Form 1097-BTC, Bond Tax Credit

2010

Department of the Treasury
Internal Revenue Service

Instructions for Form
1097-BTC
Section references are to the Internal Revenue Code unless
otherwise noted.

What’s New
Issuers of certain tax credit bonds use Form 1097-BTC to
report tax credits to the bond holders and the IRS. Bond
holders who receive a Form 1097-BTC also use Form
1097-BTC to report tax credits passed to another person.
Because Form 1097-BTC is new, reporting is voluntary
for 2010. Reporting will be mandatory for 2011. The 2011
Form 1097-BTC will likely allow for the reporting of
credits in aggregate rather than bond-by-bond as is the
case for 2010.

Reminder
In addition to these specific instructions, you should also
use the 2010 General Instructions for Certain Information
Returns (Forms 1098, 1099, 3921, 3922, 5498, and
W-2G). Those general instructions include information
about the following topics.
• Backup withholding.
• Electronic reporting requirements.
• Penalties.
• Who must file (nominee/middleman).
• When and where to file.
• Taxpayer identification numbers.
• Statements to recipients.
• Corrected and void returns.
• Other general topics.
You can get the general instructions at IRS.gov or by
calling 1-800-TAX-FORM (1-800-829-3676).

Specific Instructions
Issuers of certain tax credit bonds (or their agents) and
nominees/intermediaries (such as a broker, a
partnership, a trust, an estate, a regulated investment
company, or a real estate investment trust) must file a
separate Form 1097-BTC for each tax credit distributed
from the following tax credit bonds issued after January
1, 2010.
• Qualified forestry conservation bonds.
• New clean renewable energy bonds.
• Qualified energy conservation bonds.
• Qualified zone academy bonds.
• Qualified school construction bonds.
• Clean renewable energy bonds.
• Midwestern tax credit bonds.
• Build America bonds (tax credit).
For tax credit bonds issued as serial bonds, each bond
must be reported on a separate Form 1097-BTC.
Note. Issuers that have elected to issue specified tax
credit bonds under section 6431(f) to receive a
refundable credit under section 6431(a) in lieu of tax
credits under section 54A should not file Form 1097-BTC.

Definitions
Tax credit bond. Generally a tax credit bond is an
obligation issued under section 54, 54A, 54AA, or
1400N(l) that entitles the taxpayer holding such bond on
one or more credit allowance dates occurring during any
tax year to a credit against the federal income tax
imposed for that tax year.
Qualified tax credit bond. Qualified tax credit bonds
under section 54A are qualified forestry conservation
bonds under section 54B, new clean renewable energy
bonds under section 54C, qualified energy conservation
bonds under section 54D, qualified zone academy bonds
under section 54E, and qualified school construction
bonds under section 54F.
Qualified forestry conservation bond. An obligation
that is part of an issue 100 percent of the available
project proceeds of which are used to finance one or
more qualified forestry conservation purposes, as defined
in section 54B.
New clean renewable energy bond. An obligation that
is part of an issue 100 percent of the available project
proceeds of which are to be used for capital expenditures
incurred by governmental bodies, public power providers,
or cooperative electric companies for one or more
qualified renewable energy facilities, as defined in section
54C.
Qualified energy conservation bond. An obligation
that is part of an issue 100 percent of the available
project proceeds of which are to be used for one or more
qualified energy conservation purposes, as defined in
section 54D.
Qualified zone academy bond. An obligation that is
part of an issue 100 percent of the available project
proceeds of which are to be used for a qualified purpose
with respect to a qualified zone academy established by
an eligible local education agency, as provided in section
54E.
Qualified school construction bond. An obligation
that is part of an issue 100 percent of the available
project proceeds of which are to be used for the
construction, rehabilitation, or repair of a public school
facility or for the acquisition of land on which such a
facility is to be constructed with the proceeds, as
provided in section 54F.
Clean renewable energy bond. An obligation that is
part of an issue 95 percent of the proceeds of which are
used for capital expenditures incurred by qualified
borrowers for one or more qualified projects as defined in
section 54.
Midwestern tax credit bond. An obligation that is part
of an issue of bonds issued in connection with
Midwestern disaster areas in any state in which a
Midwestern disaster area is located. See section
1400N(l) for more information about these requirements.

