Form 1045 (2015) – Application for Tentative Refund
What This Form Does
Individuals, estates, and trusts use Form 1045 to apply for an expedited tax refund when they carry back net operating losses, unused general business credits, or net section 1256 contracts losses to earlier tax years. Partnerships, S corporations, and C corporations cannot use this form and must file different forms to request tentative refunds.
The 2015 version provides updated computation worksheets that adjust itemized deductions when NOL carrybacks reduce tax liability in prior years. Filers must report any loss or credit stemming from reportable transactions by disclosing them on Form 8886.
Filing Requirements and Timing
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. You must file your 2015 income tax return no later than the date you file Form 1045 to ensure proper processing.
The IRS will process your application within 90 days from the later of:
- The date you file the complete application.
- The last day of the month that includes the due date for filing your 2015 income tax return.
The processing of Form 1045 and payment of the requested refund does not mean the IRS has accepted your application as correct.
Filer Status and Carryback Year Alignment
You must verify that your filer eligibility falls within the categories of individuals, estates, or trusts only. Your filer status must match the carryback year filing status to ensure proper application of the loss or credit carryback.
Additional filer requirements include:
- Corporations must use Form 1139 rather than Form 1045 for tentative refund applications.
- All executors or administrators must sign and date Form 1045 when filing for an estate.
- Trusts require a signature and date from the fiduciary or an authorized representative on Form 1045.
Net Operating Loss Computation
Complete Schedule A on page 4 to calculate your 2015 NOL using the line 25 formula provided in the form instructions. You must include the domestic production activities deduction from the applicable 2015 return line when computing your NOL:
- Form 1040, line 35
- Form 1040NR, line 34
- Form 1041, line 15a
Schedule A requires you to:
- Enter taxable income
- Adjust for non-business deductions and income
- Account for capital losses and exclusions
Line 23 of Schedule A requires entry of the domestic production activities deduction before completing the final NOL calculation on line 25.
Carryback Year Adjustments
For each carryback year, complete Schedule B on pages 4 and 5 to adjust prior-year taxable income using the NOL deduction after carryback.
Schedule B requires the following:
- Amounts from the original or amended return belong in the “Before carryback” column.
- Refigured amounts belong in the “After carryback” column.
Modified taxable income results from combining taxable income with adjustments for capital losses, exclusions, deductions, and exemptions.
The itemized deduction adjustment worksheets covering lines 11 through 38 apply only if capital loss deductions, section 1202 exclusions, or domestic production deductions exist in that carryback year.
Form Completion Steps
Complete the following steps when preparing Form 1045:
- Enter the 2015 tax year designation and carryback year-end dates on page 1, line 2a, using the format “preceding tax year ended [month/day/year].”
- Mark the appropriate year columns if you carry back losses to three prior years.
- Declare on page 1, line 8, whether any loss or credit generating the decrease in tax arises from a reportable transaction requiring Form 8886 disclosure.
- Answer “Yes” on line 8 if the transaction meets Form 8886 criteria for that year.
- Disclose on page 1, line 9, whether the NOL or net section 1256 contracts loss carryback triggered the release of foreign tax credits or credits dependent on the foreign tax credit limitation in the carryback years.
Tax Computation and Decrease Calculation
Compute the decrease in tax across all carryback years on pages 2 and 3 of Form 1045. You must recompute the following for each carryback year:
- Income tax on line 16
- Excess advance premium tax credit repayment on line 17
- Alternative minimum tax on line 18
- General business credit on line 20
- Net premium tax credit on line 21
- Self-employment tax on line 25
- Additional Medicare tax on line 26
- Net investment income tax on line 27
- Health care individual responsibility payment on line 28
- Other taxes on line 29
Enter amounts in both the “Before carryback” and “After carryback” columns to show the tax decrease attributable to the carryback.
Premium Tax Credit Adjustments
Include the line 17 computation for excess advance premium tax credit repayment if the carryback reduces modified adjusted gross income and triggers repayment reconciliation under the Affordable Care Act.
Key considerations include:
- Tax year 2014 was the first year individuals reconciled advance premium tax credit payments using Form 8962.
- You must attach an explanation showing how the NOL carryback affects the premium tax credit calculation and any resulting repayment obligation.
- Carrybacks to 2014 or later years may reduce modified adjusted gross income below the threshold that determines premium tax credit eligibility and repayment amounts.
Year-Specific Requirements for 2015
The 2015 Form 1045 instructions incorporate Health Insurance Marketplace premium tax credit repayment adjustments on line 17 for filers whose carryback reduces modified adjusted gross income.
Additional 2015-specific requirements include:
- Schedule A line 23 requires entry of the domestic production activities deduction from the applicable 2015 return.
- This deduction remains subject to W-2 wage and basis limitations that apply under 2015 tax year rules.
- Schedule B itemized deduction adjustment worksheets include 2015-specific line references for medical expense floors, mortgage insurance premium limitations, and miscellaneous deduction thresholds.
- Net investment income tax on line 27 applies to 2015 filers subject to section 1411 at the 3.8 percent rate.
- You must attach an explanation showing how the NOL carryback affects net investment income tax liability in each carryback year.
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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.
