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Schedule Indiana Department of Revenue
Enclosure Sequence
IT-40NOL
State Form 46004 Individual Income Tax No. 16
(R20 / 9-22) Net Operating Loss Computation 2022

Your Name Your Social Security Number

IMPORTANT: Indiana net operating loss deductions claimed after Dec. 31, 2011 must be carried forward.

Part 1 – Computation of Indiana Net Operating Loss _________________________________________ Loss Year
1. Enter as a negative amount your federal net operating loss as calculated on the last line of the
federal Form 1045, Schedule A (see instructions). Note: If the amount on the last line of Form 1045,
Schedule A is positive or zero, or if you are a full-year or part-year nonresident, see instructions _____ 1

2. Enter certain add-backs from the loss year IT-40 or IT-40PNR (see instructions) _________________ 2

3. Enter as a positive amount the aggregate of any NOL from this loss year previously carried back
(see instructions) __________________________________________________________________ 3

4. Add lines 1, 2 and 3 ________________________________________________________________ 4

5. Enter certain deductions from the loss year IT-40 or IT-40PNR (see instructions) _________________ 5

6. Subtract line 5 from line 4. If the amount is zero or greater, enter zero _________________________ 6

7. Enter (as a negative number) any disallowed excess business loss incurred in the taxable year.
See instructions if you are a full- or part-year nonresident __________________________________ 7

8. Add lines 6 and 7. This is your Indiana NOL available to carryforward ______________ Indiana NOL 8

Part 2 - Record of Indiana NOL Application
(1) (2) (3) (4) (5)
Indiana NOL available for
Indiana AGI available to be deduction (from the Carryfor- Enter the amount from Indiana NOL deduction: Enter
Enter the year to which you offset (from the Carryforward ward Worksheet, line 6; enter either line 7 or line 8 of the the amount from line 9 of the
are carrying the loss. Worksheet, line 5) as positive amount) Carryforward Worksheet. Carryforward Worksheet

1st Year:

2nd Year:

3rd Year:

4th Year:

5th Year:

6th Year:

7th Year:

8th Year:

Attach additional sheets if necessary.

*24100000000*
24100000000

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Schedule IT-40NOL Carryforward Worksheet: Enter Loss Year

Column A Column B Column C Column D Column E
Complete one column before going to the next
column. See instructions. 1st following 2nd following 3rd following 4th following 5th following
tax year______ tax year______ tax year______ tax year______ tax year______
Note: If you have previously carried a loss to this
year, skip lines 1 through 4. Enter on line 5 the
modified Indiana AGI from the previous year’s
worksheet.

From the intervening year’s IT-40/IT-40PNR:
1. Enter the amount from IT-40/IT-40PNR
line 1 (if reporting from IT-40PNR for tax
year 2008 or before, skip line 2 and enter
the same amount on line 3) .....................

2. Enter some or all of the Indiana add-backs
from the intervening year’s return (see
instructions) ..............................................

3. Subtotal: Add lines 1 and 2 and enter total
here ..........................................................

4. Enter some or all of the Indiana deduc-
tions from the intervening year’s return (see
instructions) ..............................................

5. Intervening year’s Indiana AGI: Subtract
line 4 from line 3 (if less than zero, enter
zero) .........................................................

6. NOL available for carryforward. Enter as a
positive number ...................................... ►

Complete line 7 OR line 8

7. If line 5 is greater than or equal to line 6,
enter the difference here .........................

8. If line 6 is greater than line 5, enter the
difference here and on line 6 in the next col-
umn. This is the remaining NOL available to
be carried forward ....................................

