Form 8912 Form 8912 Credit to Holders of Tax Credit Bonds

2009 Form 8912, Credit to Holders of Tax Credit Bonds

Purpose: This is the first circulated draft of the 2009 Form 8912 for your review and
comments. See the next page for a discussion of the major changes.
TPCC Meeting: None, but may be arranged if requested.
Prior Version: The 2008 Form 8912 is available at:
http://www.irs.gov/pub/irs-pdf/f8912.pdf
Other Products: Circulations of draft tax forms, instructions, notices, and publications
are posted at: http://taxforms.web.irs.gov/Circulations/index.htm
Comments: Please email, fax, call, or mail any comments to me by August 10, 2009.
Comments submitted by telephone must be followed up in writing to be considered. Send
a copy of any email comments to the form’s reviewer, Sharon Dewsbury, at
[email protected]
D. Jeffrey Buchanan
Tax Forms and Publications
SE:W:CAR:MP:T:B:C
Email: [email protected]
Phone: 202-622-3085
Fax: 202-622-3262

Memo of Major Changes for 2009 Form 8912, Credits to Holders of Tax Credit
Bonds

In Part I, we added line 9 so the carryforward of credits from qualified tax credit bonds
and build America bonds from 2008 could be reported on the form. Since the first year
these specific credits could be calculated was 2008, the 2009 form is the first year that
will have a carryforward line. All subsequent line number references on the form and
instructions that are affected by this change have been updated as appropriate.
On updated line 16, the items reported on 2008’s lines 15b, 15c, 15d, and 15e have been
combined and are now reported on line 16b. In addition, line 16b list additional credits.
This conforms to the way the reporting of these credits is handled on similar credit forms.
The subsequent lettered lines that make up line 16 have been updated as appropriate.
In the instructions, we eliminated the “What’s New” sections, as the information is no
longer new. We added specific instructions for new line 9.

Version A, Cycle 2

Form

8912

OMB No. 1545-2025

Credit to Holders of Tax Credit Bonds

Department of the Treasury
Internal Revenue Service

© Attach

2009

Attachment
Sequence No. 154
Identifying number

to your tax return.

Name(s) shown on return

Part I
1
2
3

Current Year Credit

Bond issuer’s name, city or town, and state
Date bond issued . . . . . . . . .
Date bond disposed of (if applicable) . . .
(a)
Principal payment dates (or for build
America bonds, interest payment dates)

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(b)
Outstanding bond
principal (or for build
America bonds,
interest payable)

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(c)
Credit
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(d)
Multiply
(b) x (c)

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(e)

(f)
Multiply
(d) x (e)

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DRAFT AS OF
July 7, 2009

5

Add the amounts on line 4, column (f)

6

For a new clean renewable energy bond or a qualified energy conservation bond, multiply the
amount on line 5 by 70% (.70). For a clean renewable energy bond, Gulf tax credit bond,
Midwestern tax credit bond, qualified forestry conservation bond, qualified zone academy bond,
qualified school construction bond, or build America bond, enter the amount from line 5. See the
instructions for how to report as interest income . . . . . . . . . . . . . . . . .
Enter the line 6 amount from page 1 of Form 8912 for each additional bond, if more than one (see
instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Bond credits from partnerships, S corporations, estates, and trusts
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Carryforward of credits for qualified tax credit bonds and build America bonds to 2009 (see instructions) . .
Total credit. Add lines 6 through 9. Estates and trusts figuring the credit for a clean renewable
energy bond, Gulf tax credit bond, or Midwestern tax credit bond, go to line 11; partnerships and
S corporations, report this amount on Schedule K; all others, go to Part II
. . . . . . . .

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Amount allocated to the beneficiaries of the estate or trust (see instructions) . . . .
Estates and trusts. Subtract line 11 from line 10. Use this amount to complete Part II

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 37722B

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Form 8912 (2009)

Version A, Cycle 2
Page 2

Form 8912 (2009)

Part II
13

Allowable Credit

Regular tax before credits:
● Individuals. Enter the amount from Form 1040, line 44 or Form 1040NR, line 41 . . . .
● Corporations. Enter the amount from Form 1120, Schedule J, line 2, or the applicable line of
your return . . . . . . . . . . . . . . . . . . . . . . . . . . .
● Estates and trusts. Enter the sum of the amounts from Form 1041, Schedule G, lines 1a and
1b, or the amount from the applicable line of your return . . . . . . . . . . . .

