Compilation of Rules and Regulations of the State of Georgia › Department 560 - RULES OF DEPARTMENT OF REVENUE › Chapter 560-7 - INCOME TAX DIVISION › Subject 560-7-4 - NET TAXABLE INCOME (INDIVIDUAL) › Rule 560-7-4-.01 - Net Taxable Income (Individual). Amended

Current through Rules and Regulations filed through June 27, 2024
(1)
				The Georgia taxable net income of an individual shall be computed pursuant to
				O.C.G.A. §
									48-7-27.
(2) There shall be added to "net income" the
				amount of deductions reflected therein which resulted from transactions
				occurring in years in which the individual was not subject to Georgia income
				tax. Such deductions shall include but not be limited to, contribution
				carryovers, capital loss carryovers, and net operating loss
				carryovers.
(3) Net Operating
				Losses
(a) An appropriate adjustment shall be
				made to such "net income" for a net operating loss carryover.
(b) For any taxable year in which the
				taxpayer claims a net operating loss deduction on the Federal income tax
				return, the amount of such deduction shall be added back to "net income". There
				shall be allowed as a separate deduction from "net income" an amount equal to
				the aggregate of the Georgia net operating loss carryovers to such year, plus
				the Georgia net operating loss carrybacks to such year if such carrybacks are
				allowed by the Internal Revenue Code of 1986. Any limitations included in the
				Internal Revenue Code of 1986 on the amount of net operating loss that can be
				used in a taxable year shall be applied; provided, however, that such
				limitations, including, but not limited to, the 80 percent limitation, shall be
				applied to Georgia taxable net income.
(c) For any taxable year in which the
				taxpayer has a Federal net operating loss, the Georgia net operating loss for
				such taxable year shall be computed by making the same adjustments to the
				Federal net operating loss that are made to Federal adjusted gross income to
				determine Georgia taxable net income. In the case of nonresident individuals,
				trusts, and estates doing business both within and without Georgia, the loss
				attributable to operations within Georgia shall be computed as provided in
				O.C.G.A. §
										48-7-30.
				The term "Georgia net operating loss" shall mean the loss computed as provided
				in this subparagraph. In the event the net Georgia adjustments completely
				offset the federal net operating loss, there shall be no Georgia net operating
				loss for the taxable year, and any excess of net Georgia adjustments over the
				Federal net operating loss shall constitute Georgia taxable net
				income.
(d) The procedural sequence
				of taxable years to which a Georgia net operating loss may be carried back or
				carried over, and the number of years for which a net operating loss may be
				carried back or carried over, shall be the same as provided in the Internal
				Revenue Code as adopted for Georgia purposes. The extent to which Georgia
				adopts the Internal Revenue Code is set forth in the definition of "Internal
				Revenue Code" in O.C.G.A. §
										48-1-2.
				The terms "Georgia net operating loss carryback" and "Georgia net operating
				loss carryover" shall mean the Georgia net operating loss carried back or
				carried over in the manner and for the number of years as provided in this
				subparagraph.
(e) In the event the
				net operating loss is allowed to be carried back and the taxpayer elects to
				forgo the carryback period for the federal net operating loss as allowed under
				the Internal Revenue Code, the taxpayer shall also forgo the carryback period
				for Georgia purposes. If the taxpayer does not have a federal net operating
				loss, the taxpayer may make an irrevocable election to forgo the carryback
				period for the Georgia net operating loss, provided the loss is allowed to be
				carried back and an affirmative statement is attached to the Georgia return for
				the year of the loss. Such election (the affirmative statement) must be made on
				or before the due date for filing the income tax return for the taxable year
				wherein the loss was incurred, including any extensions which have been
				granted. Form 500-NOL must also be separately filed when the taxpayer forgoes
				the carryback so that the net operating loss can be established on the
				Department's system for future years. Such filing must occur on or before the
				due date for filing the income tax return for the taxable year wherein the loss
				was incurred, including any extensions which have been granted. Form 500-NOL
				cannot be filed as an attachment to Form 500. If the net operating loss is
				allowed to be carried back and if the taxpayer does not elect to forgo the
				carryback period for the federal net operating loss, the election to forgo the
				net operating loss period shall not be allowed for Georgia purposes.
(f) Claim for Refund.
1. In the event the taxpayer is entitled to a
				refund of income taxes by reason of a net operating loss carryback, a net
				operating loss carryback adjustment claim for refund will be filed on Form
				500-NOL and in accordance with O.C.G.A. §
											48-7-21(b)(10.1).The
				taxpayer must file such claim for refund within three years after the due date
				for filing the income tax return for the taxable year wherein the loss was
				incurred (including any extensions which have been granted) as prescribed in
				O.G.C.A. §
											48-7-21(b)(10.1).Such
				claim for refund shall constitute a claim for credit or refund for purposes of
				O.C.G.A. §
											48-2-35.
				Within a period of ninety (90) days from the last day of the month in which
				such claim for refund is filed, the Commissioner shall make, to the extent he
				or she deems practicable in such period, an examination of the claim for refund
				to determine the amount of tax decrease attributable to such carryback
				adjustment upon the basis of the claim for refund and the examination. The
				decrease so determined shall be applied against any unpaid amount of the tax
				and the remainder shall, within such ninety (90) day period, be either credited
				against any income tax then due from the taxpayer, or refunded to the taxpayer.
				Any such credit or refund made within such ninety (90) day period shall be
				without interest as provided in O.C.G.A. §
											48-7-21(b)(10.1)
				and shall be subject to further examination as provided in subparagraph
				(3)(f)3.
2. If such claim for
				refund contains errors of computation which the Commissioner deems cannot be
				corrected within such ninety (90) day period or which contains material
				omissions, the Commissioner may disallow without further action any such claim
				for refund. Alternatively, the Commissioner may request that the taxpayer
				correct such errors or omissions. In either case, the date upon which the
				taxpayer later corrects such errors or omissions shall be considered the filing
				date for the claim for refund for purposes of the aforementioned (90) day no
				interest period.
3. The
				Commissioner may further examine, subject to the applicable statute of
				limitations, such claim for refund at a later time and assess as
				necessary.
(g) The
				provisions of Sections 108, 381, 382, and 384 of the Internal Revenue Code of
				1986, as amended, as they relate to net operating losses also apply for Georgia
				purposes. These shall be applied as provided in O.C.G.A. §
										48-7-21(b)(10.1)(D)
				and the regulations thereunder.