Small Business and Consumer Credit Act of 2026

This bill amends the Internal Revenue Code to create special net operating loss (NOL) carryback and carryover rules for certain financial institutions for taxable years beginning after 2026.

Sec. 2, Net operating losses of certain financial institutions: For a specified financial institution that elects this provision, for taxable years beginning in 2027, the NOL is a carryover to each of the 20 following years. For taxable years beginning in 2028, the NOL is a carryback to the preceding year and a carryover to each of the 20 following years. For taxable years beginning after 2028, the NOL is a carryback to each of the 2 preceding years and a carryover to each of the 20 following years. A specified financial institution means a bank that is not part of an affiliated group, a member of an affiliated group that includes a bank not described in certain Bank Holding Company Act provisions, or a bank as defined in section 585(a)(2)(B). Elections must be made by the return due date and are irrevocable. Conforming amendments update cross-references in existing law. The changes apply to NOLs arising in taxable years beginning after December 31, 2026.