Statute section
IRC section 172
Net operating loss deduction
Country
United States
Section
172
Updated
2026-05-20
Operative text
Section 172 allows a deduction for net operating losses (NOLs) carried to other tax years. TCJA repealed the two-year carryback for NOLs generated in 2018 and later and limited the deduction to 80 percent of pre-deduction taxable income for those NOLs. The CARES Act temporarily restored a five-year carryback for NOLs arising in 2018 through 2020.
Amendment history
2017-12-22
Pub. L. 115-97
TCJA repealed NOL carrybacks and capped post-2017 NOL deduction at 80 percent of taxable income.
2020-03-27
Pub. L. 116-136
CARES Act temporarily restored five-year carryback and removed the 80-percent cap for 2018-2020 NOLs.
Cross-references
Related guides
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Primary sources
- 26 U.S.C. section 172Verified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.