Hawaii Application for Tentative Refund from Carryback of Net Operating Loss

Application for Tentative Refund from Carryback of Net Operating Loss
Form N-109, Rev. 2021, Application for Tentative Refund From Carryback of Net Operating Loss
Clear Form
FORM

STATE OF HAWAII — DEPARTMENT OF TAXATION

N-109
(REV. 2021)

APPLICATION FOR TENTATIVE REFUND FROM CARRYBACK
OF NET OPERATING LOSS

Do Not Attach to Your Income Tax Return — File Separately to Expedite Processing
For use by individuals, estates, or trusts.

(NOTE: References to “married” and “spouse” are also references to “in a civil union” and “civil union partner,” respectively.)

Please Type or Print

CAUTION:  Nonresidents and part-year residents (Form N-15 filers) cannot file this form. See Instructions.
Name(s)	

Federal Employer I.D. No. if any

Address (number and street)	

Your social security number

City or town, State and Postal/ZIP code	

Spouse’s social security number

	 1	 Return for year of net operating loss	
(a) Tax year ended	
(b) Date filed	
2 Amount of net operating loss (see Instructions)
			$_______________________________
CAUTION: For net operating losses arising in tax years
ending after December 31, 2017, only farming net
operating losses may be carried back 2 years.

3	 (a) Preceding tax year(s) affected by carryback	

(b) Did spouse file a separate return?

	2nd	
	1st	

 Yes	
 Yes	

 No
 No

	 4	 If you changed your accounting period, give date permission to change was granted
	 5	 Have you filed a petition in the Tax Appeal Court for the year or years to which the loss is to be applied?.  .  .  .  .  .  .  .  .  .  .  .  .  Yes	

Computation of Decrease in Tax

2nd preceding tax year ended              
(a) Before
carryback

(b) After
carryback

 No

1st preceding tax year ended              
(c) Before
carryback

(d) After
carryback

	 6	 Adjusted gross income as last determined.  .  .  .  .  .  .  .  .  .
	 7	 Net operating loss deduction resulting from
carryback (attach computation) (see Instructions). .  .  .  .
	 8	 Line 6 minus line 7. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	 9	 Deductions (see Instructions) .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	 10	 Line 8 minus line 9. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	 11	Exemptions .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	 12	 Taxable income (line 10 minus line 11).  .  .  .  .  .  .  .  .  .  .  .  .
	 13	 Income tax.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	 14	 Refundable tax credits. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	 15	 Line 13 minus line 14. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
	 16	 Nonrefundable tax credits (see Instructions).  .  .  .  .  .  .  .  .
	 17	 Total tax liability (line 15 minus line 16).  .  .  .  .  .  .  .  .  .  .  .  .
column (b)
			
	 18	 Enter amount from line 17.  .  .  .  .  .  .  .  .  . 	 column (d)

{

	 19	 Decrease in tax, line 17 minus line 18. .  .  .  .  .  .  .  .  .  .  .  .  .

ATTACH A COPY OF YOUR ORIGINAL FEDERAL RETURN FOR THE LOSS YEAR (See Instructions.)
Declaration
I declare, under the penalties set forth in section 231-36, HRS, that I have examined this application, including any accompanying schedules and
statements, and, to the best of my knowledge and belief, it is true, correct, and complete.

Your signature	

Date	

Spouse’s signature (If joint return, both must sign)	

Date

FORM N-109 (REV. 2021)
N109_I 2021A 01 VID01

ID NO 01

FORM N-109
(REV. 2021)
Schedule A (Form N-109)—Computation of Net Operating Loss
	 1	 Adjusted gross income from Form N-11 or N-15 (estates and trusts, start on line 3).  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	
	 2	 Deductions (applies to individuals only):
		
a	 Enter the amount of your total itemized deductions OR
	 standard deduction from Form N-11 or N-15 (Form N-15 filers, see Instructions). .  . 	 2a
		
b	 Exemptions from Form N-11 or N-15.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	 2b
		
c	 Add lines 2a and 2b.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	
	 3	 Combine lines 1 and 2c (estates and trusts, enter your taxable income).  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	
		
