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Instructions for Form NYC-NOLD-GCT - 2020 Page 2
GENERAL INFORMATION operating loss deduction by computing the deduction for New
York City purposes as if it filed on a separate basis for federal
Note that according to the federal Tax Cuts and Jobs Act of purposes.
2017, most net operating losses (NOL) generated during or
after 2018 generally may no longer be carried back. These The New York City (“NYC”) Net Operating Loss deduction is
losses may be carried forward indefinitely; however each subject to three general statutory limitations: (1) any net operat-
year’s NOL deduction will be limited to 80% of federal tax- ing loss must be adjusted to reflect the inclusions and exclusions
able income (without regard to the deduction). from entire net income: (2) the deductions must not include any
taxable year in which the taxpayer was not subject to the New
Note further that for GCT purposes, Admin. Code §11- York City tax; and (3) the deduction shall not exceed the federal
602(8)(f)(6) decouples from the federal Coronavirus Aid, Re- net operating loss deduction for the period. See NYC Adminis-
lief, and Economic Security Act (CARES Act) provisions that trative Code section 11-602(8)(f). Note that as a result of clause
temporarily reversed the Tax Cuts and Jobs Act changes re- (3), above, the NYC Net Operating Loss deduction will be sub-
lating to net operating losses for federal purposes. See Fi- ject to any applicable restrictions on the taxpayer’s federal net
nance Memorandum 20-6 for more information. operating loss limitations, including the federal "as if" net oper-
ating loss limitation provided in IRC section 382 and the fed-
WHO SHOULD FILE THIS FORM? eral Separate Return Limitation Year (SRLY) limitation set forth
in Treasury Regulation section 1.1502-15.
NOTE: This form may be used by federal Subchapter S Cor-
porations and Qualified Subchapter S Subsidiaries only. If any SPECIFIC INSTRUCTIONS
instructions appear to apply to C Corporations, they should
be read to apply only to S corps and qualified S subsidiaries. SCHEDULE A - COLUMN BY COLUMN
INSTRUCTIONS
This schedule should be completed for net operating losses being
utilized in the current year and subsequent years. A combined NOTE: Except with respect to the amount on Line A regarding an
group of corporations should file one Form NYC-NOLD-GCT interrupted NOL, discussed below, Schedule A should not include
for the entire group. prior year losses that have been fully used or expired previously.
Only the losses expiring or used in the current year and all losses re-
The net operating loss is computed as though the federal Sub- maining to be carried forward should be included in the schedule.
chapter S election had not been made.
Line A:
New York City generally allows net operating losses to be used NOL Carryforward from prior years: Enter the NOL Carryfor-
in the same manner as provided under Internal Revenue Code ward available for NYC purposes during the years indicated on
(“IRC”) Section 172. However, for losses sustained during tax- Schedule A that was generated in tax years more than 20 years
able years ending after June 30, 1989, only the first $10,000 of prior to the current year and where the carryforward of this loss
loss in any taxable year may be carried back to preceding taxable interrupted the use of net operating losses generated during the
periods as permitted under IRC Section 172. Any remaining twenty year period indicated on Schedule A which was subse-
NOL may be carried forward: for loss years before 8/5/1997 quently partially or wholly used during the current year. Attach
there is a 15-year carry forward; for loss years beginning after a schedule indicating the year(s) the NOL was generated, the
8/5/1997 but on or before December 31, 2017, there is a 20-year amount used and the year(s) it was used.
loss carry forward.
Example:
Losses incurred during taxable years beginning after December In 1988 Taxpayer A had a net operating loss of $1 million. Tax-
31, 2017, may not be carried back, but can be carried forward in- payer A carried forward $500,000 of this NOL to 1989. Subse-
definitely. The deduction for losses incurred during taxable years quently, in 2002, Taxpayer A had a net operating loss of
beginning after December 31, 2017, is limited to 80% of federal $300,000. In 2003, instead of carrying forward the loss from
taxable income calculated as if the corporation had not made the 2002, Taxpayer used the $500,000 net operation loss available
election pursuant to subchapter S of the IRC (without regard to from 1988. Taxpayer A then carries forward the NOL generated
the deduction). in 2002 to 2005 (using $150,000) and 2012 (using the remain-
ing $150,000). Because the use of the 1988 loss interrupted the
Any net operating loss that may be carried back or forward for use of the loss incurred in 2002 and the 2002 loss was partially
federal tax purposes must be adjusted to reflect the additions and used in 2012, the 1988 loss should be reflected on Line A of
subtractions required by Section 11-602(8)(f) of the NYC Ad- Schedule A of this form filed with the 2012 return. If instead
ministrative Code. Taxpayer A had carried forward the available $500,000 loss from
1988 to 1990 or if the 2002 loss had been used prior to the cur-
If a corporation files a federal consolidated return, but for New rent year, the loss generated in 1988 would not need to be re-
York City purposes files a separate return rather than a combined flected on Line A or Schedule A of the NOLD form filed with the
return, that corporation must determine its eligibility for a net 2012 return.
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