Covid-19 Carrryback rules

[pvilarreal]

TP had a $35K NOL for 2018 on Sch. C.  No tax was due.  New Covid rules say we can now carry back 5 years starting with 2018 NOLs. 

In 2016 TP had wages of $67K with tax Liability of $7,289.  No Schedule C income or SE tax.   

In 2017 TP had $35K Sch.C income and 7K Wages.  Income Tax liability was $4K and SE Tax was $5K.

Do I start with tax year 2016 or 2017?  It will get used up either way.  Seems to have more value in 2016 since NOLs cannot offset SE Tax.  

[George4Tacks · Accepted solution]

You state " $35K NOL for 2018 on Sch. C". Was there really a NOL? Even with a negative Schedule C, there may not be an NOL. 

"In 2016 TP had wages of $67K with tax Liability of $7,289.  No Schedule C income or SE tax." says you really don't understand NOL, but if there really was a NOL in 2018, then you really need to go back 5 years. 1=2017, 2=2016, 3= 2015, 4= 2014, 5 = 2013 so start in 2013.

"Do I start with tax year 2016 or 2017?  It will get used up either way.  Seems to have more value in 2016 since NOLs cannot offset SE Tax. " shows that you would like to pick and choose, but that is NOT an option. 

Start by reading this in your spare time https://www.irs.gov/pub/irs-pdf/p536.pdf

[rbynaker]

---

@pvilarreal wrote:

Do I start with tax year 2016 or 2017?  

---

How about 2013?

[pvilarreal]

 You are correct.  I did not understand NOL's.  I am still a rookie.   Thank you for your help!  I need to learn as much as possible.