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Bill

HR 9383

Small Business and Consumer Credit Act of 2026

119th Congress Introduced by Mike Carey and 10 co-sponsors

Specified financial institutions may elect NOL rules allowing up to 20-year carryforwards, with limited back-carry options in certain years, reshaping their tax relief.

Introduced in House
0
WeVote Research Nonpartisan
Bill Summary · HR 9383

Purpose and intent

  • H.R. 9383, the Small Business and Consumer Credit Act of 2026, aims to modify the treatment of net operating losses (NOLs) for a specific group of financial institutions.
  • The bill introduces a new set of election-based rules that change how NOLs can be carried forward, backward, and applied to taxable years for certain banks and related institutions beginning after 2026.

Key provisions and changes

  • Net Operating Loss (NOL) treatment for specified financial institutions:
    • For taxable years beginning after December 31, 2026, certain financial institutions that elect to apply the new rules may have their NOLs carried forward for up to 20 years (D-iv(i)).
    • For taxable years beginning after December 31, 2027, electing institutions may have NOLs:
    • Carried back to the preceding taxable year (D-ii)(I), and
    • Carried forward to each of the 20 following taxable years (D-ii)(II).
    • For taxable years beginning after December 31, 2028, electing institutions may have NOLs:
    • Carried back to each of the 2 preceding years (D-iii)(I), and
    • Carried forward to each of the 20 following years (D-iii)(II).
    • The policy defines “specified financial institution” to include:
    • Banks (as defined in Section 581) that are not members of an affiliated group,
    • Banks that are part of an affiliated group containing one or more banks not described in certain Bank Holding Company Act provisions, and
    • Banks within the meaning of Section 585(a)(2)(B).
    • Elections under the new subparagraph (D):
    • Must be made in a manner prescribed by the Secretary of the Treasury,
    • Must be made no later than the due date of the taxpayer’s return for the tax year of the NOL to which the election relates,
    • Once made for a given year, the election is irrevocable for that year.
  • Conforming amendments:
    • The statute modifies existing internal revenue code references to incorporate the new NOL election framework (adjusting how the new subparagraphs (D)(i)-(iii) and (E) fit within Section 172(b)(1)).
  • Effective date:
    • The amendments apply to NOLs arising in taxable years beginning after December 31, 2026.

Who is affected

  • The primary impact is on “specified financial institutions,” defined to include certain banks and bank-affiliated groups meeting specific criteria.
  • Taxpayers within those institutions would be eligible to elect the modified NOL rules, altering how their NOLs can be utilized across 20-year carryforwards, and (in some years) carrybacks to prior years.

Procedural and timeline aspects

  • Elections:
    • Must be elected by the due date of the tax return for the year of the NOL.
    • Once elected for a given year, the election is irrevocable for that year.
  • Transition timeline:
    • 2027 window: NOLs can be carried forward up to 20 years for the 2027 tax year the election applies to.
    • 2028 window: NOLs can be carried back to the prior year and forward up to 20 years for the 2028 tax year the election applies to.
    • 2029 onward: NOLs can be carried back to the two preceding years and forward up to 20 years for the 2029 and later tax years the election applies to.
  • Legislative status:
    • Introduced June 22, 2026, and referred to the House Ways and Means Committee. No further action details provided in the text.

Potential impact and considerations

  • The proposed NOL framework provides flexibility for specified banks to offset income over a 20-year horizon, with varying carryback and carryforward rules depending on the year the election is made.
  • The ability to carry back NOLs (especially in 2028) could provide tax refunds or tax relief for earlier profitable years, potentially smoothing tax liabilities across business cycles.
  • Setting irrevocable elections for each year limits future policy reversals for those tax years.
  • The bill affects tax planning, financial projections, and capital planning for eligible financial institutions.

Compiled from official sources — confirm details with the bill’s official record.

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