20 NYCRR § 3-9.3

Application of NOLs

Official textus-ny/regstax.ny.gov

# (a)

Except as otherwise provided in this Subpart, an NOL must be carried back three years preceding the taxable year of the loss (the “loss year”). However, no NOL can be carried back to a taxable year beginning before January 1, 2015. The NOL is first carried to the earliest of the three taxable years preceding the loss year. If the NOL is not entirely used to offset income in that year, the remainder is carried to the second taxable year preceding the loss year, and any remaining amount is carried to the taxable year immediately preceding the loss year. Any unused amount of NOL then remaining may be carried forward for as many as twenty taxable years following the loss year. NOLs carried forward are carried first to the taxable year immediately following the loss year and then to the next immediately succeeding taxable year or years until the NOL is used up or to the twentieth taxable year following the loss year, whichever comes first.

# (b)

When there are two or more NOLs, or portions thereof, to be carried back or carried forward and deducted in one particular taxable year, the earliest NOL incurred must be applied first.

# (c)

An NOL from a separate return year of a corporation that is filing as a new member of a combined group may not be carried back to offset income of that combined group in a taxable year in which the corporation was not a member of the combined group.

# (d)

In the case of a combined report, the portion of the combined NOL attributable to any member of the group that files a separate report, or to a member of a different group that files a combined report for a preceding or succeeding taxable year will be an amount bearing the same relation to the combined loss as the NOL of such corporation bears to the total NOLs of all members of the group having such losses, to the extent that such losses are taken into account in computing the combined NOL. The NOL attributable to a member filing a separate report, or as a member of a different group filing a combined return, is to be calculated by applying the business apportionment factor (BAF) of the combined group to that member’s proportional share of the group’s business loss. A corporation’s share of the combined group’s NOL may be carried back to a separate return year of such corporation to offset only that corporation’s business income in such year. A NOL of a combined group may not be carried back to offset the income of a corporation that was not a member of the combined group when the loss was incurred.

# (e)

If the taxpayer makes the election to waive the carryback period, it shall be irrevocable for that taxable year. In the case of a combined report, the election is made by the designated agent and applies to all members of the combined group. Therefore, a member of a combined group that has elected to waive the entire carry back period may not carry back its share of the combined group’s NOL to a separate return year. A separate election must be made for each loss year. Failure to affirmatively waive the entire carryback period in the manner prescribed by the commissioner means that such NOL must be carried back.

# (f)

If a corporation calculates a higher tax liability for a taxable year under the capital base tax or the fixed dollar minimum tax than under the business income base, it does not need to utilize an NOLD. However, the year will be treated as a taxable year for purposes of determining the number of taxable years to which an NOL may be carried forward or back.

Source: official source document (DTF adopted rule text, December 2023 corporate reform)

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