REMINDER TO EMPLOYERS OF APPROACHING DEADLINES TO TAKE ADVANTAGE OF BUSINESS LOSS CARRYBACK OPTION IN ARRA RULES

On August 13, 2009, the IRS issued a reminder for small businesses entities and their owners of the approaching deadlines to take advantage of the expanded business loss carryback option included in the 2009 American Recovery and Reinvestment Act (ARRA). Under ARRA, eligible small businesses (ESB) can choose to carry back a net operating loss (NOL) arising in a taxable year beginning or ending in 2008 for three, four or five years instead of two. The provision was enacted to benefit businesses with past profitability that incurred a large loss in 2008. An ESB is defined as a small business 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.

The deadline to opt for the expanded carryback is September 15, 2009 for calendar-year corporations and October 15, 2009 for individuals. For purposes of the filing, an individual includes a sole proprietor that qualifies as an ESB, an individual partner in a partnership that qualifies as an ESB and a shareholder in an S corporation that qualifies as an ESB.

For the full article, including additional information on the required forms to accelerate any applicable tax refunds, click here.

Jackson & Campbell, P.C.'s Business Law Practice Group can assist you with interpreting the new ARRA rules. For more information, contact John Matteo at jmatteo@jackscamp.com.

The contents of this Business Alert are intended for general informational purposes only and should not be considered legal advice. Moreover, the mailing of this Business Alert is not intended to create nor does it constitute an attorney-client relationship.

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