How to resolve Lacerte diagnostic ref 38754 - CA NOL make the election to waive the carryback

This article will help resolve the following diagnostic:

• California NOL generated in the current year. Make the election to waive the carry back or enter CA taxable income for the prior year and second prior year. If you wish to elect to waive the carry back, make the election in the Current Year NOL section of the California NOL screen. (ref. #38754)

Suspension of NOL carryover deduction

California frequently changes its tax law regarding NOL calculations. To see Form 3805V instructions for a given tax year:

1. Go to California's Forms and Publications Search page.
2. Select the tax year from the Tax Year dropdown menu.
3. In the field Form Number and/or Keywords, enter 3805 V.

To resolve the diagnostic for 2018 and prior, or to forgo the carryback of the NOL:

1. Go to Screen 15, Net Operating Loss.
2. Select California Net Operating Loss from the top-left panel.
3. Select Miscellaneous Info in the Loss box of the left panel.
4. Select the Forgo carryback of 20YY NOL box.