Effective November 6th, 2009 under the “Worker, Homeowner, and Business Assistance Act of 2009 – WHABBA for short”….all US Businesses of every size can now carry back Net Operating Losses (NOL’s) up to FIVE years. A Net Operating Loss is the excess of the taxpayer’s business deductions over its GROSS Income. The previous legislation allowed businesses with less than $15 Million in gross receipts to carry back a NOL two years.
IMPACT FOR BUSINESSES – A business that carries back a NOL to a prior profitable year can obtain a quick refund from the IRS for that prior year. This will provide additional cash that the business can use to pay expenses, maintain operations, and make new investments.
