Title: To amend the Internal Revenue Code of 1986 to allow for a 5-year carryback of operating losses of small businesses, and for other purposes.
Policy area: Taxation

Summary:
This bill allows certain small businesses (fewer than 250 employees) a 5-year carryback of net operating losses incurred in 2020 due to COVID-19 (i.e., the coronavirus disease 2019).

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6391 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6391

   To amend the Internal Revenue Code of 1986 to allow for a 5-year 
   carryback of operating losses of small businesses, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 25, 2020

Mr. Schneider introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to allow for a 5-year 
   carryback of operating losses of small businesses, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. 5-YEAR CARRYBACK OF OPERATING LOSSES OF SMALL BUSINESSES.

    (a) In General.--Section 172(b)(1) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(D) Carryback for 2020 net operating losses of 
                small businesses due to covid-19.--
                            ``(i) In general.--If an eligible small 
                        business elects the application of this 
                        subparagraph with respect to an applicable 2020 
                        net operating loss due to COVID-19, 
                        subparagraph (A)(i) shall be applied by 
                        substituting `shall be a net operating loss 
                        carryback to each of the 5 taxable years 
                        preceding the taxable year of such loss' for 
                        `shall not be a net operating loss carryback to 
                        any taxable year preceding the taxable year of 
                        such loss'.
                            ``(ii) Applicable 2020 net operating 
                        loss.--For purposes of this subparagraph, the 
                        term `applicable 2020 net operating loss' 
                        means--
                                    ``(I) the taxpayer's net operating 
                                loss for any taxable year ending in 
                                2020, or
                                    ``(II) if the taxpayer elects to 
                                have this subclause apply in lieu of 
                                subclause (I), the taxpayer's net 
                                operating loss for any taxable year 
                                beginning in 2020.
                            ``(iii) Election.--Any election under this 
                        subparagraph shall be made in such manner as 
                        may be prescribed by the Secretary, and shall 
                        be made by the due date (including extension of 
                        time) for filing the taxpayer's return for the 
                        taxable year of the net operating loss. Any 
                        such election, once made, shall be irrevocable. 
                        Any election under this subparagraph may be 
                        made only with respect to 1 taxable year.
                            ``(iv) Eligible small business.--For 
                        purposes of this subparagraph, the term 
                        `eligible small business' means a small 
                        business with fewer than 250 employees that is 
                        a small business concern as defined in section 
                        3(a) of the Small Business Act (15 U.S.C. 
                        632(a)).''.
    (b) Anti-Abuse Rules.--The Secretary of the Treasury or the 
Secretary's designee shall prescribe such rules as are necessary to 
prevent the abuse of the purposes of the amendments made by this 
section, including anti-stuffing rules, anti-churning rules (including 
rules relating to sale-leasebacks), and rules similar to the rules 
under section 1091 of the Internal Revenue Code of 1986 relating to 
losses from wash sales.
    (c) Effective Date.--The amendments made by this section shall 
apply to net operating losses arising in taxable years ending after 
December 31, 2019.
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