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exceeds the 8-cent threshold price. The refined coal credit

Poultry waste is poultry manure and litter, including

is proportionately phased out over an $8.75 range when

wood shavings, straw, rice hulls, and other bedding

the reference price of fuel used as feedstock exceeds 1.7

material for the disposition of manure.

times the 2002 reference price. The 1.5-cent credit rate,

Open-loop biomass is solid, nonhazardous, cellulosic

the 8-cent threshold price, the $4.375 refined coal rate,

waste material; lignin material; or agricultural livestock

the reference price of fuel used as a feedstock, and the $2

waste nutrients as defined in section 45(c)(3). See Notice

Indian coal rate are adjusted for inflation. The reference

2008-60, 2008-30 I.R.B. 178, for rules related to

price and the inflation adjustment factor (IAF) for each

open-loop biomass, including an expanded definition of a

calendar year are published during the year in the Federal

qualified facility and rules related to sales.

Geothermal energy is energy derived from a

price (adjusted by the IAF), there is no reduction. For

geothermal deposit as defined by section 613(e)(2).

electricity produced, if the reference price is more than 3

cents over the adjusted threshold price, there is no credit;

Small irrigation power is power generated without

if the reference price is more than the threshold price, but

any dam or impoundment of water. See section 45(c)(5).

not more than 3 cents over the adjusted threshold price,

Municipal solid waste is solid waste as defined under

there is a phaseout adjustment on line 2 or line 16. For

paragraph 27 of 42 U.S.C. 6903. For electricity produced

refined coal produced, if the reference price is more than

and sold after January 2, 2013, in tax years ending after

$8.75 over the adjusted threshold price, there is no credit;

January 2, 2013, municipal solid waste does not include

if the reference price is more than the threshold price, but

paper which is commonly recycled and which has been

not more than $8.75 over the adjusted threshold price,

segregated from other solid waste (as so defined).

there is a phaseout adjustment on line 19.

Refined coal is a liquid, gaseous, or solid fuel

Note. For calendar year 2014, the effective credit rate for

produced from coal or high carbon fly ash meeting the

electricity, refined coal, and Indian coal produced and

requirements of section 45(c)(7). See Notice 2010-54 for

sold is, respectively, 2.3 cents per kWh, $6.601 per ton,

additional information on refined coal facilities. Notice

and $2.317 per ton; there is no phaseout adjustment.

2010-54 is available at

Example. If the reference price of electricity is 10.0¢

and the adjusted threshold price is 9.0¢, reduce the credit

Hydropower production means the incremental

by 1/3 ((10.0¢ – 9.0¢) ÷ 3¢ = .3333). Enter the line 1 credit

hydropower production for the tax year from any

in the first entry space on line 2, .3333 in the second entry

hydroelectric dam placed in service on or before August 8,

space, and multiply to figure the reduction.

2005, and the hydropower production from any

nonhydroelectric dam described in section 45(c)(8)(C).

Definitions

Marine and hydrokinetic renewable energy means

Construction of a Qualified Facility

energy derived from waves, tides, and currents in oceans,

Two methods can be used to establish that construction of

estuaries, and tidal areas; free flowing water in rivers,

a qualified facility has begun. One method establishes the

lakes, and streams; free flowing water in an irrigation

system, canal, or other man-made channel, including

beginning of construction by starting physical work of a

projects that utilize nonmechanical structures to

significant nature as described in section 4 of Notice

accelerate the flow of water for electric power production

2013-29. Another method establishes the beginning of

construction by meeting the safe harbor provided in

purposes; or differentials in ocean temperature (ocean

section 5 of Notice 2013-29 as modified by section 5 of

thermal energy conversion). See section 45(c)(10)(B) for

Notice 2014-46. Although both methods can be used, only

exceptions.

one method is needed to establish that construction of a

Indian coal means coal which is produced from coal

qualified facility has begun.

reserves which on June 14, 2005, were owned by an

Indian tribe or held in trust by the United States for the

For more information, see Notice 2013-29, 2013-20

benefit of an Indian tribe or its members.

I.R.B. 1085, as clarified by Notice 2013-60, 2013-42 I.R.B.

Qualified facility is any of the following facilities

431. These notices are clarified and modified by Notice

owned by the taxpayer and used to produce electricity or,

2014-46, 2014-36 I.R.B. 520. Notice 2013-29 is available

in the case of coal production facilities, refined and Indian

coal. The facilities are shown by form section.

, Notice 2013-60

is available at

Part I

, and Notice

2014-46 is available at

Poultry waste facility placed in service after December

31, 1999, and before January 1, 2005.

Resources means wind, closed-loop biomass, poultry

Wind facility placed in service after December 31,

waste, open-loop biomass, geothermal energy, solar

1993, and before October 23, 2004.

energy, small irrigation power, municipal solid waste,

Closed-loop biomass facility placed in service after

hydropower production, marine and hydrokinetic

December 31, 1992, and before October 23, 2004.

renewables, refined coal, and Indian coal.

Part II

Closed-loop biomass is any organic material from a

plant that is planted exclusively for use at a qualified

Wind facility placed in service after October 22, 2004,

facility to produce electricity.

and the construction of which begins before January 1,

-2-

Instructions for Form 8835 (2014)

Instructions For Form 8835 - Renewable Electricity, Refined Coal, And Indian Coal Production Credit - 2014 Page 2

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