How to File an IRS Carryback Claim and Get a Refund

To file an IRS carryback claim, first confirm your loss still qualifies (most net operating losses after 2020 no longer do), then pick one of two routes: Form 1045 for individuals or Form 1139 for corporations if you want a fast tentative refund the IRS must act on within 90 days, or an amended return on Form 1040-X or Form 1120-X if you need the longer filing window. The tentative route is faster but has a strict 12-month deadline. The amended return route is slower but stays open for years. Which one fits depends on how much time has passed since your loss year ended and how quickly you need the money.

Confirm Your Loss Still Qualifies

For tax years beginning after December 31, 2020, the general NOL carryback under IRC Section 172 is gone. Post-2020 NOLs carry forward indefinitely instead, and they can only offset up to 80% of taxable income in any future year.¹ If you’re a typical business owner with a garden-variety NOL from a recent year, a carryback isn’t available to you. Silence on the point can be misleading, so make sure your loss falls into one of the surviving categories before you spend time on the forms.

Farming Losses

Farming losses keep a two-year carryback. A “farming loss” is the lesser of the NOL you would have if you counted only farming income and deductions, or your total NOL for that year.¹ A farming business means cultivation of land or raising or harvesting of agricultural or horticultural commodities. If your entire NOL comes from farming, the whole loss can go back two years. If only part is attributable to farming, only that part qualifies.²

Non-Life Insurance Companies

Insurance companies other than life insurance companies keep a two-year carryback and a 20-year carryforward for their NOLs.¹

Unused General Business Credits

Not every carryback claim involves an NOL. Unused general business credits under IRC Section 39 have their own one-year carryback and 20-year carryforward. When your current-year credits exceed the Section 38 tax liability limit, the excess is first carried back to the immediately preceding year and only carries forward if it can’t be absorbed there.³ The filing mechanics are the same as for an NOL.

Choosing Between the Tentative Claim and the Amended Return

Two filing routes exist, and picking the right one comes down to timing.

The tentative carryback claim is filed on Form 1045 (individuals, estates, trusts) or Form 1139 (corporations other than S corporations).⁴ The IRS is required to process a tentative claim within 90 days. That speed comes at a cost: the review is an administrative math check, not a determination that your loss is legitimate. You can still be audited later.

The amended return uses Form 1040-X for individuals or Form 1120-X for corporations.⁵ Processing runs 8 to 12 weeks and can stretch to 16, and NOL carrybacks tend to sit at the longer end of that range.⁶ There’s no statutory deadline pushing the IRS to act. But the amended return can be filed for years after the tentative window has closed, and it’s your remedy if a tentative claim is denied.

Use the tentative route when you’re inside the 12-month window and want the money quickly. Use the amended return when that window has closed, when you expect the IRS to push back on aspects of the loss, or when your tentative claim was rejected and you need access to the standard dispute process.

The Deadlines You Have to Hit

Two deadlines govern carryback claims, and they run in parallel.

The tentative claim deadline: Form 1045 or Form 1139 must be filed within 12 months after the end of the tax year in which the loss arose. A calendar-year taxpayer with a 2025 NOL has until December 31, 2026. Miss it by a day and the tentative route is closed for that loss year.⁷

The amended return deadline: Section 6511(d)(2) sets a special extended statute of limitations for refunds attributable to carrybacks. Individuals have until the 15th day of the 40th month after the end of the loss year. Corporations get the 39th month.⁸ A calendar-year individual with a 2025 farming loss has until April 15, 2029, to file the amended return. A corporation with the same loss has until March 15, 2029.

These deadlines run from the end of the loss year, not from when the carryback year’s original return was filed. That’s the point of the rule: the carryback year may already be past its normal three-year refund window, and the special provision keeps it alive.

Miss the 12-month tentative deadline and you can still recover the refund on an amended return. Miss both and the refund is gone.

Calculating the Refund

A carryback refund isn’t just the loss multiplied by a tax rate. You’re rebuilding the carryback year’s return with the loss dropped in, which changes several other numbers along the way.

Compute the NOL

The NOL is generally the excess of allowable business deductions over gross income, with adjustments so only genuine business losses count. For individuals, non-business deductions can only offset non-business income, and capital losses are limited to capital gains.¹

Apply the Loss to the Earliest Eligible Year

The loss goes to the earliest year in the carryback period first. For a two-year farming carryback from 2025, that’s 2023. If 2023’s taxable income can’t absorb the full loss, the balance moves to 2024. The sequencing is mandatory.

Recalculate AGI-Sensitive Items

Lower AGI in the carryback year can change more than the bottom line. Medical expenses are deductible above a percentage of AGI, so a lower AGI produces a larger medical deduction. Charitable contribution limits, education credits, and other AGI-sensitive amounts all shift. Rework them, then compare the recalculated tax to the tax originally paid. The difference, minus any refunds or credits already applied to that year, is your net overpayment.

