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Net Operating Loss (NOL) Provisions

  • Net Operating Loss (NOL) Provisions

You are allowed to carryback a net operating loss to the two previous tax years. You can carry any remaining amount of net operating loss forward for up to 15 years following the loss year.

You are allowed to forego the carryback period, and you have a choice of two methods for making the election. You can make the election on Alabama Form NOL-85 (Part III), or make the election by carrying the loss forward on a timely-filed return for the year subsequent to the loss year.


Locate these forms in the 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.