9. Enter the smaller of the amount from line 5
or 6. This is your Indiana NOL deduction .

*24100000000*
24100000000

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Instructions for Schedule IT-40NOL and Carryforward Worksheet

A separate Schedule IT-40NOL must of the loss in 2009. He has a $25,000 loss should be reflected here.
be used for each loss year. available to be carried to tax year 2011.
Important: Full-year and part-year Indiana
Indiana Code 6-3-2-2.5 and 6-3-2-2.6 allow Indiana NOLs may be carried forward for nonresidents who file Form IT-40PNR for
for a net operating loss (NOL) deduction up to 20 years following the loss year tax year 2008 or before should skip line 2
from Indiana adjusted gross income. All loss (HEA 1316-2018(ss), Sec. 5). Note. If you and continue to line 3.
years ending after January 1, 2004, and any potentially had a net operating loss for
existing NOL(s) carried over to a taxable 2018 through 2021, please see the specific
year after this date must be recomputed modifications for Line 2 related to those Net the following Indiana add-backs as
by applying the amended provisions of years and later. reported on the loss year’s return.
this Act. Deductions for net operating
losses that were incurred in taxable years Part 1 – Computation of Indiana NOL For tax years 2003 and beyond (tax years
ending before January 1, 2004, and carried 2009 and beyond for IT-40PNR filers), add:
back or forward and deducted in taxable Enter the loss year (this is the year in • Tax add-back
years ending before January 1, 2004, are which the NOL occurred). • Net operating loss carryforward
calculated under the law in effect for the • Lump sum distribution
year the NOL was incurred. P.L. 81-2004, effective January 1, 2004, • Section 179 expense
provides for an NOL deduction from • Bonus depreciation
For tax years 2021 and later, itemized Indiana adjusted gross income equal to the
deductions are not permitted in determining amount of a federal NOL, computed under
Indiana net operating losses. In addition, if IRC Section 172, for the taxable year, For tax years 2009 and beyond, add:
you have a net operating loss carryforward that is derived from sources from within • Unemployment compensation (2009
that was calculated in whole or in part using Indiana, and adjusted for modifications only)
an itemized deduction, you must recalculate under IC 6-3-1-3.5. The federal NOL for • Deferral of business indebtedness
the net operating loss without the itemized individuals, which reflects the IRC Section discharge and reacquisition
deduction in order to determine the amount 172 application, is computed on federal • Qualified disaster assistance property
to be carried forward. Schedule A from Form 1045. • Qualified refinery property
• Qualified restaurant property
Note. The use of Indiana modifications • Qualified film or television production
Important: In order to carry a pre- may result in an Indiana net operating loss • Qualified preferred stock
2004 Indiana NOL to tax year 2004 even if there is no federal NOL. • Qualified retail improvement property
and beyond, you must:
Line 1 – Full-year Indiana residents
Step 1 – refigure the NOL using You must complete Schedule A from For tax years 2010 – 2012, add:
the new method on Form IT-40NOL federal Form 1045 before figuring your • Educator expense
revised R3/ 10-04, or after; Indiana net operating loss (NOL). If the • Employer-provided educational
Step 2 – reduce the refigured NOL by amount on the last line of Schedule A, expenses**
any amount previously used in any computed without itemized deductions, is: • IRA charitable distribution**
pre-2004 intervening year;* • negative (a loss), enter that amount • Qualified transportation fringe
Step 3 – use any remaining NOL on here as a negative figure; expenses**
line 17 of Carryforward Worksheet 2. • zero*, enter zero here; or • Student loan interest**
• positive*, enter that amount here as a • Tuition and fees**
* The application of the NOL in the pre- positive figure.
2004 tax year(s) must conform with the
rules that govern those years. Do not * Due to the application of Indiana For tax years 2010 and beyond, add
refigure the amount of deduction used in modifications, it is possible to have an • Discharge of debt of a principal
the pre-2004 tax years. Indiana NOL without first having a federal residence
NOL as computed under IRC Section 172. • Motorsports entertainment complex**
When to use an Indiana NOL If you think you have an Indiana NOL after • Qualified advance mining safety
the application of Indiana modifications, equipment**
Carryback and carryforward years. then you must first complete Schedule A of • Qualified environmental remediation
Public Law 172-2011 amends IC 6-3-2- the Form 1045 to arrive at the amount to costs**
2.5 and IC 6-3-2-2.6. It provides that no be entered on this line. • Qualified leasehold improvement
Indiana net operating loss carryback claim
property**
may be filed after Dec. 31, 2011. Full-year and part-year Indiana • Start-up expenditures**
nonresidents
Example. Paul has an Indiana NOL for the Apply like kind modifications (as computed
2010 tax year. Paul did not file an Indiana under IRC Section 172) derived from Do not include the following add-backs for
NOL carryback claim before Jan. 1, 2012. Indiana sources to the amount from line tax years 2010 and beyond:
Therefore, he will have to carry the loss 1 of Form IT-40PNR, and enter the result • Domestic production activities
forward. here. If the modified amount from line 1 of • Oil and gas well depletion deduction
Form IT-40PNR is: • Qualified electric utility amortization
Note. This rule will have no impact on • negative (a loss), enter that amount • RIC dividends to nonresident aliens
carryback claims filed before Jan. 1, 2012. here as a negative figure;
• zero, enter zero here; or **Apply these if 2010 is the loss year.
Example. Ross has a $200,000 Indiana • positive, enter that amount here as a While these add-backs were first required
NOL for the 2010 tax year. In October positive figure. for the 2010 tax year, individuals were
of 2011 he carried this loss back to his
given a choice to report them on either
2008 and 2009 Indiana returns. He used Line 2 – Certain Indiana modifications as
their 2010 or their 2011 Indiana tax return.
$75,000 of the loss in 2008, and $100,000 reported on the loss year IT-40/IT-40PNR
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Therefore, if 2010 is the loss year, include • Unemployment excluded from federal           Line 7 – For taxable years beginning 
on line 2 only those add-backs that were       gross income (2020 only)                     in 2021 and later, enter as a negative 
reported on the 2010 tax return.                                                            amount the amount of excess business 
                                             For tax years 2021 and later, add:             losses for the taxable year disallowed for 
For tax year 2011 and beyond, add:           • Student loan debt discharged under           federal purposes under IRC section 461 
• Certain trade or business deductions         IRC section 108(f)(5) except “those          (any negative amount shown on federal 
                                                                                            Form 461, Line 16, for the loss year) but 
  based on employment of unauthorized          excluded as a result of death, total and     permitted to be carried forward as a net 
  alien                                        permanent disability, or bankruptcy.         operating loss in future taxable years.
                                             • 50% of certain meals deducted in 
For tax year 2012 and beyond, add:             determining AGI                              For taxable years 2018 through 2020, enter 
• OOS municipal obligation interest                                                         the amount of excess business losses 
                                             For tax years 2022 and later, subtract:        disallowed for Indiana adjusted gross 
Note. In 2013 the following add-backs        • Indiana education scholarship account        income tax purposes. If you are a part- or 
were deemed to be no longer required,          deduction                                    full-year nonresident, enter the portion of 
retroactive to 2012:                         • Indiana enrichment scholarship               such losses attributable to Indiana sources. 
• IRA charitable distribution                  account deduction                            Any Indiana excess business loss should 
• Motorsports entertainment complex                                                         be reported in a manner consistent with 
• Qualified advance mining safety            Line 3 – If any amount of loss from this loss  how your adjusted gross income from 
  equipment                                  year has been carried to a preceding year,     Indiana sources was reported. 
• Qualified leasehold improvement            enter as a positive amount the amount of 
  property                                   loss used in that preceding year(s).           However, in no case should the Indiana 
                                                                                            loss be greater than the federal excess 
• Qualified restaurant property              Example. Ross has a $200,000 Indiana           business loss reported for federal purposes. 
• Qualified retail improvement property      NOL for the 2010 tax year. He previously       Further, in no case should the Indiana loss 
• Qualified transportation fringe expenses   carried this loss back to his 2008 and         reported in adjusted gross income plus the 
• Tuition and fees                           2009 Indiana returns. He used $75,000          disallowed portion permitted as an Indiana 
                                             of the loss in 2008, and $100,000 of           NOL carryforward exceed the Indiana 
If you reported any of the above on your     the loss in 2009. He must enter the            loss determined without regard to the loss 