Cat. No. 54657F

Build America bond (tax credit). An obligation issued
by a state or local government (excluding private activity
bonds under section 141) as defined in section 54AA(d).

Penalties for Failure To File
There are penalties for failure to file correct information
returns by the due date and for failure to furnish correct
payee statements. See part O in the 2010 General
Instructions for Certain Information Returns for details.
The failure to file Forms 1097-BTC also includes the
requirement to file electronically. For more information on
penalties for failure to file electronically, see part F in the
2010 General Instructions for Certain Information
Returns.

Who Must File
File Form 1097-BTC, Bond Tax Credit, for each person
who is allowed a tax credit as a holder, directly or
indirectly, of a tax credit bond or a stripped credit coupon
on one or more credit allowance dates during the tax
year in an amount of at least $10.
The tax credit from tax credit bonds or stripped credit
coupons is allowed on each credit allowance date for
which the bond was outstanding or to which the stripped
credit coupon corresponds. The credit allowance dates
are March 15, June 15, September 15, December 15,
and the last day on which the bond is outstanding. For
bonds issued during the 3-month period ending on a
credit allowance date, the amount of the credit is
determined ratably based on the portion of the 3-month
period during which the bond is outstanding. The same
ratable determination of credit applies when a bond is
redeemed or matures.

Filing Form 1097-BTC is voluntary for 2010.
Penalties are not applicable for failure to file
CAUTION
correct information returns by the due date and
for failure to furnish correct payee statements.

!

Statement to Recipient
If required to file Form 1097-BTC you must provide a
statement to the recipient quarterly and separately for
each credit amount indicated and for each bond type, on
or before the 15th day of the 2nd calendar month after
the close of the calendar quarter in which the credit was
issued. For more information about the requirement to
furnish a statement to the recipient, see part M in the
2010 General Instructions for Certain Information
Returns.

The tax credit allowed to holders of any tax credit
bonds or stripped credit coupons is treated as interest
which is included in gross income and must be reported
as interest income on a Form 1099-INT or Form
1099-OID, as applicable. For more information on
reporting the tax credit treated as interest income as paid
from tax credit bonds, see the Instructions for Forms
1099-INT and 1099-OID.

Form 1097-BTC Issuer’s Name, Address,
and Telephone Number
Enter the name, street address, city, state and ZIP code,
and telephone number of the entity issuing the Form
1097-BTC.
Enter the entity’s true name (as set forth in the legal
documents creating it). Enter the address of the entity’s
principal office or place of business. Include the suite,
room, or other unit number after the street address. If the
post office does not deliver mail to the street address and
the entity has a P.O. box, show the box number instead.
Note. Do not use the address of the registered agent for
the state in which the entity is incorporated. For example,
if a business is incorporated in Delaware or Nevada and
the corporation’s principal office is located in Little Rock,
AR, the corporation should enter the Little Rock address.
If the entity receives its mail in care of a third party
(such as an accountant or an attorney), enter for the
street address “C/O” followed by the third party’s name
and street address or P.O. box.

Exceptions to reporting. No Form 1097-BTC is
required to be filed for distribution of tax credits from tax
credit bonds to exempt recipients or for interest excluded
from reporting.
Exempt recipients. You are not required to file
Form 1097-BTC for tax credits distributed to certain
payees, including but not limited to tax-exempt
organizations, any IRA, Archer MSA, or health savings
account (HSA), a U.S. agency, a state, the District of
Columbia, or a U.S. possession. A complete list of
exempt recipients can be found in section 6049(b)(4) and
Regulations section 1.6049-4(c) with the exception that
you are required to file Form 1097-BTC for tax credits
distributed to the following holders of tax credit bonds or
stripped credit coupons:
• A corporation,
• A dealer in securities or commodities required to
register as such under the laws of the United States, a
state, the District of Columbia, or a possession of the
United States,
• A real estate investment trust as defined in section
856,
• An entity registered at all times during the tax year
under the Investment Company Act of 1940,
• A common trust fund as defined in section 584(a), or
• Any trust which is exempt from tax under section
664(c).

