# Schedule NOL — Kentucky Schedule NOL: corporate NOL deduction and carryforward for 2025

- **Canonical URL:** https://formspedia.com/us/kentucky-schedule-nol/
- **Last updated:** 2026-11-06
- **Country & Language:** United States (`en-US`)
- **Form:** Schedule NOL
- **Revision:** 2025 schedule, 41A720NOL (10-25); Form 720 instructions 2025
- **Issuing Agency:** Kentucky Department of Revenue
- **Tax Area:** Business and corporate tax
- **Who Must File:** Corporations filing Form 720 as a separate return or an elective consolidated return that claim an NOL deduction or carry losses forward; unitary combined groups use Form 720U, Schedule U10
- **Filing Method:** Attached to Form 720 (e-filed if federal gross receipts are $1,000,000 or more; paper returns to Frankfort, KY 40620-0021 with payment or 40618-0010 with no tax due or a refund)
- **Filing Deadline:** With Form 720: 15th day of the fourth month after the close of the taxable year (Form 720EXT extends filing by seven months, not payment)
- **Legal Basis / Statute:** KRS 141.011; KRS 141.201; 103 KAR 16:250; IRC section 172
- **Official Form PDF:** https://revenue.ky.gov/Forms/Schedule%20NOL%20(10-25).pdf

Kentucky Schedule NOL is the page a corporation attaches to Form 720 when it deducts net operating losses carried in from earlier years, or when it needs to track what is left to carry into 2026. The 2025 schedule (41A720NOL, revision 10-25) keeps two pools apart: losses from tax years beginning before January 1, 2018, which come off taxable income first and in full, and losses from tax years beginning after December 31, 2017, which can offset no more than 80% of what remains. Line 10 of Section A is the figure that goes to Form 720, Part I, line 42.

### Who files Schedule NOL and who uses Schedule U10 instead

The schedule's own instructions limit it to two kinds of filers: corporations filing a separate return and affiliated groups filing an elective consolidated return. Both of them file Form 720. A unitary combined group files Form 720U and does not use Schedule NOL at all; its NOL deduction and carryforward are worked out on Form 720U, Schedule U10.

The Form 720 instructions for line 42 say to attach Schedule NOL whenever a net operating loss deduction is claimed. Section B also asks for the current-year loss from Form 720, Part I, line 41, so a corporation in a loss year uses the schedule to record the carryforward even though it claims no deduction.

A corporation that was not doing business in Kentucky has nothing to carry. The schedule instructions say there is no NOL carryforward from a tax year in which the corporation did not have Kentucky nexus, and DOR's corporation income tax page, in its notes on unitary group NOL sharing, says no prior-year carryforward is available to an entity that was not doing business in Kentucky in the year the loss was incurred.

### The Kentucky NOL rules behind each column

Column A and Column B exist because Kentucky treats the two generations of losses differently. The 2025 schedule instructions give the rules:

- A pre-2018 NOL, generated in a tax year beginning before January 1, 2018, may be carried forward 20 years following the loss year. It is not subject to the 80% cap on the schedule.

- A post-2017 NOL, generated after December 31, 2017, may offset up to 80% of taxable income, and any unused amount carries forward with no time limit.

- No NOL may be carried back for tax years beginning on or after January 1, 2005, under KRS 141.011(2). The Form 720 instructions repeat this: losses must be carried forward.

DOR's corporation income tax page describes the post-2017 rule as Kentucky adopting the federal 80% limitation under IRC section 172(a) and the federal unlimited carryforward. The Form 720 instructions for line 42 add that the IRC section 172 carryforward provisions apply for Kentucky purposes, that the loss carried forward is the amount determined under KRS Chapter 141, and that for a multistate corporation it is the amount after apportionment and allocation. They point to federal Publication 536 for further carryover detail.

That last point drives the numbers in Columns A and B. Kentucky NOLs are figured on a post-apportionment basis for every filer. Where a group filed a mandatory nexus consolidated return in an earlier year, any carryforward from that year that was kept on a pre-apportioned basis has to be converted using the nexus group's apportionment factor for the year the loss arose. The schedule refers to 103 KAR 16:250 for the conversion method and examples.

