Form 8835 – Fill Out and Use This PDF

1	Kilowatt-hours produced and sold (see instructions) . . .	0.021
2	Phaseout adjustment (see instructions)	$
3	Credit before reduction. Subtract line 2 from line 1
	Reduction for government grants, subsidized financing, and other credits:

4Total of government grants, proceeds of tax-exempt government obligations, subsidized energy financing,

and any federal tax credits allowed for the project for this and all prior tax years (see instructions) . . .

5Total of additions to the capital account for the project for this and all prior tax years . . . .

6	Divide line 4 by line 5. Show as a decimal carried to at least 4 places
7	Multiply line 3 by line 6
8	Subtract line 7 from line 3

9Part I renewable electricity production credit from partnerships, S corporations, cooperatives,

estates, and trusts . . . . . . . . . . . . . . . . . . . . . . . . . .

10Add lines 8 and 9. Cooperatives, estates, and trusts, go to line 11; partnerships and S corporations,

report this amount on Schedule K; all others, report this amount on Form 3800, line 1f . . . .

11Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions)

12Cooperatives, estates, and trusts. Subtract line 11 from line 10. Report this amount on Form 3800, line 1f

1

2

3

4

5

6

7

8

9

10

11

12

.

	Electricity produced at qualified facilities using wind, closed-loop biomass, geothermal,
	and solar
13	Kilowatt-hours produced and sold (see instructions) . . .	0.021
	Electricity produced at qualified facilities from open-loop biomass, small irrigation power,
	landfill gas, trash, hydropower, and electricity produced from marine and hydrokinetic
	renewables
14	Kilowatt-hours produced and sold (see instructions) . . .	0.011
15	Add lines 13 and 14
16	Phaseout adjustment (see instructions)	$

17Subtract line 16 from line 15 . . . . . . . . . . . . . . . . . . . . . .

Refined coal produced at a qualified refined coal production facility

18 Tons produced and sold (see instructions) . . . . . .

19 Phaseout adjustment (see instructions) . . . . . . . $

20Subtract line 19 from line 18 . . . . . . . . . . . . . . . . . . . . . .

Steel industry fuel produced at a qualified refined coal production facility

21	Barrel-of-oil equivalents produced and sold (see instructions)	$2.00
	Indian coal produced at a qualified Indian coal production facility
22	Tons produced and sold (see instructions)	$1.625
23	Credit before reduction. Add lines 17, 20, 21, and 22
	Reduction for government grants, subsidized financing, and other credits:

24Total of government grants, proceeds of tax-exempt government obligations, subsidized energy financing,

and any federal tax credits allowed for the project for this and all prior tax years (see instructions) . . .

25Total of additions to the capital account for the project for this and all prior tax years . . . .

26	Divide line 24 by line 25. Show as a decimal carried to at least 4 places
27	Multiply line 23 by the smaller of 1/2 or line 26
28	Subtract line 27 from line 23

29Part II renewable electricity, refined coal, and Indian coal production credit from partnerships,

S corporations, cooperatives, estates, and trusts . . . . . . . . . . . . . . . .

30Add lines 28 and 29. Partnerships and S corporations, report this amount on Schedule K; all

others continue to line 31 . . . . . . . . . . . . . . . . . . . . . . .

31Renewable electricity, refined coal, and Indian coal production credit included on line 30 from

	passive activities (see instructions)
32	Subtract line 31 from line 30	. . . . . . . . . . . . . . . . . . . . . .

13
14
15
16
17
18
19
20
21
22
23
24
25
26	.
27
28
29
30
31
32

33Renewable electricity, refined coal, and Indian coal production credit allowed for 2009 from a

	passive activity (see instructions)
34	Carryforward of renewable electricity, refined coal, and Indian coal production credit to 2009 .
35	Carryback of renewable electricity, refined coal, and Indian coal production credit from 2010
	(see instructions)

36Add lines 32 through 35. Cooperatives, estates, and trusts, go to line 37; All others: For electricity or refined coal produced during the 4-year period beginning on the date the facility was placed in service, report the applicable part of this amount on Form 3800, line 29e; for Indian coal produced before 2010 or during the 4-year period beginning on the date the facility was placed in service, report the applicable part of this amount on Form 3800, line 29e; for all

other production of electricity, refined coal, or Indian coal, report the applicable part of this amount on Form 3800, line 1f . . . . . . . . . . . . . . . . . . . . . .

37Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions)

38Cooperatives, estates, and trusts. Subtract line 37 from line 36. For electricity or refined coal produced during the 4-year period beginning on the date the facility was placed in service, report the applicable part of this amount on Form 3800, line 29e; for Indian coal produced before 2010 or during the 4-year period beginning on the date the facility was placed in service, report the applicable part of this amount on Form 3800, line 29e; for all other production of electricity, refined coal, or Indian coal,

report the applicable part of this amount on Form 3800, line 1f . . . . . . . . . . . . .

33

34

35

36

37

38

General Instructions

Section references are to the Internal Revenue Code.

Purpose of Form

Use Form 8835 to claim the renewable electricity, refined coal, and Indian coal production credit. The credit is allowed only for the sale of electricity, refined coal, or Indian coal produced in the United States or U.S. possessions from qualified energy resources at a qualified facility (see Definitions below).

Generally, if you are a taxpayer that is not a partnership or S corporation, and your only source of this credit is from a partnership, S corporation, estate, trust, or cooperative, you are not required to complete Part I of this form. Instead, you can report this credit directly on line 1f of Form 3800. The following exceptions apply.

●You are an estate or trust and the source credit can be allocated to beneficiaries. For more details, see the Instructions for Form 1041, Schedule K-1, box 13.

●You are a cooperative and the source credit can or must be allocated to patrons. For more details, see the Instructions for Form 1120-C, Schedule J, line 5c.

Election To Treat a Qualified Facility as Energy Property

Section 48(a)(5) provides an irrevocable election to treat qualified property (described in section 48(a)(5)(D)) that is part of a qualified investment credit facility (described in section 48(a)(5)(C)) as energy property eligible for the investment credit (reported on Form 3468, Investment Credit) in lieu of a production credit reportable on this form. This election applies to a facility placed in service after 12/31/08, and before 1/1/14, (before 1/1/13 for a wind facility). See Notice 2009-52 and Form 3468, for information on making the election. Notice 2009-52 is available at www.irs.gov/irb/2009-25_IRB/ar09.html.

Coordination with Department of Treasury Grants

If a grant is paid under the American Recovery and 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

section 45, or investment credit under section 48, is allowed for the property for the current tax year or any subsequent tax year. See section 48(d) for more information.

How To Figure the Credit

Generally, the credit for electricity, refined coal, and Indian coal produced from qualified energy resources at a qualified facility during the credit period (see Definitions below) is:

●1.5 cents per kilowatt-hour (kWh) for the sale of electricity produced by the taxpayer;

●1/2 of 1.5 cents for open-loop biomass, small irrigation, landfill gas, trash, hydropower, and marine and hydrokinetic renewable facilities;

●$4.375 per ton for the sale of refined coal produced, see section 45(e)(8)(A);

●$2 per barrel-of-oil equivalent for the sale of steel industry fuel, see section 45(e)(8)(A); or

●$1.50 per ton for the sale of Indian coal produced.

The credit for electricity produced is proportionately phased out over a 3-cent range when the reference price exceeds the

8-cent threshold price. The refined coal credit is proportionately phased out over an $8.75 range when the reference price of fuel used as feedstock exceeds 1.7 times the 2002 reference price. The 1.5-cent credit rate, the

8-cent threshold price, the $4.375 refined coal rate, the reference price of fuel used as a feedstock, the $2 steel industry fuel rate, and the $1.50 Indian coal rate are adjusted for inflation. The reference price and the inflation adjustment factor (IAF) for each calendar year are published during the year in the Federal Register. If the reference price is less than the threshold price (adjusted by the IAF), there is no reduction. For electricity produced, if the reference price is more than 3 cents over the adjusted threshold price, there is no credit; if the reference price is more than the threshold price, but not more than 3 cents over the adjusted threshold price, there is a phaseout adjustment on line 2 or line 16. For refined coal produced, if the reference price is more than $8.75 over the adjusted threshold price, there is no credit; if the reference price is more than the threshold price, but not more than $8.75 over the adjusted threshold price, there is a phaseout adjustment on line 19.

