Notice 2010-30

Part III. Administrative, Procedural, and Miscellaneous
Transitional Guidance for
Taxpayers Claiming Relief
Under the Military Spouses
Residency Relief Act for
Taxable Year 2009
Notice 2010–30
I. PURPOSE
This notice grants certain civilian
spouses of active duty members of the
uniformed services (servicemembers), as
defined under 10 U.S.C. § 101(a)(5), an
extension of time through October 15,
2010 for paying the amount of tax shown
or required to be shown on a federal income tax return for the taxable year that
includes November 11, 2009 (this will
generally be the calendar year 2009 and
is referred to hereinafter as “2009”). This
extension is granted with respect to civilian spouses of servicemembers (civilian
spouses) who: (1) were away from their
residence or domicile (tax residence) in a
State or the District of Columbia during
2009 solely to be with a servicemember
spouse serving in compliance with military
orders at a military duty station in American Samoa, Guam, the Northern Mariana
Islands, Puerto Rico, or the U.S. Virgin
Islands (hereinafter, a “U.S. territory”);
and (2) maintained their tax residence in
a State or the District of Columbia for
2009 under MSRRA. As discussed in Part
III(A)(2) of this notice, the extension to
pay tax provided in this notice does not
apply to civilian spouses claiming tax residence in a State or the District of Columbia
who are (1) federal employees in American Samoa, Guam, or the U.S. Virgin
Islands (USVI), or (2) individuals working
in Guam or the Northern Mariana Islands
(NMI) to whom section 935 applies.
Certain taxpayers who worked in a
State or the District of Columbia during
2009 and who claim tax residence in a
U.S. territory under MSRRA for 2009 may
apply for a refund of federal income taxes
that the taxpayer’s employer withheld and
remitted to the Internal Revenue Service
(IRS) or estimated tax payments that the
taxpayer paid to the IRS during 2009. This
notice provides guidance and procedures
for submitting claims for refund of fed-

May 3, 2010

eral income taxes to civilian spouses who:
(1) were away from their tax residence
in the U.S. territories during 2009 solely
to be with a servicemember spouse serving in compliance with military orders at
a military duty station in a State or the
District of Columbia; and (2) maintained
their tax residence in the U.S. territories
for 2009 under MSRRA. As discussed in
Part III(B)(2), the procedures set forth in
this notice do not apply to certain civilian
spouses claiming tax residence in Guam,
the NMI, or the USVI.
II. BACKGROUND
MSRRA was signed into law on
November 11, 2009 and applies retroactively to 2009 as well as to subsequent
taxable years. MSRRA amends the Servicemembers Civil Relief Act, 50 U.S.C.
App. § 501 et seq., to provide a civilian
spouse with rights similar to those afforded
to the servicemember when the civilian
spouse accompanies the servicemember
serving at a duty station on military orders
within one of the 50 States, the District of
Columbia, or a U.S. territory.
Although it does not explicitly amend
any provision of the Internal Revenue
Code (Code), MSRRA nonetheless may
have the effect of modifying the application of certain provisions of the Code with
respect to federal income tax withholding, source of income, and residency for a
civilian spouse who claims relief under the
tax provisions of MSRRA and who was
employed in a State, the District of Columbia, or a U.S. territory. MSRRA provides
in relevant part that a civilian spouse shall
neither lose nor acquire tax residence by
reason of being absent or present in any
tax jurisdiction of the United States (defined in 50 U.S.C. App. §§ 511 and 571
to include the 50 States, the District of
Columbia, and a commonwealth, territory,
or possession of the United States) solely
to be with the servicemember serving in
compliance with military orders if the tax
residence is the same for the servicemember and civilian spouse. See MSRRA,
§ 3. Accordingly, pursuant to MSRRA,
a civilian spouse may maintain tax residence other than where the civilian spouse
is physically present while accompanying

