---
title: "Loss carry back and startup refunds: turning a bad year into cash"
description: Discover how loss carry back and startup refunds can transform tax losses into cash flow opportunities for businesses, providing support during tough times.
image: https://blog.incragroup.com.au/hubfs/AI-Generated%20Media/Images/Modern%20Office%20Workspace%20with%20Financial%20Graph%20and%20Potted%20Plant-3.png
---

Home > [Blog](https://www.incragroup.com.au/blog) >Loss carry back and startup refunds: turning a bad year into cash

# Loss carry back and startup refunds: turning a bad year into cash

![](https://blog.incragroup.com.au/hubfs/AI-Generated%20Media/Images/Modern%20Office%20Workspace%20with%20Financial%20Graph%20and%20Potted%20Plant-3.png)

Two measures in the Budget make tax losses more useful than they've been in years.

First, loss carry back returns. From 1 July 2026, companies with turnover under $1B can carry back tax losses up to 2 years, generating a refundable offset capped by your franking account balance. If you've had a strong run followed by a downturn, you can convert that loss into a real cash refund of tax already paid. Last applied during COVID, this is a useful cash flow tool when trading conditions turn.

Second, and separate, is a startup loss refund. From 1 July 2028, companies under $10M turnover in their first 2 years of operation can convert their tax losses into a refundable offset, capped at the FBT and PAYG withholding the company has paid. Effectively, the government is letting early-stage companies recycle their employment tax payments back into the business when they're loss-making.

Worth knowing:

- Loss carry back is for established companies with a franking balance
- The startup refund is for new companies investing in wages and benefits
- Both are claimed through the tax return, not through a separate application
- Good record keeping on franking and PAYG matters more under both measures

If your company is in a position to use either of these, let us know. They're meaningful at the right moment, and easy to miss in a busy year.

[ Previous ](https://blog.incragroup.com.au/the-ev-fbt-wind-back-what-to-do-before-1-april-2027) [Next ](https://blog.incragroup.com.au/rd-tax-incentive-2028-who-wins-who-loses)

### Share Post

[![Share on linkedin](https://7528302.fs1.hubspotusercontent-na1.net/hub/7528302/hubfs/raw_assets/public/mV0_d-web-default-modules_hubspot/img/linkedin-color.png?width=24&name=linkedin-color.png) ](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fblog.incragroup.com.au%2Floss-carry-back-and-startup-refunds-turning-a-bad-year-into-cash%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin)