Net Operating Loss Carryforward Calculator
A net operating loss (NOL) lets a business offset taxable income in future years. For losses arising after 2017, the deduction in any year is generally capped at 80 percent of taxable income computed before the NOL, and any unused amount carries forward indefinitely. This calculator takes your available NOL carryforward and your current-year taxable income, applies the 80 percent limit (editable for older loss years), and shows the deduction you can take this year, your taxable income after the deduction, and the NOL balance that carries to next year. Use it to plan how long a loss will take to absorb.
NOL carryforward formula
Deduction cap = taxable income * (limit / 100)
Deduction = min(available NOL, deduction cap)
Taxable income after NOL = taxable income - deduction
Carryforward = available NOL - deduction
For post-2017 losses the limit is 80 percent and the carryforward is indefinite. For pre-2018 losses, older rules with carrybacks and no 80 percent cap may apply; set the limit to 100 to model an uncapped deduction.
US NOL context
- The 80 percent of taxable income limit applies to NOLs arising in tax years beginning after December 31, 2017.
- Post-2020 NOLs generally cannot be carried back, only forward, with narrow exceptions.
- Unused post-2017 NOLs carry forward indefinitely until fully absorbed.
- When multiple NOLs exist, ordering rules determine which loss is used first.
- IRS Publication 536 and the Form 1045 instructions govern individual NOL computations.
NOL carryforward: frequently asked questions
How does the NOL 80 percent limitation work?
For net operating losses arising in tax years after 2017, the NOL deduction is generally limited to 80 percent of taxable income computed before the NOL deduction. Any unused loss carries forward indefinitely. This calculator applies the 80 percent cap by default but lets you change the percentage if a different rule applies.
Can NOLs be carried back?
Under current law, most net operating losses arising after 2020 can only be carried forward, not back, with limited exceptions for certain farming and insurance losses. Carryforward is indefinite for post-2017 losses. Confirm the rules for your loss year with the IRS.
What is the deduction in the calculator?
The allowed deduction is the smaller of your available NOL carryforward and 80 percent of your current taxable income before the NOL. The remaining carryforward is the available NOL minus the allowed deduction, carried to the next year.
Does the 80 percent limit apply to all losses?
No. NOLs that arose in tax years beginning before 2018 are generally not subject to the 80 percent limit and follow older rules. The limit applies to losses from years after 2017. Use the percentage input to match your situation.
Is this the same as my actual deduction?
It is an estimate of the federal NOL deduction mechanics. Your actual deduction depends on the loss year, ordering rules when multiple NOLs exist, and other items. The IRS instructions for Form 1045 and Publication 536 govern the calculation.
Official sources
- Internal Revenue Service: About Form 1045 (NOL).
- Internal Revenue Service: IRS home (Publication 536).
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.