NOL: Net Operating Loss Deduction (2025)
Minnesota · Minnesota DOR · Used for tax years 2025
Minnesota’s 2025 Schedule NOL shows the sources and use of a corporation’s net operating losses. It reports taxable net income or loss, Minnesota losses used, the deduction entered on Form M4T, line 6, and losses remaining to carry forward.
Who files this form
Corporations claiming a net operating loss (NOL) deduction must complete Schedule NOL and attach a copy to their Minnesota tax return.
Combined income return filers must complete a separate Schedule NOL for each corporation carrying forward a net operating loss. A separate schedule is required for each corporation in a unitary group claiming an NOL deduction.
What you'll need
Have the following information available to complete Schedule NOL:
- The corporation’s name, FEIN, and Minnesota Tax ID number.
- Taxable net income or loss for each year used to calculate or use the NOL. If a return was amended or adjusted, use the most recent amounts.
- Minnesota losses used and losses remaining for those years.
- The loss-year apportionment percentage, if the corporation apportions income to Minnesota.
You will also need Form M4T to report the deduction on line 6.
How to file
- List only the years used to calculate the NOL and the years the losses are used.
- Enter each year’s taxable net income or loss in the Taxable Net Income/Loss column.
- For a loss year, add the loss to the previous year’s Losses Remaining total and enter the result in that column.
- For an income year when prior losses are used, enter the loss used in Minnesota Losses Used, applying the limit for that year. For 2025, the deduction is limited to 70% of taxable net income.
- Complete the 2025 summary with the NOL deduction and total losses remaining to carry forward. Enter the deduction on Form M4T, line 6.
- Attach a copy of the completed Schedule NOL to your Minnesota tax return.
The supplied text does not give a mailing address or e-file instructions.
Common mistakes
- Exceeding the deduction limit. For 2025, the NOL deduction is limited to 70% of taxable net income.
- Using outdated income or loss figures. If a return was amended or adjusted, use the most recent amounts for that year.
- Carrying losses backward. Minnesota NOLs may be carried forward only, for 15 years.
- Improperly creating or increasing a loss. Corporations may not create or increase an NOL through the dividends-received deduction on Form M4T, line 8, or the foreign royalties subtraction for tax years beginning before 2013.
- Leaving out separate schedules. Each corporation in a unitary group claiming an NOL deduction needs its own Schedule NOL.
Questions people ask
What is Schedule NOL used for?
It shows the sources and uses of net operating losses. Only the years used to calculate the NOL and the years the losses are used need to be listed.
How long can a loss be carried forward?
The carryforward period is 15 years. A return covering less than 12 months counts as a full taxable year for NOL carryforward purposes.
Does it matter whether the corporation operates entirely in Minnesota?
Yes. Corporations operating entirely in Minnesota may deduct the full amount of a previously unused NOL after applying the 70% limit. Corporations that apportion income to Minnesota use the apportionment percentage from the loss year for previously unused losses.
Are acquired net operating losses subject to limits?
Yes. Acquired NOLs are subject to a limitation determined under Internal Revenue Code section 382(g).