Note: If line 3 is zero or more, do not complete the rest of the schedule. You do not have a net operating loss.
Adjustments:
	 4	 Exemptions from line 2b above (estates and trusts, enter exemption from
your tax return) .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	 4
	 5	a	 Enter the excess of your nonbusiness capital losses
over your nonbusiness capital gains .  .  .  .  .  .  .  .  .  .  .  .  . 	 5a
		
b	 Enter the excess of your business capital losses
over your business capital gains plus nonbusiness
capital gains not used in figuring line 8c .  .  .  .  .  .  .  .  .  . 	 5b
		
c	 Enter total of lines 5a and 5b but not more than your capital loss limitation .  .  .  .  .  .  . 	 5c
	 6	 a	 Enter the amount of interest income from Hawaii or
any of the Hawaii counties’ obligations .  .  .  .  .  .  .  .  .  .  . 	 6a
		
b	 Enter the amount of interest expense related to
income not taxable by Hawaii .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	 6b
		
c	 Line 6a minus line 6b.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	 6c
	 7	 Net operating loss deduction from other years.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	 7
	 8	 a	 Nonbusiness deductions (attach supporting documentation).  .  . 	 8a
		
b	 Nonbusiness income plus the excess of your
nonbusiness capital gains over your nonbusiness
capital losses.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	 8b
		
c	 Line 8a minus line 8b.  If 8b is more than 8a, enter zero.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	 8c
	 9	 Add lines 4, 5c, 6c, 7 and 8c.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	
	 10	 Combine lines 3 and 9.  This is your net operating loss.  (see Instructions). .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	
		
Caution:  If the amount entered on line 10 is zero or more, you do not have a net operating loss.

1

2c
3

(	)

9
10

Instructions for Schedule A (Form N-109) — Computation of Net Operating Loss

Use this schedule to figure your net operating loss (NOL) that is available for carryback (farming NOL only) or carryforward.
Note: If you are a nonresident or part-year
resident (Form N-15 filer), you cannot file Form
N-109. However, you may use this schedule to
figure your NOL that is available for carryback
or carryforward. You will need to figure two NOL
amounts: (1) Your Total NOL (using amounts from
Form N-15, Column A), and (2) Your H
­ awaii NOL
(using amounts from Form N-15, Column B).
Line 1.—Individuals, enter your adjusted
gross income.
Line 2a.—Individuals, enter your itemized
deductions, after any limitations, or standard deduction.
Form N-15 filers who itemized deductions: When
computing your Total NOL, enter your total
itemized deductions calculated as if you were a
full-year resident. When computing your Hawaii
NOL, enter your Hawaii itemized deductions from
Form N-15.
Line 2b.—Individuals, enter the amount of
your personal exemptions.
Line 5.—If your business capital gains plus
your nonbusiness capital gains not used in figuring line 8c exceed your business capital ­losses,
enter zero on line 5b.  If you have a net capital
loss for the year, do not include in line 5c your net
capital loss not allowed this year because of the
Page 2

capital loss limitation. For more information, see
federal regulations section 1.172-3.
Line 8a and b.—Nonbusiness income and
deductions are those not connected with a trade
or business. For example:
Your standard deduction is a nonbusiness
deduction.
Itemized deductions, if elected, are usually
nonbusiness, except for state income taxes related to a trade or business, casualty loss deductions, and any employee business expenses
such as union dues, uniforms, tools and educational expenses.
Salaries and wages you received are trade or
business income.
Gain or loss on sale or other disposition of
real or depreciable property used in your trade or
business is considered business income or loss.
Rental income or loss is business income or
loss.
Loss on the sale of accounts receivable, if
such accounts arose under the accrual method
of accounting in your business, is included as a
business deduction.
Casualty losses and theft losses are considered attributable to your trade or business. This
is true even if it involves nonbusiness property.
Your proportionate share of a partnership’s
income or loss is considered business income
or loss.

Losses on stock in small business corporations which qualify as ordinary losses are business losses.
Shareholders of an electing small business
corporation (S Corporation) see Internal Revenue Code section 1366, for tax treatment of
pass-thru items to shareholders.
Loss resulting from the sale or exchange of
small business investment company stock, which
qualifies as an ordinary loss, is considered as a
loss attributable to your trade or business.
The deduction allowed for payment made by
a self-employed person to a retirement plan is
treated as a nonbusiness deduction.
Note: Nonbusiness income does not include
pensions, social security benefits, and other income that is exempt from Hawaii income tax.
Line 10.—If you are carrying back your farming NOL, enter on page 1, line 2, the lesser of
(1) the amount which would be the NOL for the
taxable year if only income and deductions attributable to farming businesses are taken into
account, or (2) the amount of the NOL on line 10.
Form N-15 filers, do not enter an amount on
page 1, line 2. You must file an amended return
on Form N-15 to carry back your NOL.

