Schedule NOL-MOD

This article is a complete, plain-English guide that explains Schedule NOL-MOD and walks you through every line so you can report Indiana net operating loss modifications accurately and with confidence.

Schedule NOL-MOD, officially titled Current Year Net Operating Loss Modification Information, is an Indiana Department of Revenue form used to adjust, explain, and track how a taxpayer’s federal net operating loss (NOL) is modified for Indiana tax purposes. Indiana does not always follow federal tax rules exactly, so when a taxpayer has a current-year loss, excess business loss, separately stated loss, discharged debt, or a loss acquired from an estate, trust, or consolidated group, this schedule ensures the correct Indiana-specific calculation is made. Schedule NOL-MOD captures required federal modifications, separately stated losses that do not directly appear on the return, losses affected by discharged indebtedness, and NOLs that are transferred, removed, or terminated. The form acts as a bridge between federal loss rules and Indiana law, making sure losses are reduced, increased, allocated, or eliminated properly before being carried forward or deducted on Indiana tax returns such as IT-40, IT-41, IT-20, IT-20NP, or FIT-20.

How To File Schedule NOL-MOD

Schedule NOL-MOD is filed with your Indiana income tax return for the year in which the net operating loss or modification occurs. It is not filed by itself. The completed schedule must be attached to the applicable Indiana return and to related schedules such as IT-40NOL, IT-20NOL, or FIT-20NOL when required. If filing on paper, include Schedule NOL-MOD in the proper enclosure sequence shown on the form. If filing electronically, the information from this schedule must be entered into your tax software exactly as shown.

How To Complete Schedule NOL-MOD

How To Complete Schedule NOL-MOD

Below is a clear explanation of every line and field on Schedule NOL-MOD, rewritten for clarity without copying the original wording.

Header Information

Loss Year Ending

Enter the month, day, and year the net operating loss year ended.

Name Of Taxpayer

Write the full legal name of the individual, estate, trust, or entity filing the schedule.

Federal Employer Identification Number Or SSN

Enter the federal identification number or Social Security number associated with the return.

Part 1 – Required Federal Modifications For Net Operating Losses

Complete this section if you have a negative Indiana adjusted gross income or if specific federal deductions or limitations affect your Indiana loss.

Lines 1 Through 5 – Modification Codes And Amounts

For each applicable modification, enter:

  • The correct three-digit modification code
  • The dollar amount related to that code

Each line represents a separate adjustment. Amounts are generally entered as positive numbers unless instructed otherwise by the code description. If you have more than five adjustments, attach an additional schedule and include the total on line 6.

Line 6 – Total Modifications

Add together the amounts from lines 1 through 5 and enter the total here.
If you are filing IT-40, IT-40PNR, or IT-41, skip line 7 and carry this amount to line 8.
Also enter this amount on Schedule IT-40NOL or IT-20NOL line 3, if applicable.

Line 7 – Indiana Apportionment Percentage

If filing IT-20, IT-20NP, or FIT-20, enter your Indiana apportionment percentage as shown on your return. If no percentage applies, use 100%.

Line 8 – Modified Loss Amount

Multiply line 6 by line 7 and enter the result. This amount adjusts your Indiana net operating loss but cannot reduce it below zero.

Part 2 – Separately Stated Net Operating Losses

This section applies when a loss does not directly appear on the return, such as excess business losses or losses from estate or trust terminations.

Line 9 – Type Of Loss Code And Amount

Enter the three-digit code identifying the type of loss and the loss amount as a negative number. If multiple loss types apply, calculate each separately.

Line 10 – Indiana Modifications To The Loss

Enter the applicable Indiana modification code tied to line 9 and the related amount. Enter this as a positive number if it offsets the loss.

Line 11 – Adjusted Loss Amount

Add lines 9 and 10 together.
For IT-40, IT-40PNR, or IT-41 filers, skip line 12 and carry this amount to line 13.

Line 12 – Apportionment Percentage

For IT-20, IT-20NP, or FIT-20 filers, enter the Indiana apportionment percentage used on the return.

Line 13 – Apportioned Loss

Multiply line 11 by line 12. This represents the Indiana current-year net operating loss to be reported on the appropriate NOL schedule.

Line 14 – Loss From Estate Or Trust Termination

Enter any net operating loss received from a terminating estate or trust as a negative number.
Also enter:

  • The year the loss was incurred
  • The FEIN of the estate or trust

Use additional lines or sheets if more than one loss year applies.

Line 15 – Loss Used In Current Year

Enter the portion of line 14 that was deducted in the current year as a negative number.

Line 16 – Remaining Loss

Subtract line 15 from line 14. Enter this amount on the applicable NOL schedule as the remaining carryforward loss.

Part 3 – Discharged Indebtedness Excluded From Federal Gross Income

Complete this part if debt was forgiven under bankruptcy, insolvency, or qualified farm debt rules and affects your losses.

Line 17 – Discharged Debt Code And Amount

Enter the three-digit code describing the type of discharged debt and the total amount excluded from income.

Lines 18 And 19 – Debt Applied To Other Tax Attributes

Enter the code and amount of discharged debt applied to other federal tax attributes. These amounts must be entered as negative numbers.

Line 20 – Total Discharged Indebtedness

Add lines 17 through 19 and enter the result.

Line 21 – Apportionment Percentage

For IT-20, IT-20NP, or FIT-20 filers, enter the Indiana apportionment percentage.

Line 22 – Indiana-Adjusted Discharged Debt

Multiply line 20 by line 21. This amount is applied first to reduce current-year Indiana losses, then to older loss carryforwards if applicable.

Line 23 – Unused Discharged Debt

For certain filers, enter any portion of line 22 that was not used to reduce net operating losses.

Part 4 – Removal Of Net Operating Losses

Use this section to report losses removed from a consolidated or combined group or transferred due to an estate or trust termination.

For each entry, provide:

  • The recipient’s FEIN, SSN, or ITIN
  • The year the loss was incurred
  • The amount of loss transferred

Each loss year and recipient must be listed separately.

Part 5 – Termination Of Net Operating Losses

This section reports losses that are no longer available due to expiration or loss of eligibility.

For each terminated loss, enter:

  • The FEIN of the entity that incurred the loss
  • The year the loss was incurred
  • The first year the loss became available
  • The amount of loss that is no longer usable

Final Tips For Completing Schedule NOL-MOD

  • Round all dollar amounts as instructed
  • Do not skip applicable lines
  • Use correct three-digit codes
  • Attach additional sheets if space is insufficient
  • Ensure consistency with all related Indiana NOL schedules
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