Note. For calendar year 2009, the effective credit rate for electricity, refined coal, and Indian coal produced and sold is, respectively, 2.1 cents per kWh, $6.20 per ton, and $1.625 per ton; there is no phaseout adjustment.

Example. If the reference price of electricity is 10.0¢ and the adjusted threshold price is 9.0¢, reduce the credit by 1/3 ((10.0¢

–9.0¢) 3¢ = .3333). Enter the line 1 credit in the first entry space on line 2, .3333 in the second entry space, and multiply to figure the reduction.

Definitions

Resources means wind, closed-loop biomass, poultry waste, open-loop biomass, geothermal energy, solar energy, small irrigation power, municipal solid waste, hydropower production, marine and hydrokinetic renewables, refined coal, and Indian coal.

Closed-loop biomass is any organic material from a plant that is planted exclusively for use at a qualified facility to produce electricity.

Poultry waste is poultry manure and litter, including wood shavings, straw, rice hulls, and other bedding material for the disposition of manure.

Open-loop biomass is solid, nonhazardous, cellulosic waste material; lignin material; or agricultural livestock waste nutrients as defined in section 45(c)(3). See Notice 2008-60, 2008-30 I.R.B. 178, for rules related to open-loop biomass, including an expanded definition of a qualified facility and rules related to sales.

Geothermal energy is energy derived from a geothermal deposit as defined by section 613(e)(2).

Small irrigation power is power generated without any dam or impoundment of water. See section 45(c)(5).

Municipal solid waste is solid waste as defined under paragraph 27 of 42 U.S.C. 6903.

Refined coal is (1) a liquid, gaseous, or solid fuel produced from coal or high carbon

fly ash meeting the requirements of section 45 (c)(7), or (2) steel industry fuel (defined below).

Steel industry fuel is a fuel that is produced through a process of liquifying coal waste sludge (as defined by section 45(c)(7) (C)(ii)) and distributing it on coal and is used as a feedstock for the manufacture of coke.

Hydropower production means the incremental hydropower production for the tax year from any hydroelectric dam placed in service on or before 8/8/2005 and the hydropower production from any nonhydroelectric dam described in section 45 (c)(8)(C).

Marine and hydrokinetic renewable

energy means energy derived from waves, tides, and currents in oceans, estuaries, and tidal areas; free flowing water in rivers, lakes, and streams; free flowing water in an irrigation system, canal, or other man-made channel, including projects that utilize nonmechanical structures to accelerate the flow of water for electric power production purposes; or differentials in ocean temperature (ocean thermal energy conversion). See section 45(c) (10)(B) for exceptions.

Indian coal means coal which is produced from coal reserves which on 6/14/05 were owned by an Indian tribe or held in trust by the United States for the benefit of an Indian tribe or its members.

Qualified facility is any of the following

facilities owned by the taxpayer and used to produce electricity or, in the case of coal production facilities, refined and Indian coal. The facilities are shown by form section.

Part I

●Poultry waste facility placed in service after 12/31/99 and before 1/1/05.

●Wind facility placed in service after 12/31/93 and before 10/23/04.

●Closed-loop biomass facility placed in service after 12/31/92 and before 10/23/04.

Part II

●Wind facility placed in service after 10/22/04 and before 1/1/13. This does not include any facility for which any qualified small wind energy property expenditure (as defined in section 25D(d)(4)) is used in determining the residential energy efficient property credit.

●Closed-loop biomass facility placed in service after 10/22/04 and before 1/1/14.

●Closed-loop biomass facility modified to

co-fire with coal or other biomass (or both), placed in service before 1/1/14. See section 45 (d)(2).

●Closed-loop biomass facility that is a new unit placed in service after 10/3/08 in connection with a facility described in section 45(d)(2)(A)(i), but only to the extent of the increased amount of electricity produced at the facility by reason of the new unit.

●Open-loop biomass facility using cellulosic waste placed in service before 1/1/14.

●Open-loop biomass facility using agricultural livestock waste placed in service after 10/22/04 and before 1/1/14, and the nameplate capacity rating is not less than 150 kilowatts.

●Open-loop biomass facility that is a new unit placed in service after 10/3/08 in connection with a facility described in section 45(d)(3)(A),

but only to the extent of the increased amount of electricity produced at the facility by reason of the new unit.

