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                                                       CIT-139
      WEST VIRGINIA CORPORATION APPLICATION FOR REFUND FROM CARRYBACK
                                    OF NET OPERATING LOSS INSTRUCTIONS

             GENERAL INSTRUCTIONS                                        the year of the loss This will delay the processing of your claim for 
                                                                         refund.
Use Form CIT-139 to claim a refund resulting from the carryback 
of a net operating loss to previous years. Losses arising from           CHANGES DUE TO FEDERAL AUDIT ADJUSTMENTS
taxable years beginning after August 5, 1997 can be carried back 
two years and carried forward 20 years. West Virginia losses for         If you are  ﬁling this claim to adjust a previous net operating loss 
taxable years beginning before August 5, 1997 can still be carried       carryback that has now changed due to federal audit adjustments 
back three years and carried forward 15 years. A corporation may         for either the year of the loss or the year to which the loss has 
elect to carry forward a net operating loss instead of  ﬁrst carrying it been carried back, you must provide detailed information about the 
back by attaching a statement to this e ﬀect on a timely  ﬁled return    federal audit changes and how it a ﬀ   ects the loss carryback.
(including any extensions) for the year of the loss Once you make 
such an election, it is irrevocable for that tax year.                   WEST VIRGINIA CAPITAL LOSS CARRYBACKS
LIMITATION ON NET OPERATING LOSS CARRYBACKS                              West Virginia law does not provide for a West Virginia capital loss 
                                                                         carryback; however, West Virginia does allow federal adjustments 
Legislative changes made during 1993 (Senate Bill 463) limits the        to arrive at adjusted West Virginia taxable income and one of those 
amount of net operating loss that can be carried back from any           adjustments would be a federal capital loss carryback. Therefore, 
taxable year beginning after December 31, 1992. For taxable years        West Virginia would allow the capital loss carryback at the federal 
beginning after December 31, 1992, taxpayers can carry back              level to arrive at adjusted federal taxable income. This method is 
to the preceding taxable years no more than $300,000 00 of net           di ﬀerent than the West Virginia net operating loss carryback which 
operating loss. Any amount remaining after the carryback may be          is computed separately for West Virginia. You should compute the 
carried forward.                                                         capital loss carryback on Form CIT-120 marked amended.
ILLUSTRATION: XYZ corporation is a calendar year taxpayer.               NET OPERATING LOSS DEDUCTION
For 2007, it incurs a $5 million West Virginia net operating loss.       WV CODE §11-24-6(D)
In each of its preceding 2 taxable years, XYZ corporation reported 
West Virginia taxable income of $1 million. Under prior law, XYZ         West Virginia Corporation Net Income Tax law allows as a deduction 
corporation would have been allowed to carry back $3 million             for the taxable year an amount equal to the aggregate of (1) the 
of its 2007 West Virginia net operating loss, thereby reducing           West Virginia net operating loss carryovers to such year plus (2) 
its West Virginia taxable income in 2005 and 2006 to zero, and           the net operating loss carryback to such year. A “West Virginia 
obtaining a refund of taxes paid. The rest of the loss, $2 million,      net operating loss deduction” is calculated in accordance with the 
would have been available to carry forward to tax years after 2007.      provisions of Section 172 of the Internal Revenue Code of 1986, as 
Under Senate Bill 463, only $300,000 00 of the loss may be carried       amended. For treatment of net operating loss carryovers in certain 
back to 2005. None of the loss may be carried back to 2006. The          corporate acquisitions and for special limitation on net operating 
rest of the loss, $4,700,000 00, is available to be carried forward      loss carryovers in case of a corporate change of ownership, 
to tax years that begin after December 31, 2007, until used or the       Sections 381 and 382 of the Internal Revenue Code of 1986, as 
applicable loss carryforward period (15 years) expires, whichever        amended, apply.
occurs  ﬁrst.
                                                                         For a multi-state corporation, the net operating loss deduction 
STATUTORY LIMITATION FOR FILING A CLAIM                                  shall be made after they have allocated and apportioned their net 
                                                                         income to West Virginia. The carryback shall be West Virginia net 
Your claim for refund must be   ledﬁwithin 3 years from the              operating loss carried back to West Virginia taxable income.
unextended due date of the West Virginia Corporate Income Tax 
Return for the period in which the net operating loss occurred.          For Taxable Years Ending Prior to June 30, 1988 a net operating 
                                                                         loss deduction could be claimed by a corporation entitled to claim 
INTEREST PAYABLE ON REFUND CLAIMS                                        a net operating loss deduction on its federal income tax return. 
WV CODE §11-10-17(E)(2)                                                  The amount of the federal net operating loss deduction had to be 
                                                                         adjusted to determine the amount of the allowable West Virginia 
Interest is not payable when a corporation net income tax refund         net operating loss deduction.
check has been requested by the tax commissioner within 6 months 
of the date a claim for refund is  ﬁled.                                 For  Taxable  Years Ending  After June 30, 1988 West Virginia 
                                                                         Corporation Net Income  Tax law was revised to provide for a 
SUPPORTING FORMS REQUIRED                                                West Virginia net operating loss deduction to be used to reduce 
                                                                         West Virginia taxable income of a corporation.  The revision is 
To speed up the processing of your claim for refund, attach a signed     e ﬀective for all taxable years ending after June 30, 1988 and 
copy of your West Virginia combined Corporation Net Income Tax           applied to all loss carryovers from taxable years ending on or 
Return (Form CIT-120) for the loss year. Do not attach the original      before June 30, 1988.
return and do not attach Form CIT-139 to your original return for 
                                                                         Taxpayers now have a West Virginia election as to the carryback 
WEST VIRGINIA STATE TAX DEPARTMENT
CNF-139 Instructions — Rev. 8/17                                                                                               Page 1 of 2

