Includes procedures for making elections relating to the carryback of NOLs arising in 2018, 2019, and 2020 taxable years (see NOL Carryback Elections).

Provides a six-month extension for filing applications for tentative refunds resulting from the carryback of NOLs arising in taxable years beginning in 2018 and ending on or before June 30, 2019, and provides an extension until July 27, 2020 for fiscal year taxpayers with a taxable year that straddles 2017 and 2018 (see Extension of Deadline for NOL Carryback Expedited Refund Requests).

A taxpayer can carry back NOLs arising in 2018, 2019, and 2020 taxable years to the five taxable years preceding the loss year and can use those losses to offset 100% of taxable income, or can elect to waive the carryback period (and carry the losses forward indefinitely). Any losses carried back are applied first to the earliest year in the carryback period, with any unused losses carried forward to each succeeding year. This relaxes changes to the NOL rules made under the Tax Cuts and Jobs Act (TCJA). The TCJA eliminated the carryback of post-2017 NOLs and limited these NOLs to 80% of taxable income.

A taxpayer can elect to exclude from the NOL carryback period all years in which the taxpayer has an income inclusion under the IRC § 965 deemed repatriation tax rules. These rules impose a one-time transition tax on US shareholders of certain 10% owned foreign corporations with deferred income, for the foreign corporation's last taxable year beginning before 2018 (generally at a 15.5% rate on deferred foreign income represented by cash and other cash equivalents and an 8% tax rate on the remaining deferred foreign income). Taxpayers could elect to pay the transition tax in installments over eight years. Under IRC § 965(n), taxpayers subject to the transition tax could also elect not to apply any NOL carrybacks or carryforwards to reduce the amount of the Section 965 income inclusion (and could therefore possibly use foreign tax credits to reduce the transition tax liability).

Under the CARES Act changes, a taxpayer is deemed to make the Section 965(n) election if it carries back a 2018, 2019, or 2020 NOL to a year in which the taxpayer has a transition tax liability.

A taxpayer with a 2017-2018 fiscal year other than a calendar year (fiscal year taxpayer) is now subject to the pre-TCJA NOL rules for that year, meaning it can carry back an NOL arising in its 2017-2018 taxable year for two years. This change clarifies the treatment of taxable years that straddle 2017 and 2018 under the TCJA, which eliminated the two-year NOL carryback provision under prior law for taxable years ending after December 31, 2017.

Filing an amended tax return for the taxable year to which the NOL is carried.

Using the expedited refund procedures of IRC § 6411. Under these procedures, a taxpayer files a tentative refund application for a previous year to which an NOL is carried on either IRS Form 1139 (for corporations) or IRS Form 1045 (for other taxpayers), and the IRS generally issues a refund within 90 days.