U.S. · Tax forms
Form 1120 line 29a, net operating loss deduction.
What goes on line 29a, the 2025 NOL cap, and the rules that can limit the deduction.
Line 29a (“Net operating loss deduction”) takes the total NOL carryovers from other tax years, but no more than taxable income after special deductions. Attach a statement showing the computation and complete Schedule K, item 12.
Look up an NOL rule
Result
NOL rules on line 29a, 2025 instructions
| Rule | Meaning | What the IRS says |
|---|---|---|
| What goes on line 29a | Total NOL carryovers | Enter the total NOL carryovers from other tax years, but not more than taxable income (after special deductions) |
| Statement | Required | Attach a statement showing the computation of the NOL deduction and complete Schedule K, item 12 |
| NOLs from before 2018 | No 80% cap | The 2025 deduction cannot exceed the NOLs arising in tax years beginning before January 1, 2018, plus the lesser of the items below |
| NOLs from after 2017 | Lesser of two amounts | The aggregate NOLs arising after December 31, 2017, or 80% of the excess of taxable income determined without any NOL deduction, section 199A deduction or section 250 deduction over pre-2018 NOL carryovers |
| Carrybacks | Limited | Only farming losses and losses of an insurance company (other than a life insurance company) can be carried back, for 2 years; the corporation can elect to waive the carryback period |
| Ownership change | Section 382 | The taxable income that pre-change NOL carryovers may offset can be limited after an ownership change |
| Acquired corporation | Section 384 | Pre-acquisition losses that may offset recognized built-in gain may be limited |
| More detail | Section 172 | See section 172 and the Instructions for Form 1139 |
The 2025 limit in plain terms
For tax year 2025 the instructions cap the deduction at the NOLs arising in tax years beginning before January 1, 2018, plus the smaller of the post-2017 NOLs carried to the year or 80% of taxable income computed without any NOL, section 199A or section 250 deduction (after subtracting pre-2018 NOL carryovers). An exception removes the 80% limit for insurance companies other than life insurance companies.
Where the deduction goes
Line 29a is added to the special deductions on line 29b to make line 29c, which is subtracted from line 28 to give taxable income on line 30.
Ownership changes
The instructions say a loss corporation must include the information statement under Regulations section 1.382-11(a) with its return for each year it is a loss corporation in which an ownership shift or other listed transaction occurs.
Worked example
Lantern Bay Foods, Inc. (made up) has $150,000 on line 28, no special deductions and a $200,000 NOL carryover that arose in 2023, with no pre-2018 NOLs and no section 199A or 250 deduction. The 80% limit is 0.80 × 150,000 = $120,000, which is less than the $200,000 carryover, so line 29a shows $120,000, line 29c is $120,000 and line 30 is $30,000. The other $80,000 is not deducted this year. Names and figures are made up.
More line pages in this set
Related lines: Form 1120 Line 11, Form 1120 Line 26, Form 1120 Line 28, Form 1120 Line 30, Form 1120 Schedule J Line 12, Form 1120 Schedule J Line 17, Form 1120 Schedule J Line 18.
Sources
- Instructions for Form 1120 (2025): the line-by-line instructions on this page. Page last reviewed or updated April 30, 2026. Read November 2, 2026.
- Form 1120 (2025), U.S. Corporation Income Tax Return: the printed line wording and arithmetic on the form (Form 1120 (2025), created 9/26/25). Read November 2, 2026.
Tax year 2025 forms and instructions: Form 1120 (2025) and its 2025 instructions. Line numbers and labels were read from the IRS PDF and instructions on the date read and can change between tax years, so check them against the form for your year. Names in worked examples are made up.
Frequently asked questions
What is Form 1120 line 29a?
The net operating loss deduction: the total NOL carryovers from other tax years, limited to taxable income after special deductions.
Is there an 80 percent limit for 2025?
Yes for NOLs arising after 2017: the deduction is limited to the lesser of those NOLs or 80% of taxable income determined without any NOL, section 199A or section 250 deduction, after pre-2018 NOL carryovers. Insurance companies other than life insurers are excepted.
Do I attach anything for line 29a?
Yes. Attach a statement showing how the NOL deduction was computed, and complete Schedule K, item 12.
Can a corporation carry an NOL back?
Only farming losses and losses of an insurance company other than a life insurance company can be carried back, for 2 years. The corporation can elect to waive the carryback.
Where do special deductions go?
On line 29b, from Schedule C, line 24. Lines 29a and 29b are added on line 29c.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. A CPA or an enrolled agent can confirm what a line means for your return. Everything runs in your browser; nothing you enter is sent anywhere.