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or carryforward of the West Virginia net operating loss deduction. Line 3 $300,000 00
The carryback period is 2 years and the carryforward is 20 years.
If the election is made to not carry back any part of the loss, the Line 4 Loss eligible for carryback.
carryforward period is 20 years.
Columns (a) and (b). Enter the appropriate ﬁgures for all lines after
The West Virginia net operating loss deduction is limited to net the loss carryback.
operating losses incurred by a corporation which did business
in West Virginia and ﬁled combined Corporation Net Income Tax Line 5(a) and (b) Enter the Net Taxable Income as appropriate.
Returns in prior taxable years.
Line 7(a) and (b) Subtract Line 6 from Line 5
The amount of net operating loss deduction available to an
a ﬃliated group which elects for the ﬁrst time to ﬁle a consolidated Line 8(a) and (b) To calculate your net income tax after the net
West Virginia Corporation Net Income Tax Return, for a taxable operating loss carryback, you must refer to
year ending after July 1, 1988, is limited to the net operating losses the original tax return. Recalculate the net
incurred by members of the a ﬃliated group which did business in income tax using the tax computation schedule
West Virginia and ﬁled separate West Virginia returns in prior years. included with your original return Attach your
recalculation of the net income tax to this form.
A West Virginia net operating loss deduction will not be allowed for
net operating losses of those members of the a ﬃ liated group which Line 9(a) and (b) If you still have net income tax due after the
did no business in West Virginia in prior taxable years and were not loss carryback and you are entitled to claim
required to ﬁle West Virginia Combined Corporation Net Income tax credits, you cannot use this form (CIT-139)
Tax Returns. to claim a refund. You must ﬁle an amended
return in order to claim a carryback refund.
For tax years beginning on or after January 1, 2009, any taxpayer You must recalculate the tax credit that you
engaged in a unitary business with one or more other corporations are eligible to claim after the loss carryback
shall ﬁle a combined report which includes the income, allocation by using the appropriate tax credit schedule.
and apportionment of income of all corporations that are members Attach copies of both your original and
of the unitary group. West Virginia computes net operating loss on amended tax credit schedules to your amended
a post-apportionment basis. NOL’s can only be carried backwards return. Please note on the amended return that
to be applied against the West Virginia source income of the it is being amended in order to claim a refund as
combined group member to which it is attributable. NOL’s that were a result of carrying back a Net Operating Loss.
incurred by an entity in a period in which the entity ﬁ led separately,
cannot be used by other members of the combined group. There is Line 11(a) and (b) Enter on this line the net payments made This
an exception for NOL’s earned when the taxpayer was lingﬁ on a is the sum of the total previous payments made
consolidated basis. Those NOL’s can be carried over and applied for the taxable year less total previous refunds
against the income of any former member of the consolidated and carry forward credits (which cannot be
group. DO NOT USE THIS FORM IF YOUR WV FILING METHOD changed).
IS COMBINED. Combined ﬁ lers must submit an amended CIT-120
to claim a refund from carryback of a net operating loss. Line 12(a) and (b) If line 11(a) or (b) is larger than line 10(a) or (b),
enter that di ﬀerence on line 12.
SRLY Rules. The separate return limitation rules set forth in
Treasury Regulation §1 1502 apply in determining the allowable Line 13 Add lines 12(a) and 12(b).
West Virginia net operating loss deduction.
Mail to West Virginia State Tax Department
When the SRLY rules apply, a member of an a ﬃliated group’s net Tax Account Administration Division
operating loss carried forward from its separate return year can P.O. Box 1202
only o ﬀset that portion of the taxable income attributable to that Charleston, WV 25324-1202
member of the group.
If you have any questions about the West Virginia Corporation Net
SPECIFIC INSTRUCTIONS Income Tax or net operating loss deductions, please contact our
Taxpayer Services Division at one of the following numbers:
Line 1 Enter the year of the net operating loss.
Telephone: (304) 558-3333 or
Line 2 Enter the amount of West Virginia net operating loss for Toll free within West Virginia (800) 982-8297
the loss year TDD service for the hearing impaired 1-800-282-9833

WEST VIRGINIA STATE TAX DEPARTMENT
CNF-139 Instructions — Rev. 8/17 Page 2 of 2

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