Calculating prior-year amounts for a NOL carryback (1041)

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Before you complete Screen NOL-2, prior-year tax returns must be recalculated using prior-year forms. Complete the following steps before preparing the Form 1045, Page 1, Computation of Decrease in Tax.

  1. Obtain copies of the original tax returns for the years that you are carrying information back.
  2. If there is a current-year NOL and you are carrying the NOL back to preceding tax years, recalculate the prior-year returns with the carryback information.
  3. Use the original returns and the recalculated returns to complete Screen NOL-2.

Notes

  • Screen NOL-2 allows multiple units. When the NOL carryback eliminates or reduces a general business credit in any prior year, you may be able to transfer back the released credit three more years. If you carry back the unused credit to tax years before the three years preceding the current tax year, a second form 1045 is required.  
  • To calculate a five-year carryback of a farming loss, you must have two units of Screen NOL-2. In the first unit, enter information for the third, second, and first preceding tax years. In the second unit, enter information for the fifth and fourth preceding year information.
  • If you use an amended Form 1041 instead of a Form 1045 to request a refund, you can use Form 1045, Schedules A and B as attachments to Form 1041.

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