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2013

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

the construction of which begins before January 1, 2014

unless otherwise noted.

(see

Construction of a Qualified

facility, later);

No credit has been allowed under section 45 for that

Future Developments

facility; and

For the latest information about developments related to

An irrevocable election was made to treat the facility as

Form 8835 and its instructions, such as legislation

energy property.

enacted after they were published, go to

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

making the election. Notice 2009-52 is available at

What's New

The American Taxpayer Relief Act of 2012 modified

Coordination with Department of Treasury

section 45 to allow certain qualified facilities whose

Grants

construction begins before 2014 to claim the renewable

If a grant is paid under the American Recovery and

electricity production tax credit (PTC) or the energy

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

investment tax credit (ITC) under section 48, in lieu of the

placing into service specified energy property (described

PTC. Notice 2013-29 provides two methods that a

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

taxpayer may use to establish that the construction of a

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

qualified facility has begun before 2014. Notice 2013-60

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

clarifies Notice 2013-29.

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

information.

General Instructions

You may have to refigure the investment credit and

Purpose of Form

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

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

Use Form 8835 to claim the renewable electricity, refined

credit was allowed for progress expenditures before the

coal, and Indian coal production credit. The credit is

grant was made. Recapture is applicable to those

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

amounts previously included in the qualified basis for an

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

energy credit, including progress expenditures, that are

possessions from qualified energy resources at a qualified

also the basis for the 1603 grant.

facility (see Definitions, later).

Generally, if you are a taxpayer that is not a partnership

How To Figure the Credit

or S corporation, and your only source of this credit is from

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

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

coal produced from qualified energy resources at a

you are not required to complete Part I of this form.

qualified facility during the credit period (see Definitions,

Instead, you can report this credit directly on Form 3800,

later) is:

Part III, line 1f. The following exceptions apply.

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

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

electricity produced by the taxpayer;

allocated to beneficiaries. For more details, see the

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

Instructions for Form 1041, Schedule K-1, box 13.

landfill gas, trash, hydropower, and marine and

You are a cooperative and the source credit can or

hydrokinetic renewable facilities;

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

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

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

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

Election To Treat a Qualified Facility as Energy

The credit for electricity produced is proportionately

Property

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

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

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

is proportionately phased out over an $8.75 range when

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

the reference price of fuel used as feedstock exceeds 1.7

part of a qualified investment credit facility (described in

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

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

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

investment credit (reported on Form 3468, Investment

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

Credit) in lieu of a production credit reportable on this

Indian coal rate are adjusted for inflation. The reference

form. This election applies to a facility that:

price and the inflation adjustment factor (IAF) for each

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

calendar year are published during the year in the Federal

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

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

Nov 18, 2013

Cat. No. 55349M

Instructions For Form 8835 - Renewable Electricity, Refined Coal, And Indian Coal Production Credit - 2013

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