Summary
RMC No. 81-2026 prescribes workaround procedures for claiming the five-year Net Operating Loss Carry-Over (NOLCO) incurred in Taxable Years 2020 and 2021 in the Offline eBIRForms Package and the eFPS.
Key points
- Why a workaround is needed. The current system validation accepts NOLCO input only for the three immediately preceding taxable years. Taxpayers filing electronically may use the temporary data-entry procedure in the Annex.
- Entering the NOLCO. Amounts that fit are reflected in the NOLCO Schedule/Table. Amounts that cannot fit go in the Special Allowable Itemized Deductions Schedule, with the NOLCO years in the description field (for example, NOLCO – TY 2020), the Legal Basis “RA No. 11494”, and the amount applied for the current year.
- Limit and filing steps. The total NOLCO claimed must not exceed the allowable NOLCO deduction for the taxable year. The filer then clicks Validate, and once there are no errors, clicks Submit.
- Coverage and exclusion. The procedure applies only to NOLCO for Taxable Years 2020 and 2021 allowed under RR No. 25-2020, including fiscal years ending July 31, 2020 to June 30, 2022, treated as 2020 and 2021 under RMC No. 138-2020. Businesses with fiscal years ending before July 31, 2020 or after June 30, 2022 cannot use the extended two-year additional carry-over.
Who is affected
- Taxpayers filing via Offline eBIRForms Package or eFPS and claiming NOLCO for Taxable Years 2020 and 2021
Deadlines and effectivity
- Issued July 22, 2026
- Covers fiscal years ending July 31, 2020 to June 30, 2022
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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