The United States Internal Revenue Service has posted questions and answers about new net operating loss (NOLs) carryback rules, which were amended by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
NOLs are normally subject to a taxable-income limitation, and they cannot be carried back to reduce income in a prior tax year. However, the CARES Act provides that NOLs arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. The provision also temporarily removes the taxable income limitation to allow a NOL to fully offset income (currently, taxpayers can use NOLs to offset up to 80 percent of taxable income). These changes will allow companies to utilize losses and amend prior year returns. On April 9, 2020, IRS issued guidance providing tax relief for taxpayers with NOLs.
Specifically, the new FAQs provide further information for C corporations that are carrying back NOLs to years in which the alternative minimum tax (AMT) applies.
While the AMT does not apply to C corporations in post-2017 tax years, it may apply to them in pre-2018 tax years. Therefore, the FAQs address situations where a C corporation may have AMT liability, including as a result of an NOL carryback.
（Resource：WoltersKluwer Global Daily Tax News Date：[2020.06.01]）