FORM N-109
(REV. 2021)
STATE OF HAWAII — DEPARTMENT OF TAXATION

GENERAL INSTRUCTIONS FOR APPLICATION FOR TENTATIVE
REFUND FROM CARRYBACK OF NET OPERATING LOSS (NOL)
FOR USE BY INDIVIDUALS, ESTATES, OR TRUSTS
(Section references are to the Internal Revenue Code unless otherwise specified)
CHANGES TO NOTE
•	 For net operating losses arising in tax years
ending after December 31, 2017, Act 27, Session Laws of Hawaii 2018, eliminates NOL
carrybacks (except for farming NOLs which
are permitted a two-year carryback), and allows unused NOLs to be carried forward indefinitely.
•	 For net operating losses arising in tax years
beginning after December 31, 2017, Act 27,
Session Laws of Hawaii 2018, limits the NOL
deduction to 80% of taxable income.
•	 For tax years beginning after December
31, 2017, and before January 1, 2026, Act
27, Session Laws of Hawaii 2018, limits the
amount of losses from the trades or businesses of noncorporate taxpayers that the taxpayer
can claim each year. Taxpayers can’t deduct
losses in excess of a threshold amount in the
current year. The amount of the excess business loss is treated as an NOL carryover to
later tax years. Use federal Form 461 to figure
the excess business loss.
A. WHO MAY FILE AN APPLICATION.—An
application for a tentative carryback adjustment
may be filed by any individual, estate, trust, or
fiduciary who desires a quick refund of taxes
which are affected by the carryback of a farming NOL.
A “farming loss” means the lesser of (1) the
amount which would be the NOL for the taxable
year if only income and deductions attributable
to farming businesses are taken into account, or
(2) the amount of the NOL for such taxable year.
Note: NOLs are limited by IRC section 461(l),
so the NOL carryback generally will not exceed
$250,000 ($500,000 for joint returns). See the
Instructions for federal Form 461, Limitation on
Business Losses.
Note: If you are a nonresident or part-year
resident (Form N-15 filer), you cannot file Form
N-109. However, you may use Schedule A (Form
N-109) to figure your NOL that is available for
carryback or carryforward. You must file an
amended return on Form N-15 to carry back your
farming NOL. See Item G, Amended Return, for
information on filing an amended return.
A taxpayer has an option on whether or not to
carry a farming loss back first before carrying it
forward. This form should only be used by those
taxpayers choosing to carry their farming losses
back.
Election Not to Carryback. You may elect
to carry the farming NOL forward instead of first
carrying it back to prior years. If you make this
election, then you can use your farming NOL only
in the carryforward period.
To make this election, attach a statement to
your original return filed by the due date (including extensions) for the farming NOL year. This
statement must state that you are electing to
waive the carryback period under section 2357(d), HRS, and IRC section 172(b)(1)(B)(iv).