### How to fill out Schedule NOL, Section A

Section A takes up most of page 1. The upper half lists each company and its prior-year carryforwards; lines 5 to 10 turn those balances into the deduction for 2025. The numbered frames in the image below were added for this guide and match the first column of the table.

| Marker | Lines on the schedule | What to enter |
| --- | --- | --- |
| 1 | Header: Name of Corporation, Federal Identification Number, Kentucky Corporation/LLET Account Number | The filer's name, FEIN and Kentucky Corporation/LLET account number. The form prints a note under the account number: it must be 9 digits, and a 6-digit number is entered with leading zeros. |
| 2 | Line 1, Corporation Filing Return | Name and Kentucky Corporation/LLET account number of the corporation filing the return, plus its pre-2018 carryforward in Column A and post-2017 carryforward in Column B. On an elective consolidated return this row is the common parent. |
| 3 | Lines 2(a) to 2(i), Subsidiaries (if applicable) | Name and account number of each subsidiary, with its Column A and Column B carryforwards. The form has room for nine. |
| 4 | Line 3, Adjustments (Intercompany eliminations and others); line 4, Totals | Line 3 holds any adjustments to the amounts in Columns A and B. Line 4 is the total of each column. |
| 5 | Lines 5 to 10 | Line 5: taxable net income from Form 720, Part I, line 41 (a loss year skips to Section B). Line 6: the smaller of line 5 and Column A, line 4. Line 7: line 5 minus line 6. Line 8: line 7 times 80%. Line 9: the smaller of line 8 and Column B, line 4. Line 10: lines 6 and 9 added, carried to Form 720, Part I, line 42. |
| 6 | Section B, lines 1 to 3 | Column A, line 4 minus Section A, line 6: the pre-2018 carryforward to 2026. |
| 7 | Section B, lines 4 to 7 | Column B, line 4, plus any current-year loss from Form 720, Part I, line 41 entered as a positive number, minus Section A, line 9: the post-2017 carryforward to 2026. |

The order of lines 6 to 9 sets the sequence: the pre-2018 losses are used first against the full line 5 amount, and the 80% limit applies only to the income left after them. The Form 720 instructions add two limits on line 42 itself. If line 41 is negative, line 42 is zero, and the deduction is never more than the corporation's taxable income.

For subsidiaries, the Form 720 instructions on Item E say that in an elective consolidated return only the common parent needs a Kentucky Corporation/LLET account number, unless payments are being made under another member's account. Schedule NOL still has an account number column on lines 2(a) to 2(i), and its instructions do not say what to enter for a subsidiary that has no number. DOR's corporation tax section, (502) 564-8139, is the contact listed on the corporation income tax page.

### Example: a 2025 profit after losses from both periods

Take a separate-return corporation whose Form 720, Part I, line 41 shows $500,000 of taxable net income for 2025. It enters $100,000 of pre-2018 carryforward in Column A and $600,000 of post-2017 carryforward in Column B on line 1, with no subsidiaries and no adjustments.

- Line 6 is $100,000, the smaller of $500,000 and $100,000.

- Line 7 is $400,000, and line 8 is 80% of that, $320,000.

- Line 9 is $320,000, the smaller of $320,000 and $600,000.

- Line 10 is $420,000, entered on Form 720, Part I, line 42, which leaves $80,000 on line 43.

In Section B, line 3 comes to zero ($100,000 minus $100,000), so nothing of the older pool survives. Line 7 is $600,000 plus a current-year loss of zero minus $320,000, a post-2017 carryforward of $280,000 into 2026. Had line 41 shown a loss of $150,000 instead, Section A would stop after line 4, line 42 would be zero, and Section B, line 7 would be $750,000, while line 3 would still show the full $100,000 of pre-2018 losses.

