Caps how much of a current-year net business loss a noncorporate taxpayer can deduct against other, non-business income at all.
How it works
Whichever is smaller — the business loss or the applicable threshold amount for filing status — is allowed against other income this year. Anything above the threshold is disallowed as “excess,” becoming part of next year’s NOL carryforward instead.
What this does not include
This computes the current-year limitation only — the disallowed excess doesn’t disappear; it flows into next year’s NOL, itself subject to the 80%-of-taxable-income limitation covered by this site’s separate NOL carryforward calculator.
How to use this calculator
- Enter your filing status and net business loss for the year.
Frequently asked questions
Who does this limitation apply to?
Noncorporate taxpayers — individuals, partnerships, and S corporations passing losses through to owners; C corporations are not subject to this specific limitation.
What changed for 2026 under the OBBBA?
The One Big Beautiful Bill Act made this limitation permanent (removing a prior scheduled expiration) and reset the threshold amounts, effectively rolling back several years of inflation adjustments.
How are multiple businesses treated under this rule?
All of a taxpayer’s trades or businesses are aggregated together — the limitation applies to the combined net business loss, not separately to each individual business.