Form 1097-BTC Issuer’s Federal
Identification Number
Enter the Form 1097-BTC Issuer’s federal identification
number, such as an employer identification number
(EIN). An issuer that does not have an EIN should apply
for one. See Form SS-4, Application for Employer
Identification Number.

Recipient’s Federal Identification Number
Enter the federal identification number, such as an EIN or
social security number, of the recipient of the distributed
(or stripped) credit from the tax credit bond.

For more information, see sections 6049(d)(8) and
6049(d)(9).

Recipient’s Name

When to File

Enter the name of the recipient of the distributed (or
stripped) credit from the tax credit bond. If not an
individual, enter the entity’s true name (as set forth in the
legal documents creating it).

File Form 1097-BTC with the IRS by February 28, 2011
(March 31, 2011, if filed electronically). See Statement to
Recipient, below, for furnishing statements to recipients.
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Instructions for Form 1097-BTC (2010)

Recipient’s Street Address (Including Apt.
No.)

Box 1c. CUSIP No
Enter the CUSIP (Committee on Uniform Securities
Identification Procedures) number of each bond. If the
issue does not have a CUSIP number, write, “None.” If
the issue either has no CUSIP number or is privately
placed, attach a schedule with each purchaser’s EIN,
name, and address. For tax credit bonds issued as bonds
with multiple maturities, each bond with a separate
maturity must be reported on a separate 1097-BTC.

Enter the street address, city, state and ZIP code of the
recipient’s principal office or place of business. Include
the suite, room, or other unit number after the street
address. If the post office does not deliver mail to the
street address and the entity has a P.O. box, show the
box number instead.
Note. Do not use the address of the registered agent for
the state in which the recipient is incorporated.

Box 2. Code
Identify the type of tax credit bond issued by entering the
corresponding three digit code.
• 101–Qualified forestry conservation bond.
• 102–New clean renewable energy bond.
• 103–Qualified energy conservation bond.
• 104–Qualified zone academy bond.
• 105–Qualified school construction bond.
• 106–Clean renewable energy bond.
• 107–Midwestern tax credit bond.
• 108–Other.
• 109–Build America bond.

If the recipient receives its mail in care of a third party
(such as an accountant or an attorney), enter for the
street address “C/O” followed by the third party’s name
and street address or P.O. box.

Bond Issuer’s Name
Enter the name of the entity issuing the tax credit bond
from which the credit is being distributed. The name of
the entity issuing the tax credit bond should be identical
to the name of the issuer listed on Form 8038-TC,
Information Return for Tax Credit Bonds, Part I, line 1.

Box 3. Stated Principal
Enter the outstanding face amount of the bond.

Bond Issuer’s Employer Identification
Number

Box 4a. March 15, 2010 Allowance Date
Credit

Enter the employer identification number (EIN) of the
entity issuing the tax credit bond from which the credit is
being distributed. The EIN of the entity issuing the tax
credit bond should be identical to the EIN listed on Form
8038-TC, Part I, line 2.

Enter the credit amount distributed to the recipient with
respect to this allowance date.

Box 4b. June 15, 2010 Allowance Date Credit
Enter the credit amount distributed to the recipient with
respect to this allowance date.

Box 1a. Bond Issue Date
Enter the issue date of the bond. The issue date should
be identical to the issue date listed on Form 8038-TC,
Part I, line 7. The issue date generally is the date on
which the issuer receives the purchase price in exchange
for delivery of the evidence of indebtedness (for example,
a bond). In no event is the issue date earlier than the first
day on which interest begins to accrue on the bond for
federal income tax purposes. See Regulations section
1.150-1(b).

Box 4c. September 15, 2010 Allowance Date
Credit

Box 1b. Maturity Date

Box 5.

Enter the maturity date of the bond. The final maturity
date is the last day the issuer must redeem the entire
issue. This date should be identical to the final maturity
date entered on Form 8038-TC, Part III, line 3.

Check as applicable whether you are the issuer of the
bond or its agent filing the initial 2010 Form 1097-BTC for
the bond or are an entity that received a 2010 Form
1097-BTC for this bond.

Enter the credit amount distributed to the recipient with
respect to this allowance date.

Box 4d. December 15, 2010 Allowance Date
Credit
Enter the credit amount distributed to the recipient with
respect to this allowance date.

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