Excess tax credits can often be carried back two years and carried forward five years, allowing taxpayers to apply these credits to past and future tax liabilities. This rule helps taxpayers to utilize their credits more flexibly and efficiently, ensuring that they can benefit from these credits even in years when their tax liability is lower.

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As a General Rule

Question 69

Multiple Choice

As a general rule,

A) excess tax credits can be carried back two years.
B) excess tax credits can be carried forward five years.
C) excess tax credits must be used in the year recognized.
D) excess tax credits can be carried back two years and can be carried forward five years.

Correct Answer: