Form 1139 (Rev. October 2018) — 2022 Tax Year Checklist
Purpose
Form 1139 allows corporations to apply for a tentative refund based on a net operating loss, net capital loss, unused general business credit, or overpayment under IRC §1341(b)(1) carryback to preceding tax years. For 2022 filings, corporations must understand that NOLs arising in tax years beginning after December 31, 2020, generally cannot be carried back.
The CARES Act provided temporary five-year carryback relief for NOLs arising in tax years beginning in 2018, 2019, and 2020, but this provision does not apply to 2022 losses. Only farming losses and losses from insurance companies other than life insurance companies may be carried back two years from tax years beginning after 2020.
Corporations filing Form 1139 for the 2022 tax year must use the December 2025 revision of the form and instructions. The IRS requires taxpayers to file Form 1139 within 12 months of the end of the tax year in which the NOL, net capital loss, unused credit, or claim of right adjustment arose. NOL carryforwards from 2022 may be carried forward indefinitely, but are limited to 80 percent of taxable income in the carryforward years. This limitation does not apply to insurance companies other than life insurance companies.
Filing Requirements and Eligibility
1. Verify Filing Eligibility
Verify that the corporation is eligible to file Form 1139 separately and that the loss, credit, or overpayment year meets the applicable statute of limitations for the carryback period under current NOL rules.
2. Identify Reasons for Filing
Identify and quantify each reason for filing on line 1, including NOL, net capital loss, unused general business credit, or other overpayment, using the corporation's tax return and workpapers. Attach separate computations showing how each amount was derived.
3. Complete Line 2 Filing Information
Complete line 2 with the tax year ended date, the date the tax return was filed, and the service center where the return was filed for the return in which the loss, credit, or overpayment originated.
4. Address Prior Carryback Credits
If the application involves an unused credit created by another carryback on line 3, enter the ending date for the tax year of the first carryback to establish the sequence and prevent duplicate claims.
5. Foreign Tax Credit and Released Credit Disclosure
Answer line 4 regarding the release of foreign tax credits or carryback of a general business credit released due to foreign tax credit release. If you answer "Yes," attach Form 8886 if required and prepare to file an amended return for the carryback year using Form 1118 or other applicable forms.
Consolidated Return and Extension Considerations
- For line 5, confirm whether a consolidated return was filed for any carryback year or whether the corporation joined a consolidated group during the carryback years.
- If you answer "Yes" to line 5, identify the common parent corporation, EIN, and tax year ended date to ensure the carryback is applied at the consolidated group level.
- On line 6, if Form 1138, Application for Extension of Time for Payment of Tax, has been filed, note whether an extension was granted and enter both the extension expiration date and the Form 1138 filing date.
- Include the unpaid tax amount for which the extension is in effect on line 6d.
Computation of Decrease in Tax
Complete the Computation of Decrease in Tax section on lines 11 through 28 for each of the three preceding tax years to which the carryback applies. Calculate taxable income before and after the carryback, applying the 80 percent limitation to NOL deductions for post-2017 loss years.
Show all tax liability reductions, including income tax, alternative minimum tax, base erosion minimum tax on line 18, general business credit, and other applicable credits. Attach all supporting schedules and forms used to refigure items in the carryback years.
On line 18, attach Form 8991 if the decrease in tax includes a base erosion minimum tax adjustment. The BEAT computation must reflect the corporation's modified taxable income and base erosion and anti-abuse tax liability for the carryback years. Answer line 10 regarding any decrease in tax arising from a reportable transaction, and if you answer "Yes," attach Form 8886 with the complete disclosure of the transaction in accordance with current tax shelter disclosure rules.
Signature and Filing Instructions
The corporation must sign the application under penalties of perjury by an authorized corporate officer. IRC §6062 specifies that the following officers may sign: president, vice president, treasurer, assistant treasurer, chief accounting officer, or any other officer duly authorized to act. Enter the officer's title and provide the signature date. Complete the preparer section if a paid preparer was engaged.
File Form 1139 as a separate document, not with the corporation's income tax return for the loss year. Retain a copy for the corporation's records and submit within the statute of limitations for the carryback year. The IRS will process the application within 90 days of the later of the date the corporation files the complete application or the last day of the month that includes the due date for filing the corporation's income tax return for the year in which the loss or credit arose.
Year-Specific Updates for 2022
- Base erosion minimum tax computation on line 18 applies to applicable corporations in 2022, and Form 8991 must be attached if BEAT is part of the decrease in tax calculation.
- Consolidated return carryback rules on line 5 require detailed identification of the common parent and all affected group members, with the 2022 carryback applied at the consolidated group level.
- Form 1138 coordination reflects current interest and extension procedures.
- Reportable transaction disclosure requires Form 8886 for any loss or credit decrease arising from a transaction required to be disclosed under Treasury Regulation §1.6011-4.
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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.