●Geothermal energy facility placed in service after 10/22/04 and before 1/1/14.

●Solar energy facility placed in service after 10/22/04 and before 1/1/06.

●Small irrigation power facility placed in service after 10/22/04 and before 10/3/08.

●Landfill gas or trash facility using municipal solid waste placed in service after 10/22/04 and before 1/1/14.

●A refined coal production facility originally placed in service after 10/22/04 and before 1/1/10, or a facility producing steel industry fuel (or any modification to such a facility) placed in service before 1/1/10.

●Hydropower facility producing incremental hydroelectric production attributable to efficiency improvements or additions to capacity described in section 45(c)(8)(B) placed in service after 8/8/05 and before 1/1/14, and any other facility producing qualified hydroelectric production described in section 45(c)(8) placed in service after 8/8/05 and before 1/1/14.

●Indian coal production facility placed in service before 1/1/09.

●Marine and hydrokinetic renewable energy facility placed in service after 10/2/08 and before 1/1/14.

A qualified facility does not include a refined coal production facility or landfill gas facility using municipal solid waste to produce electricity, if the production from that facility is allowed as a credit under section 45K. This does not apply to a refined coal facility producing steel industry fuel.

Credit period is:

●10 years for a wind, poultry waste,

closed-loop biomass (not modified for co-fire purposes), or refined coal production facility, beginning on the date the facility was placed in service.

●10 years for a closed-loop biomass facility modified to co-fire with coal, other biomass, or both, beginning on the date the facility was placed in service, but not earlier than 10/22/04.

●10 years for a hydropower facility, beginning on the date the efficiency improvements or additions to capacity are placed in service.

●7 years for an Indian coal production facility, beginning on the date the facility was placed in service, but not before 1/1/06.

●5 years for an open-loop biomass facility using agricultural livestock waste, geothermal, solar energy, small irrigation power, landfill gas, or trash facility, beginning on the date the facility was placed in service, if placed in service during the period after 10/22/04 and before 8/9/05. The credit period is 10 years if placed in service after 8/8/05.

●5 years for an open-loop biomass facility using cellulosic waste, beginning on the date the facility was placed in service, but not earlier than 1/1/05.

●The period beginning on the later of the date the facility was placed in service, the date the modifications (described in section 45(e)(8)(D)(iii)) were placed in service, or 10/1/08, and ending on the later of 12/31/09, or 1 year after the date the facility or modifications (described in section 45(e)(8)(D)(iii)) were placed in service for steel industry fuel.

United States and U.S. possessions include the seabed and subsoil of those submarine areas that are adjacent to the territorial waters over which the United States has exclusive rights according to international law.

Who Can Take the Credit

Generally, the owner of the facility is allowed the credit. In the case of closed-loop biomass facilities modified to co-fire with coal, other biomass, or both, and open-loop biomass facilities, if the owner is not the producer of the electricity, the lessee or the operator of the facility is eligible for the credit.

Specific Instructions for Part I and Part II

Figure any renewable electricity, refined coal, and Indian coal production credit from your trade or business on lines 1 through 8 or lines 13 through 28. Skip lines 1 through 8 or lines 13 through 28 if you are only claiming a credit that was allocated to you from an S corporation, partnership, cooperative, estate, or trust.

Fiscal year taxpayers. If you have sales in 2009 and 2010 and the credit rate on lines 1, 13, 14, 18, 21, or 22 (or the phaseout adjustment on lines 2, 16, or 19) is different for 2010, make separate computations for each line. Use the respective sales, credit rate, and phaseout adjustment for each calendar year. Enter the total of the two computations on the credit rate line(s) (lines 1, 13, 14, 18, 21, or 22) or the phaseout adjustment line(s) (lines 2, 16, or 19). Attach the computations to Form 8835 and write “FY” in the margin.

Line 1 and Line 13

Enter the kilowatt-hours of electricity produced at qualified facilities and multiply by $.021. Fiscal year filers with 2010 sales may have to refigure lines 1 and 13 as explained under Fiscal year taxpayers above.

