Form 1045 (2021) – Application for Tentative Refund
Purpose
Form 1045 permits individuals, estates, and trusts to apply for a tentative refund by carrying back net operating losses, unused general business credits, or net section 1256 contract losses to prior tax years. For 2021, filers must report carrybacks within the framework established by the Tax Cuts and Jobs Act and modified by the CARES Act.
Special five-year carryback provisions for 2018, 2019, and 2020 net operating losses have expired, and standard rules now apply to losses arising in 2021. Complete applications receive IRS processing within 90 days from the filing date or the return due date, whichever is later.
Filing Requirements
Verify NOL Carryback Eligibility Under Current Law
Generally, you cannot carry back net operating losses arising in tax years ending after 2020. Farming losses qualify for a two-year carryback period if you have not elected to waive this provision. Insurance companies subject to the rules of section 172 may also carry back certain losses under specific statutory provisions that differ from the general prohibition.
Calculate the 80-Percent NOL Deduction Limitation
When you claim an NOL deduction in a tax year beginning after December 31, 2020, the deduction cannot exceed 80 percent of taxable income computed without regard to NOL deductions, qualified business income deductions, or section 250 deductions. This limitation applies to NOLs arising in tax years beginning after December 31, 2017, when those losses are carried forward to 2021 or later years.
The 80-percent limitation does not apply when you carry a loss back to a tax year beginning before 2021. NOLs arising in tax years beginning before January 1, 2018, remain fully deductible without the 80-percent restriction.
Complete Schedule A Accurately
You must complete Schedule A on page 4 of Form 1045 to calculate your 2021 net operating loss. Reconcile all capital loss limitations, section 1202 exclusions, and prior-year NOL carryovers on the appropriate lines of Schedule A. Enter section 1202 exclusions on line 17 with careful attention to whether the loss arose before or after December 22, 2017, because different treatment rules apply based on this timing.
Identify Carryback Year Filing Status
State the tax year for which you are claiming the carryback on line 2a of Form 1045. Mark whether you filed a joint return or a separate return for each year involved in the carryback computation on line 4. Filing status changes between the loss year and carryback years affect NOL limitations and credit allocation under special computational rules described in the form instructions.
Report Excess Advance Premium Tax Credit Repayment
Enter the excess advance premium tax credit repayment amount for each carryback year on line 17 of the tax computation pages. Reconcile this amount with your 2021 Form 1040, Schedule 2, and ensure prior-year entries reflect the actual credit reconciliation you reported on Form 8962. The American Rescue Plan Act of 2021 waived repayment requirements for tax year 2020, so you should not enter a repayment amount for that specific year.
Address Individual Shared Responsibility Payment Requirements
Line 28 of Form 1045 applies only to carryback years in which the Affordable Care Act shared responsibility payment was in effect. Complete line 28 if you are computing carryback tax for years 2014 through 2018, when the individual mandate penalty applied. The Tax Cuts and Jobs Act reduced the shared responsibility payment to zero, effective for tax year 2019 and all subsequent years, so leave line 28 blank for carryback years 2019 forward.
Determine Modified Taxable Income for Each Carryback Year
For each carryback year on Schedule A, enter taxable income before the 2021 NOL carryback on line 2. Apply the required adjustments on lines 3 through 8 to arrive at modified taxable income on line 9. Compute any remaining NOL carryover to earlier years on line 10 only if the 2021 NOL exceeds the allowable deduction amount for that carryback year under applicable limitations.
Complete Itemized Deduction Adjustments When Required
You must complete lines 11 through 38 of Schedule A only if you itemized deductions in the carryback year and at least one of the following lines shows an amount greater than zero: line 3 (net capital loss deduction), line 4 (section 1202 exclusion), or line 5 (domestic production activities deduction).
The domestic production activities deduction was repealed for tax years beginning after December 31, 2017, so line 5 should remain zero for carryback years 2018 forward. Mortgage insurance premium thresholds and miscellaneous itemized deductions followed different rules before 2018 under pre-TCJA law, and you must apply the rules that were in effect during each specific carryback year.
Answer All Form 1045 Questions Completely
Question 7 asks whether you filed a Tax Court petition for any carryback year, and you must answer yes if applicable. Question 8 requires disclosure if the loss or credit arises from a reportable transaction requiring Form 8886 attachment. Question 9 addresses foreign tax credit release triggered by NOL carryback, and you must mark yes if applicable and attach a detailed explanation as required by the instructions.
Verify Signatures and Preparer Information
Both you and your spouse must sign page 2 of Form 1045 if you are filing a joint application. Paid preparers must enter their preparer tax identification number, firm employer identification number, and complete address. Mail the completed Form 1045 in a separate envelope and do not attach it to your annual income tax return filing.
Need Help With Your Tax Filing?
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
We offer:
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Call now before filing: (888) 260-9441
Fast transcript pull available
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