2012 tax return, and you utilized Option 2   $175,000 ($75,000 plus $100,000) net loss      disallowance.
to report them as a negative add-back on     previously carried back.
                                                                                            Line 8 – Add lines 6 and 7. If the amount is 
your 2013 return (using a 300-series 3-digit                                                zero or greater, STOP. You do not have an 
code number in lieu of filing an amendment   Note. Do not include on this line any loss 
for 2012), do not include these amounts on   amount previously carried forward.             Indiana NOL. If the amount is a loss, enter 
                                                                                            (as a positive entry) this amount on line 
line 2 when 2013 is the loss year.           Example. Olivia has a $100,000 Indiana         6, Column A, of the Schedule IT-40NOL 
                                             NOL for the 2009 tax year. She previously      Carryforward Worksheet.
Do not include the following add-backs for   carried $10,000 of this loss back to her 2007 
tax years 2016 and beyond:                   return, $11,000 to her 2008 return, and used   Part 2 – Record of Indiana NOL 
• Certain trade or business deductions       $19,000 of the loss on her 2010 return.                 Application
  based on employment of unauthorized        She must enter the $21,000 ($10,000 plus 
  aliens                                     $11,000) net loss previously carried back.     Column 1 – List the year(s) to which you 
• Lump sum distribution                                                                     are carrying the loss.
• Discharge of debt of a principal           Line 5 – Enter the net of the following 
  residence                                  Indiana deductions as claimed on the loss      Column 2 – Enter the amount of Indiana 
                                             year’s return:                                 AGI available to be offset from line 5 of the 
                                             • Non-Indiana locality earnings deduction      completed Carryforward Worksheet.
For tax years 2017 and beyond, add:          • State tax refund and/or other 
• Deduction under IRC 965(c) allowable         recovered itemized deductions                Column 3 – Enter as a positive amount 
  for untaxed foreign earnings and           • Interest from U.S. government                the Indiana NOL available for deduction 
  profits (repatriated dividends)              obligations                                  from line 6 of the completed Carryforward 
                                             • Social Security and/or benefits issued       Worksheet.
For tax years 2018 and beyond, add:            by the U.S. Railroad Retirement Board
• Excess federal interest (under IRC         • Qualified patent income exemption            Column 4 – Enter the amount from 
  Section 163(j))                            • National Guard and reserve                   either line 7 or line 8 of the Carryforward 
• Excess business losses permitted             component member’s deduction                 Worksheet (only one of those lines will 
  for federal purposes but not Indiana       • Nonresident military spouse earned           have an entry).
  purposes (2018-2020 only)                    income deduction
                                             • Government or civic group capital            Column 5 – Enter the amount from line 9 
                                               contribution deduction                       of the completed Carryforward Worksheet. 
For tax years 2020 and beyond, add:          • COVID-related ERC expense deduction          This is your Indiana NOL deduction. Enter 
• Charitable contributions deductions        • Indiana education scholarship account        on IT-40 Schedule 1 (Schedule 2 for the 
  claimed by individuals in determining        grant deduction                              2009 tax year and beyond), under line 11, 
  federal AGI (2020 only)                    • Indiana enrichment scholarship account       or IT-40PNR Schedule B (Schedule C for 
• Student loan payments made by                deduction                                    the 2009 tax year and beyond), under line 
  an employer and excluded from              • Student loan interest deduction              11. If carrying the loss forward to a tax year 
  federal gross income, net of interest        for interest paid from student loan          which has already been filed, enter the 
  that would have been permitted for           payments required to be added back           amount on  Form IT-40X, line 1, Column B.
  federal purposes absent the federal 
  exclusions                                 Line 6 –   Subtract line 5 from line 4. If the Schedule IT-40NOL Carryforward 
                                             amount is zero or greater, enter zero.         Worksheet Instructions

