By Survive and Thrive - Wednesday, July 8th, 2009

If a business incurred a non-capital loss in its current fiscal year, or did have a loss last year, it can carry this loss back and apply it against a profit it made in any one of its previous three tax years. Applying this loss against a profitable year will provide a refund of some portion of the taxes that were paid in that year. This refund can be used to boost cash flow or otherwise finance the business. Note that this loss can also be carried forward a maximum of 20 years.  See CRA’s Guidelines on Loss Carrybacks.

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Tags: Canada Revenue Agency, CRA, loss carryback, P&L, profit and loss