Instructions For Form 1097-Btc - Bond Tax Credit

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

STEP 1. For each recipient, multiply the outstanding face

the annual Form 1097-BTC and 4

quarter reporting

amount of the qualified tax credit bond, clean renewable

period, October to December, due to recipient by

energy bond, or qualified zone academy bond issued

February 16 and to the IRS by February 29, 2016 (March

before October 4, 2008, by the applicable credit rate. The

31, 2016, if filed electronically), enter 25% of the credit

outstanding face amount of the bond is the face amount of

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

the bond minus any payment of principal received. The

credit amount determined in STEP 1 in box 1.

credit rate for the qualified tax credit bond, clean

renewable energy bond, or qualified zone academy bond

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

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

allowance date if a clean renewable energy bond or

the Treasury Direct website under “IRS Tax Credit Bond

qualified tax credit bond is issued, redeemed, or matures

Rates” at

during the 3-month period ending on a credit allowance

rates_irstcb.htm

for the first day on which there is a

date with respect to which you are reporting the credit.

binding contract in writing for the sale or exchange of the

The percentage of credit allowed for that credit allowance

bond.

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

outstanding during the 3-month period.

The credit rate for qualified zone academy bonds

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

Example. You issued a qualified energy conservation

applicable federal rate (AFR), compounded annually, for

bond on March 23, 2015. Since the bond was not

the month and year the bond is issued. The IRS

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

announces the long-term AFR monthly in a series of

2015, the pro-rated portion of the 25% is figured by

revenue rulings published in the Internal Revenue Bulletin.

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

Go to enter "AFR" in the search box; then

beginning on the day after the date the bond was issued

click on "Applicable Federal Rates" in the Top

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

Recommendation area to access the index. The online

number of days included in the 3-month period beginning

index is posted back to January 2000.

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

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

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

See below.

the amount of interest payable with respect to the interest

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

sending a statement to the credit recipient. Enter the

84 days (number of days from

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

March 24 through June 15)

month in which the interest payment date occurred. Thus,

= .913 X 25% = 23%

if the interest payment dates for a build America bond are

92 days (number of days from

June 30 and December 31, enter the credit amounts in

March 16 through June 15)

boxes 5f and 5l.

Thus, for each credit allowance date with respect to the

For qualified zone academy bonds issued before

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

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

box 5 that corresponds to the credit allowance date.

or matured, you would multiply the credit allowance by the

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

pro-rated percentage. In the example above, for the 2

the same amount in box 1.

quarter reporting period, due to recipient by August 17,

you would enter the amount determined by multiplying

STEP 2. For qualified tax credit bonds or clean

23% with the credit amount determined in STEP 1 in

renewable energy bonds only, multiply the credit amount

box 5f. You would carry the same percentage to the Total

so determined in STEP 1 by 25% for each credit

annual credit reported in box 1 for the annual/4

quarter

allowance date you hold a qualified tax credit bond or

reporting period filed with the IRS and sent to the

clean renewable energy bond during your taxable year.

recipient. Thus, in the example above, you would enter in

Enter the credit amount determined in STEP 2 in the box

box 1 (73%) of the amount determined in STEP 1.

for the month in which the credit allowance date occurred.

Example. You issued a qualified energy conservation

Note. For new clean renewable energy bonds issued

bond on March 16, 2015. For the Form 1097-BTC

under section 54C and qualified energy conservation

statement for the 2

quarter reporting period, April to

bonds issued under section 54D, report the credit amount

June, due to recipient by August 17, you would enter 25%

after the 70% limit has been applied.

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

Box 6. Comments

1097-BTC statement for the 3

quarter reporting period,

July to September, due to recipient by November 16, you

Enter any additional information.

-4-

Instructions for Form 1097-BTC (2015)

Instructions For Form 1097-Btc - Bond Tax Credit - 2015 Page 4

Related Articles

Related forms

Related Categories