This bill modifies tax rules for certain financial institutions regarding net operating losses, which occur when a business's deductions exceed its income. Specifically, it allows eligible banks and bank holding companies to carry forward or carry back these losses over extended periods depending on the year, with losses from 2027 able to be carried forward for up to 20 years, losses from 2028 carried back one year and forward for 20 years, and losses from 2029 onward carried back two years and forward for 20 years. The legislation applies to independent banks, bank holding company affiliates that include independent banks, and certain other banking entities, allowing them to elect whether to use these special rules for each applicable year. The changes take effect for net operating losses arising after December 31, 2026, giving financial institutions greater flexibility in managing tax liability during periods of financial losses. No specific appropriations or federal funding are mentioned in the bill.
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