If you claimed the credit for a closed-loop biomass facility modified to co-fire with coal, other biomass, or both, after 10/21/04, and before tax year 2007, you should file an amended return to refigure your credit. Use Form 8835 for the applicable tax year to refigure your credit. The additional limitation, based on the thermal content of closed-loop biomass used in the facility and the thermal content of all fuels used in the facility, that applied to these facilities no longer applies. As a result, the credit related to these facilities is figured on line 13.

Line 14

Enter the kilowatt-hours of electricity produced and sold at qualified facilities and multiply by $.011. Fiscal filers with 2010 sales must figure line 14 as explained under Fiscal year taxpayers above.

Line 2 and Line 16

Calendar year filers enter zero on line 2 or line

16.Fiscal year filers with sales in 2010 also enter zero if the published 2010 reference price is equal to or less than the 2010 adjusted threshold price. See How To Figure the Credit on page 2 to figure the adjustment.

Line 18

Enter the tons of refined coal (other than steel industry fuel) produced and sold during 2009 from a qualified refined coal production facility

and multiply by $6.20. Fiscal filers with 2010 sales must figure line 18 as explained under Fiscal year taxpayers on page 3.

Line 19

Calendar year filers enter zero on line 19. Fiscal year filers with sales in 2010 also enter zero if the published 2010 reference price is equal to or less than 1.7 times the 2002 reference price. See How To Figure the Credit on page 2 to figure the adjustment.

Line 21

Enter the barrel-of-oil equivalents of steel industry fuel produced and sold from a qualified refined coal facility and multiply by $2.00.

Line 22

Enter the tons of Indian coal produced and sold from a qualified Indian coal facility and multiply by $1.625.

Line 4 and Line 24

Enter the sum, for this and all prior tax years, of:

●Grants provided by the United States, a state, or political subdivision of a state for the project;

●Proceeds of a tax-exempt issue of state or local government obligations used to provide financing for the project;

●Total of subsidized energy financing provided directly or indirectly under a federal, state, or local program provided for the project; and

●The amount of any federal tax credit allowable for any property that is part of the project.

Line 10 and Line 30

Partnerships that own and produce electricity from qualified wind facilities should see Rev. Proc. 2007-65, 2007-45 I.R.B. 967, for information on how to allocate the credit. Rev. Proc. 2007-65 is available at www.irs.gov/

irb/2007-45_IRB/ar18.html.

Line 31

Enter the amount included on line 30 that is from a passive activity. Generally, a passive activity is a trade or business in which you did not materially participate. Rental activities are generally considered passive activities, whether or not you materially participate. For details, see Form 8582-CR, Passive Activity Credit Limitations (for individuals, trusts, and estates), or Form 8810, Corporate Passive Activity Loss and Credit Limitations (for corporations).

Line 33

Enter the passive activity credit allowed for the 2009 renewable electricity, refined coal, and Indian coal production credit from Form 8582-CR or Form 8810.

Line 35

Use only if you amend your 2009 return to carry back an unused renewable electricity, refined coal, and Indian coal production credit from 2010.

Line 11 and Line 37

Cooperative election to allocate credit to

patrons. A cooperative described in section 1381(a) can elect to allocate any part of the renewable electricity, refined coal, and Indian coal production credit among the patrons of the cooperative. The credit is allocated among the patrons eligible to share in patronage dividends on the basis of the quantity or value of business done with or for such patrons for the tax year.

The cooperative is deemed to have made the election by completing line 11 or line 37, as applicable. However, the election is not effective unless (a) made on a timely filed return (including extensions) and (b) the organization designates the apportionment in a written notice mailed to its patrons during the payment period described in section 1382

(d).

If you timely file your return without making an election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Enter “Filed pursuant to section 301.9100-2” on the amended return.

Once made, the election cannot be revoked.

Estates and trusts. Allocate the credit on line 10 or line 36 between the estate or trust and the beneficiaries in the same proportion as income was allocated and enter the beneficiaries’ share on line 11 or line 37.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for individual taxpayers filing this form is approved under OMB control number

1545-0074 and is included in the estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown below.

Recordkeeping . . . . 11 hr., 57 min.

Learning about the law

or the form . . . . . . . 1 hr., 5 min.

Preparing, copying, assembling, and sending

the form to the IRS . . . 1 hr., 19 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed.