Form N-309 - Corporation Application For Tentative Refund From Carryback Of Net Operating Loss Page 2
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1
2FORM N-309
(REV. 2011)
PAGE 2
INSTRUCTIONS
ATTENTION: Hawaii has not adopted the change in the carryback period for net operating losses to five years.
GENERAL INSTRUCTIONS
IRC section 243 are allowed for federal purposes by reason of IRC section
246(b)(2); and (3) there shall be included in gross income the amount of
NOLs that occur in tax years beginning after August 5, 1997, are carried
interest which is excluded from gross income by section 235-7(a), HRS,
back 2 years and then carried forward to each of the next 20 years following
decreased by the amount of interest paid or accrued which is disallowed as
the year of the loss. Farming losses in tax years beginning after 1997 are
a deduction by section 235-7(e), HRS. All adjustments required to compute
carried back 5 years. Any portion of an NOL that is a specified liability
a net operating loss which may be carried back to any year must be shown
loss is carried back 10 years. Certain corporations that qualify as “small
on a separate schedule.
business” or that are engaged in the trade or business of farming may
D. ALLOWANCE OF ADJUSTMENT.—The director will act on this
use a 3-year carryback period for losses attributable to federally declared
disasters. These rules do not apply to excess interest losses or NOLs of
application within a period of 90 days from whichever of the following two
real estate investment trusts. See IRC section 172(b)(1) for rules for those
dates is the later:
losses.
(1) the date on which the application is filed; or
Additional Forms N-309 may be needed if the corporation is carrying back
(2) the last day of the month in which falls the last date prescribed by
an NOL to more than 3 preceding tax years. On the additional forms,
law (including any extension of time granted) for filing the return for
complete lines 11 through 27 for each additional year.
the taxable year of the net operating loss from which the carryback
REQUIRED ATTACHMENTS — Attach to this form copies of the first 2
results.
pages of the corporation’s federal return for the loss year, any forms or
E. DISALLOWANCE OF APPLICATION.—Any application which contains
schedules from which the carryback results, and forms or schedules for
material omissions or computation errors which the director deems cannot
items refigured in the carryback years.
be corrected within a 90-day period may be disallowed. This application
ELECTION NOT TO CARRYBACK: A corporation may elect to carry
for a tentative carryback adjustment does not constitute a claim for credit
forward a net operating loss instead of first carrying it back by attaching a
or refund. If this application is disallowed in whole or in part, no suit based
statement to this effect on a timely filed return (including any extensions) for
thereon may be maintained in any court for the recovery of any tax. The
the year of the loss. Once you make such an election, it is irrevocable for
taxpayer may, however, file a regular claim for credit or refund on an
that tax year. The carry forward is limited to 20 years for losses occurring
amended Form N-30 (corporation return) at any time before the expiration
during taxable years beginning after August 5, 1997 (15 years for losses
of the applicable period of limitation.
occurring during taxable years beginning after December 31, 1981, and
F. EXCESS ALLOWANCES.—Any amount applied, credited, or refunded
before August 6, 1997) whether or not a carryback is used first. Do not
on the basis of this application which is later determined by the Department
attach Form N-309 to your income tax return.
to be excessive may be assessed as a deficiency as if it were due to
A. WHO MUST FILE AN APPLICATION.—An application for a tentative
mathematical or clerical error appearing on the return.
carryback adjustment may be filed on this form by any corporation which
G. LINE 4, COLUMN (b).—If the amount of any tax for any taxable year
desires a quick refund of taxes which are affected by the carryback of a net
specified in column (a) of line 4 is unpaid, including any installment not yet
operating loss. This does not apply to an S corporation which elects the tax
due, at the date of filing the application, enter the unpaid amount of such tax
treatment provided by IRC section 1372(a).
and specify the kind of tax or taxes.
