Maine Revenue Services issued a Guidance Document for C-corporations regarding state modifications to federal net operating losses (NOLs). In light of Maine’s inconsistent conformity with the federal NOL rules, the guidance contains helpful explanations and examples of Maine’s NOL methodology through the years. For federal tax purposes, losses generally may be carried back two years and forward up to 20 years. Currently, Maine law does not allow any federal loss carryback but does permit income in future years (other than 2009, 2010, and 2011) to be offset by the amount of federal carryback not allowed in Maine. For tax years after 2001, Maine decoupled from the federal carryback provisions, and, for purposes of computing Maine taxable income, federal carrybacks must be offset by an addition modification of the same amount in the year of the carryback. Maine also decoupled from federal carryforward provisions for tax years 2009 through 2011, and federal carryforwards in those years must be also offset with an addition modification. Any of these addition modifications may be recaptured in subsequent years through subtraction modifications to the extent of Maine income not already offset in the year of the loss. No recapture modifications may be made in tax years 2009 through 2011, but they can be claimed beginning with tax year 2012. For tax year 2008, Maine disallows 10% of any loss in excess of $100,000, and recapture modifications are limited to $100,000. Any disallowed subtraction modifications as a result of these 2008 rules may be recaptured in later years. Me. Rev. Serv., Guidance Doc., Modifications Related to Net Operating Losses – Examples for C Corporations (Jan. 2014).