650

the servicemember to a military duty station.
MSRRA also provides that income
for services performed by the civilian
spouse in a tax jurisdiction of the United
States shall not be deemed to be income
for services performed or from sources
within that tax jurisdiction if the civilian
spouse is not a resident or domiciliary of
the jurisdiction in which the income is
earned because the civilian spouse is in
the jurisdiction solely to be with the servicemember serving in compliance with
military orders. See MSRRA, § 3. Consequently, the civilian spouse claiming the
benefits of MSRRA may not be required to
pay income taxes to a jurisdiction in which
the civilian spouse performs services if
that jurisdiction is different from the civilian spouse’s chosen tax residence under
MSRRA. Instead, the civilian spouse may
be required to pay applicable State and
local income taxes or U.S. territory taxes
in the jurisdiction in which the civilian
spouse claims tax residence. In addition,
the civilian spouse will be required to
pay federal income taxes on income from
services if the civilian spouse’s chosen
tax residence is in a State or the District
of Columbia. For example, if a civilian
spouse is working in Guam but properly
claims tax residence in Virginia under
MSRRA, the civilian spouse’s income
from services would not be considered
to be from sources in Guam. Thus, this
income would not constitute taxable income for Guam tax purposes. However,
the civilian spouse would owe taxes to the
IRS and may owe taxes to Virginia.
III. TRANSITIONAL RELIEF FOR
2009
A. Taxpayers Claiming Tax Residence in
a State or the District of Columbia
1. In General
MSRRA was enacted on November 11,
2009, and applies retroactively to 2009. As
a result, the IRS recognizes that taxpayers working in a U.S. territory who claim
tax residence in a State or the District of
Columbia may experience undue hardship
in timely paying federal income tax liabilities due the IRS for 2009. This sit-

2010–18 I.R.B.

uation may occur, in particular, if a taxpayer claims tax residence in a State or
the District of Columbia and files a 2009
federal income tax return with the IRS,
but the taxpayer’s employer withheld income tax for 2009 that was remitted to
a U.S. territory tax administration, and/or
the taxpayer made estimated tax payments
to a U.S. territory tax administration. (As
discussed in Part III(A)(2), this situation
generally should not arise for (1) federal
employees in American Samoa, Guam, or
the USVI, or (2) individuals working in
Guam or the NMI to whom section 935 of
the Code applies.) Accordingly, withheld
amounts and estimated tax payments that
should have been paid to the IRS were actually paid to the territory. The IRS recognizes that a taxpayer in this situation, in order to recover amounts erroneously paid to
a U.S. territory, may need to file a claim for
refund or credit of amounts withheld by the
taxpayer’s employer or estimated tax payments that the taxpayer remitted to the U.S.
territory tax administration during 2009.
Furthermore, a civilian spouse should
be aware that to the extent that a Form
W–2, Wage and Tax Statement (or its
equivalent), issued to the taxpayer by an
employer indicates income tax withholding paid to a tax administration of a U.S.
territory for 2009, such amount should
not be claimed as a payment on a federal
income tax return (e.g., Form 1040, Line
61) if such withholding amount has not
been paid or treated as paid to the IRS. In
such a case, the amount owed as shown
on a tax return filed with the IRS will be
higher than if such withholding amounts
had been paid to the IRS.
a. Applicable Provisions of the Code
Section 6651(a) of the Code imposes a
penalty on any failure to pay (on or before
the due date for payment, including extensions) any amount shown as tax on any return. In general, individuals must pay income tax by April 15. Section 6161 of the
Code authorizes the Secretary of the Treasury or his delegate to grant taxpayers reasonable extensions of time (generally not
to exceed 6 months) to pay the amount of
tax shown or required to be shown on any
return. However, section 6601 of the Code
imposes interest on any amount of tax not
paid by the due date, determined without
regard to any extension of time for pay-

2010–18 I.R.B.