With respect to a net operating loss, the taxpayer has an option on
H. RECOMPUTATION OF TAX LIABILITY.—Line 11.—Enter in columns
whether or not to carry a loss back first before carrying it forward. This
(a), (c), and (e) the amount for the applicable carryback year, starting with
form should only be used by those taxpayers choosing to carry their losses
the earliest carryback year, as shown on the original or amended return or
back.
as previously adjusted. Enter the ordinal number of years the loss is being
B. TIME AND PLACE FOR FILING.—This form must be filed with the
carried back and the date the carryback year ends in the spaces above
Hawaii Department of Taxation at P.O. Box 3559, Honolulu, HI 96811-3559,
columns (a) and (b), (c) and (d), or (e) and (f). If the return was examined,
and must be filed on or after the date of filing of the return for the taxable
enter amounts that were determined as a result of the examination. If
year of the net operating loss and within 12 months from the end of such
carrying back to more than 3 years, attach additional Forms N-309.
taxable year. Do not attach this form to your income tax return. Form
To arrive at the decrease in the tax previously determined, recompute the
N-309 attached to an income tax return cannot be processed and will not
tax after taking the carryback(s) into account. Form N-30 and instructions
be considered timely filed even if submitted with the return within 12 months
for the applicable year will be helpful in making this recomputation. Attach a
from the end of the taxable year in which the net operating loss occurred.
detailed computation of the new tax liability shown on lines 16, 17, and 19.
IF YOU FAIL TO MEET THE FOREGOING LIMITATION, YOU MAY FILE
Deductions that are limited by taxable income are to be recomputed after
AN AMENDED RETURN WITHIN THREE YEARS OF THE DUE DATE
carryback of a net operating loss. The deduction for charitable contributions,
PRESCRIBED FOR FILING THE RETURN, INCLUDING EXTENSIONS,
however, is computed without regard to any carryback. Attach a schedule
FOR THE NET OPERATING LOSS YEAR OR THE PERIOD AGREED TO
showing the recomputation. Also, credits based on or limited by the tax
UNDER A WRITTEN EXTENSION OF TIME, WHICHEVER IS LATER.
must be recomputed on the basis of the tax liability after application of the
C. NET OPERATING LOSS DEDUCTION.—Generally, a net operating
carrybacks.
loss must be carried back to each of the 2 tax years before the year of the
I. LINE 12.—For accrual basis taxpayers, a reduction of the net operating
loss. Special rules apply for any part of a net operating loss attributable to
loss deduction representing the tax benefit derived from the original state
a foreign expropriation loss, a product liability loss, and certain other losses.
income tax expense deduction is required. Attach a separate schedule
(See IRC section 172(b) and related regulations for details.)
showing your computation.
All adjustments required to compute a net operating loss that may be
J. LINE 21.—Enter any recapture of the capital goods excise tax credit,
carried back to any year must be shown on a separate schedule. A copy
the low-income housing tax credit, the high technology business investment
of pages 1 and 2 of Form N-30 for the loss year may be attached instead.
tax credit, the tax credit for flood victims, and the important agricultural land
Hawaii Tax Law does not allow the carryback of net capital losses. Identify
qualified agricultural cost tax credit.
the part of the NOL, if any, that qualifies as a specified liability loss. Also
K. LINE 23.—See Schedule CR for a list of the refundable credits.
identify the part of the specified liability loss that is attributable to: (1) product
liability; and (2) a federal or state law or tort (other than product liability).
L. LINE 25.—See Schedule CR for a list of the nonrefundable credits.
For each of these parts of the specified liability loss, separately identify the
types of deductions that generate that part of the loss. For any part of a
M. SPECIAL INSTRUCTIONS IF YOU ARE CARRYING A LOSS BACK
specified liability loss that is attributable to a federal or state law or a tort
TO YEARS PRIOR TO 2010.—
(other than product liability) describe the act or actions (or failures to act)
giving rise to each deduction that occurred at least 3 years before the loss
Line 23.— Enter the amount of nonrefundable tax credits on this line.
year. For special rules for specified liability losses, see IRC section 172(f).
Line 24.— Line 22 minus line 23, but not less than zero.
The term “net operating loss” means the excess of allowable deductions
over gross income, computed with the following modifications: (1) no net
Line 25.— Enter the amount of refundable tax credits on this line.
operating loss deduction is allowed; (2) the special deductions allowed
Line 26.— Line 24 minus line 25. Balance of tax liability (or
certain corporations under section 235-7(c), HRS, shall be computed
overpayment).
without regard to IRC section 246(b)(1) if the special deductions under
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