### When Schedule NOL is due, where it goes and the official PDF

Schedule NOL has no deadline of its own: it travels with Form 720. The 2025 Form 720 instructions set the filing and payment date at the 15th day of the fourth month after the close of the taxable year, moved to the next business day when that date falls on a weekend or legal holiday. Form 720EXT gives a seven-month extension of time to file if it is filed by the original due date, but the extension does not move the payment date. See the [Form 720-EXT](https://formspedia.com/us/720-ext/) guide for the extension voucher.

Corporations with federal gross receipts of $1,000,000 or more must file and pay electronically for tax years beginning on or after October 1, 2021, according to the 2025 instructions; a waiver is requested on Form 8948 (K-C). A paper return goes to the Kentucky Department of Revenue, Frankfort, Kentucky 40620-0021 when it includes a payment, or to Frankfort, Kentucky 40618-0010 when there is no tax due or a refund is requested.

The current file is the [2025 Schedule NOL PDF](https://revenue.ky.gov/Forms/Schedule%20NOL%20(10-25).pdf), 41A720NOL (10-25), with fillable fields and the instructions on page 2. DOR's forms library also holds "Schedule NOL 2024.pdf", which is the 2024 version and carries amounts forward to 2025, and an older "Schedule NOL.pdf" printed for 2023. The year in the top right corner of the form is the one to match against the Form 720 being filed.

### Problems the Form 720 instructions say hold up processing

- Missing forms or schedules, and incomplete information, are on DOR's list of errors that delay processing. Line 42 of Form 720 tells the filer to attach Schedule NOL.

- Using the wrong year's form. A return filed on a wrong-year form by the due date is accepted as timely, but it must be submitted again on the correct year's form before DOR processes it.

- Submitting the incorrect form, also on the delay list. Unitary combined groups belong on Form 720U with Schedule U10, which the Schedule NOL instructions name for them.

- An invalid Kentucky Corporation/LLET account number or FEIN can get a return or payment rejected. The instructions say to complete Form 20A100, Declaration of Representative, and call the Registration Section at 502-564-3306.

### Questions about Kentucky NOLs

#### Can a Kentucky corporation carry a 2025 loss back to an earlier year?

Kentucky has not allowed NOL carrybacks for tax years beginning on or after January 1, 2005, so a 2025 loss is carried forward through Section B, line 7. Amended Kentucky forms remain the route for carrybacks from years before 2005, and the Form 720 instructions say not to send federal Form 1139 for a Kentucky refund.

#### Does the 80% limit apply to losses from before 2018?

The cap on line 8 covers only the post-2017 pool in Column B. Pre-2018 losses on line 6 can offset up to the full taxable net income on line 5, within their 20-year carryforward period.

#### Is the federal NOL deduction used on Schedule NOL?

The schedule starts from Kentucky taxable net income on Form 720, Part I, line 41, after apportionment. The Form 720 instructions apply the IRC section 172 carryforward provisions but measure the loss carried forward under KRS Chapter 141, and for a multistate corporation after apportionment and allocation.

### Official sources

- Kentucky Department of Revenue, [Schedule NOL, Net Operating Loss Schedule, 2025, 41A720NOL (10-25)](https://revenue.ky.gov/Forms/Schedule%20NOL%20(10-25).pdf)

- Kentucky Department of Revenue, [Instructions for Form 720, Kentucky Corporation Income Tax and LLET Return, 2025](https://revenue.ky.gov/Forms/INSTR_41A720(I)%20(2025).pdf)

- Kentucky Department of Revenue, [Form 720, Kentucky Corporation Income Tax and LLET Return, 2025, 41A720 (10-25)](https://revenue.ky.gov/Forms/Form%20720%20(2025).pdf)

- Kentucky Department of Revenue, [Corporation Income and Limited Liability Entity Tax](https://revenue.ky.gov/Business/Corporation-Income-and-Limited-Liability-Entity-Tax/Pages/default.aspx)

- Kentucky Department of Revenue, [Schedule NOL for tax year 2024 (file named Schedule NOL 2024.pdf)](https://revenue.ky.gov/Forms/Schedule%20NOL%202024.pdf)