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What Are the Net Operating Loss Tax Provisions?

loss NET operating tax
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What Are the Net Operating Loss Tax Provisions?

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Both the American Recovery and Reinvestment Act, enacted February 17, 2009, and the WHBAA, enacted November 6, 2009, include net operating loss tax provisions. The ARRA provides eligible small businesses a net operating loss tax provision for the 2008 tax year. A net operating loss is defined as expenses exceeding gross income. Eligible small business is defined as those who have averaged less than $15 million in revenue for the last three years. Normally, an NOL is only allowed to be carried back two years. The ARRA allows the taxpayer to elect whether to carry back losses three, four, or five years, whichever provides the biggest benefit. Business Provisions of the ARRA on www.irs.gov states, “For small businesses that were profitable in the past but lost money in 2008, this could mean a special tax refund.” The IRS Commissioner Doug Shulman stated, “The new net operating loss provision could throw a lifeline to struggling businesses, providing them with a quick infusion of cash.” He

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