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INSTRUCTIONS: ALABAMA COMPUTATION OF NET OPERATING LOSS (Form NOL-85)

Alabama individuals whose business deductions exceed their business income after modifications may complete a form NOL-85 to see if they qualify to carry their net operating loss forward. This document is found on the website of the Alabama Department of Revenue.

Alabama Computation Of Net Operating Loss NOL-85 Step 1: Enter your name and that of your spouse if filing jointly, as well as your Social Security number. Enter the date of the year for which you are claiming a net operating loss.

Alabama Computation Of Net Operating Loss NOL-85 Step 2: Lines 1a through 1h require you to detail nonbusiness deductions including federal income tax claimed as a deduction and alimony paid. 

Alabama Computation Of Net Operating Loss NOL-85 Step 3: If you are claiming a standard deduction, enter this on line 2a. If you are claiming an itemized deduction, enter this on line 2b.

Alabama Computation Of Net Operating Loss NOL-85 Step 4: Enter any casualty or theft loss claimed on Schedule A on line 3a.

Alabama Computation Of Net Operating Loss NOL-85 Step 5: Enter the sum of any other miscellaneous deductions on line 3b.

Alabama Computation Of Net Operating Loss NOL-85 Step 6: Enter the sum of lines 3a and 3b on line 4.

Alabama Computation Of Net Operating Loss NOL-85 Step 7: Subtract line 4 from line 2b. Enter the resulting difference on line 5.

Alabama Computation Of Net Operating Loss NOL-85 Step 8: Compute the sum of lines 1a through 2a and line 5. Enter the resulting number on line 6.

Alabama Computation Of Net Operating Loss NOL-85 Step 9: Document your nonbusiness income as instructed on lines 7a through 9.

Alabama Computation Of Net Operating Loss NOL-85 Step 10: On line 1 of Part II, enter your taxable income.

Alabama Computation Of Net Operating Loss NOL-85 Step 11: Document and total your modifications on lines 2 through 6.

Alabama Computation Of Net Operating Loss NOL-85 Step 12: Add lines 1 and 6 of Part II. If the result is a negative figure, you qualify for net operating loss status. Enter the number on line 7.

Alabama Computation Of Net Operating Loss NOL-85 Step 13: Sign and date the form. Your spouse must sign as well if filing jointly.