to 20 years. Special carryback rules exist for farming losses and certain insurance companies, which this tool does not apply. This tool treats each bucket as one amount.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Why is some taxable income left after the NOL?

The 80 percent limit on post-2017 losses means at least 20 percent of the remaining income is taxed even when the NOL is larger.

Do post-2017 NOLs expire?

No. They carry forward to each following year without a time limit.

Can I carry a 2026 loss back?

No. Section 172(b)(1) allows carrybacks only for farming losses, certain insurance company losses and losses of tax years 2018 to 2020.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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