When your business experiences a significant loss or you have unused tax credits, waiting for a standard amended return to process can tie up much-needed cash flow. Form 1045 offers a faster path to getting money back from the IRS—often within 90 days. Here's everything you need to know about this expedited refund option in plain English.

What Form 1045 Is For

Form 1045 is the IRS's "fast-track" refund application for individuals, estates, and trusts who want to quickly recover overpaid taxes from previous years. Think of it as an express lane for getting your money back when specific financial events create refund opportunities. IRS.gov

You can use Form 1045 to request a tentative (temporary) refund in four situations:

• Net Operating Loss (NOL) Carryback: When your business deductions exceed your income in 2024, creating a loss you can apply to profitable years (typically limited to certain farming businesses and some insurance companies who can carry losses back 2 years)
• Unused General Business Credit Carryback: When tax credits you earned but couldn't fully use can be applied to the previous year
• Net Section 1256 Contracts Loss Carryback: When losses from regulated futures contracts, foreign currency contracts, or certain options can be carried back up to 3 years
• Claim of Right Adjustment: When you had to repay income you reported and paid taxes on in a prior year under section 1341(b)(1)

The word "tentative" is important—this isn't a final determination. The IRS processes your application quickly but reserves the right to audit and adjust it later. IRS.gov

When You’d Use Form 1045 (Late/Amended Returns)

Timing is everything with Form 1045. You must file it within 1 year after the end of the tax year in which your NOL, unused credit, or loss occurred. For a 2024 loss, that means you have until December 31, 2025, to file.

Here's the crucial sequence: You cannot file Form 1045 before filing your 2024 tax return. File your regular return first, then immediately follow up with Form 1045 if you're eligible. Don't mail them together—they go in separate envelopes to avoid processing delays. IRS.gov

When NOT to use Form 1045: If you're carrying back losses or credits to a "section 965 year" (a year when you had mandatory repatriation income from foreign corporations), or if an NOL releases a foreign tax credit that then releases a general business credit, you must use Form 1040-X (the standard amended return) instead. Form 1045's expedited process isn't available for these complex international tax situations.

If disaster strikes—literally—and you're in a federally declared disaster area, you may get additional filing time. Check IRS.gov/DisasterTaxRelief for current extensions.

Key Rules or Details for 2024

New Form 172 Requirement

Starting in 2024, you must use the brand-new Form 172 to calculate your NOL before completing Form 1045. The IRS removed Schedules A and B from Form 1045 and created Form 172 to handle NOL computations. This is a significant procedural change—make sure you complete Form 172 first and attach it to your Form 1045. IRS.gov

Electronic Filing Now Available

For the first time, you can file your 2024 Form 1045 electronically starting in 2025. This should speed up processing and reduce errors.

NOL Carryback Limitations

Most NOLs from 2024 cannot be carried back to prior years—they can only be carried forward indefinitely (subject to an 80% taxable income limitation each year). The major exceptions are:

• Farming losses: Can be carried back 2 years
• Insurance company NOLs: May qualify for 2-year carryback under specific circumstances

Excess Business Loss Limitation

For tax years 2021-2028, noncorporate taxpayers (individuals, partnerships, S corporations, estates, and trusts) cannot deduct more than $270,000 ($540,000 for married filing jointly) in business losses in any single year. Losses exceeding this threshold become NOLs subject to carryforward rules. This affects how much of your 2024 loss actually qualifies for carryback treatment.

90-Day Processing Window

The IRS commits to processing complete Form 1045 applications within 90 days from the later of: (1) when you file the complete application, or (2) the last day of the month that includes your 2024 tax return's due date (including extensions).

Step-by-Step (High Level)

Step 1: Calculate Your NOL or Unused Credit

Use Form 172 to compute your 2024 net operating loss following the detailed instructions. For unused credits, use Form 3800 (General Business Credit) or Form 6781 (Section 1256 Contracts). These calculations form the foundation of your refund request.

Step 2: File Your 2024 Tax Return

Complete and file your regular 2024 Form 1040 (or 1041 for estates/trusts) showing the loss or unused credit. Wait for confirmation that the IRS received it before proceeding.

Step 3: Complete Form 1045

Fill out the main form showing which years you're carrying the loss or credit back to. You'll complete a "before carryback" and "after carryback" computation for each affected prior year, demonstrating how the carryback reduces your previous tax liability.

Step 4: Gather Required Attachments

This is where many applications fail. You must attach:

• Copy of your 2024 Form 1040 (or 1040-SR/1041) with all schedules
• Form 172 showing NOL calculation
• Form 461 (Limitation on Business Losses)
• All Schedules K-1, K-2, and K-3 from partnerships, S corporations, estates, or trusts
• Form 6251 (Alternative Minimum Tax) for each loss year
• Refigured forms for carryback years (like revised Form 3800, Form 8962, Schedule 8812)
• Any relevant business schedules (Schedule C, E, F, etc.)

Step 5: Mail to the Correct IRS Service Center

Send Form 1045 with all attachments to the IRS Service Center that serves your location (check your 2024 tax return instructions for the address). Do not include it with your 2024 tax return—mail it separately.

Step 6: Authorize a Representative (Optional)

If you want your accountant or tax preparer to handle IRS inquiries, attach Form 2848 (Power of Attorney) to authorize them.

Common Mistakes and How to Avoid Them

Mistake #1: Filing Before Your Tax Return

Many taxpayers try to expedite the process by filing Form 1045 simultaneously with or before their 2024 return. The IRS will reject or delay applications filed prematurely. Always file your 2024 return first, then submit Form 1045.

