For which tax years has California suspended the net operating loss (NOL) carryover deduction?

California has suspended the net operating loss (NOL) carryover deduction for the tax years 2019, 2020, and 2021. The state's decision to suspend this deduction was part of the larger fiscal response to the COVID-19 pandemic, aiming to stabilize revenue amid economic uncertainties. By doing so, the state limited the ability of businesses to offset taxable income with prior losses, which had been a key benefit for many operating in California.

The NOL carryover typically allows businesses to apply losses from previous years to reduce taxable income in future years, helping to lessen tax burdens especially in times of economic downturns. However, California's temporary suspension during these specific tax years reflects its approach to managing state revenues and addressing the economic impact of the pandemic. By selecting all of the aforementioned tax years as the period of suspension, it accurately captures the breadth of the measure's impact on business tax deductions during that period.