Alabama Net Operating Loss (NOL) Provisions for Individuals

Taxpayers are allowed to carryback a net operating loss to the two previous tax years. Any remaining amount of net operating loss can be carried forward for up to fifteen years following the loss year.

Taxpayers are allowed to forego the carryback period, and the taxpayer has a choice of two methods for making the election. The election can be made on Alabama Form NOL-85 (Part III), or the election can be made by carrying the loss forward on a timely-filed return for the year subsequent to the loss year.

• Section 40-18-15.2, Code of Alabama 1975
• Administrative Rule 810-3-15.2-.01

Forms

Locate these forms in the Forms Search.

Forms Search

• Form NOL-85: compute the net operating loss for the loss year.
• Form NOL-85A: carry the net operating loss back or forward. Form NOL-85A is prepared for each year to which a loss is carried. The form computes the modified taxable income, unused net operating loss, and the tax due for the carryback or carryforward year.