Oregon Administrative Rules
Chapter 150 - DEPARTMENT OF REVENUE
Division 314 - INCOME TAXATION GENERALLY GENERAL PROVISIONS
Section 150-314-0250 - Refunds; Net Operating Loss and Net Capital Loss Carryback Claims

(a) A special period of limitations is provided under ORS 314.415(5)(a) to claim a refund or credit attributable to an individual net operating loss (NOL) or corporation net capital loss carryback. A refund claim for an individual net operating loss or corporation net capital loss carryback year must be filed within three years from the due date (including extensions) of the taxable year of the net operating loss or net capital loss which results in the carryback.

Example 1: Edward filed his 2007, 2008, 2009, 2010, and 2011 returns by their respective due dates. On March 15, 2014, Edward filed his 2012 return on which he claimed a net operating loss. The refund claims for the carryback years (2007 through 2011) must be filed by April 15, 2016, three years after the due date of the 2012 net operating loss year return.

(b) The provision allowing refunds of tax within two years of the date of payment is not extended.

Example 2: Assume the same facts as in Example 1 except that the original 2012 return was not filed until March 15, 2016, was filed as a paid return and did not claim a net operating loss. On June 15, 2016, Edward filed an amended return (refund claim) for 2012 to claim an additional business expense. The amended return creates a net operating loss for 2012. Edward is allowed a refund for the 2012 taxes paid within the two years preceding his refund claim. Refund claims for the net operating loss carryback years (2007 through 2011) must have been filed by April 15, 2016, three years after the due date of the 2012 net operating loss year return. The date of filing of the net operating loss claim (June 15, 2016) does not extend the date of filing of the refund claims for the carryback years beyond the three-year period.

(a) If a claim for a credit or refund is based on an overpayment attributable to an individual net operating loss or corporation net capital loss carryback, the credit or refund may exceed the amount of tax paid within three years of when the return was filed or within two years immediately preceding the filing of the claim but only to the extent the overpayment is attributable to the net operating loss or net capital loss carryback.

Example 3: Jake amended his timely filed 2013 return November 1, 2017 to claim a refund for a carryback arising from a 2015 net operating loss. In addition to reducing income for the net operating loss carryback, Jake claimed a subtraction for U.S. government interest and an additional exemption credit. The refund claim is limited to the portion of the overpayment attributable to the net operating loss carryback. The subtraction for interest and the additional exemption credit are outlawed by the period of limitations under ORS 314.415(2).

(b) If a claim for a credit or refund is based not only on an overpayment attributable to an individual net operating loss or corporation net capital loss carryback, but also on other items, the credit or refund may not exceed the sum of:

(c) Delinquent returns. If a taxpayer filed an original return after the three-year period for requesting a refund provided in ORS 314.415(2)(a), but amends the same return for an individual net operating or corporation net capital loss carryback within the period allowed by ORS 314.415(5)(a), a refund will be allowed. The refund will be limited to the amount of net tax liability shown on the original return. Any additional refund requested on the amended return is barred by ORS 314.415(2)(a).

Example 5: Chuck files his 2014 return on September 30, 2018, more than three years beyond the original due date of the return. His return showed tax liability of $500 and he requested a refund of $300 for overpayment of estimated tax. The refund was denied based on ORS 314.415(2)(a). On October 15, 2018, Chuck filed an amended 2014 return carrying back a 2017 net operating loss. Chuck requests a refund of $800 since he filed within the additional three-year period allowed by ORS 314.415(5)(a). Chuck will receive a refund of $500 that is attributable to the net operating loss carryback. The additional $300 refund is not allowable based on ORS 314.415(2)(a).