Instructions For Idaho Form 56
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2EIN00022
Instructions for Idaho Form 56
07-10-15
GENERAL INSTRUCTIONS
Individuals — Add back any:
A net operating loss (NOL) is the amount that Idaho
● NOL carryovers deducted from previous years
taxable income, after making modifications discussed
● Federal net capital losses deducted
later, is less than zero. Individuals, C corporations, trusts,
● Idaho capital gains deduction
and estates are allowed a deduction in computing Idaho
taxable income for an Idaho NOL. S corporations and
Subtract any:
partnerships aren’t allowed an NOL deduction. Instead,
any losses are passed through to the shareholders and
● Casualty losses on Idaho property included in
partners.
itemized deductions
A net operating loss incurred in tax years beginning on
Losses reported on Section B of federal Form 4684,
or after January 1, 2013, will be subtracted in the 20
such as losses resulting from Ponzi schemes, are
succeeding tax years unless an amended return carrying
considered theft losses, not casualty losses, and must
the loss back is filed within one year of the end of the tax
be added back in determining the amount of an Idaho
year of the net operating loss that results in the carryback.
NOL.
If an amended return is filed to carry the loss back, the
loss is first applied to the second tax year preceding the
Trusts and estates — Add back any:
loss year. Any loss not fully subtracted or absorbed by
Idaho income is next applied to the first preceding tax
● NOL carryovers deducted from previous years
year. The loss carried back is limited to a total of $50,000
● Federal net capital losses deducted
for an individual filing as married filing separately or
$100,000 for individuals filing as married filing jointly. Any
Corporations — Add back any NOL carryovers deducted
remaining loss may be carried forward until used, but not
from previous years
longer than 20 years. Losses carried forward are applied
to each year in order until absorbed.
APPLICATION OF AN NOL
Use the NOL Application section to show how your NOL
For tax years beginning on or after January 1, 2000,
is being applied to the carryback and carryover years.
and before January 1, 2013, you generally must carry
You may use your own schedule if it’s more helpful
an NOL back to the two preceding tax years unless you
to you. The Form 56 or your own schedule must be
made a timely election, on the Idaho return, to forgo the
included with the return for any year to which the NOL is
carryback period. The carryback is limited to a maximum
carried.
of $100,000. Any remaining loss may be carried forward
until used, but not longer than 20 years.
If the NOL is carried back to a tax year for which a return
was previously filed, you must file an amended Idaho
For tax years beginning before January 1, 2000, you
return to report the NOL carryback. File the appropriate
generally must carry an NOL back to the three preceding
form for each tax year to which the NOL is being applied.
tax years unless you made a timely election, on the Idaho
Check the “Amended Return” box if available at the top
return, to forgo the carryback period. The carryback is
of the form, or if not on the form, write “Amended Return”
limited to a maximum of $100,000. Any remaining loss
at the top of the form. Recompute your Idaho taxable
may be carried forward until used, but not longer than 15
income, Idaho tax liability, and any nonrefundable
years.
tax credits claimed. Include a copy of Form 56 or a
schedule showing the application of the loss with your
CALCULATION OF NOL AND INCOME AVAILABLE
amended return.
FOR ABSORPTION
Each year to which an NOL is applied is referred to as
For tax years beginning before January 1, 2013, if you
an absorption year. Certain adjustments must be made
are carrying back the loss, you have until the 15th day of
to taxable income or loss to calculate the NOL and how
the 40th month following the end of the loss year to file
much income is available for absorption in the year to
the amended return for absorption year(s). For example,
which the NOL is carried back or carried forward.
if the loss was incurred in 2012, you have until April 15,
2016, to file the amended returns for absorption years
To compute the NOL, the following adjustments need to
2010 and 2011.
be made:
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