Page 3

If you filed your original return on time but
did not file the statement with it, you can make
this election on an amended return filed within
6 months of the original due date of the return,
but not including any extension. Attach a statement to your amended return, and write “Filed
pursuant to 26 C.F.R. 301.9100-2” at the top of
the statement. Also include the statement noted
above that you are waiving the carryback period.
Once you elect to waive the carryback period,
it cannot be changed later.
If you do not file this statement on time, the
carryback period cannot be waived and you must
first carry the farming NOL back before carrying
it forward.
However, no part of any farming NOL incurred
outside of the State prior to beginning business in
the State may be included in such election.
Change in Filing Status. Special rules apply
if you filed a joint return (or a separate return) for
some but not all of the tax years involved in figuring an NOL carryback. For details, see federal
Publication 536. Attach a computation showing
how you figured the carryback.
B. TIME AND PLACE FOR FILING.—This
form must be filed with the Hawaii Department
of Taxation at P.O. Box 3559, Honolulu, Hawaii
96811-3559, and must be filed on or after the
date of filing of the return for the taxable year of
the NOL and within 12 months from the end of
such taxable year. Do not attach this form to your
income tax return.
Note:  If you fail to meet the foregoing limitation,
you may file an amended return within three
years of the due date prescribed for filing the
return, including extensions, for the NOL year or
the period agreed to ­under a written extension of
time, whichever is later.
C. RECOMPUTATION OF TAX LIABILITY.—
To arrive at the decrease in the tax previously
determined, recompute the tax after taking the
carryback(s) into account. Form N-11 or N-40
and instructions for the applicable year will be
helpful in making this recomputation.
Figure the amount of decrease, attributable
to the carryback, in tax previously determined for
each tax year before the tax year of the NOL. The
tax previously determined will be the tax shown
on the return as filed, increased by any amounts
assessed (or collected without assessment) as
deficiencies before the date of the filing of the application, and decreased by any amounts abated,
credited, refunded, or otherwise repaid prior to
that date.
After figuring the tax previously determined,
figure the decrease in tax previously determined
attributable to the carryback and any related adjustments on the basis of the items of tax taken
into account in computing the tax previously determined. In determining any decrease attributable to the carryback or any related adjustment,
items must be taken into account only to the extent that they were reported on the return, or were
reflected in amounts assessed (or collected without assessment) as deficiencies, or in amounts

abated, credited, refunded, or otherwise repaid,
before the date of filing the application.
Deductions (except the charitable contributions deduction) which are limited, for example,
by taxable income or adjusted gross income, are
to be recomputed after carryback of the NOL.
If the amount of any tax for any taxable year is
unpaid, including any installment not yet due, at
the date of filing the application, enter the unpaid
amount of such tax in the appropriate column.
Note: As provided by statute, adjustment to
refundable tax credits, except the credit for child
and dependent care expenses, must be claimed
on or before the end of the year following the
year for which the credits are claimed.
D.  ALLOWANCE OF ADJUSTMENT.—The
Director of Taxation will act on this application
within 90 days from whichever of the following
two dates is later:
1.  The date on which this application is filed;
or
2.  The last day of the month in which falls the
last date prescribed by law (including any extension of time granted) for filing the return for the
taxable year of the NOL from which the carryback
results.
E. DISALLOWANCE OF APPLICATION.—
Any application which contains material omissions or computation errors which the Director of
Taxation deems cannot be corrected within the
90-day period may be disallowed. This application for a tentative carryback adjustment does not
constitute a claim for credit or refund. If this application is disallowed in whole or in part, no suit
based thereon may be maintained in any court
for the recovery of the tax. The taxpayer may,
however, file a regular claim for credit or refund
on an amended return at any time before the expiration of the applicable period of limitation, as
further explained in Item G.
F. EXCESS ALLOWANCES.—Any amount
applied, credited, or refunded on the basis of
this application which is later determined by the
Department of Taxation to be excessive may be
assessed as a deficiency as if it were due to a
mathematical or clerical error appearing on the
return.
G. AMENDED RETURN.—An individual, estate, trust, or fiduciary may obtain a refund by
filing an amended return. A separate amended
return must be filed for each year that a refund is
requested. Generally, the amended return must
be filed within 3 years after the due date of the
return for the tax year of the NOL.
If you are an individual, fill in the amended
return oval and the NOL Carryback oval at the
top of Form N-11 or Form N-15. Complete your
amended return with all of the correct information.
Attach Schedule AMD, Explanation of Changes
on Amended Return, to the income tax return.
Also attach all forms and statements required to
file a complete return. If you are claiming any tax
credits, remember to attach the required forms,
such as Schedule CR and Schedule X, even if

