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
▶

See separate instructions.

▶

OMB No. 1545-1362

2011

Attachment
Sequence No. 95

Attach to your tax return.

Identifying number

Name(s) shown on return

Part I

Electricity Produced at Qualified Facilities Placed in Service Before 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 . . . . . . . . . . . . . . . . . . . . . . . . . .

10

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

11
12

.

× 0.022
×
. . . .

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

Part II

13
a
b
c
d
e

a
b
c
d
e
f
g

15
16
17
18
19
20

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

(a)
Kilowatt-hours produced
Electricity produced at qualified
and sold (see instructions)
facilities using:
Wind . . . . . . . .
13a
Closed-loop biomass . . .
13b
Geothermal . . . . . .
13c
Solar . . . . . . . .
13d
Add column (c) of lines 13a through 13d and enter here
. . .

(c)
Column (a) ×
Column (b)

(b)
Rate

0.022
0.022
0.022
0.022
. . .

.

.

(a)
Kilowatt-hours produced
and sold (see instructions)

14

1
2
3

(b)
Electricity produced at qualified
Rate
facilities using:
0.011
Open-loop biomass . . .
14a
0.011
Small irrigation power . . .
14b
0.011
Landfill gas . . . . . .
14c
0.011
Trash . . . . . . . .
14d
0.011
Hydropower . . . . . .
14e
Marine and hydrokinetic
renewables . . . . . .
0.011
14f
Add column (c) of lines 14a through 14f and enter here . . . . . . . .
Add lines 13e and 14g . . . . . . . . . . . . . . . . . .
$
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) . . . . . .
$
Phaseout adjustment (see instructions) . . . . . . .
Subtract 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)

22
23

Indian coal produced at a qualified Indian coal production facility
Tons produced and sold (see instructions) . . . . . .
Credit before reduction. Add lines 17, 20, 21, and 22 . . . . . .

For Paperwork Reduction Act Notice, see separate instructions.

.

.

.

.

.

.

13e

.
.

.
.

.

.

14g
15
16
17

.

(c)
Column (a) ×
Column (b)

.
.

.
.

.

.

. .
. .
×
. .

.

× $6.33
×
. . . .

18
19
20

× $2.89

21

× $2.20
. . . .

22
23

.

.

.

Cat. No. 14954R

Form 8835 (2011)

Form 8835 (2011)

Page

2

Reduction for government grants, subsidized financing, and other credits:
24

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 . . . . . . . . . . . . . . . .

30

31
32

24
25
26
27
28

.

29

Add lines 28 and 29. Cooperatives, estates, and trusts, go to line 31. Partnerships and S
corporations, report this amount on Schedule K. All others: For electricity, refined coal, or Indian
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 4e. For all other production of
electricity, refined coal, or Indian coal, report the applicable part of this amount on Form 3800,
line 1f (see instructions) . . . . . . . . . . . . . . . . . . . . . . . .
Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions)

30
31

Cooperatives, estates, and trusts, subtract line 31 from line 30. For electricity, refined coal, or Indian
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 4e. For all other production of electricity, refined
coal, or Indian coal, report the applicable part of this amount on Form 3800, line 1f . . . . . .

32
Form

8835

(2011)

2011

Instructions for Form 8835

Department of the Treasury
Internal Revenue Service

Renewable Electricity, Refined Coal, and Indian Coal Production Credit
Section references are to the Internal Revenue Code unless
otherwise noted.

What’s New
• The carryforwards, carrybacks, and passive activity

limitations for this credit are no longer reported on this
form; instead, they must be reported on Form 3800,
General Business Credit.
• The IRS has created a page on IRS.gov for information
about Form 8835 and its instructions at www.irs.gov/
form8835. Information about any future developments
affecting Form 8835 (such as legislation enacted after we
release it) will be posted on that page.

General Instructions
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, later).
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
Form 3800, Part III, line 1f. 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 December 31, 2008, and before January 1, 2014,
(before January 1, 2013 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.
Nov 28, 2011

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, later) 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)(D); or
• $2 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 $2 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 2011, the effective credit rate
for electricity, refined coal, steel industry fuel, and Indian
coal produced and sold is, respectively, 2.2 cents per
kWh, $6.33 per ton, $2.89 per barrel-of-oil equivalent,
and $2.20 per ton; there is no phaseout adjustment.

Cat. No. 55349M

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.

Part I
• Poultry waste facility placed in service after December
31, 1999, and before January 1, 2005.
• Wind facility placed in service after December 31,
1993, and before October 23, 2004.
• Closed-loop biomass facility placed in service after
December 31, 1992, and before October 23, 2004.

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). See Notice 2010-54 for additional
information on refined coal facilities. Notice 2010-54 is
available at www.irs.gov/irb/2010-40_IRB/ar07.html.
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 August
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 June 14, 2005, 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 II
• Wind facility placed in service after October 22, 2004,

