To accurately reflect when the NOL suspension enacted by AB 85 (Ch. 20-8) applies, the FTB is correcting the originally released 2020 Form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations — Individuals, Estates, and Trusts and the Form 3805V instructions.
AB 85 suspended NOLs for the 2020, 2021, and 2022 taxable years. However, noncorporate taxpayers are exempt from the suspension if their modified AGI or net business income is less than $1 million. Corporate taxpayers are exempt if their business income subject to California taxation is less than $1 million.
The originally released Form 3805 and instructions erroneously stated that noncorporate taxpayers were subject to the suspension if either modified AGI or net business income is $ 1 million or more. The FTB has since corrected the form and instructions to accurately state that taxpayers are only subject to the suspension if their modified AGI and net business income is $1 million or more.