What is Form 1045 Application for Tentative Refund?

Taxpayers must file a Form 1045 within one year after the end of the year in which the loss or unused credit occurred, and they will likely also have to file amended returns. It is important to note that using Form 1045 can trigger the Alternative Minimum Tax for filers, so it is important to seek qualified tax counsel.

How Does Form 1045 Application for Tentative Refund Work?

Specifically, according the IRS, Form 1045 is for individuals, estates, or trusts that want to apply for a quick tax refund resulting from:

  • The carryback of a net operating loss (that is, using part of a prior year's loss to offset taxes due on profits this year)
  • The application of a previously unused general business credit
  • The application of a net section 1256 contracts loss from another year
  • An overpayment of tax due to a claim of right adjustment under section 1341(b)(1)

The IRS defines what counts as an eligible loss. For individuals, this includes loss of property arising from fire, storm, shipwreck, other casualty, or theft. For small businesses, losses due to federally declared disasters are eligible.

Why Does Form 1045 Application for Tentative Refund Matter?

A Form 1045 is a firm that allows individuals, trusts, and estates to apply for tax refunds resulting from certain carrybacks, business tax credits, or certain overpayments.