Taxpayers With Net Operating Losses (NOLs); The Internal Revenue Service (IRS) issues guidance for those taxpayers who are claiming net operating losses due to Coronavirus (COVID-19) in USA. As per the details, Revenue Procedure 2020-24 (PDF) guidance provides details regarding coronavirus relief for taxpayers claiming NOLs under the CARES Act. The IRS recently issued relief for partnerships filing amended returns. Just like Economic Impact Payments, Employee Retention Credit, Tax Deadline Extension To July 15 & Paid-Leave Tax Credits, this initiative of coronavirus relief for taxpayers claiming net operating losses (NOLs) is a remarkable act by the U.S. government. Check the complete update to know all details regarding the guidance. If you need any further assistance on coronavirus relief for taxpayers claiming net operating losses (NOLs), you can make online inquiry with our representatives who are working remotely to assist in during the pandemic outbreak throughout the country.
Coronavirus Relief for Taxpayers Claiming Net Operating Losses (NOLs)
Revenue Procedure 2020-24 (PDF) provides guidance to all those taxpayers with NOLs that are carried back under the CARES Act. The provision has details on coronavirus relief for taxpayers claiming net operating losses (NOLs) in different cases. The IRS issues CARES ACT guidance for the taxpayers with NOLs. Revenue Procedure 2020-24 (PDF) provides procedures for the following cases:
- Waiving the carryback period in the case of a net operating loss arising in a taxable year beginning after December 31, 2017, and before January 1, 2021.
- Disregard of certain amounts of foreign income put through transition tax that would usually have been included as income throughout the five-year carryback period, and
- Waiving a carryback period, reducing a carryback period, or revoking an election to waive a carryback period for a taxable year that began before January 1, 2018, and ended after December 31, 2017.
Six Month Extension of Time for Filing NOL Forms
The Internal Revenue Service (IRS) provides a six-month extension of time in Notice 2020-26 (PDF). The extension is granted for filing Form 1045 or Form 1139, as applicable, with respect to the carryback of a net operating loss that arose in any taxable year that began during calendar year 2018 and that ended on or before June 30, 2019. Moreover, individuals, trusts, and estates would file Form 1045 (PDF), and corporations would file Form 1139 (PDF) to request for extension in filing returns as coronavirus relief for taxpayers claiming net operating losses (NOLs).
COVID Relief for Partnerships with NOLs
The Internal Revenue Service IRS issued Revenue Procedure 2020-23 (PDF) on April 8, 2020. As per this notice, eligible partnerships are allowed for filing mended partnership returns using a Form 1065, U.S. Return of Partnership Income. This can be filed by checking the “Amended Return” box and issuing amended Schedules K-1, Partner’s Share of Income, Deductions, Credits, to each of its partners. Furthermore, partnerships are recommended write “FILED PURSUANT TO REV PROC 2020-23” at the top of the amended return when filing these amended returns. Coronavirus relief for taxpayers claiming net operating losses (NOLs) can assist partnerships also to save big during the pandemic situation.