and before January 1, 2013. 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
October 22, 2004, and before January 1, 2014.
• Closed-loop biomass facility modified to co-fire with
coal or other biomass (or both), placed in service before
January 1, 2014. See section 45(d)(2).
• Closed-loop biomass facility that is a new unit placed
in service after October 3, 2008, 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 January 1, 2014.
• Open-loop biomass facility using agricultural livestock
waste placed in service after October 22, 2004, and
before January 1, 2014, and the nameplate capacity
rating is not less than 150 kilowatts.
• Open-loop biomass facility that is a new unit placed in
service after October 3, 2008, 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
October 22, 2004, and before January 1, 2014.
• Solar energy facility placed in service after October 22,
2004, and before January 1, 2006.
• Small irrigation power facility placed in service after
October 22, 2004, and before October 3, 2008.
• Landfill gas or trash facility using municipal solid waste
placed in service after October 22, 2004, and before
January 1, 2014.
• A refined coal production facility originally placed in
service after October 22, 2004, and before January 1,
2012, or a facility producing steel industry fuel (or any
modification to such a facility) placed in service before
January 1, 2010. See Notice 2010-54 for more
information on refined coal facilities and modifications to
those facilities.
• 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 August 8,
2005, and before January 1, 2014, and any other facility
producing qualified hydroelectric production described in
section 45(c)(8) placed in service after August 8, 2005,
and before January 1, 2014.
• Indian coal production facility placed in service before
January 1, 2009.
• Marine and hydrokinetic renewable energy facility
placed in service after October 2, 2008, and before
January 1, 2014.
A qualified facility does not include a refined coal
production facility or landfill gas facility using municipal
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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.

Wind

10

10

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 2011 and
2012 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 2012, 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.

Closed-loop
biomass

10

10

Line 1 and Line 13

Credit Period.
Credit period for
facilities placed in
service before
August 9, 2005
Eligible electricity (years from
production
placed-in-service
activity:
date):

Credit period for
facilities placed in
service after
August 8, 2005
(years from
placed-in-service
date):

Enter the kilowatt-hours of electricity produced at the
applicable qualified facilities and multiply by $.022. Fiscal
year filers with 2012 sales may have to refigure lines 1
and 13 as explained under Fiscal year taxpayers above.

Open-loop biomass
(including
agricultural
livestock waste
nutrient facilities)

51

10

Line 14

Geothermal

5

10

Solar (pre-2006
facilities only)

5

10

Enter the kilowatt-hours of electricity produced and sold
at the applicable qualified facilities and multiply by $.011.
Fiscal year filers with 2012 sales must figure line 14 as
explained under Fiscal year taxpayers above.

5

10

Small irrigation
power
Municipal solid
waste (including
landfill gas facilities
and trash
combustion
facilities)

Calendar year filers enter zero on line 2 or line 16. Fiscal
year filers with sales in 2012 also enter zero if the
published 2012 reference price is equal to or less than
the 2012 adjusted threshold price. See How To Figure
the Credit on page 1 to figure the adjustment.
5

10

N/A

10

Marine and
hydrokinetic

N/A

10

Indian coal

N/A

7

Refined coal

10

10

Steel industry fuel

N/A

1

Qualified
hydropower

Line 2 and Line 16

Line 18
Enter the tons of refined coal (other than steel industry
fuel) produced and sold during 2011 from a qualified
refined coal production facility and multiply by $6.33.
Fiscal year filers with 2012 sales must figure line 18 as
explained under Fiscal year taxpayers above.

Line 19
Calendar year filers enter zero on line 19. Fiscal year
filers with sales in 2012 also enter zero if the published
2012 reference price is equal to or less than 1.7 times the
2002 reference price. See How To Figure the Credit on
page 1 to figure the adjustment.

The 5-year credit period for qualified open-loop biomass facilities
(other than a facility described in section 45(d)(3)(A)(i) that uses
agricultural livestock waste nutrients) placed in service before
October 22, 2004, begins on January 1, 2005.
1

Line 21

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.

Enter the barrel-of-oil equivalents of steel industry fuel
produced and sold from a qualified refined coal facility
and multiply by $2.89.

Who Can Take the Credit

Enter the tons of Indian coal produced and sold from a
qualified Indian coal facility and multiply by $2.20.

Line 22

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, open-loop
biomass facilities, and refined coal facilities, if the owner
is not the producer of the electricity, the lessee or the
operator of the facility is eligible for the credit.

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

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
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• The amount of any federal tax credit allowable for any

Estates and trusts. Allocate the credit on line 10 or line
30 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 31.
If the estate or trust is subject to the passive activity
rules, include on line 9 any Part I renewable electricity
production credit and on line 29 any Part II renewable
electricity, refined coal, and Indian coal production credit
from passive activities disallowed for prior years and
carried forward to this year. Complete Form 8582-CR,
Passive Activity Credit Limitations, to determine the
allowed credit that must be allocated between the estate
or trust and the beneficiaries. For details, see the
Instructions for Form 8582-CR.

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, as modified by Announcement
2009-69, 2009-40 I.R.B. 475, for information on how to
allocate the credit. Rev. Proc. 2007-65 is available at
www.irs.gov/irb/2007-45_IRB/ar18.html and
Announcement 2009-69 is available at
www.irs.gov/irb/2009-40_IRB/ar16.html.

Line 11 and Line 31
Cooperative election to allocate credit to patrons. A
cooperative described in section 1381(a) that is more
than 50 percent owned by agricultural producers or by
entities owned by agricultural producers 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.
If the cooperative is subject to the passive activity
rules, include on line 9 any Part I renewable electricity
production credit and on line 29 any Part II renewable
electricity, refined coal, and Indian coal production credit
from passive activities disallowed for prior years and
carried forward to this year. Complete Form 8810,
Corporate Passive Activity Loss and Credit Limitations, to
determine the allowed credits that can be allocated to
patrons. For details, see the Instructions for Form 8810.
The cooperative is deemed to have made the election
by completing line 11 or line 31, 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.

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 . . . . . . . . . . . . . . . . . . . . . . . 16 hr., 44 min.
Learning about the law or the form . . . . . . . . 2 hr., 47 min.
Preparing and sending the form to the IRS . . 3 hr., 10 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.

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