M4NP NOL: Net Operating Loss Deduction (2024)
Minnesota · Minnesota DOR · Used for tax years 2024
Minnesota Schedule M4NP NOL tracks net operating losses for tax-exempt organizations and cooperatives that file federal Form 990-T or 1120-C. It reports Minnesota taxable net income or loss, losses used, losses remaining to carry forward, and the net operating loss deduction ente
Who files this form
Schedule M4NP NOL is for tax-exempt organizations and cooperatives that file federal Form 990-T or 1120-C. Use it to show the sources and uses of net operating losses when claiming a net operating loss deduction on Form M4NP.
Each corporation in a unitary group claiming the deduction must complete a separate schedule.
Organizations that file federal Form 1120-H or 1120-POL are not allowed a net operating loss deduction.
What you'll need
Have these details available to complete the schedule:
- Your organization’s name, FEIN, and Minnesota Tax ID.
- Minnesota taxable net income or loss from Form M4NP, line 6, for each year listed.
- The years losses arose, the amounts used in each year, and the losses remaining.
- The loss-year apportionment percentage, if you apportion income to Minnesota.
How to file
Complete Schedule M4NP NOL and attach a copy to your Minnesota tax return.
- List the years used to calculate the net operating loss and the years you used the losses.
- Enter each year’s Minnesota taxable net income or loss from Form M4NP, line 6.
- If the amount is a loss, add it to the previous year’s losses remaining and enter the total in the Losses Remaining column.
- If the amount is income and you use prior-year losses to reduce it, enter the loss used in the Minnesota Losses Used column. The amount used is limited to 70% of that year’s taxable net income.
- Complete the summary and enter the net operating loss deduction on Form M4NP, line 7.
The supplied text does not give a mailing address or e-file directions.
Common mistakes
- Exceeding the deduction limit: The deduction cannot exceed 70% of taxable net income in a single taxable year.
- Reusing losses: Only prior-year losses not previously used to offset net income may be deducted.
- Creating or increasing a loss with prohibited deductions: You may not do this with the deduction for dividends received or the foreign royalties subtraction for tax years beginning before 2013.
- Missing required schedules: Attach the completed schedule to your Minnesota tax return, and complete a separate schedule for each corporation in a unitary group claiming the deduction.
- Overlooking acquired-loss limits: Acquired net operating losses are subject to limitations under Internal Revenue Code section 382(g).
Questions people ask
How long can losses be carried forward?
Net operating losses may be carried forward for 15 years.
Can losses be carried back?
The instructions say losses may be carried forward only. The two-year carryback was eliminated starting with tax years beginning after December 31, 2017.
What if my business operates entirely in Minnesota?
You may deduct the full amount of previously unused net operating losses after applying the 70% limitation.
What if I apportion income to Minnesota?
Use the apportionment percentage from the loss year to determine the previously unused loss you may deduct. The deduction remains subject to the 70% limit.