What is the Qualified Business Loss Carryforward?

Created by Harendra Singh Rathore, Modified on Sun, 05 Feb 2023 at 08:49 PM by Harendra Singh Rathore

A business tax loss occurs when your company has more expenses than profit in a given tax year. However, if your business experienced a tax loss in 2022, you may be able to use a qualified business loss carryforward to offset your tax bill in the future.


Also known as a net operating loss carryfoward, a qualified business loss carryforwad is a strategy you might consider if your company didn’t make a net operating profit last year.


You can carry forward the loss to any future tax year, but only for 80% of the taxable income. A provision in the 2020 CARES Act temporarily removed the 80% limit from business loss carryforwards, but this expanded benefit has since expired.


For example, if you have a $10,000 loss in 2022, you could carry forward $8,000 (or 80%) of this loss for your 2023. Depending on where you live, you may also be able to carry forward net operating losses for your state tax returns.


You can carry forward a qualified business loss if you’re a sole-proprietor, member of a limited liability company, partner (in a partnership), or an owner of an S-corporation. There are some constraint for limited partners who do not actively run the company.

If you’ve determined your business has a net operating loss, you can complete IRS Form 1045, Schedule B to figure out how much you can carry forward.

Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select atleast one of the reasons

Feedback sent

We appreciate your effort and will try to fix the article