Form 1045 (2023) — Application for Tentative Refund
Purpose and Eligibility
Form 1045 allows individuals, estates, and trusts to request a tentative refund by carrying back net operating losses, unused general business credits, or net section 1256 contracts losses to prior tax years. You must determine carryback eligibility by identifying whether your 2023 tax year generated an NOL (Schedule A, line 24), an unused general business credit, or a net section 1256 contracts loss. If none of these conditions apply, do not file Form 1045.
Filing Requirements and Deadlines
You must complete item 2a with your 2023 tax year dates and 2b with the actual filing date of your 2023 return. The IRS requires you to verify that the tax year is not under dispute in Tax Court, as a "Yes" response to item 7 blocks filing. Generally, you must file Form 1045 within one year after the end of the year in which an NOL, unused credit, net section 1256 contracts loss, or claim of right adjustment arose.
Critical Pre-Filing Steps
- Do not file your 2023 Form 1045 before you file your 2023 income tax return.
- Mail Form 1045 in a separate envelope from your 2023 return and any amended returns.
- Attach copies of your 2023 Form 1040 or pages 1 through 3 of Form 1040-SR and all relevant schedules.
- Include all Schedules K-1, K-2, and K-3 you received from partnerships, S corporations, estates, or trusts that contribute to the carryback.
Computing the Net Operating Loss
Schedule A Completion Process
- For individuals, subtract your standard deduction or itemized deductions from your adjusted gross income and enter the result on line 1.
- Enter nonbusiness capital losses before limitation as a positive number on line 2.
- Do not include any section 1202 exclusion amounts on line 2, even if entered as a loss on Schedule D.
- Complete lines 3 through 15 following the specific instructions for business versus non-business income and deductions.
- Enter the loss from Schedule D (Form 1040), line 16, on Schedule A, line 16 as a positive number.
- Enter as a positive number any gain excluded under section 1202 on the sale or exchange of qualified small business stock on line 17.
- Subtract line 17 from line 16 per line 18 instructions for 2023.
- Enter the loss from Schedule D (Form 1040), line 21, on Schedule A, line 19 as a positive number.
The 2023 separation between lines 16 and 21 capital loss sources is mandatory for correct NOL calculation. Schedule A, line 17, explicitly requires entry of the section 1202 gain exclusion as a positive number when a 2023 capital gain includes a qualified small business stock exclusion.
Carryback Year Computations
You must complete the Computation of Decrease in Tax (lines 10 through 32) for each carryback year by showing taxable income before and after NOL carryback. Enter the ordinal number of years the loss is being carried back and the date the carryback year ends in the spaces provided in the headings above line 10 for each pair of columns. Use one pair of columns to enter amounts before and after carryback for each year to which the loss is being carried.
Key Line Items
- Line 10: Enter the NOL deduction after carryback to reflect applicable carryback period rules for farming losses or insurance company NOLs.
- Line 11: Refigure adjusted gross income after you apply the NOL carryback and after you refigure items based on or limited to a percentage of your AGI.
- Line 12: Recalculate deductions using refigured AGI for the "After carryback" column if you itemized deductions in the carryback year.
- Line 16: Attach an explanation showing the income tax calculation method used for each carryback year.
- Line 17: Enter excess advance payments for premium tax credit and child tax credit for both "Before carryback" and "After carryback" columns.
Premium Tax Credit and Child Tax Credit Reconciliation
Line 17 on page 1 of the Computation of Decrease in Tax requires entry of excess advance premium tax credit and child tax credit payments. You must use Form 8962 and its instructions for your carryback years to figure or refigure the amount of your premium tax credit, advance payment of the premium tax credit, and excess advance premium tax credit. Include any excess advance premium tax credit on line 17 for both the "Before carryback" and "After carryback" columns.
For the carryback year 2021, include any excess advance payments of the child tax credit on line 17 for both columns. See the 2021 Instructions for Schedule 8812 (Form 1040) for information regarding calculating or recalculating the credit, advance payments, any excess advance payments, and the effect of carrying back other tax items to 2021. You must complete Form 8962 using data from Form 1095-A if the carryback year involved Health Insurance Marketplace coverage.
Schedule B Itemized Deduction Adjustments
Suppose you itemized deductions in any carryback year, complete Schedule B, lines 14 through 38, to refigure medical expenses, mortgage insurance premiums, and charitable contributions under modified AGI limitations. Schedule B, lines 14 and 15, reference Schedule A (Form 1040), line 4, or as previously adjusted, to clarify that carryback year deduction limits under the applicable AGI threshold must be recalculated using each year’s own threshold.
Schedule B Line 30 Requirements
You must multiply line 22, modified adjusted gross income, by 10 percent to determine the casualty and theft loss threshold. Only casualty or theft losses resulting from a federally declared disaster are deductible as itemized deductions for individuals for tax years beginning after 2017 and before 2026. The 10 percent AGI threshold applies to the carryback year calculations for qualifying federally declared disaster losses.
Reportable Transactions and Foreign Credits
Answer item 8 regarding whether the NOL or credit decrease results from a reportable transaction requiring Form 8886 disclosure. All 2023 Form 1045 filers must flag any listed transactions or transactions with contractual protection. You must also disclose on line 9 if the NOL or net section 1256 contracts loss carryback caused the release of foreign tax credits or dependent credits due to foreign tax credit interaction under 2023 Internal Revenue Code rules.
Signature and Submission
Both spouses must sign Form 1045 if filed jointly, including both taxpayer and spouse signatures and dates. Retain a copy for your records and allow processing time per 2023 IRS procedures. The IRS will process your application within 90 days from the later of the date you file the complete application or the last day of the month that includes the due date for filing your 2023 income tax return.
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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.
