Congress has approved a liberalized tax net operating loss (NOL) provision for companies have reported tax losses in 2008 or 2009.  Rather than the current limit of a 2-year carryback for most operating losses, this new rule (once signed by President Obama) will allow virtually all businesses to carryback their 2008 and 2009 losses as far back as 2003 to the extent they had reported federal taxable income in that year – or other intervening years.

This change means that many companies which have fallen on hard times the last couple of years can secure up to five years of refunds for taxes paid in prior years.

See Time Magazine.com article for more details regarding these latest changes (note these refunds are attributable to losses rather than credit; however certain tax credits are also eligible for carryback and refunds):

http://www.time.com/time/business/article/0,8599,1934813,00.html

See my December 2008 AICPA article detailing the refund filing process under the prior rules:

http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2008/CorpTax/Corporate_Tax_Losses.jsp

Tags: Federal Refunds, Form 1139, Net Operating Losses, Quick Refunds, Tax Credits, Tax Loss, Tax Loss Refunds, Tax NOL, Time Magazine.com

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