ment or any installment agreement entered
into under section 6159 of the Code, from
such due date to the date the tax is paid.
Section 6654(a) of the Code provides
for an addition to tax in the case of an underpayment of estimated tax by an individual. An underpayment of estimated tax
is the excess of the required quarterly estimated tax payment over the amount actually paid on or before the due date for
the payment. Section 6654(e)(3)(A) of the
Code provides that the addition to tax shall
not be imposed to the extent that the Secretary or his delegate determines that the
imposition of such addition to tax would
be against equity and good conscience due
to unusual circumstances.
b. Procedures for Relief
Pursuant to section 6161 of the Code,
the IRS is providing to certain taxpayers
an extension of time through October 15,
2010 for paying the amount of tax shown
or required to be shown on a federal income tax return for 2009. This extension
is being provided to taxpayers who: (i)
worked in a U.S. territory; (ii) claim tax
residence in a State or the District of Columbia under MSRRA; and (iii) are not
(1) federal employees in American Samoa,
Guam, or the USVI, or (2) individuals
working in Guam or the NMI to whom section 935 applies. Additionally, pursuant to
section 6654(e)(3)(A) of the Code, the IRS
has determined that with respect to such
taxpayers, applying the addition to tax under section 6654(a) is against equity and
good conscience due to unusual circumstances. However, interest on the amount
of tax must be paid for the period from the
time the tax is due, without regard to such
extension (generally, April 15), until the
date the tax is paid.
Taxpayers should be aware that the extension of time to pay provided in this notice is not an extension of time to file a
return. To obtain an automatic extension
of time to file, a taxpayer should file IRS
Form 4868.
To qualify for the extension of time to
pay under this notice, taxpayers must follow these procedures:

•

Taxpayers must mark “MSRRA” in red
ink on the top of their returns and include with their returns a copy of the
Form(s) W–2, or its equivalent, that

651

•

•
•

they received from their employers in
the U.S. territory where they worked
during 2009.
Taxpayers must also attach the following declaration:
“I
am
claiming
as
my
residence or domicile under the
Military Spouses Residency Relief
Act (“MSRRA”). Under penalties of
perjury, I declare that I am qualified
for relief under MSRRA because I am
present in
solely
to accompany my spouse who is a
servicemember serving in compliance
with military orders, and my claimed
residence or domicile is the same as
my spouse’s residence or domicile.”
The declaration must be signed and
dated by the taxpayer. Neither a
stamped signature nor a faxed signature is permitted.
Taxpayers must mail their returns to
the IRS Service Center to which the
return would be mailed if the taxpayer lived in the jurisdiction claimed
as the taxpayer’s tax residence under
MSRRA. The address for the appropriate IRS Service Center may be found
in the instructions to IRS Form 1040.
For example, if a civilian spouse works
in Puerto Rico but claims tax residence
in Virginia under MSRRA, the civilian
spouse should mail the federal income
tax return to the IRS Service Center in
Kansas City, Missouri. Taxpayers may
use private delivery services designated by the IRS to mail their returns,
as provided in the instructions to IRS
Form 1040.

2. Exceptions
a. Taxpayers Employed by the U.S.
Federal Government in American
Samoa, Guam, or the USVI
The relief provided in Part III(A)(1)(b)
does not apply to a federal employee
claiming tax residence under MSRRA in a
State or the District of Columbia but who
was working in American Samoa, Guam,
or the USVI in 2009. In this case, the
taxpayer’s federal agency employer withheld income taxes and remitted amounts
withheld to the IRS during 2009. As a
result, the taxpayer does not need the relief
provided in Part III(A)(1)(b). Instead, the

May 3, 2010

taxpayer should file an income tax return
with the IRS and may claim as a payment
on that federal income tax return (e.g.,
Form 1040, Line 61) the amount reported
as income tax withholding paid to the IRS
on the Form W–2, or its equivalent, issued
to the taxpayer by the federal agency employer.
b. Certain Other Taxpayers Present in
Guam or the NMI
The relief provided in Part III(A)(1)(b)
also does not apply to a civilian spouse
working in Guam or the NMI to whom section 935 applies. In that case, the civilian spouse does not need to file a claim
for refund with Guam or the NMI because
the civilian spouse may treat amounts paid
to Guam or the NMI as paid to the IRS.
Section 935 applies to a civilian spouse
claiming tax residence in a State or the
District of Columbia under MSRRA if the
civilian spouse is a U.S. citizen or resident alien and has income from sources
in Guam or the NMI (other than income
from services performed in Guam or the
NMI). A resident alien is a person with
a green card or who meets the substantial
presence test, which generally means that
the person is present in the United States
for a specified number of days. If section 935 applies, the taxpayer may treat
amounts withheld and paid to the relevant
U.S. territory as paid to the IRS. See Treas.
Reg. § 1.935–1(c)(1)(ii)(A). The taxpayer
should file an income tax return with the
IRS and pay any tax due by the relevant
due date.
B. Taxpayers Claiming Tax Residence in
a U.S. territory
Circumstances similar to those described in Part III(A)(1) may arise for a
civilian spouse who is present in a State or
the District of Columbia but who claims
tax residence under MSRRA in one of the
U.S. territories. In that case, the civilian
spouse may be required to file a 2009
income tax return with the relevant U.S.
territory tax administration, but the civilian spouse’s employer withheld income
tax for 2009 that was remitted to the IRS,
and/or the civilian spouse made estimated
tax payments to the IRS. Thus, taxes that
should have been paid to the U.S. territory
tax administration were actually paid to
the IRS.

May 3, 2010

As described in more detail in Parts
III(B)(1) and (2), the federal income tax
treatment of taxpayers in this situation
may depend in part on whether the taxpayer is treated under section 937 as a
bona fide resident of the U.S. territory
in which the taxpayer claims tax residence under MSRRA. Under Treas. Reg.
§ 1.937–1(b)(2), a servicemember who
qualified as a bona fide resident of a U.S.
territory in a prior taxable year is deemed
to satisfy the requirements for bona fide
residence in such U.S. territory for a subsequent taxable year if the servicemember
is otherwise unable to satisfy such requirements during such subsequent year
by reason of being absent from the U.S.
territory or present in a State or the District of Columbia solely in compliance
with military orders. The IRS and the
Department of Treasury intend to issue
regulations under section 937 to provide
a civilian spouse with treatment similar to
that provided to the servicemember spouse
for purposes of section 937. In particular,
the regulations will provide that a civilian
spouse who claims tax residence under
MSRRA in a U.S. territory but is present
in a State or the District of Columbia qualifies as a bona fide resident of such U.S.
territory under section 937 of the Code if
the civilian spouse satisfies the following
requirements: (1) the civilian spouse qualified as a bona fide resident of the U.S.
territory in a prior taxable year, and (2)
the civilian spouse is unable to satisfy the
requirements for bona fide residence in
the U.S. territory in a subsequent taxable
year by reason of being present in a State
or the District Columbia solely to be with
the servicemember spouse who is serving
in compliance with military orders. For
general rules regarding bona fide residence in a U.S. territory, please refer to
IRS Publication 570.

fide resident of American Samoa, but who
had income taxes withheld and paid to the
IRS during 2009 with respect to services
performed by the taxpayer in a State or the
District of Columbia, may therefore be entitled to claim a refund of these withheld
amounts because the income from such
services may be deemed to be from sources
in American Samoa.
Similar rules apply in the case of Puerto
Rico. Specifically, section 933 generally
provides that gross income for U.S. federal
income tax purposes does not include income of a bona fide resident of Puerto Rico
from sources within Puerto Rico (except
amounts received for services performed
as an employee of the United States or any
agency thereof). A civilian spouse who
claims tax residence in Puerto Rico under MSRRA and is a bona fide resident
of Puerto Rico, but who had income taxes
withheld and paid to the IRS during 2009
with respect to services performed by the
taxpayer in a State or the District of Columbia, may therefore be entitled to claim
a refund of income taxes withheld and paid
to the IRS.
a. Procedures for Taxpayers Claiming
Tax Residence in American Samoa
or Puerto Rico Who Are Not Federal
Employees
Taxpayers who worked in a State or the
District of Columbia during 2009 but were
not employees of the U.S. federal government, who claim tax residence in American Samoa or Puerto Rico for 2009 under
MSRRA, and who claim a refund of federal income taxes should follow these procedures.

•
•

1. American Samoa and Puerto Rico
Section 931 of the Code provides that,
in the case of a bona fide resident of American Samoa, income derived from sources
within American Samoa is not included in
gross income for U.S. federal income tax
purposes (except amounts paid for services
performed as an employee of the United
States or any agency thereof). A civilian
spouse who claims tax residence in American Samoa under MSRRA and is a bona

652

•

Complete the appropriate Form 1040
and mark “MSRRA” in red ink on the
top of the return;
Attach the statement signed under
penalties of perjury described in Part
III(A)(1)(b), verifying the taxpayer’s
eligibility for relief under MSRRA;
and
Mail the Form 1040 and attached statement to the IRS Service Center indicated in the instructions to the Form
1040, based on the location in which
the taxpayer lives at the end of the year.
(For example, if the taxpayer lives and
works in Virginia but claims tax residence in Guam under MSRRA, the taxpayer should mail the required forms

2010–18 I.R.B.

and statements to the IRS Service Center in Kansas City, Missouri.) Taxpayers may use private delivery services
designated by the IRS to mail their returns, as provided in the instructions to
IRS Form 1040.
Taxpayers claiming tax residence in
American Samoa or Puerto Rico under
MSRRA may be required to pay taxes
to American Samoa or Puerto Rico, as
the case may be, on their income from
services. Taxpayers should contact the appropriate U.S territory tax administration
for further information regarding their tax
obligations in that U.S. territory, including
whether any relief may be available for
late filings and payments. See Part IV
below for contact information for the U.S.
territory tax administrations.
b. Procedures for Taxpayers Claiming
Tax Residence in American Samoa or
Puerto Rico Who Are Federal Employees
Taxpayers claiming tax residence in
American Samoa or Puerto Rico under MSRRA who are federal employees
should file a return with the relevant U.S.
territory tax administration and file a federal income tax return with the IRS. These
taxpayers should report income from federal employment as income from sources
in American Samoa or Puerto Rico on
their federal income tax returns.
Taxpayers should contact the appropriate U.S territory tax administration for
further information regarding their tax
obligations in that U.S. territory, including
whether any relief may be available for
late filings and payments. See Part IV
below for contact information for the U.S.
territory tax administrations.
2. Guam, the NMI, and the USVI
Under section 932(c) of the Code, an
individual who is a bona fide resident
of the USVI for the entire taxable year
(or a person who files a joint return with
such an individual) must file an income
tax return for the taxable year with the
USVI. For purposes of the territorial income tax of the USVI (that is, “mirrored”
sections of the Code), a bona fide resident
of USVI may take income tax paid to the
United States into account as payments

2010–18 I.R.B.