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A Carryforward Worksheet must be Line 3 – Add lines 1 and 2 and enter the Complete line 7 OR line 8 based on the
completed for each loss year. result here. following:
If you are carrying your loss forward for more • If line 5 is greater than line 6,
than five years, modify the top of the column Line 4 – Enter the net of certain complete line 7.
to show the year to which it is being carried. deductions as claimed on the intervening • If line 6 is greater than line 5,
year’s return. See the instructions for complete line 8.
Example. Modify Column A, ‘1st’ following Line 5 of the IT-40NOL for a list of the
year, to read ‘6th’ following year. deductions. Line 7 – If the line 5 intervening year’s
• Non-Indiana locality earnings Indiana AGI is greater than or equal to the
Before you begin deduction line 6 NOL available for carryforward, then
You must have a completed state tax • Homeowner’s residential property tax you will use all of the available NOL as a
return (not including the Indiana NOL deduction deduction. Subtract line 6 from line 5 and
deduction) for the intervening year(s) in • State tax refund and/or other enter the difference here. Skip line 8 and
which you are applying the loss. recovered itemized deductions complete line 9.
• Interest from U.S. government
Columns A – E. Enter in Column A obligations Line 8 – If the line 6 NOL available for
information from the first year following the • Social Security and/or benefits issued carryforward is greater than the line 5
loss year. Enter in Column B information by the U.S. Railroad Retirement Board intervening year’s Indiana AGI, then you
from the second year following the loss • Indiana partnership long-term care will be able to offset the entire intervening
year. Complete the remaining columns policy premiums deduction year’s Indiana AGI and have a reduced NOL
accordingly. • Human services deduction available to carry to other years. Subtract
• Qualified patent income exemption line 5 from line 6 and enter the difference
Example. The loss year is 2009. Column • National Guard and reserve here and on line 6 in the next column.
A should reflect information from tax year component member’s deduction
2010; Column B should reflect information • Nonresident military spouse earned Line 9 – Enter the smaller of the amount
from tax year 2011, and so on. income deduction on line 5 or line 6. This is your Indiana
• Total exemptions claimed (after NOL deduction. Enter on IT-40 Schedule
Intervening year. Year to which a loss is proration, if applicable) 1 (Schedule 2 for the 2009 tax year and
being carried. • Government or civic group capital beyond), under line 11, or IT-40PNR
contribution deduction Schedule B (Schedule C for the 2009 tax
Complete lines 1 through 5 of the year and beyond), under line 11. If carrying
Carryover Worksheet to figure the Line 5 – Intervening year’s Indiana AGI. the loss forward to a tax year which has
intervening year’s Indiana AGI. Subtract line 4 from line 3 (if less than already been filed, enter the amount on
zero, enter zero). Form IT-40X, line 4, Column B.
Line 1 – Enter the amount from line 1 of
the intervening year’s IT-40 or IT-40PNR. Line 6 – NOL available for carryforward.
Enter here the amount from Schedule IT-
Note. If reporting from the IT-40PNR for 40NOL, Part 1, line 8 (enter as a positive
tax year 2008 or before, skip line 2 and amount).
enter this amount on line 3. • If this is the first time the NOL from
Schedule IT-40NOL, Part 1, line 8, is
Line 2 – Net the following Indiana being used, then enter the full amount
addbacks as reported on the intervening here.
year’s return. • If you have already used the NOL
from Schedule IT-40NOL, Part 1, line
For tax years 2003 and beyond (tax years 8, to offset income, then enter the
remaining available loss here (from
2009 and beyond for IT-40PNR filers), add line 8 of the Carryforward Worksheet).
the modifications applicable for the taxable See line 8 instructions.
year. See the instructions for Line 2 of the
IT-40NOL for a list of modifications.

If you reported any of the above on your
2012 tax return, and you utilized Option 2
to report them as a negative add-back on
your 2013 return (using a 300-series 3-digit
code number in lieu of filing an amendment
for 2012), do not include these amounts on
line 2 when 2013 is the intervening year.

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