Redo the AMT

The carryback has to be calculated separately for alternative minimum tax purposes, using AMT adjustments and preferences. The alternative tax NOL deduction is capped at 90% of alternative minimum taxable income. A waiver of the carryback for regular tax automatically applies to AMT.⁹ The regular tax and AMT pieces together make up the total refund.

Filing Form 1045 or Form 1139

The loss year income tax return must be filed before or at the same time as Form 1045. You cannot submit the tentative claim before the underlying return is on file. Don’t put both in the same envelope.

For individual filers, attach copies of the loss year Form 1040 (pages 1 and 2), Schedules 1 through 3, any of Schedules A, D, F, and J that apply, all Schedules K-1 that fed into the carryback, and Form 6251 for both the loss year and each carryback year. If you extended the loss year return, include a copy of the extension application.⁷

Neither Form 1045 nor Form 1139 can be filed electronically. Mail the form to the IRS Service Center for your area, as shown in your income tax return instructions. Use certified mail with return receipt. The postmark controls the 12-month deadline, and you’ll want proof.

Once received, the IRS has 90 days to act. It’s a math check, not an audit. If the IRS finds errors, it can correct them and issue a reduced refund, or deny the claim. A denial of a tentative claim is not a Notice of Deficiency and cannot be taken directly to Tax Court. To contest it, file an amended return, which then opens the standard refund claim dispute process.

Filing Form 1040-X or Form 1120-X

Form 1040-X can be filed electronically through tax software.¹⁰ Corporations file Form 1120-X. Both require the original figures, the change caused by the carryback, and the corrected numbers. Attach the same supporting documentation you would send with a tentative claim.

Interest on the Refund

The IRS pays interest on carryback refunds, but the start date isn’t the loss year. Interest generally runs from the later of the carryback year return’s filing due date, the date you actually filed that return, or the date you paid the tax being refunded. The IRS also has a 45-day administrative window to issue the refund without owing any interest at all. If processing takes longer, interest runs from the applicable start date through the payment date.¹¹

If you believe the IRS shorted you on interest, Form 843 is the vehicle for additional overpayment interest. It must be received within six years of the scheduled overpayment date.¹¹

Waiving the Carryback

Even when a carryback is available, you can walk away from it. Section 172(b)(3) lets you make an irrevocable election to waive the carryback period and carry the loss forward instead. It’s all-or-nothing: full carryback or full waiver.¹²

To elect, attach a statement to the original loss year return, filed by the due date including extensions, indicating that you’re waiving the carryback under Section 172(b). If the original return was timely but the statement was left off, you can still make the election on an amended return filed within six months of the original due date without extensions. Write “Filed pursuant to section 301.9100-2” at the top.²

Waiving makes sense when the carryback year had modest income that would soak up only a fraction of the loss, and you expect higher-rate income in future years that could put the full loss to better use. Once elected, the choice is locked in.

Audit Risk After the Refund Lands

Getting paid isn’t a stamp of approval. A tentative refund is processed on math. The IRS retains the right to audit both the loss year and the carryback years until the applicable statute of limitations expires, generally three years from the date the loss year return was filed. If a later audit finds the NOL was overstated or invalid, the IRS will demand repayment with interest and possibly accuracy-related penalties. Document the deductions that produced the NOL before you file. That’s the first thing an examiner will ask for.

State Returns Are Separate

A federal carryback refund does not automatically generate a state refund. State conformity to federal NOL rules varies widely: some states cap the deduction, some have shorter carryforwards, some allow carrybacks the federal code no longer permits, and some prohibit carrybacks entirely. Each state where you filed a return during the carryback years needs its own analysis, on its own forms, under its own deadlines.

1
Office of the Law Revision Counsel. 26 U.S. Code 172 – Net Operating Loss Deduction
2
Internal Revenue Service. Instructions for Form 172 – Net Operating Losses for Individuals, Estates, and Trusts
3
Office of the Law Revision Counsel. 26 U.S. Code 39 – Carryback and Carryforward of Unused Credits
4
Internal Revenue Service. About Form 1139, Corporation Application for Tentative Refund
5
Internal Revenue Service. File an Amended Return
6
Internal Revenue Service. Where’s My Amended Return?
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Internal Revenue Service. 2024 Instructions for Form 1045
8
eCFR. 26 CFR 301.6511(d)-2 – Overpayment of Income Tax on Account of Net Operating Loss Carrybacks
9
Internal Revenue Service. Instructions for Form 6251
10
Internal Revenue Service. Instructions for Form 1040-X – Amended U.S. Individual Income Tax Return
11
Internal Revenue Service. Interest
12
Internal Revenue Service. Frequently Asked Questions About Carrybacks of NOLs for Taxpayers Who Have Had Section 965 Inclusions