Time is running out for many small businesses wishing to take advantage of the expanded business loss carryback option included in the American Recovery and Reinvestment Act (ARRA). Under ARRA, eligible taxpayers can choose to carry back a net operation loss (NOL) arising in a taxable year beginning or ending in 2008 for three, four or five years instead of two. The option is available for an eligible small business (ESB) that has no more than an average of $15 million in gross receipts over a three-year period ending with the tax year of the NOL. This choice may be made for only one tax year.

Most taxpayers still have time to choose this special carryback and get a refund. A calendar-year corporation that qualifies as an ESB must file a claim by September 15, 2009. For individuals, the deadline is October 15, 2009. Deadlines vary for fiscal-year taxpayers, depending upon when their fiscal year ends and whether they are making the choice for the tax year that ends or begins in 2008.

More information on claiming the NOL carryback is provided in IRS news release IR-2009-72.

To view additional information and frequently asked questions and answers regarding other provisions of the American Recovery and Reinvestment Act of 2009 go to Tax Provisions in the American Recovery and Reinvestment Act of 2009.