Article: 50464
Overview
If you have a Net Operating Loss (NOL) from a prior or current year, Wisconsin allows you to carry that loss back or forward to offset taxable income in other years. To claim this adjustment, you must complete the WI – Net Operating Loss Carryback/Carryforward form.
What Is a Net Operating Loss (NOL)?
A Net Operating Loss occurs when your allowable tax deductions exceed your taxable income for a given year. This often happens with:
- Business or farming losses
- Casualty and theft losses
- Certain deductions exceeding income.
NOL rules allow taxpayers to apply these losses to prior or future years to reduce tax liability, providing relief during years of financial loss.
Wisconsin Rules for NOLs
Wisconsin follows its own rules for NOLs, which may differ from federal law:
- Carryback period: 2 years.
- Carryforward period: Up to 20 years (or until fully used).
- Separate calculation: Wisconsin requires you to calculate your NOL using state-specific rules, not just your federal NOL.
This means your federal and state NOL amounts may not match.
Who Needs to File the NOL Form?
You should complete the WI – Net Operating Loss Carryback/Carryforward form if:
- You have an NOL in the current year and want to apply it to a prior year (carryback).
- You are using an unused NOL from a past year to reduce this year’s income (carryforward).
- You need to track remaining NOL amounts to carry forward into future years.
How to Report
- Navigate to the State Taxes section on the left-hand side of the screen.
- Click the link: I’d like to see the forms I’ve filled out or search for a form.
- In the dropdown menu, select Wisconsin.
- Click on the General tab.
- Click on Net Operating Loss Carryback/Carryforward to open the form.
- Enter all applicable information.
- Click Save once complete.
Additional Resources
For further information see:
Wisconsin Schedule NOL1 Instructions (2024) – Net Operating Loss Carryback** (PDF)
Wisconsin Schedule NOL2 Instructions (2024) – Net Operating Loss Carryforward** (PDF)