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2011

Department of the Treasury

Internal Revenue Service

Instructions for Form 8835

Renewable Electricity, Refined Coal, and Indian Coal Production Credit

Coordination with Department of Treasury

Section references are to the Internal Revenue Code unless

otherwise noted.

Grants

If a grant is paid under the American Recovery and

What’s New

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

placing into service specified energy property (described

•

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

The carryforwards, carrybacks, and passive activity

section 45, or investment credit under section 48, is

limitations for this credit are no longer reported on this

allowed for the property for the current tax year or any

form; instead, they must be reported on Form 3800,

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

General Business Credit.

information.

•

The IRS has created a page on IRS.gov for information

about Form 8835 and its instructions at

How To Figure the Credit

form8835. Information about any future developments

Generally, the credit for electricity, refined coal, and

affecting Form 8835 (such as legislation enacted after we

Indian coal produced from qualified energy resources at

release it) will be posted on that page.

a qualified facility during the credit period (see

Definitions, later) is:

•

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

General Instructions

electricity produced by the taxpayer;

•

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

Purpose of Form

landfill gas, trash, hydropower, and marine and

hydrokinetic renewable facilities;

Use Form 8835 to claim the renewable electricity, refined

•

$4.375 per ton for the sale of refined coal produced,

coal, and Indian coal production credit. The credit is

see section 45(e)(8)(A);

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

•

$2 per barrel-of-oil equivalent for the sale of steel

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

industry fuel, see section 45(e)(8)(D); or

possessions from qualified energy resources at a

•

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

qualified facility (see Definitions, later).

The credit for electricity produced is proportionately

Generally, if you are a taxpayer that is not a

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

partnership or S corporation, and your only source of this

exceeds the 8-cent threshold price. The refined coal

credit is from a partnership, S corporation, estate, trust,

credit is proportionately phased out over an $8.75 range

or cooperative, you are not required to complete Part I of

when the reference price of fuel used as feedstock

this form. Instead, you can report this credit directly on

exceeds 1.7 times the 2002 reference price. The 1.5-cent

Form 3800, Part III, line 1f. The following exceptions

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

apply.

coal rate, the reference price of fuel used as a feedstock,

•

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

the $2 steel industry fuel rate, and the $2 Indian coal rate

allocated to beneficiaries. For more details, see the

are adjusted for inflation. The reference price and the

inflation adjustment factor (IAF) for each calendar year

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

are published during the year in the Federal Register. If

•

You are a cooperative and the source credit can or

the reference price is less than the threshold price

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

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

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

produced, if the reference price is more than 3 cents over

the adjusted threshold price, there is no credit; if the

Election To Treat a Qualified Facility as

reference price is more than the threshold price, but not

Energy Property

more than 3 cents over the adjusted threshold price,

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

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

refined coal produced, if the reference price is more than

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

$8.75 over the adjusted threshold price, there is no

is part of a qualified investment credit facility (described

credit; if the reference price is more than the threshold

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

price, but not more than $8.75 over the adjusted

investment credit (reported on Form 3468, Investment

threshold price, there is a phaseout adjustment on

Credit) in lieu of a production credit reportable on this

line 19.

form. This election applies to a facility placed in service

after December 31, 2008, and before January 1, 2014,

Note. For calendar year 2011, the effective credit rate

(before January 1, 2013 for a wind facility). See Notice

for electricity, refined coal, steel industry fuel, and Indian

2009-52 and Form 3468, for information on making the

coal produced and sold is, respectively, 2.2 cents per

election. Notice 2009-52 is available at

kWh, $6.33 per ton, $2.89 per barrel-of-oil equivalent,

irb/2009-25_IRB/ar09.html.

and $2.20 per ton; there is no phaseout adjustment.

Nov 28, 2011

Cat. No. 55349M

Instructions For Form 8835 - Renewable Electricity, Refined Coal, And Indian Coal Production Credit - 2011

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