2023 Schedule NOL1 Instructions 

Purpose of Schedule NOL1 
The 2023 Schedule NOL1 is used by an individual, estate, or trust to compute your net operating loss (NOL) based on your 2023 
tax return. If your trade or business deductions for the year are more than your income for the year, you may have a Wisconsin 
NOL. Attach Schedule NOL1 to your Wisconsin return for any year you compute an NOL. You should compute your federal NOL 
before computing your Wisconsin NOL, because computation of the Wisconsin NOL is based on the federal NOL. For information 
on computing the federal NOL, see federal Form 1045, Application for Tentative Refund, and the instructions. 

For NOLs incurred in taxable years beginning in 2023, you may carry the NOL back two years and then forward for up to 20 years. 
Or, you may elect to waive the carryback period and only carry the NOL forward for up to 20 years. If you choose to carry your 
NOL back, complete 2021 and/or 2022 Form X-NOL, Carryback of Wisconsin Net Operating Loss (NOL). 

Schedule NOL2 is used to compute your Wisconsin modified taxable income and allowable deduction for a Wisconsin NOL 
carryforward. Schedule NOL3 is a record of your carryforwards and carrybacks. These schedules are required to be submitted 
with your return each year you claim a Wisconsin NOL carryforward or carryback. 

Who Must File Schedule NOL1 
Schedule NOL1 must be filed by individuals, estates, and trusts who incur an NOL for the taxable year and will claim an NOL 
carryback or carryforward in other years. Include Schedule NOL1 with your Form 1, 1NPR, or 2 in the year you incur a loss. 

General Instructions 
You must have a federal NOL in order to have a Wisconsin NOL. The federal NOL is the starting point for computing the Wisconsin 
NOL. Although Wisconsin law provides that the federal NOL is adjusted for certain addition and subtraction modifications, the 
modifications operate to increase or decrease the amount of NOL available for Wisconsin purposes. Modifications may not be 
used to create a Wisconsin NOL where no federal NOL exists. 

Exception:      If a tax-option (S) corporation shareholder’s allowable deduction for their pro rata share of the corporation’s losses 
results in a loss on the shareholder’s Wisconsin income tax return, the loss generally will be treated in the same manner as other 
Wisconsin NOLs. However, unlike other Wisconsin NOLs, Wisconsin tax-option (S) corporation losses may be claimed even if the 
shareholder has no federal NOL. 

Specific Instructions 
  Line 1        Fill in your Wisconsin income from Form 1, line 7. For individuals filing Form 1NPR (nonresident and part-year resident 
return), Wisconsin income is the amount from line 16, column B, of Form 1NPR, less the amount on line 29, column B, Form 
1NPR. 

  Line  2       Fill in your allowable federal standard deduction regardless of whether you claimed the standard deduction on your 
federal return. Use the federal standard deduction allowable based on your federal filing status. For 2023, this generally is: 
• Single – $13,850
• Married filing joint return or qualifying surviving spouse – $27,700
• Married filing separate return – $13,850
• Head of household – $20,800
In some  cases,  your allowable federal standard deduction may be more or less than the amount indicated above. See the 
instructions for your federal income tax return to determine your allowable standard deduction if (1) you can be claimed as a 
dependent on another person’s return, (2) you (and/or your spouse) are 65 years of age or older or legally blind, (3) you are filing 
a tax return with a short tax year, (4) you are a nonresident or dual status alien during the year, or (5) you incurred a net disaster 
loss during the year. 

  Line  4       Fill in your Wisconsin capital gain exclusion as a positive number. This will generally be the amount from line 26 of 
Schedule WD (line 26 of Schedule 2WD (Form 2) for estates and trusts). However, if you filed Wisconsin Form 1, your only capital 
gain or loss was a capital gain distribution reported on line 7 of federal Form 1040 or 1040-SR, and you did not file Wisconsin 
Schedule WD, fill in the amount of capital gain exclusion from line 5 of Schedule SB (Form 1). Include on line 4 as a positive 
number the (1) amount of any subtraction claimed for deferral of long-term capital gain from the sale of an asset due to the 
investment of the gain in a qualified Wisconsin business (amount from line 7 of Schedule CG), (2) the capital gain exclusion from 
the sale of an investment in a qualified Wisconsin business held at least 5 years (amount from line 15a of Schedule WD), and (3) 

I-154 (R. 11-23)

the capital gain exclusion from the sale of an investment in a Wisconsin qualified opportunity fund held at least 5 years (amount 
from line 49 of Schedule SB (Form 1) or line 83 of Schedule M (Form 1NPR)). 

  Lines 6 through 23  The adjustments computed on these lines are required because (1) nonbusiness deductions are allowed 
only to the extent of nonbusiness income, and (2) capital losses are allowed only to the extent of capital gains. 

To complete these lines, you will have to sort your capital gains and losses and your income and deduction items to determine 
what portion is “business” and what portion is “nonbusiness.” 

Nonbusiness income is income that is unrelated to your trade or business or your employment. The following is a list of examples 
of nonbusiness income: 

• Dividends                                                       • Alimony
• Pensions and annuities                                          • Interest on investments

Some examples of business income you receive from your trade or business or employment include: 

• Salaries and wages                                              • Rental income
• Self-employment income                                          • Ordinary gain from the sale or disposition of business
• Your share of business income from partnerships and             property
  tax-option (S) corporations                                     • Unemployment compensation

Nonbusiness deductions are deductions that are unrelated to your trade or business. Some examples include: 

• Alimony paid                                                    • Health savings account deduction
• The Wisconsin subtraction for medical care insurance            • The federal standard deduction
• Contributions to an IRA, Keogh, or other retirement plan

See federal Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts, or the instructions for federal Form 
1045 for further information on items that are considered “business” or “nonbusiness.” Caution: Do not include any federal
itemized deductions as nonbusiness deductions. 

The amounts filled in on lines 6 through 23 should be the Wisconsin amounts which reflect the related addition and subtraction 
modifications from Schedules AD and SB (Form 1) (lines 1 through 5 and 7 through 11 of Schedule A of Form 2 for estates and 
trusts). Individuals who file Form 1NPR should use the amounts from column B of Form 1NPR plus any addition and subtraction 
modifications from Schedule M (Form 1NPR) when completing these lines. 

Example: When computing your federal NOL, you determine that your total nonbusiness income consisted of $800 of interest 
income. You show a subtraction on line 2 of your Schedule SB (Form 1) of $200 for interest from U.S. Government securities. The 
amount to fill in as nonbusiness income on line 11 of the worksheet is $600 ($800 less $200 U.S. Government interest). 

Line 24  If you claimed a Wisconsin NOL deduction from other years on line 23 of Schedule SB (Form 1), line 57 of Schedule M 
(Form 1NPR) or line 11, Schedule A, of Form 2 for estates and trusts, fill in the amount of the NOL carryforward on line 24. 

Line 25  If the amount on line 25 is less than zero, you have a Wisconsin NOL. Enter this amount on Schedule NOL3, line 1a. 

                                                 Applicable Laws and Rules 
  This document provides statements or interpretations of the following laws and regulations enacted as of November 29, 2023: 
  secs. 63 and 172, IRC, and ch. 71, Wis. Stats. 

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