Instructions for Form NYC-2.3
 Prior Net Operating Loss Conversion (PNOLC) Subtraction                                                                              2022

All citations are to New York City Administrative Code sections unless       The PNOLC subtraction is applied against the business income base be-
specifically noted otherwise.                                                fore the net operating loss deduction (NOLD). 
                                                                              
                                                                             The PNOLC subtraction is limited in any tax year to the amount required 
GENERAL INFORMATION                                                          to reduce the tax on the allocated business income base to the higher of 
                                                                             the capital base tax or the fixed dollar minimum tax. For a combined 
Form NYC-2.3 is used by a taxpayer subject to tax under Subchapter 3-A       group, the PNOLC subtraction is limited in any tax year to the amount 
of Chapter 6 of Title 11 of the Administrative Code to compute the prior net required to reduce the tax on the allocated combined business income 
operating loss conversion (PNOLC) subtraction pool, and subtraction          base to the higher of the combined capital base tax or the fixed dollar 
amounts, allowed in the computation of the business income base by §11-      minimum tax of the designated agent. 
654.1(2)(a) for tax years beginning on or after January 1, 2015.  Part 2 of   
Schedule A provides the PNOLC subtraction pool detail and tax period al-     Definitions 
lotment of the taxpayer or, in the instance of a combined group, each mem-   Base year means the last tax year beginning on or after January 1, 2014, 
ber of a combined group. Schedule B calculates the overall limitation of      and before January 1, 2015.  
the PNOLC subtraction for the current period. Schedule C computes the        Unabsorbed net operating loss (UNOL) means the unabsorbed portion of 
amount of PNOLC subtraction used and the amount to be carried forward        NOL as calculated under §11-602.8(f) or §11-641(k-1) as such sections were 
to the next tax period.   Schedules D and E are to be completed by NYC-      in effect on December 31, 2014, that was not deductible in previous tax years 
2A filers when there have been changes to the taxpayer’s combined group.     (including the base year) and was eligible for carryover on the last day of the 
 
Note:  Form NYC-2.3 must be filed, with all schedules completed, for every   base year, subject to the limitations for deduction under such sections, and 
tax year that you carry a PNOLC subtraction balance, even if no such sub-    including any NOL sustained by the taxpayer during the base year.  If the re-
traction can be applied in that tax year, so that carryforward amounts are   turn filed for the base year was a combined return, all combined group mem-
properly accounted for.  Failure to file Form NYC-2.3 for any tax year for   bers of that base year combined return must determine their own individual 
which you carry a balance of PNOLC subtraction may result in a delay in      share of that base year combined group’s UNOL as of the last day of that 
receiving such benefits. A combined group completes only one Form NYC-       combined group’s base year. The UNOL of an entity is a fixed amount as of 
2.3 each year for the entire group.                                          the last day of the base year. For your first tax period that begins on or after 
                                                                             January 1, 2015, you must attach a statement detailing how the UNOL was 
The unabsorbed net operating loss (UNOL) and PNOLC subtraction pool          computed (if filing a combined return, the statement must detail the UNOL 
of a taxpayer, or of a corporation that was a member of a combined group,    computation for each member of the combined group). 
that was subject to tax under either Subchapter 2 (the General Corporation   Current tax period means the tax period for which you are filing this 
Tax) or Part 4 of Subchapter 3 (the  Banking Corporation Tax) in the base    form NYC-2.3. 
year (see Definitions) are computed only once, on the first Form NYC-2.3      
filed after the base year. The UNOL and PNOLC subtraction pool will be       Financial Corporation means a corporation, or, if the corporation is in-
the same for every tax year following that taxpayer’s base year.             cluded in a combined group, a combined group, as defined in Adminis-
                                                                             trative Code §11-654(1)(e)(1)(i). 
Unabsorbed net operating losses that were incurred for tax years begin-        
ning before January 1, 2015 were converted to a PNOLC subtraction 
pool to be applied, with certain limitations, as a PNOLC subtraction         SPECIFIC INSTRUCTIONS 
                                                                              
against the apportioned business income base. You may claim one-tenth        When filing a combined return, enter the legal name and EIN of the 
of the pool, plus the amount of any prior tax period unused allotments,      group’s designated agent. In all cases, enter loss amounts (UNOL, 
in each of the first ten tax periods following the base year. After that,    PNOLC) as positives in order to ensure proper computation. 
you may continue to claim any unused amount, but for no longer than           
twenty tax periods following the 2015 tax year. Alternatively, on the first  Line A – Enter the total number of members in the combined group in 
return for the first tax  year that began  on or after January 1, 2015 and   the current tax period, including the designated agent, all taxpayer mem-
before January 1, 2016, by the due date of such return determined with       bers, and all nontaxpayer members in the group. 
extensions,  you could have made a revocable election to utilize your         
PNOLC subtraction pool by claiming not more than 50% of your                 SCHEDULE A 
PNOLC subtraction pool (“50% election”) in each of the tax years that        PNOLC subtraction pool detail and tax period allotment 
                                                                              
