How do I carryback a California net operating loss?.
NOL Carryback: For Tax Years 2011 & 2012, California only allowed NOL calculations for specific situations, due to the suspension of NOL's. Due to this, 2011 & 2012 cannot be utilized to calculate the amount of NOL that would have been absorbed during a carryback. This information must be calculated manually.
Allowable NOL carryback percentages can be found here:
- 2012 and Prior: 2012 Form 3805V Instructions
- Beginning in TY2013: What's New 2013 Form 3805V
- Beginning in TY2014: What's New 2014 Form 3805V
- Beginning in TY2015, 2016 & 2017: What's New 2015 Form 3805V
- Beginning in TY2018: What's New 2018 Form 3805V
Per the 2016 FTB 3805V Instructions:
Amended return for NOL carryback – Individuals, estates, and trusts claim the NOL carryback by amending the 2014 and/or 2015 tax return using Form 540X, Amended Individual Income Tax Return, or Form 541, California Fiduciary Income Tax Return.
Note: Individuals, estates and trusts claiming the NOL as a carryback in any of the previous two years, must first file the applicable 2016 tax return and attach the completed 2016 form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations - Individuals, Estates, and Trusts, to the tax return. After the 2016 tax return is filed, file an amended tax return for 2014 and/or 2015 to claim the NOL carryback deduction. Individuals will provide the following explanation on Form 540X, Part II, Explanation of Changes, line 5: “2016 NOL carryback deduction”.
Do not attach the 2016 form FTB 3805V to the 2014 or 2015 amended tax return. Attaching form FTB 3805V may delay processing of the amended tax return.
To Amend Prior Year Returns/Carryback a CA NOL:
- Open the Lacerte Tax Program for the year that you need to carry back to
- Make a copy of the client file.
- Go to Screen 59, Amended Return
- Select the Federal/State return(s) to amend (Ctrl+T) (MANDATORY) from the drop down menu
- Click OK after selecting the Returns to Amend
- Go to Screen 15, Net Operating Loss
- In the left navigation panel click California
- Enter the Type of loss as Disaster (The prior year program still follows the rules set in that year, only disaster losses were allowed)
- Enter the Year of loss (e.g., 20xx) (MANDATORY)
- Note: You must enter a PRIOR year of loss here.
- Enter the amount of Initial loss (The amount of loss being carried back, manually adjusted per the new rules)
- Enter the amount of AMT initial loss (The amount of AMT loss being carried back)
- Note: Not all NOL's will have an accompanying AMT NOL
- Enter the amount of Carryover from 20XX (Same as Initial loss)
- Enter the amount of AMT carryover from 20XX (Same as AMT Initial loss)