to the USVI under mirrored sections 31
(tax withheld on wages), 6315 (payments
of estimated income tax), and 6402(b)
(credits against estimated tax). See Treas.
Reg. § 1.932–1(g)(2)(ii)(A). As a result, a
civilian spouse who claims tax residence
in the USVI under MSRRA and is a bona
fide resident of the USVI should file an
income tax return with the USVI and may
treat amounts paid to the IRS in 2009 as
paid to the USVI on the taxpayer’s return.
Section 935(b) of the Code provides in
relevant part that, with respect to a taxpayer who is (i) a bona fide resident of
Guam or the NMI, (ii) a citizen of Guam
or the NMI (but not otherwise a U.S. citizen and not a resident of the United States),
or (iii) an individual who files a joint return for a taxable year with an individual described in (i) or (ii) if the individual described in (i) or (ii) has the greater
adjusted gross income, the taxpayer shall
file an income tax return with Guam or the
NMI, as the case may be. Under section
935(c)(3), an individual is relieved of liability for income tax to the jurisdiction
other than the jurisdiction with which the
individual is required to file under section 935(b). In applying the territorial income tax of Guam or the NMI (under “mirrored” sections of the Code), a bona fide
resident or citizen of Guam or the NMI
may take income tax paid to the United
States into account under mirrored sections 31 (tax withheld on wages), 6315
(payments of estimated income tax), and
6402(b) (credits against estimated tax), as
payments to the relevant U.S. territory. See
Treas. Reg. § 1.935–1(c)(1)(ii)(A). Consequently, a civilian spouse who claims
tax residence in Guam or the NMI under
MSRRA and is a bona fide resident or citizen of Guam or the NMI should file an income tax return with the relevant U.S. territory and may treat amounts paid to the
IRS in 2009 as paid to the U.S. territory.
C. Other Guidance
In the case of taxpayers described in
Part III(A)(1) and III(B)(1) of this notice,
the IRS and tax administrations of the U.S.
territories may determine by agreement or
otherwise to coordinate relief for taxpayers claiming the benefits of MSRRA. The
IRS and U.S. territories will issue additional guidance if coordinated procedures

653

become available. Taxpayers claiming the
benefits of MSRRA should continue to use
the procedures set forth in this notice until
the IRS issues further guidance.
Taxpayers who have already filed 2009
federal income tax returns and were not
aware of the procedures provided in this
notice and taxpayers who have any questions regarding the relief or procedures in
this notice, may call 1(800) 829–1040 or
(215) 516–2000 (not a toll-free call) for assistance.
State, local, and U.S. territory tax administrations may establish their own procedures for the implementation of the taxation provisions of MSRRA. However, such
procedures are beyond the scope of this notice.
IV. CONTACT INFORMATION
FOR U.S. TERRITORY TAX
ADMINISTRATIONS
Taxpayers may direct questions regarding U.S. territory taxes and claims for refund to the following:
American Samoa
Tax Division
Government of American Samoa
Pago Pago, American Samoa 96799
Phone number: 684–633–4181
Fax Number: 684–633–1513
The Northern Mariana Islands
Department of Finance
Division of Revenue and Taxation
Commonwealth of the Northern
Mariana Islands
P.O. Box 5234 CHRB
Saipan, MP 96950
Phone number: 670–664–1000
Fax Number: 670–664–1015
Guam
Department of Revenue and Taxation
Government of Guam
P.O. Box 23607
GMF, GU 96921
Phone number: 671–635–1840 or
671–635–1841
Fax Number: 671–633–2643

May 3, 2010

Puerto Rico
Departamento de Hacienda
Negociado de Asistencia Contributiva
P.O. Box 9024140
San Juan, Puerto Rico 00902–4140
Phone number: 787–721–2020,
extension 3611,
or 1–800–981–9236 (toll-free within
Puerto Rico but outside San Juan)
U.S. Virgin Islands
Virgin Islands Bureau of Internal
Revenue
9601 Estate Thomas
Charlotte Amalie
St. Thomas, VI 00802
Phone number: 340–715–1040
Fax Number: 340–714–9341 and
340–714–9345
V. EFFECTIVE DATE
The relief provided in Part III(A)(1)(b)
and the procedures in Part III(B)(1) of this
notice are effective for taxable years that
include November 11, 2009.
The regulations under section 937 providing a civilian spouse with treatment
similar to that provided to the servicemember spouse for purposes of section 937 will
be effective for taxable years that include
November 11, 2009 and subsequent years.
VI. PAPERWORK REDUCTION ACT
The collection of information contained
in this notice has been reviewed and approved by the Office of Management and
Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. § 3507) under
control number 1545–2169.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collections of information in this
notice are in Part III(A)(1) and III(B)(1).
This information will be used to verify a
taxpayer’s eligibility for relief under the
taxation provisions of MSRRA. The collection of information is required to obtain
a benefit. The likely respondents are individuals.
The estimated total annual reporting
burden is 6,200 hours. Public reporting

