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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 110. Individual Income Tax
11/21/2024

23VAC10-110-86. Net operating losses; preparation of the carryback year or carryforward year return.

A. Carryback year return. The amended Virginia return for the carryback year shall start with the recomputed federal adjusted gross income. The net modifications from the NET OPERATING LOSS MODIFICATION WORKSHEET shall be entered on the line for "other" additions to federal adjusted gross income if positive or shall be entered on the line for "other" subtractions from federal adjusted gross income if negative. This net modification for the loss year shall be combined with the modifications as originally claimed for the carryback year, the recomputed federal adjusted gross income, personal exemption amount and deduction amount to compute Virginia taxable income in the carryback year. Since the computation of the Virginia standard deduction and the amount of Virginia credit for taxpayers age 62 and over are both based upon the amount of federal adjusted gross income, these amounts must be recomputed in the carryback year to reflect the recomputed federal adjusted gross income.

The following forms and their supporting schedules must be included with the amended return.

1. NET OPERATING LOSS MODIFICATION WORKSHEET or facsimile.

2. Copy of the Virginia return for the loss year.

3. Copy of the Federal Form 1045 or 1040X.

B. Carryforward year return. Since the net operating loss deduction is a component of federal adjusted gross income in the carryforward year, there is no need to recompute federal adjusted gross income for Virginia purposes. The net modification from the NET OPERATING LOSS MODIFICATION WORKSHEET shall be entered on the line for "other" additions to federal adjusted gross income if positive, or shall be entered on the line for "other" subtractions from federal adjusted gross income if negative. This net modification for the loss year shall be combined with the modifications of the carryforward year, federal adjusted gross income, personal exemption amount and deduction amount to compute Virginia taxable income in the carryforward year.

The following statements must be included with the carryforward year return.

1. NET OPERATING LOSS MODIFICATION WORKSHEET or facsimile.

2. Copy of the Virginia return for the loss year.

Statutory Authority

§§ 58.1-203 and 58.1-311 of the Code of Virginia.

Historical Notes

Derived from VR630-2-311.1 § 7, eff. taxable years beginning on and after January 1, 1985.

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