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Improved loss carrybacks for 2008, 2009 pass Senate

November 05, 2009

All taxpayers with net operating losses for 2008 and 2009 would be able to carry them back five years under a provision passed by the Senate yesterday. Tax Analysts reports ($link):

H.R. 3548 would also allow all companies (except those assisted by the Treasury Department's Troubled Asset Relief Program) to deduct losses from either 2008 or 2009 against income reported over the previous five years. Businesses would be able to offset 50 percent of available income from the fifth year, but 100 percent of available income for the remaining four years.

The five-year carryback that applied to 2008 losses only applied to businesses with gross receipts under $15 million, greatly limiting its usefulness.

Tax Analysts says the bill could pass the House as early as today; the President is expected to sign it.