FORM N-109
(REV. 2021)
you claimed the credits on the original return. A
copy of your original federal income tax return for
the loss year must also be attached.
H. YEARS TO WHICH YOU MAY CARRY
AN NOL.— For NOLs arising in tax years ending after December 31, 2017, NOL carrybacks
are eliminated (except for farming NOLs which
are permitted a two-year carryback), and unused
NOLs may be carried forward indefinitely.
Any amount of the loss not used to offset 80%
of the taxable income (adjusted, as explained in
Item K) for the second preceding year is carried
to the first preceding year. Where the loss is not
entirely used to offset 80% of the taxable income
(adjusted) in the 2 preceding years, the balance
may be carried forward indefinitely.
I.  NOL DEDUCTION.—The sum of your NOL
carrybacks and carryovers is your NOL deduction for the tax year to which carried. Before you
can figure your NOL deduction for the year, you
must first determine what part of any NOLs for
any earlier or later tax years represents carryovers or carrybacks to the tax year under consideration. When you have more than one NOL
to be carried to the same tax year, apply the loss
from the earliest year first.
J. COMPUTATION WHEN THE NOL IS
FULLY ABSORBED IN THE EARLIEST PRECEDING TAX YEAR.—In refiguring your tax liability for the year to which the NOL is carried
and fully absorbed, the deduction for charitable
contributions is determined without regard to any
NOL carryback. Any other deductions claimed,
based on or limited to a percentage of your adjusted gross income (such as medical expenses)
must be refigured on the basis of your adjusted
gross income, determined after application of the
NOL carryback. Also, any credits based on or
limited by the tax may be figured on the tax liability as determined after application of the NOL
carryback.
K. COMPUTATION WHEN THE NOL IS
NOT FULLY ABSORBED IN PRECEDING TAX
YEAR(S).—The amount of an NOL which you
may carry to the next year, after applying it to a
prior year or years, is the excess, if any, of the

Page 4

NOL carryback over 80% of the taxable income
of such prior year(s) figured with the following
modifications:
(1) Your deduction for capital losses must not
be more than the capital gains included in gross
income.
(2) You are not permitted any deduction for
the excess of a net long-term capital gain over a
net short-term capital loss.
(3) Your taxable income for the prior tax
year(s) is determined without taking into account the NOL carryback from the loss year or
any later tax year. NOLs, otherwise allowable as
carrybacks or carryovers, occurring in tax years
before such loss year, are taken into account in
figuring the taxable income for the prior tax year.
(4) You may not claim any personal exemptions.
(5) Any deductions claimed, except charitable
contributions, which are based on or limited to
a percentage of adjusted gross income (such as
medical expenses) must be refigured on the basis of the adjusted gross income after application
of adjustments (1), (2), and (3) above. The deduction for charitable contributions is determined
using the same adjustments except that you do
not take into account any NOLs being carried
back.
The taxable income as modified is to be considered not less than zero.
L. ATTACHMENTS.—Attach a copy of your
original federal income tax return for the loss
year to Form N-109. If a copy of your federal return is not attached, the processing of your return
and refund may be delayed.

Line-By-Line Instructions For
Form N-109

Enter in columns (a) and (c), your tax for the
applicable carryback year as shown on your original or amended return. If the return was examined, enter the amounts that were determined as
a result of the examination.
Line 2. Amount of net operating loss. —
Enter the lesser of (1) the amount which would

be the NOL for the taxable year if only income
and deductions attributable to farming businesses are taken into account, or (2) the amount of
the NOL on page 2, Schedule A, line 10.
Line 7. Net operating loss deduction resulting from carryback. — Your NOL deduction
is limited to 80% of taxable income.
Line 9. Deductions. — Individuals — Enter
the amount of your itemized deductions, after any
limitations, or the standard deduction amount if
you did not itemize your deductions.
If your Hawaii adjusted gross income was
more than $83,400, and you were not able to
deduct all of your itemized deductions, enter the
amount you were able to deduct as calculated on
the Total Itemized Deductions Worksheet in your
Form N-11 instruction booklet.
The standard deduction amounts are $2,200
for single or married filing separately filers;
$3,212 for head of household filers; and $4,400
for married filing jointly or qualifying widow(er) filers.
Line 11. Exemptions. — Individuals — Enter
$1,144 times the number of exemptions claimed.
Those qualifying for the disability exemption use the appropriate amounts instead of the
above.
Line 13. Income Tax. — Refigure your tax after the carryback to determine the tax decrease.
Include in the tax before carryback, amounts
shown on your original or amended return, and
later adjusted, based on an examination of your
return.
Attach a detailed computation of the new tax
liability shown on line 13, columns (b) and (d).
The tax form and instructions for the applicable
year will be helpful in making this computation.
Include in the amount on line 13 any tax from
Forms N-2, N-103, N-152, N-312, N-338, N-344,
N-348, N-405, N-586, or N-814.
Line 16. Nonrefundable tax credits. — Enter the total of your nonrefundable tax credits. Do
not enter an amount that is more than the amount
of your adjusted income tax liability on line 15. If
line 15 is zero or less, enter zero on line 16.