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The Rhode Island Personal Income Tax law relating to Net Operating Loss deduction (NOL) has been amended by enactment of RIGL §44-30-2.8 and RIGL §44-30-87.1 Under the provisions of section 44-30-2.8, the five (5) year carry back provision for years ending in 2001 and 2002 provided by the Job Creation and Worker Assistance Act of 2002 (P.L.107-147) for federal tax purposes shall not be allowed for Rhode Island tax purposes. If a taxpayer has already filed a return claiming a five (5) year carry-back, he/she must file a Rhode Island amended return on form RI-1040X. Under the provisions of section 44-30-87.1, for losses incurred for taxable years beginning on or after January 1, 2002, an NOL deduction may not be carried back for Rhode Island personal income tax purposes, but will only be allowed as a carry-forward for the number of succeeding years as provided in IRS Sec. 172. A carry-forward can only be used on the Rhode Island return to the extent that the carry forward is used on the federal return.
Should you have any questions regarding this notice, please call the Personal Income Tax Section at (401) 222-3911.
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