When filing for your Annual Income Tax for Corporations and Partnerships (1702RT), you may have noticed being asked if you have any Net Operating Loss Carry Over (NOLCO).
Net Operation Loss Carry Over (NOLCO) is the total of your excess allowable deductions over business gross income per taxable year. You can carry over your NOLCO for the next three (3) consecutive taxable years. This will only be applicable for corporations not under MCIT rate in the current taxable year.
You can view the computation of your NOLCO in Schedule III of your 1702RT form:
If you are filing this form in Taxumo, here's how you can compute for your NOLCO:
To declare and compute for your NOLCO, answer "Yes" in this screen.
This will trigger the pre-submission screen below.
You can only only declare excess allowable deductions for a maximum of three (3) taxable years, which is why there are only three (3) rows of fields where you can input data. The last row shows the current taxable year's excess allowable deduction computed from the data you inputted in Taxumo, which is why it is not an editable field.
You don't have to fill up all three (3) rows i.e. if you only have excess allowable deductions for two (2) years, then you can just fill up two rows.
Year Incurred - Input the taxable year where you had an excess allowable deduction.
Amount - Input the amount of your excess allowable deduction.
NOLCO Applied (Previous) - Input here the NOLCO amount you used (if any) from the previous years for your previous 1702RT filings. This should always be less than or equal to the Amount column of that respective year. If none, then you can just input "0".
NOLCO Expired - Input here the NOLCO amount that has expired (if any) from the previous years for your previous 1702RT filings. If none, then you can just input "0".
NOLCO Applied (Current) - Input here the NOLCO amount that you want to apply for your current taxable year.
From your inputted data in this screen, we will be able to compute for your NOLCO and apply it as excess allowable deduction for your current 1702RT filing.
Please note that the 1702RT form is a newly released form on Taxumo. As you continue to file this form on our platform for the next coming taxable years, we will be able to automate the next years for your NOLCO as well. 😉
If you have any questions or need clarifications, you can reach out to us at email@example.com or through our live chat agents.