New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter I - Franchise and Certain Business Taxes › Subchapter A - Business Corporation Franchise Tax › Part 3 - COMPUTATION OF TAX › Subpart 3-9 - NET OPERATING LOSS AND NET OPERATING LOSS DEDUCTIONS FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 2015 › Section 3-9.3 - Application of NOLs

Current through Register Vol. 46, No. 28, July 10, 2024
(Tax Law, sections 210(1), 210-C)
(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.