%

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%

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Alternative minimum tax:
● Individuals. Enter the amount from Form 6251, line 36 . . . . . . .
● Corporations. Enter the amount from Form 4626, line 14
. . . . . .
● Estates and trusts. Enter the amount from Schedule I (Form 1041), line 56 .
15
Add line 13 and line 14 . . . . . . . . . . . . . . . . . .
16a Foreign tax credit . . . . . . . . . . . . . . . . . . 16a
b Credits from Form 1040, lines 48 through 52 (or Form 1040NR,
lines 45 through 48); Form 8859, line 11; Form 8834, lines 22 and
29; Form 8910, line 21; Form 8911, line 23; Form 8936, line 14;
and Schedule R, line 24 . . . . . . . . . . . . . . . . 16b

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DRAFT AS OF
July 7, 2009

c General business credit (see instructions) . . . . . . . . . .
d Credit for prior year minimum tax (Form 8801, line 27; or Form 8827,
line 8b)
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Add lines 16a through 16d . . . . . . .
Net income tax. Subtract line 16e from line 15 .

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16e
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Credit to holders of tax credit bonds allowed for the current year. Enter the smallest of line
10, line 17, or the amount as limited by the formula in the instructions for line 18 (if line 18 is
smaller than line 10, see instructions). Estates and trusts, enter the smallest of line 12, line 17, or
the amount as limited by the formula in the instructions for line 18 (if line 18 is smaller than line 12,
see instructions). Report this amount on Form 1040, line 53 or Form 1040NR, line 49; Form 1120,
Schedule J, line 5e; Form 1041, Schedule G, line 3; or the applicable line of your return . . . .

General Instructions
Section references are to the Internal Revenue
Code unless otherwise noted.

Purpose of Form
Use Form 8912 to claim the credit for the
following tax credit bonds.
● Clean renewable energy bond (CREB).
● Gulf tax credit bond (GTCB).
● Midwestern tax credit bond (MTCB).
● Qualified forestry conservation bond
(QFCB).
● New clean renewable energy bond
(NCREB).
● Qualified energy conservation bond (QECB).
● Qualified zone academy bond (QZAB).
● Qualified school construction bond (QSCB).
● Build America bond (BAB).
Generally, in lieu of receiving periodic
interest payments from the issuer, the holder
of the bond is allowed an annual income tax
credit. The credit compensates the holder for
lending money to the issuer and functions as
interest paid on the bond. Build America bond
holders receive taxable interest from the
issuer in addition to being allowed an annual
income tax credit.
Note. Beginning in 2008, holders of QZABs
who previously figured their credit on Form
8860, Qualified Zone Academy Bond Credit,
must now use Form 8912 to figure their credit.
Form 8860 has been obsoleted for tax years
beginning after 2007.

Who Can Claim the Credits
A taxpayer holding a CREB, GTCB, MTCB, or
qualified tax credit bond (a qualified tax credit
bond does not include a QZAB issued before
October 4, 2008) on 1 or more credit
allowance dates can claim the credit by filing
Form 8912 for each tax year in which it holds
the bond on a credit allowance date.
Generally, the credit allowance dates are:
● March 15,
● June 15,
● September 15, and
● December 15.
The credit allowance date also includes the
last day on which the qualified tax credit bond
is outstanding.
Holders of QZABs issued before October 4,
2008. An eligible taxpayer holding a QZAB on
the credit allowance date can claim the credit
by filing Form 8912. To be an eligible
taxpayer, the taxpayer must be a bank,
insurance company, or other corporation
actively engaged in the business of lending
money. In addition, the shareholder of an
S corporation may claim the credit from an
S corporation that is an eligible taxpayer. The
credit allowance date is the last day of: (a)
the 1-year period beginning on the date the
bond was issued and (b) each successive
1-year period thereafter. See section 1397E
(as in effect on October 3, 2008).
QZABs issued after October 3,
2008, are considered qualified tax
credit bonds and the rules of
section 54E apply.

18

Holders of BABs. A taxpayer holding a BAB
on an interest payment date can claim the
credit by filing Form 8912. An interest
payment date is any date on which the
bondholder of record is entitled to a payment
of interest under the bond.

Definitions
CREB. A CREB is any bond issued after 2005
and before 2010 by a qualified issuer, the
proceeds of which are used for capital
expenditures incurred by a qualified
borrower for a qualified project. In addition,
the bond must be designated by the issuer as
a CREB under section 54. An issuer can make
such a designation only if it applied for and
received a CREB allocation from the IRS.
A qualified issuer is either a:
● Cooperative electric company—a mutual or
cooperative electric company described in
section 501(c)(12) or 1381(a)(2)(C), or a notfor-profit electric utility that has received a
loan or loan guarantee under the Rural
Electrification Act,
● Clean renewable energy bond lender—a
lender that is a cooperative which is owned
by, or has outstanding loans to, 100 or more
cooperative electric companies and is in
existence on February 1, 2002, and including
any affiliated entity which is controlled by
such lender, or
● Governmental body—any state, territory,
possession of the United States, the District
of Columbia, Indian tribal government, and
any political subdivision thereof.

Version A, Cycle 2
Page 3

Form 8912 (2009)

A qualified borrower is a mutual or
cooperative electric company described in
section 501(c)(12) or 1381(a)(2)(C), or a
governmental body.
A qualified project is any qualified facility
(as determined under section 45(d) without
regard to paragraph (10) and to any placed in
service date) owned by a qualified borrower.
GTCB. A GTCB is any bond with a maturity of
not more than 2 years that was issued after
2005 and before 2007 by the state of
Alabama, Louisiana, or Mississippi, and
designated by the governor of that state as a
Gulf tax credit bond. At least 95% of the
proceeds of the bond must be used to pay
principal, interest, or premiums on qualified
bonds issued by that state or any political
subdivision thereof, or to make a loan to any
political subdivision thereof to pay principal,
interest, or premiums on a qualified bond
issued by that subdivision.
A qualified bond for purposes of the GTCB
credit means any obligation of a state or
political subdivision which was outstanding
on August 28, 2005. This term does not
include any private activity bond, any bond for
which there is any outstanding refunded or
refunding bond during the period a GTCB is
outstanding for such bond, or any bond
issued as part of an issue if any portion of the
proceeds of such issue was (or is to be) used
to provide any property described in section
144(c)(6)(B).
MTCB. An MTCB is any bond with a maturity
of not more than 2 years that was issued after
2008 and before 2010 by any state in which a
Midwestern disaster area is located or any
instrumentality of the state as a Midwestern
tax credit bond. At least 95% of the proceeds
of the bond must be used to pay principal,
interest, or premiums on qualified bonds
issued by that state or any political
subdivision, or to make a loan to any political
subdivision to pay principal, interest, or
premiums on a qualified bond issued by that
subdivision. A qualified bond for purposes of
the MTCB credit means any obligation of a
state or political subdivision which was
outstanding on the earliest applicable disaster
date for Midwestern disaster areas within the
state. This term does not include any private
activity bond, any bond for which there is any
outstanding refunded or refunding bond
during the period an MTCB is outstanding for
such bond, or any bond issued as part of an
issue if any portion of the proceeds of such
issue was (or is to be) used to provide any
property described in section 144(c)(6)(B).
Qualified tax credit bond. A qualified tax
credit bond means a qualified forestry
conservation bond, new clean renewable
energy bond, qualified energy conservation
bond, qualified zone academy bond, or
qualified school construction bond that is a
part of an issue that meets the requirements
of section 54A(d)(2), (3), (4), (5), and (6).
QFCB. A QFCB is any bond issued after May
22, 2008, by a qualified issuer as a qualified
forestry conservation bond and 100% of the
available project proceeds are used for one or
more qualified forestry conservation
purposes.
A qualified issuer for purposes of the
QFCB is a state or any political subdivision or
instrumentality thereof, or a 501(c)(3)
organization (as defined in section 150(a)(4)).

Qualified forestry conservation purpose
means the acquisition by a qualified issuer
from an unrelated person of forest and forest
land that meets the following qualifications.
● Some portion of the land acquired must be
adjacent to the United States Forest Service
Land.
● At least half of the land acquired must be
transferred to the United States Forest
Service at no net cost to the United States
and not more than half of the land acquired
may either remain with or be conveyed to a
State.
● All of the land must be subject to a native
fish habitat conservation plan approved by
the United States Fish and Wildlife Service.
● The amount of acreage acquired must be at
least 40,000 acres.
NCREB. An NCREB is any bond issued after
October 3, 2008, by a qualified issuer as a
new clean renewable energy bond and 100%
of the available project proceeds are used for
capital expenditures incurred by
governmental bodies, public power providers,
or cooperative electric companies for one or
more qualified renewable energy facilities.
A qualified issuer is a public power
provider, a cooperative electric company, a
governmental body, a clean renewable energy
bond lender, or a not-for-profit electric utility
that has received a loan or loan guarantee
under the Rural Electrification Act.
A clean renewable energy bond lender is
a lender that is a cooperative that is owned
by, or has outstanding loans to, 100 or more
cooperative electric companies and is in
existence on February 1, 2002, and shall
include any affiliated entity that is controlled
by that lender.
A cooperative electric company is a
mutual or cooperative electric company
described in section 501(c)(12) or section
1381(a)(2)(C).
A governmental body is any state or Indian
tribal government, or any political subdivision
thereof.
A public power provider is a state utility
with a service obligation, as defined in section
217 of the Federal Power Act (as in effect on
October 3, 2008).
A qualified renewable energy facility is a
qualified facility (as determined under section
45(d) without regard to paragraphs (8) and
(10) thereof and to any placed in service date)
owned by a public power provider, a
governmental body, or a cooperative electric
company.
QECB. A QECB is any bond issued after
October 3, 2008, by a state or local
government as a qualified energy
conservation bond and 100% of the available
project proceeds are used for one or more
qualified conservation purposes. See section
54D(f) for the definition of qualified
conservation purposes.
QZAB. A QZAB is any bond issued by a state
or local government as a qualified zone
academy bond and 100% of the available
project proceeds are used to improve certain
eligible public schools (for QZABs issued
before October 4, 2008, 95% of the available
project proceeds are used to improve certain
eligible public schools).

