Definition

1. Verb:
   • To deduct a loss or an unused credit from taxable income for a prior period: In accounting and taxation, to apply a current financial loss or a tax credit that cannot be used in the present period to reduce the taxable income or tax liability of a previous year.

Usage

• This term is used almost exclusively in financial, accounting, and tax contexts.
• It describes a specific procedure where a business or individual applies a current net operating loss (NOL) or unused tax credit to the tax return of a year that has already been filed, typically to receive a refund of taxes previously paid.
• The structure is typically: carry back [something] or [something] is carried back.
• It is often contrasted with "carry forward."

Examples

• Verb:
  • The company had a significant loss this year and will carry it back to offset profits from two years ago.
  • Under the old tax law, net operating losses could be carried back for up to five years.
  • You may carry back this unused charitable contribution credit to last year's return.

Advanced Usage

• "carryback" (noun): The act or an instance of carrying back; the amount of a loss or credit that is carried back.
  • The tax refund was a result of the net operating loss carryback.
  • The carryback of the capital loss generated a substantial refund.

Variants and Related Words

• Carryback (n): The process or the amount involved in carrying back.
• Carry forward / Carryover (v/n): The opposite action; to apply a loss or credit to future tax years.
  • If you cannot use the entire credit this year, you may carry it forward for ten years.

Synonyms

• Apply retroactively: To make something apply to a past period.
• Offset against prior income: To use a loss to reduce previously declared income.

Related Phrases

• Net operating loss (NOL) carryback: A specific tax term for carrying back a net operating loss.
• Tax loss carryback: Another common term for the same procedure.
• Carry-back provision: The rule in tax law that allows this action.

Verb

1. deduct a loss or an unused credit from taxable income for a prior period