Form 8835 Renewable Electricity and Refined Coal Production Credit

Form

8835

Department of the Treasury
Internal Revenue Service

Renewable Electricity, Refined Coal,
and Indian Coal Production Credit
©

2009

Attachment

Attach to your tax return.

Sequence No. 95
Identifying number

Name(s) shown on return

Part I

OMB No. 1545-1362

Electricity Produced at Qualified Facilities Placed in Service Prior to October 23, 2004

1
2
3

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

4

Total 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) . . .

5
6
7
8
9

Total of additions to the capital account for the project for this and all prior tax years . . . .
Divide line 4 by line 5. Show as a decimal carried to at least 4 places . . . . . . . . .
Multiply line 3 by line 6 . . . . . . . . . . . . . . . . . . . . . . . .
Subtract line 7 from line 3 . . . . . . . . . . . . . . . . . . . . . . .
Part I renewable electricity production credit from partnerships, S corporations, cooperatives,
estates, and trusts . . . . . . . . . . . . . . . . . . . . . . . . . .
Add 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 . . . .
Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions)

10
11
12

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

Part II

13

14
15
16
17
18
19
20
21
22
23

.

3 0.021
3
. . . .

Electricity produced at qualified facilities using wind, closed-loop biomass, geothermal,
and solar
Kilowatt-hours produced and sold (see instructions) . . .
3 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
Kilowatt-hours produced and sold (see instructions) . . .
3 0.011
Add lines 13 and 14 . . . . . . . . . . . . . . . . . . . . . . . . .
$
3
Phaseout adjustment (see instructions) . . . . . . .
Subtract line 16 from line 15
. . . . . . . . . . . . . . . . . . . . . .
Refined coal produced at a qualified refined coal production facility
Tons produced and sold (see instructions) . . . . . .
3 $6.20
$
3
Phaseout adjustment (see instructions) . . . . . . .
Subtract line 19 from line 18
. . . . . . . . . . . . . . . . . . . . . .
Steel industry fuel produced at a qualified refined coal production facility
Barrel-of-oil equivalents produced and sold (see instructions)
3 $2.00
Indian coal produced at a qualified Indian coal production facility
Tons produced and sold (see instructions) . . . . . .
3 $1.625
Credit before reduction. Add lines 17, 20, 21, and 22 . . . . . . . . . . . . . .
Reduction for government grants, subsidized financing, and other credits:
Total 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) . . .

25
26
27
28
29

Total of additions to the capital account for the project for this and all prior tax years . . . .
Divide line 24 by line 25. Show as a decimal carried to at least 4 places . . . . . . . .
Multiply line 23 by the smaller of 1/2 or line 26 . . . . . . . . . . . . . . . . .
Subtract line 27 from line 23
. . . . . . . . . . . . . . . . . . . . . .
Part II renewable electricity, refined coal, and Indian coal production credit from partnerships,
S corporations, cooperatives, estates, and trusts . . . . . . . . . . . . . . . .
Add lines 28 and 29. Partnerships and S corporations, report this amount on Schedule K; all
others continue to line 31 . . . . . . . . . . . . . . . . . . . . . . .
Renewable electricity, refined coal, and Indian coal production credit included on line 30 from
passive activities (see instructions) . . . . . . . . . . . . . . . . . . . .
Subtract line 31 from line 30
. . . . . . . . . . . . . . . . . . . . . .

31
32

4
5
6
7
8

.

9
10
11
12

Electricity and Refined Coal Produced at Qualified Facilities Placed in Service After
October 22, 2004 (After October 2, 2008, for Electricity Produced From Marine and Hydrokinetic
Renewables), and Indian Coal Produced at Facilities Placed in Service After August 8, 2005

24

30

1
2
3

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 14954R

13

14
15
16
17
18
19
20
21
22
23

24
25
26
27
28

.

29
30
31
32
Form 8835 (2009)

Form 8835 (2009)

33
34
35

Page

Renewable electricity, refined coal, and Indian coal production credit allowed for 2009 from a
passive activity (see instructions) . . . . . . . . . . . . . . . . . . . . .
Carryforward of renewable electricity, refined coal, and Indian coal production credit to 2009 .
Carryback of renewable electricity, refined coal, and Indian coal production credit from 2010
(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . .

33
34
35

36

Add 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 . . . . . . . . . . . . . . . . . . . . . .

37
38

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

36
37

Cooperatives, 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 . . . . . . . . . . . . .

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.

2

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¢) 4 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

Form

8835

(2009)

Page 3

Form 8835 (2009)

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

Page 4

Form 8835 (2009)

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.