California nol 80% adjustment

Forum|Forum|1 year ago
February 26, 2025
1 reply
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I have a California resident with an NOL carryforward. There's an 80% adjustment needed on the federal which I did by calculating what the NOL amount that should be absorbed and putting it in the box for that. I believe that there should be such an adjustment for the California NOL as well. I was on the phone with Lacerte for a very long time today and a place for an adjustment could not be identified. Anyone have any ideas for how I could adjust the California NOL?

Thanks.

Susan Lee

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Best answer by strongsilence

I believe that there should....

Where did you get that idea?

The TCJA introduced an 80% limitation on NOL deductions for losses arising in taxable years beginning after December 31, 2017, California has not conformed to this federal change. Therefore, for California tax purposes, there is no 80% limitation on NOL deductions.

https://www.ftb.ca.gov/tax-pros/law/legislation/2021-2022/AB2065-021422-031722.pdf

Also see the FTB's instructions for Form 3805V, "Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations

https://www.caltax.com/spidellweb/public/marketing/pages/Nonconformity-TCJA.pdf?utm_campaign=129037768&utm_medium=email&utm_source=Real+Magnet

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