QSCB. A QSCB is any bond issued after
February 17, 2009, by a state or local
government as a qualified school construction
bond and 100% of the available project
proceeds are for the construction,
rehabilitation, or repair of a public school
facility or for the acquisition of land on which
the bond-financed facility is to be
constructed.
BAB. A BAB is any bond (other than a private
activity bond) issued after February 17, 2009,
and before January 1, 2011, by an issuer who
makes an irrevocable election to have the
rules of section 54AA apply and except for
that election, the interest on the bond would
have been excludable under section 103.

DRAFT AS OF
July 7, 2009

Specific Instructions
Separate entries and calculations are required
for each bond with a different issuance date
or a different credit rate.

Part I—Current Year Credit
Line 3

Enter the date the bond was redeemed, sold,
or otherwise disposed of.

Line 4, Column (b)
Enter the face amount of the CREB, GTCB,
MTCB, qualified tax credit bond, or QZAB
(issued before October 4, 2008) minus any
payment of principal received. For a BAB,
enter the amount of interest payable.

Line 4, Column (c)
The credit rate for the CREB, GTCB, MTCB,
qualified tax credit bond, and QZAB (issued
before October 4, 2008) is the rate published
on the Treasury Direct website under “IRS Tax
Credit Bond Rates” at:
www.treasurydirect.gov/govt/rates/
rates_irstcb.htm for the first day on which
there is a binding contract in writing for the
sale or exchange of the bond.
The credit rate for QZABs issued before
July 1, 1999, is 110% of the long-term
applicable federal rate (AFR), compounded
annually, for the month and year the bond is
issued. The IRS announces the long-term AFR
monthly in a series of revenue rulings
published in the Internal Revenue Bulletin.
The credit rate for a BAB is 35%.

Line 4, Column (e)
Generally, enter 25% for each credit
allowance date you hold a CREB, GTCB,
MTCB, or qualified tax credit bond during
your tax year. Enter 100% for a BAB, or a
QZAB issued before October 4, 2008.
Example. Your tax year begins December
1, 2009, and ends November 30, 2010. You
were issued a GTCB on March 16, 2010, and
held it through the end of the tax year ending
November 30, 2010. You would enter 50%
computed as follows.
Credit allowance date

%

June 15, 2010
September 15, 2010

25
25
50

Version A, Cycle 2
Page 4

Form 8912 (2009)

However, the 25% will be prorated if a
CREB, GTCB, MTCB, or qualified tax credit
bond is issued, redeemed, or matures during
the 3-month period ending on a credit
allowance date. The percentage of credit
allowed for that credit allowance date is
prorated for the number of days the bond was
outstanding during the 3-month period.
Example. Your tax year begins December
1, 2009, and ends November 30, 2010. You
were issued a CREB on March 24, 2010.
Since the bond was not held for the entire
3-month period ending on June 15, 2010, the
prorated portion of the 25% is figured by
dividing (a) the number of days the bond was
outstanding beginning on the date the bond
was issued and ending on the next credit
allowance date by (b) the number of days
included in the 3-month period beginning on
the day after the credit allowance date and
ending on the next credit allowance date. See
below.
84 days (number of
days from March 24
through June 15)
92 days (number of
days from March 16
through June 15)

Line 7
If you have more than one tax credit bond,
attach an additional page 1 of Form 8912 for
each additional bond showing the information
for lines 1 through 6. Combine the line 6
amount from page 1 of Form 8912 for each
additional bond and enter the total on line 7.

