IRS Publication 536 — Net Operating Losses

Use your refigured AGI (Form 1045, line 11, using the “After carryback” column) to refigure certain deductions and other items that are based on or limited to a percentage of your AGI. Refigure the following items.

• The itemized deduction for medical expenses.

• The itemized deduction for qualified mortgage insurance premiums.

• The itemized deduction for casualty losses.

• Miscellaneous itemized deductions subject to the 2% limit.

• The overall limit on itemized deductions.

• The phaseout of the deduction for exemptions. Note. For tax years after 2017, the TCJA eliminated the itemized deduction for miscellaneous itemized deductions subject to the 2% limit, the overall limit on itemized deductions, and the deduction for exemptions. Do not refigure the itemized deduction for charitable contributions, even if you refigure your AGI. Also, since you do not decrease your charitable contributions, do not increase your charitable contributions carryover. Finally, use your refigured taxable income (Form 1045, line 15, using the “After carryback” column) to refigure your total tax liability. Refigure your income tax, your alternative minimum tax, and any credits that are based on or limited by your AGI, modified AGI (MAGI), or tax liability. (On Form 1045, use lines 16 through 30, and the “After carryback” column.) The earned income credit, for example, may be affected by changes to AGI or the amount of tax (or both) and, therefore, must be refigured. If you become eligible for a credit because of the carryback, complete the form for that specific credit (such as the EIC Worksheet) for that year.

While it is necessary to refigure your income tax, alternative minimum tax, and credits, do not refigure your self-employment tax and Additional Medicare Tax. For information about refiguring your net investment income tax and credits, see the Instructions for Form 1045.