NOL deduction cap
In accounting, NOL deduction cap means a limit on how much of a year's income a loss carryforward may offset — federally 80% for post-2017 NOLs; in the states it varies: Pennsylvania caps pre-2025 losses at 40% and later ones at 50% in 2026, rising ten points a year to 80% from 2029, and some states suspend NOL deductions outright in deficit years.
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Authority
This definition follows IRC §172(a)(2); state law.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
What it is not called
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- NOL expiry (a time limit rather than an amount limit)
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