Line 9
Enter the amount of the credit carryforward
from 2008 that is attributable to a qualified tax
credit bond or a BAB. Credits attributable to a
CREB, GTCB, MTCB, or QZAB (issued before
October 4, 2008) cannot be carried forward.

Line 17 x

Taxable income attributable to your
interest in the pass-through entity
Your taxable income for the year

If in the current tax year you had no taxable
income attributable to a particular interest in a
pass-through entity, you cannot claim any
CREB, GTCB, or MTCB credit this year for
that interest.
All taxpayers (other than estates and
trusts). For line 18, add the line 8 credits
separately figured for each interest in a passthrough entity (as limited by the formula
above for each such interest) to the total
credit on line 6. Enter on line 18 the smaller of
this result or the amount on line 17.
Estates and trusts. For line 18, add the
line 8 credits (excluding any amount allocated
to beneficiaries) separately figured for each
interest in a pass-through entity (as limited by
the formula above for each such interest) to
the total credit on line 6 (excluding any
amount allocated to beneficiaries). Enter on
line 18 the smaller of this result or the amount
on line 17.

DRAFT AS OF
July 7, 2009
Line 11

Estates and trusts. Allocate the CREB,
GTCB, or MTCB credit on line 10 between the
estate or trust and the beneficiaries in the
same proportion as income was allocated and
enter the beneficiaries share on line 11.

Part II—Allowable Credit

= .913 x 25% = 23%

The credit allowed for the current year may be
limited based on your tax liability. Use Part II
to figure the allowable credit.

Line 16c

You would enter 48% computed as follows.
Credit allowance date
June 15, 2010

%
23

September 15, 2010

25
48

Line 4, Column (f)
This amount is the income tax credit to the
holder of a tax credit bond.

Line 6
Interest Income
The current year credit on line 6 is deemed to
be a payment of qualified stated interest (as
defined in Regulations section 1.1273-1(c))
and as such is treated as taxable interest
income paid on the credit allowance date, or
for BABs, the interest payment date. If the
holder is on the accrual method, the holder
must accrue the credit amount as taxable
interest income on the credit allowance date
or interest payment date.
If a holder of a tax credit bond sells the
bond between credit allowance dates (or for
BABs, interest payment dates), part of the
sales price is treated as accrued interest to
the date of the sale and must be reported as
interest income. If a holder purchases a bond
between credit allowance dates or interest
payment dates, the interest accrued as of the
date of the purchase (as reflected in the
purchase price) is not included as interest
when the purchaser receives the value of the
credit (and the deemed payment of interest)
on the next credit allowance date or interest
payment date. Instead, the payment of the
deemed interest is treated as a return of
capital to the extent of the accrued interest at
the time of purchase and reduces the holder’s
basis in the bond.

If you are filing Form 3800, General Business
Credit, enter the credit from Form 3800.

Line 18
If you do not have an entry space for these
credits on your tax return, enter the allowable
credit on the “Total credits” line with the
applicable notation (for example, “CREB” or
“QECB”).
Holders of an MTCB, a GTCB, a CREB, or a
QZAB (issued before October 4, 2008). If
you cannot use all of the credit from Part I
because of the tax liability limit (for example,
line 18 is smaller than line 10), you can deduct
the unused credit for the current tax year.
However, you can choose to deduct the
unused credit in the next tax year instead of
the current tax year.
Because a current year deduction may
further reduce the tax liability limit, you may
need to refigure the tax liability limit and the
unallowed credit. Refigure the unallowed
credit until it equals the deduction. It may be
necessary to use the “trial and error” method.
Holders of a qualified tax credit bond or a
BAB. If you cannot use all of the credit from
Part I (for example, line 18 is smaller than line
10), you may carry the unused portion of the
credit to the next tax year and add it to any
credit allowable to the holder of the same
bond in the next tax year. A holder of a
qualified tax credit bond or BAB cannot
deduct any unused credit.
Limitation on credit from pass-through
entities. For a CREB, GTCB, or MTCB from a
pass-through entity (partnership, S
corporation, estate, or trust), the credit on line
8 is limited to the amount of tax attributable to
your taxable income from your interest in the
pass-through entity generating the credit.
Figure the credit limitation separately for each
interest in a pass-through entity using the
following formula:

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 . . . . 7 hr., 24 min.
Learning about the
law or the form . . . . 1 hr., 59 min.
Preparing and sending
the form to the IRS . . . 2 hr., 11 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.