May 3, 2010

burden for this collection of information is
estimated to average 1 hour per response,
including the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed,
and completing and reviewing the collection of paperwork. The estimated number
of respondents is 6,200. Send comments
regarding this burden estimate or any
other aspect of this collection of information, including suggestions for reducing
this burden, to Internal Revenue Service,
Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution
Avenue, NW, IR–6526, Washington, DC
20224.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. § 6103.
VII. DRAFTING INFORMATION
The principal author of this notice is
Rosy L. Lor of the Office of Associate
Chief Counsel (International). For further information regarding this notice, contact Rosy L. Lor at (202) 435–5262 (not a
toll-free call).

Credit for Renewable
Electricity Production,
Refined Coal Production,
and Indian Coal Production,
and Publication of Inflation
Adjustment Factors and
Reference Prices for Calendar
Year 2010
Notice 2010–37
This notice publishes the inflation adjustment factors and reference prices for
calendar year 2010 for the renewable electricity production credit, the refined coal
production credit, and the Indian coal production credit under § 45 of the Internal
Revenue Code. The 2010 inflation adjustment factors and reference prices are used
in determining the availability of the credits. The 2010 inflation adjustment factors
and reference prices apply to calendar year

654

2010 sales of kilowatt-hours of electricity
produced in the United States or a possession thereof from qualified energy resources and to calendar year 2010 sales of
refined coal and Indian coal produced in
the United States or a possession thereof.
BACKGROUND
Section 45(a) provides that the renewable electricity production credit for any
tax year is an amount equal to the product of 1.5 cents multiplied by the kilowatt
hours of specified electricity produced by
the taxpayer and sold to an unrelated person during the tax year. This electricity
must be produced from qualified energy
resources and at a qualified facility during
the 10-year period beginning on the date
the facility was originally placed in service.
Section 45(b)(1) provides that the
amount of the credit determined under
§ 45(a) is reduced by an amount which
bears the same ratio to the amount of the
credit as (A) the amount by which the
reference price for the calendar year in
which the sale occurs exceeds 8 cents,
bears to (B) 3 cents. Under § 45(b)(2),
the 1.5 cent amount in § 45(a), the 8 cent
amount in § 45(b)(1), the $4.375 amount in
§ 45(e)(8)(A), and in § 45(e)(8)(B)(i), the
$2.00 amount in § 45(e)(8)(D)(ii)(I), the
reference price of fuel used as feedstock
(within the meaning of § 45(c)(7)(A)) in
2002 are each adjusted by multiplying the
amount by the inflation adjustment factor
for the calendar year in which the sale
occurs. If any amount as increased under
the preceding sentence is not a multiple
of 0.1 cent, the amount is rounded to the
nearest multiple of 0.1 cent.
Section 45(c)(1) defines qualified
energy resources as wind, closed-loop
biomass, open-loop biomass, geothermal energy, solar energy, small irrigation
power, municipal solid waste, qualified
hydropower production, marine and hydrokinetic renewable energy.
Section 45(d)(1) defines a qualified facility using wind to produce electricity as
any facility owned by the taxpayer that is
originally placed in service after December 31, 1993, and before January 1, 2013.
See § 45(e)(7) for rules relating to the inapplicability of the credit to electricity sold
to utilities under certain contracts.

2010–18 I.R.B.