Tax Reform changes the rules about Net Operating Losses


Notice: Historical Content

This is an archival or historical document and may not reflect current law, policies or procedures.

December 18, 2018

The Tax Cuts and Jobs Act made changes to the tax law, including Net Operating Loss (NOL) rules.

Here’s what changed:

  • For most taxpayers, NOLs arising after 2017 can only be carried forward.
  • Certain farming businesses and insurance companies (other than life insurance) can still use a two-year carryback for certain losses.
  • After December 31, 2017, the net operating loss deduction is limited to 80 percent of taxable income.

Rules for existing or pre-2018 NOLs remain the same.