When can an Illinois Net Loss Deduction (NLD) be used?

NLD can be used to reduce the base income allocable to Illinois only if the loss year return and all other returns that are impacted by the loss year carryback and carryforward provisions have been filed and to the extent the loss was not used to offset income from any other tax year. For Illinois net losses in tax years ending on or after December 31, 2003, Illinois net losses can no longer be carried back, and can only be carried forward for 12 years. Illinois net losses are used in order of expiration beginning the first year with taxable income after the loss year.

The use of Illinois net losses 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). 

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