Schedule NOL: Net Operating Loss Schedule (2025)
Kentucky · Kentucky DOR · Used for tax years 2025
Kentucky Schedule NOL is attached to Form 720 to calculate a corporation’s net operating loss deduction and track available loss carryforwards. It separately reports pre-2018 and post-2017 losses and calculates the amounts carried forward to 2026.
Who files this form
Kentucky Schedule NOL is used by corporations filing separate returns or elective consolidated returns to calculate their net operating loss (NOL) deduction and track available NOL carryforwards.
Companies filing unitary combined returns should not use this schedule. Those groups should use Form 720U, Schedule U10, instead.
What you'll need
Have the following information available to complete the schedule:
- Form 720, Part I, line 41, showing taxable net income or the current-year loss.
- The corporation’s name, Kentucky Corporation/LLET account number, and federal identification number.
- Names and Kentucky Corporation/LLET account numbers for subsidiaries, if applicable.
- Prior-year NOL carryforward amounts, separated into pre-2018 and post-2017 amounts.
- Any adjustments, including intercompany eliminations.
For an elective consolidated return, enter the common parent’s name and Kentucky Corporation/LLET account number on Section A, line 1.
How to file
Attach the completed 2025 Schedule NOL to Form 720.
Enter the total NOL deduction from Section A, line 10, on Form 720, Part I, line 42. Use Section B to calculate the pre-2018 and post-2017 NOL amounts carried forward to 2026.
Common mistakes
- Using this schedule for a unitary combined return. These groups should use Form 720U, Schedule U10.
- Entering a short Kentucky account number without leading zeros. The Kentucky Corporation/LLET account number must be 9 digits. If it has 6 digits, add leading zeros.
- Continuing the deduction calculation when there is a current-year loss. If Form 720, Part I, line 41 shows a loss, skip to Section B and enter the loss on line 5 as a positive amount.
Questions people ask
How long can an NOL be carried forward?
An NOL from a tax year beginning before January 1, 2018 may be carried forward for 20 years following the loss year. Unused post-2017 NOL amounts may be carried forward indefinitely.
How much post-2017 NOL can I deduct on the 2025 schedule?
First subtract the pre-2018 NOL deduction from taxable income. Multiply the remaining income by 80%. The post-2017 deduction is the smaller of that result or the available post-2017 NOL carryforward.
Can an NOL be carried back?
No NOL carryback is allowed for tax years beginning on or after January 1, 2005.
Does Kentucky nexus in the loss year matter?
Yes. A corporation does not have an NOL carryforward if it did not have Kentucky nexus during the tax year of the NOL.
Are Kentucky NOLs calculated before or after apportionment?
Kentucky NOLs are calculated after apportionment for all filers. Pre-apportioned carryforward amounts from years when a group filed a mandatory nexus consolidated return must be apportioned using the nexus group’s apportionment factor for the year the loss was generated.