In this study, the influences of the applied magnetic field and fluid elasticity were investigated for a nonlinear viscoelastic fluid obeying the Carreau equation between concentric annulus where the inner cylinder rotates at a constant angular velocity and the outer cylinder is stationary. The governing motion and energy balance equations are coupled while viscous dissipation is taken into account, adding complexity to the already highly correlated set of differential equations. The numerical solution is obtained for the narrow gap limit and steady-state base flow. Magnetic field effect on local entropy generation due to steady two-dimensional laminar forced convection flow was investigated. This study was focused on the entropy generation characteristics and its dependency on various dimensionless parameters. The effects of the Hartmann number, the Brinkman number, the Deborah number, and the fluid elasticity on the stability of the flow were investigated. The application of the magnetic field induces a resistive force acting in the opposite direction of the flow, thus causing its deceleration. Moreover, the study shows that the presence of magnetic field tends to slowdown the fluid motion and thus increases the fluid temperature. However, the total entropy generation number decreases as the Hartmann number and fluid elasticity increase and it increases with increasing Brinkman number.