Oct 01, 2009

Deadline Fast Approaching for Special NOL Refund Claim

If your business had a large loss in 2008 and any profitable years in the prior five-year period, you'll want to take advantage of a special one-time refund offer from the IRS. Under a new provision of the American Recovery and Reinvestment Act, small businesses that had a net operating loss (NOL) in 2008 can elect to carry back that loss for up to five years instead of the usual two. This extended NOL carryback can be used only once and is only available to businesses that average $15 million or less in gross receipts for the three-year period ending with the NOL carryback election year.

Eligible small businesses will need to act quickly to take advantage of this one-time offer from the IRS. Individuals--which includes sole proprietors, partners in a partnership, and shareholders in an S corporation--have until October 15, 2009 to elect the three, four, or five-year carryback period. The deadline for calendar year corporations ended on September 15, 2009. The deadlines for fiscal-year taxpayers vary depending on their year-end date. For more information, see IRS Issue Number IR-2009-072.