FEDA has signed on to a letter urging Senate Finance Committee leaders to preserve tax rules regarding net operating losses (NOLs) that were established by the CARES Act.
The CARES Act provided a five-year carryback for NOLs generated in 2018, 2019, or 2020 and also suspended otherwise applicable limitations on excess business losses for non-corporate taxpayers in the same years.
“The ability to carryback NOLs is a critical component of a well-operating income tax system,” the letter states. “Indeed, NOL carryback provisions have long been bipartisan tools utilized by lawmakers to provide liquidity and are routinely expanded during times of economic dislocation.”
“The tax and liquidity provisions in the CARES Act are helping to ensure that the severe economic situation created by COVID-19 do not become even worse,” the letter continues. “We urge Congress to protect American jobs by preserving the NOL carryback and suspension of limitation of excess business loss provisions contained in the CARES Act.”
The full letter to Senate Finance Committee can be read here.