The net operating losses of a C corporation can be carried back to reduce its taxable income in prior tax years.

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Under the current tax law, a C corporation is allowed to carry back net operating losses (NOLs) for up to 5 years and apply them against taxable income in those prior years, potentially resulting in a refund of taxes paid in those years. After the carryback period, any remaining NOL amount can be carried forward for up to 20 years to offset future taxable income. However, the Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the carryback option for NOLs arising in tax years after 2017, except for certain farming and insurance company losses.

The Net Operating Losses of a C Corporation Can Be