Quick Cash: COVID-19 CARES Act Creates Five-Year NOL Carryback

Quick Cash: COVID-19 CARES Act Creates Five-Year NOL Carryback

CARES Act Provides Potential Cash Flow Opportunities for Businesses with NOLQuick Cash:

Nobody wants their business to generate a net operating loss (NOL).

But if your business is showing an NOL, Congress is currently offering some significant help.

In 2017, The Tax Cuts and Jobs Act (TCJA) took away your ability to get an immediate cash benefit from your NOL.

But the law has just changed!

Due to the COVID-19 pandemic, Congress has temporarily restored your ability to get an almost instant benefit from your NOL. Book your appointment to take advantage of the significant law change. https://bit.ly/3jZudwB

1. NOL rules. Before tax-year 2017, you could carry back your NOL for two years and carry it forward for 20 years. What's more, your NOL could offset up to 100% of your taxable income. That was helpful. Then the TCJA made significant changes to the law that delayed your ability to get tax savings from your business losses. 

2. New temporary NOL rules. The CARES Act, recently passed by Congress, suspends the TCJA limitation on your NOLs for the tax-years beginning in 2018, 2019, and 2020.

This means (under new rules) you can carry back your NOL for five years and carry it forward indefinably!

What's more, you can apply 100% of the loss. 

You'll learn how to benefit from the new laws when you meet with me. 

3.  Claim your refund. The best way to claim your refund from an NOL carryback is to use the "tentative" refund procedure. You do this by filing one of two IRS forms. (We'll tell you what they are.) If you qualify to claim your refund, you'll take advantage of two huge benefits. 

Don't miss it 

Conclusion

The five-year carryback will give a welcomed injection of liquidity to many businesses strained by the adverse impact of the COVID pandemic. The relief, however, is only temporary. NOLs arising in tax years beginning after 2020 do not have a carryback period, except for a two-year carryback for farming losses. An unlimited carryforward period continues to apply to all post-2017 NOLs.

Book your appointment here:

https://bit.ly/3jZudwB

Sincerely,

 Miguel A. Palma  CPA, PFS, CGMA

p: 925.307.5454

p: 408.295.4963

w:www.mpalma.com  

e: [email protected]

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