Mistake #2: Incomplete Attachments

The IRS explicitly warns: "You must attach copies of all required forms...Otherwise, your application may be delayed or disallowed." Create a checklist from the instructions and verify you've included every required document. Missing a single Schedule K-1 or Form 6251 can derail your entire application.

Mistake #3: Math Errors in Recomputations

You must recalculate your tax for each carryback year twice—once "before carryback" and once "after carryback." Errors in these computations are a leading cause of disallowance. Use tax software or work with a professional to ensure accuracy. Remember: many deductions and credits are based on adjusted gross income (AGI), so when your AGI changes due to the carryback, these items must be refigured too.

Mistake #4: Using Form 1045 for Ineligible Carrybacks

If you're carrying back to a section 965 year or dealing with released foreign tax credits, you must use Form 1040-X instead. Using the wrong form wastes months of processing time.

Mistake #5: Missing the One-Year Deadline

Form 1045 has a strict one-year filing window from the end of the loss year. For 2024 losses, that's December 31, 2025. There are no extensions except for federally declared disasters. Calendar reminders are essential.

Mistake #6: Mailing Forms Together

Sending Form 1045 in the same envelope as your 2024 tax return confuses IRS processing systems. Always mail them separately, even if they're going to the same service center.

Mistake #7: Not Keeping Copies

Keep complete copies of everything you submit. If the IRS contacts you with questions or if your application is lost, you'll need to reproduce the entire package.

What Happens After You File

Initial Processing (0–90 Days)

The IRS commits to processing your application within 90 days. During this period, they may contact you or your authorized representative requesting additional information or clarification. Respond promptly—delays in providing requested information extend the processing timeline.

Tentative Refund Issued

If your application is approved, the IRS will issue a check or direct deposit for the tentative refund amount. This typically happens within the 90-day window, though complex applications may take the full period.

Important Caveat: "Tentative" Means Temporary

Receiving your refund doesn't mean the IRS has fully accepted your application. The instructions explicitly state: "The processing of Form 1045 and the payment of the requested refund doesn't mean the IRS has accepted your application as correct." The IRS can audit and adjust your carryback claim for up to three years after filing. IRS.gov

Potential Disallowance

If your application contains "material omissions or math errors that aren't corrected within the 90-day period," the IRS may disallow it entirely. Unlike a formal refund claim, you cannot sue over a disallowed Form 1045 application. However, you still have the right to file Form 1040-X (the standard amended return) within the normal statute of limitations.

Excessive Allowances and Penalties

If the IRS later determines your refund was excessive due to overvalued property, negligence, disregard of rules, or substantial understatement of tax, you'll have to repay the excess plus penalties and interest (compounded daily). This is why accuracy in your calculations is critical.

No Interest on Quick Refunds

Under section 6611(e), if the IRS issues your refund within 45 days of filing Form 1045, you won't receive interest on that refund amount. If processing takes longer than 45 days, interest begins accruing from your loss year's return due date.

Parallel Options

You can file both Form 1045 (for a quick tentative refund) and Form 1040-X (for a formal refund claim) for the same carryback. The Form 1040-X preserves your right to litigation if disputes arise, while Form 1045 gets you cash flow quickly.

FAQs

Q1: Can I file Form 1045 if I operated at a loss in 2024?

Not automatically. Most 2024 NOLs can only be carried forward, not back. You can use Form 1045 only if your loss qualifies as a "farming loss" (from a farming business as defined in section 263A(e)(4)) or you're an eligible insurance company. Otherwise, you'll carry the loss forward to 2025 and beyond using Form 172. IRS.gov

Q2: How far back can I carry my 2024 NOL?

If you have a qualifying farming loss, you can carry it back 2 years to 2022 (first) and then to 2023 if any loss remains. You cannot skip years—you must apply losses in chronological order. Non-farming NOLs cannot be carried back at all and must be carried forward indefinitely (subject to the 80% limitation).

Q3: What's the difference between Form 1045 and Form 1040-X?

Form 1045 is an application for a tentative refund processed within 90 days, but you cannot sue if it's disallowed. Form 1040-X is a formal amended return that takes 12-16 weeks (or longer) to process, but it preserves your right to appeal or litigate if the IRS disagrees. Many tax professionals recommend filing both: Form 1045 for quick cash flow and Form 1040-X to protect legal rights.

Q4: Do I need to file a separate Form 1045 for each carryback year?

No. One Form 1045 covers all carryback years for a single loss or credit year. You complete multiple columns on the form showing the computation for each affected prior year.

Q5: What if I filed a joint return in the loss year but separate returns in prior years (or vice versa)?

Special allocation rules apply. You must attach detailed allocation schedules showing how the loss is divided between spouses for each year with different filing statuses. These rules are complex—consult the Instructions for Form 172 and consider professional assistance.

Q6: Can I e-file Form 1045 for 2024?

Yes! Starting in 2025, the IRS accepts electronic filing of 2024 Form 1045. This is a new option that should reduce errors and speed processing. Check with your tax software provider or e-filing service for availability.

Q7: What happens to my NOL if I don't file Form 1045?

Nothing—Form 1045 is completely optional. If you don't want a quick refund or don't qualify for carryback, simply carry your NOL forward to future years using Form 172 and report it on Schedule 1 of your Form 1040 in subsequent years. The NOL carries forward indefinitely until fully used (subject to the 80% annual limitation).

Sources

All information derived from official IRS publications including the Instructions for Form 1045 (2024), About Form 1045, Instructions for Form 172 (2024), and the Form 1045 PDF instructions.

Disclaimer

Note: Tax rules are complex and change frequently. This guide provides general information based on 2024 rules. Consult a qualified tax professional for advice specific to your situation.