Instructions For Form 1097-Btc - Bond Tax Credit

outstanding face amount of the bond is the face amount of

in STEP 1 in box 5l and 75% of the credit amount

the bond minus any principal that has been paid. The

determined in STEP 1 in box 1.

credit rate for the qualified tax credit bond, clean

However, the 25% will be pro-rated for any credit

renewable energy bond, or qualified zone academy bond

allowance date if a clean renewable energy bond or

issued before October 4, 2008, is the rate published on

qualified tax credit bond is issued, redeemed, or matures

the Treasury Direct website under “IRS Tax Credit Bond

during the 3-month period ending on a credit allowance

Rates” at

date with respect to which you are reporting the credit.

rates_irstcb.htm

for the first day on which there is a

The percentage of credit allowed for that credit allowance

binding contract in writing for the sale or exchange of the

date is pro-rated for the number of days the bond was

bond.

outstanding during the 3-month period.

The credit rate for qualified zone academy bonds

Example. You issued a qualified energy conservation

issued before July 1, 1999, is 110% of the long-term

bond on March 23, 2017. Since the bond was not

applicable federal rate (AFR), compounded annually, for

outstanding for the entire 3-month period on June 15,

the month and year the bond is issued. The IRS

2017, the pro-rated portion of the 25% is figured by

announces the long-term AFR monthly in a series of

dividing (a) the number of days the bond was outstanding

revenue rulings published in the Internal Revenue Bulletin.

beginning on the day after the date the bond was issued

For build America bonds (Tax Credit), multiply by 35%

and ending on the next credit allowance date by (b) the

the amount of interest payable with respect to the interest

number of days included in the 3-month period beginning

payment date for which you are filing Form 1097-BTC or

on the day after the prior (March 15) credit allowance date

sending a statement to the credit recipient. Enter the

and ending on the next (June 15) credit allowance date.

credit amount so determined in boxes 5a–5l for the month

See below.

in which the interest payment date occurred. Thus, if the

interest payment dates for a build America bond are June

30 and December 31, enter the credit amounts in boxes 5f

84 days (number of days from

and 5l.

March 24 through June 15)

= 0.913 X 25% = 23%

For qualified zone academy bonds issued before

92 days (number of days from

October 4, 2008, enter the amount so determined in the

March 16 through June 15)

box 5 that corresponds to the credit allowance date.

When filing the annual Form 1097-BTC with the IRS, enter

Thus, for each credit allowance date with respect to the

the same amount in box 1.

3-month period in which the bond was issued, redeemed,

STEP 2. For qualified tax credit bonds or clean

or matured, you would multiply the credit amount

renewable energy bonds only, multiply the credit amount

determined in STEP 1 by the pro-rated percentage. In the

so determined in STEP 1 by 25% for each credit

example above, for the 2

quarter reporting period, due to

allowance date you hold a qualified tax credit bond or

recipient by August 15, you would enter the amount

clean renewable energy bond during your taxable year.

determined by multiplying 23% with the credit amount

Enter the credit amount determined in STEP 2 in the box

determined in STEP 1 in box 5f. You would carry the same

for the month in which the credit allowance date occurred.

percentage to the Total annual credit reported in box 1 for

the annual/4

quarter reporting period filed with the IRS

Example. You issued a qualified energy conservation

and sent to the recipient. Thus, in the example above, you

bond on March 15, 2016. For the Form 1097-BTC

would enter in box 1 (73%) of the amount determined in

statement for the June 15, 2017, credit allowance date,

STEP 1.

due to recipient by August 15, you would enter 25% of the

amount computed in STEP 1 in box 5f. For the Form

Note. For new clean renewable energy bonds issued

1097-BTC statement for the September 15, 2017, credit

under section 54C and qualified energy conservation

allowance date, due to recipient by November 15, you

bonds issued under section 54D, report the credit amount

would enter 25% of amount computed in STEP 1 in 5i. For

after the 70% limit has been applied.

the annual Form 1097-BTC and December 15, 2017,

credit allowance date, due to recipient by February 15 and

Box 6. Comments

to the IRS by February 28, 2018 (April 2, 2018, if filed

Enter any additional information.

electronically), enter 25% of the credit amount determined

-4-

Instructions for Form 1097-BTC (2017)

Instructions For Form 1097-Btc - Bond Tax Credit - 2017 Page 4

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