Texas policy changes for temporary business loss carryforward credit - Annual election not required; group may claim credit of departed member

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August 2017


Pursuant to a letter from Tax Policy to the Audit Division published by the Texas Comptroller of Public Accounts, the Comptroller announced certain policy changes regarding the temporary credit for business loss carryforwards. Taxpayers are not required to make an annual election to claim the credit. As a remedy, taxpayers are allowed to amend returns to take past credits not claimed or disallowed.  If impacted years are outside the statute of limitations, taxpayers may carry over lost credits.

Additionally, when a member with a credit leaves the combined filing group, the revised policy permits the group to claim the departing member’s credit in the year of the departure.

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Peter Michalowski

Peter Michalowski

State and Local Tax Leader, PwC US

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