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2014

Department of the Treasury

Internal Revenue Service

Instructions for Form 8835

Renewable Electricity, Refined Coal, and Indian Coal Production Credit

Section references are to the Internal Revenue Code

investment credit (reported on Form 3468, Investment

unless otherwise noted.

Credit) in lieu of a production credit reportable on this

form. This election applies to a facility that:

Future Developments

Is a qualified facility under section 45(d)(1), (2), (3), (4),

For the latest information about developments related to

(6), (7), (9), or (11) that is placed in service after 2008 and

Form 8835 and its instructions, such as legislation

the construction of which begins before January 1, 2015

enacted after they were published, go to

(see

Construction of a Qualified

Facility, later);

No credit has been allowed under section 45 for that

facility; and

What's New

An irrevocable election was made to treat the facility as

The Tax Increase Prevention Act of 2014 has made the

energy property.

following changes.

See Notice 2009-52 and Form 3468, for information on

The credit period for Indian coal produced at a qualified

making the election. Notice 2009-52 is available at

Indian coal production facility has been extended to a

9-year period for Indian coal produced at a qualified

Indian coal facility placed in service before 2009.

Coordination with Department of Treasury

To claim the renewable electricity production tax credit

Grants

(PTC), the construction of a qualified facility must begin

If a grant is paid under the American Recovery and

before 2015. For more information, see

Construction of a

Reinvestment Act of 2009 (the Act), section 1603, for

Qualified

Facility, later.

placing into service specified energy property (described

The election to treat qualified facilities as energy

in Act section 1603(d)), no production credit under section

property for the energy investment tax credit (ITC) was

45, or investment credit under section 48, is allowed for

extended. For more information, see

Election To Treat a

the property for the tax year in which the grant is made or

Qualified Facility as Energy

Property, later.

any subsequent tax year. See section 48(d) for more

information.

General Instructions

You may not partition the basis of property for which a

Purpose of Form

section 1603 award was received and claim a production

credit under section 45 or investment credit under section

Use Form 8835 to claim the renewable electricity, refined

48 for any part of the basis of that property. However, you

coal, and Indian coal production credit. The credit is

must reduce the basis of the specified energy property by

allowed only for the sale of electricity, refined coal, or

50% of the amount of the actual section 1603 payment.

Indian coal produced in the United States or U.S.

You may have to refigure the investment credit and

possessions from qualified energy resources at a qualified

recapture all or a portion of it if a grant under section 1603

facility (see Definitions, later).

of the Act was made for section 48 property for which a

Partnerships and S corporations must file this form to

credit was allowed for progress expenditures before the

claim the credit. All others are generally not required to

grant was made. Recapture is applicable to those

complete or file this form if their only source for this credit

amounts previously included in the qualified basis for an

is a partnership, S corporation, estate, trust, or

energy credit, including progress expenditures, that are

cooperative. Instead, they can report this credit directly on

also the basis for the 1603 grant.

Form 3800, General Business Credit. The following

How To Figure the Credit

exceptions apply.

You are an estate or trust and the source credit can be

Generally, the credit for electricity, refined coal, and Indian

allocated to beneficiaries. For more details, see the

coal produced from qualified energy resources at a

instructions for Form 1041, Schedule K-1, box 13, code J.

qualified facility during the credit period (see Definitions,

You are a cooperative and the source credit can or

later) is:

must be allocated to patrons. For more details, see the

1.5 cents per kilowatt-hour (kWh) for the sale of

instructions for Form 1120-C, Schedule J, line 5c.

electricity produced by the taxpayer;

1/2 of 1.5 cents for open-loop biomass, small irrigation,

Election To Treat a Qualified Facility as Energy

landfill gas, trash, hydropower, and marine and

Property

hydrokinetic renewable facilities;

Section 48(a)(5) provides an irrevocable election to treat

$4.375 per ton for the sale of refined coal produced; or

qualified property (described in section 48(a)(5)(D)) that is

$2 per ton for the sale of Indian coal produced.

part of a qualified investment credit facility (described in

The credit for electricity produced is proportionately

section 48(a)(5)(C)) as energy property eligible for the

phased out over a 3-cent range when the reference price

Feb 10, 2015

Cat. No. 55349M

Instructions For Form 8835 - Renewable Electricity, Refined Coal, And Indian Coal Production Credit - 2014

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