Think Tank: Net Operating Loss Carrybacks are Critical for Struggling Businesses

As federal policymakers explore options for a “Phase 4” coronavirus relief plan, the Tax Foundation notes that it’s important to understand how the CARES Act modified tax rules for businesses, including changes to net operating loss (NOL) deduction rules such as NOL carrybacks.

The HEROES Act, recently approved by the U.S. House of Representatives, would limit NOL carrybacks by only allowing firms to carry back losses to 2018 rather than a full five years. The Tax Foundation says this would cut short an important liquidity measure while disrupting firms’ plans. 5/26/2020