began on or after January 1, 2015 and before January 1, 2017.  If the        All filers must complete Schedule A in its entirety. If any entity or com-
pool was not exhausted at the end of such period, the remainder of the       bined member did not have a UNOL as of the last day of its base year, 
pool is forfeited.                                                           enter  0for that entity or combined member in columns D, E, G, and H. 
                                                                             If more space is needed, attach additional sheets providing the informa-
Note: For taxpayers who previously elected the 50% subtraction allot-        tion in the same format. 
ment, the PNOLC subtraction is no longer allowed.                            Column A: NYC-2 filers: enter your name and EIN in row A. 
                                                                              
If an entity leaves – or joins – a combined group it takes – or brings – its NYC-2A filers    : enter the name and EIN of each member of the com-
own PNOLC subtraction pool, and its share of any unused PNOLC sub-           bined group, including the designated agent and any non-taxpayers. The 
traction carry forward with it. An entity’s PNOLC subtraction pool and       designated agent completes row A. All corporations within the group 
its PNOLC subtraction allotment generally get computed only once, and        must continue to be reported on their own row, even after a merger or liq-
are fixed amounts as of the last day of the entity’s base year. If an en-    uidation. 
tity filed as a member of a combined group for the base year, the mem-        
ber’s PNOLC subtraction pool will represent   that member’s      share of    Column B:   NYC-2 filers: enter the tax period ending date of yourbase 
the group’s PNOLC subtraction pool.                                          year in row A. 

 Instructions for Form NYC-2.3 - 2022                                                                                                   Page 2

NYC-2A filers: enter, for each member of the combined group, the tax        Column F: For each entity listed, enter that entity’s applicable PNOLC 
period ending date of that member’s base year.                              subtraction allotment %, which is generally 10%. 
                                                                             
Column C: For each entity listed, enter the total number of tax periods,    Column G: For each entity listed, if any of the following conditions are 
including any short periods, that have ensued for that entity since that    met, enter 0: 
entity’s base year. Include the current tax period in the count. Do not      
enter a number higher than “11”.                                            -  the PNOLC subtraction allotment percentage in column F is 10%, 
                                                                               and the tax period count in column C is greater than 10; 
Example: Assume the current tax period is calendar year 2022 for Com-        
pany C. Company C’s base year was calendar year 2014. If Company C          -  the PNOLC subtraction allotment percentage in column F is 50%, 
filed calendar year returns for 2015 through 2021, then Company C’s            and the tax period count in column C is greater than 2; 
tax period count is 8, since there have been 8 tax periods that followed     
Company C’s base year, including the current tax period. If, on the other   For each entity listed, if none of the above conditions are met, enter the 
hand, Company C filed two short period returns in 2017, then Company        product of the amount in column E and the percentage in column F. 
C’s tax period count would be 9, including the current tax period.          When filing a combined return, the designated agent must also report 
                                                                            the amount on Form NYC-2A, Schedule A, line 36, while each member 
Column D: NYC-2 filers: Enter the UNOL from Form NYC-2.3, column            of the group must report this amount on its Form NYC-2A/BC, Sched-
D filed for the previous tax period by you or on your behalf by a combined  ule A, line 7. 
group.                                                                       
                                                                            Column H: For each entity listed, enter the result of subtracting from 
NYC-2A filers: For each member of the combined group listed, enter on       the amount in column E the product of the number in column C and the 
the applicable row that member’s UNOL, as follows:                          amount in column G. If the amount is less than zero, enter 0. 
                                                                             
A) If the member filed Form NYC-3L or NYC-1 in its base year, then          SCHEDULE B  
 enter its UNOL, or                                                         Overall limitation on PNOLC subtraction 
 
