The law allows companies to apply losses sustained in recent years against taxes on profits paid in earlier years. Businesses may offset 50% of the available income from the fifth year and 100% of all income in the remaining four carryback years. All businesses may carry back net operating losses for up to five years for losses incurred either in 2008 or 2009, but not both (at the election of the taxpayer). Small businesses that have already elected to carryback 2008 may also elect to carryback losses from 2009.
The new law also extends a temporary Federal Unemployment Tax Act (FUTA) surtax of 0.2% of wages up to $7,000 per employee to help fund unemployment benefits. The surtax was scheduled to expire at the end of 2009 but will now continue through June 2011.