What are the limitations for using an Illinois Net Operating Loss?

The use of Illinois Net Operating Loss Deduction to offset income for tax years ending on or after December 31, 2012, and before December 31, 2014, is limited to a maximum deduction of $100,000 per year for Corporations other than S corporations. This limitation does not apply to S corporations, partnerships, estates, or fiduciaries.

For tax years ending on or after January 1, 2011, and before December 31, 2012, the use of Illinois net operating loss to offset income is suspended for Corporations (other than S corporations).

For tax years ending on or after December 31, 2003, Illinois allows a carryforward provision of 12 years. There is no carryback provision.

For tax years ending on or after December 31, 1999, but before December 31, 2003, Illinois net loss deductions (NLDs) must be carried back 2 years, then forward 20 years. You may make the election to forgo the carryback period for these years; however, once the election is made, it is irrevocable.

Losses incurred in tax years ending before December 31, 1999, could be carried back and forward for the periods allowed under IRC Section 172 for the tax year in which the loss was incurred.

In general, for tax years beginning after August 5, 1997, and ending before December 31, 1999, losses must be carried back 2 years, then forward 20 years; and for tax years beginning on or before August 5, 1997, losses must be carried back 3 years, then forward 15 years.

For more information about Illinois Net Loss Deductions, see the instructions for  Schedule NLD or  Schedule UB/NLD.

If you have additional inquiries, you may submit them to the Questions, Comments, or Request form.