B) If the member filed as a member of a combined group in its      base      
 year, then enter its   individual share of its base year combined          All filers must complete Schedule B. 
 group’s UNOL.                                                               
                                                                            SCHEDULE C 
If, on the last day of its base year, an entity has no UNOL, or its indi-   Computation of PNOLC subtraction used, and unused amount carried 
vidual share of its base year combined group’s UNOL is zero, enter   0      forward 
for that entity in columns D, E, G, and H.                                   
                                                                            Line 2 – Follow the appropriate instructions below based on whether you 
The UNOL entered in column D for an entity will be the same for every               are filing Form NYC-2, or Form NYC-2-A, for the current tax 
tax period following that entity’s base year.  Therefore, enter the UNOL            period. 
from that member’s row of Form NYC-2.3, column D filed for the pre-          
vious tax period by the member or on the member’s behalf by a com-                  Current tax period   Form NYC-2 filers   , follow instruction A 
bined group.                                                                        or B, whichever applies. 
                                                                                     
When filing a combined report, the designated agent must also report                A) Member of combined group in immediately preceding tax pe-
this amount on Schedule A, line 35 of Form NYC-2A, while each mem-                      riod: 
ber of the group must also report this amount on Schedule A, line 6 of its           
Form NYC-2-A/BC.                                                                        Enter on line 2 your share of the amount from Schedule C, 
                                                                                        line 5 of your former combined group’s immediately preced-
Column E: NYC-2 filers: Enter the PNOLC subtraction pool from your                      ing tax period’s Form NYC-2.3. 
row of Form NYC-2.3, column E filed for the previous tax period by you or            
on your behalf by a combined group.                                                 B) Form NYC-2 filer in immediately preceding tax period: 
                                                                                     
                                                                                        Enter on line 2 the amount from Schedule C, line 5 of your 
NYC-2A filers: For each member of the combined group listed, enter the                  immediately preceding tax period’s Form NYC-2.3. 
PNOLC subtraction pool from that member’s row of Form NYC-2.3,                       
column E filed for the previous tax period by the member, or on the                 Current tax period Form NYC-2A filers, follow instruction A 
member’s behalf by a combined group. When filing a combined report,                 or B, whichever applies. 
the designated agent must also report the amount on Schedule A, line 34              
of Form NYC-2-A, while each other member of the group must also re-                 A) When the same combined group filed on a combined return 
port this amount on Schedule A, line 5 of its Form NYC-2-A/BC.                          in the immediately preceding tax period: Enter the amount 
 
                                                                                        from Schedule C, line 5 of the immediately preceding tax 
The PNOLC subtraction pool amount entered in this column for an en-
                                                                                        period’s Form NYC-2.3. 
tity will be the same for every tax year following the entity’s base year.  
                                                                                     
Therefore, the PNOLC subtraction pool amount entered in column E for 
                                                                                    B) When the members of the combined group have changed         
an entity will continue to be the amount to enter in column E on each sub-
                                                                                        since the immediately preceding tax period, the amount to 
sequent tax period’s Form NYC-2.3 filed. 
                                                                                        be entered on line 2 is determined by following Steps 1, 2 
Attach a statement to Form NYC-2.3 showing the computation of this                      and 3 below. 
column for each member of the combined group.                                        
                                                                                          Step 1. For each member of the current tax period com-

 Instructions for Form NYC-2.3 - 2022                                      Page 3

               bined group that filed Form NYC-2 for the tax pe-
               riod       immediately preceding the current tax pe-
               riod: Add together the amounts from Schedule C, 
               line 5 of the      immediately preceding tax periods’ 
               Form NYC-2.3 filed by each such member. The 
               sum is the Step 1 result. 
        
       Step 2. For each member of the    current tax period com-
               bined group that filed as part of a combined group 
               in the tax period immediately preceding the cur-
               rent tax period, determine such member’s share of 
               the amount from Schedule C, line 5 of the imme-
               diately preceding tax period’s Form NYC-2.3 that 
               such member was included on. Add together the 
               amounts so obtained. The sum is the Step 2 result. 
        
       Step 3. Add together the results of Steps 1 and 2 and enter 
               the resulting sum on line 2. 
 
Line 4 – Enter the lesser of line 3 or Schedule B, line 5.  Also enter the 
line 4 amount on Form NYC-2 or NYC-2A, Schedule B, line 33.  Do 
not enter less than zero. 
 
Line 5 – Subtract line 4 from line 3. Reduce this amount by the amount 
of any unused PNOLC subtraction that cannot be carried forward due to 
limitations and enter the result. 
 
Note: Any unused PNOLC subtraction may not be carried forward for 
longer than 20 tax years following the 2015 tax year, or to any tax year 
beginning on or after January 1, 2036, whichever comes first. (§§11-
654.1(2)(b)(4) and 11-654.1(2)(d)). 
 
                                                                           NYC-2.3 Instructions - 2022