Net Operating Loss Runway Calculator

Estimate how many years your net operating loss carryforward will protect taxable income and how much federal tax it will save. Provide the remaining NOL balance, your projected taxable income, and optionally adjust the tax rate or income growth to see coverage duration, first-year shelter, and the annualized tax benefit.

Total remaining NOL carryforward available to offset future taxable income.
Expected positive taxable income before applying the NOL each year.
Optional. Defaults to 21% if blank to mirror the current U.S. corporate rate.
Optional. Defaults to 0%. Negative values slow NOL usage; positive values accelerate it.

This tool simplifies U.S. tax code provisions and does not account for Section 382 limitations, consolidated return nuances, or international tax rules. Consult your tax advisor before making decisions.

Examples

  • $7,500,000 NOL, $1,450,000 taxable income, 21% rate, 4% growth ⇒ NOL lasts for 4.79 years • Total federal tax savings unlocked: $1,575,000.00 USD • Year 1 tax shield: $304,500.00 USD • Average annual tax shield: $328,706.69 USD • Final year of usage: Year 5 (utilized 79.15% of that year’s income) • NOL remaining after horizon: $0.00 USD • Tax rate assumed: 21.00%
  • $3,250,000 NOL, $900,000 taxable income, 24% rate, no growth ⇒ NOL lasts for 3.61 years • Total federal tax savings unlocked: $780,000.00 USD • Year 1 tax shield: $216,000.00 USD • Average annual tax shield: $216,000.00 USD • Final year of usage: Year 4 (utilized 61.11% of that year’s income) • NOL remaining after horizon: $0.00 USD • Tax rate assumed: 24.00%

FAQ

Does this include state income tax effects?

No. The model focuses on federal tax savings. Run a separate scenario with your state rate substituted for the federal rate if you want a state-specific view.

Can I model 80% limitation rules?

Yes. Reduce the projected taxable income input to 80% of the forecasted amount for years affected by the limitation, or run the calculator year-by-year with adjusted figures.

How should I treat partial acquisitions of NOLs?

Input only the portion of the NOL that you can utilize under Section 382 or other limitation frameworks so the runway reflects your usable balance.

What growth rate should I enter?

Use your long-range plan or rolling forecast for pre-NOL taxable income. Negative growth is allowed if losses shrink slowly while the business stabilizes.

Additional Information

  • The calculator assumes the NOL can offset 100% of taxable income each year; adjust income downward if local limits apply.
  • Growth is compounded annually on the projected taxable income to reflect expansion or contraction in profitability.
  • Average annual tax shield divides total savings by the number of years the NOL lasts so finance teams can benchmark yearly benefit.
  • Outputs show the final year of usage and the share of that year's income consumed so you can forecast when residual taxable income resumes.

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