U.S. Individual Income Tax Return Forms

Instructions for Form 8900

Department of the Treasury
Internal Revenue Service

(Rev. December 2023)

Qualified Railroad Track Maintenance Credit
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments

For the latest information about developments related to
Form 8900 and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form8900.

What’s New
Credit made permanent. The qualified railroad track
maintenance credit was extended to cover qualified
railroad track maintenance expenditures paid or incurred
in all tax years beginning after 2022.
Credit rate reduced to 40%. For tax years beginning
after 2022, the credit rate on line 2 of Form 8900 was
reduced from 50% to 40%.
Class I railroads. In 2023, Canadian Pacific merged with
Kansas City Southern reducing the list of Class I railroads
from seven to six entities. See Eligible taxpayers.

Which Revision To Use

Use the December 2023 revision of Form 8900 for tax
years beginning in 2023 or later, until a later revision is
issued. The December 2023 revision reflects the new 40%
credit rate discussed earlier. Use prior revisions of the
form and instructions for earlier tax years. All revisions are
available at IRS.gov/Form8900.

General Instructions
Who Must File

Eligible taxpayers use Form 8900 to claim the railroad
track maintenance credit (RTMC) for qualified railroad
track maintenance expenditures (QRTME) paid or
incurred during the tax year. If you are an assignor of miles
of eligible railroad track, you must file Form 8900 even if
you do not claim any RTMC. See the instructions for
line 3b for the additional information that must be provided
by assignors.
Partnerships and S corporations must file this form to
claim the credit. All other taxpayers are not required to
complete or file this form if their only source for this credit
is a partnership or S corporation. Instead, they can report
this credit directly on line 4g in Part III of Form 3800,
General Business Credit.

Definitions
Eligible taxpayers. Eligible taxpayers include the
following.
1. Any Class II or Class III railroad, as these terms are
defined by the Surface Transportation Board.

Oct 5, 2023

2. Any person (including a Class I railroad (see
below)) who transports property using the rail facilities of a
Class II or Class III railroad.
3. Any person (including a Class I railroad (see
below)) who furnishes railroad-related services or
property to a Class II or Class III railroad.
For purposes of (2) or (3) above, the taxpayer is only
eligible to claim the credit for miles of eligible railroad track
assigned to it by a Class II or Class III railroad for
purposes of the credit. See the instructions for line 3c.
Class I railroads include only the following six entities.
• BNSF.
• Canadian National.
• Canadian Pacific Kansas City.
• CSX.
• Norfolk Southern.
• Union Pacific.
Rail facilities. Rail facilities of a Class II or Class III
railroad are railroad yards, tracks, bridges, tunnels,
wharves, docks, stations, and other related assets that are
used in the transport of freight by a railroad and owned or
leased by that railroad.
Railroad-related property. Railroad-related property is
property that is provided directly to a Class II or Class III
railroad and is unique to railroads. For a complete
description, see Regulations section 1.45G-1(b)(7).
Railroad-related services. Railroad-related services are
services that are provided directly to, and are unique to, a
railroad and that relate to railroad shipping, loading and
unloading of railroad freight, or repairs of rail facilities or
railroad-related property. For examples of what are and
what are not railroad-related services, see Regulations
section 1.45G-1(b)(8).
Eligible railroad track. Eligible railroad track is railroad
track located within the United States that is owned or
leased by a Class II or Class III railroad at the close of its
tax year. The railroad is treated as owning the railroad
track if it is subject to depreciation under section 167 by
the railroad. Double track is treated as multiple lines of
railroad track, rather than as a single line of railroad track.
That is, 1 mile of single track is 1 mile, but 1 mile of double
track is 2 miles.
Qualifying railroad structure. Qualifying railroad
structure is property located within the United States that
includes, in part, tunnels, bridges, and railroad track. For a
complete description, see Regulations section 1.45G-1(b)
(4).
Qualified railroad track maintenance expenditures
(QRTME). QRTME are expenditures (whether or not
otherwise chargeable to a capital account) for
maintaining, repairing, and improving a qualifying railroad
structure that is owned or leased as of January 1, 2015, by
a Class II or Class III railroad. If you paid or incurred

Cat. No. 66497D

An assigned mile of eligible railroad track need not
correspond to any specific mile of eligible railroad track for
which the eligible taxpayer actually pays or incurs the
QRTME. Further, an assignment requires no transfer of
legal title or other indicia of ownership of the eligible
railroad track, and need not specify the location of any
assigned mile of eligible railroad track. However, the
following information must be provided for the assignment
in the form of a statement attached to the tax return for the
tax year for which the assignment is made.
• The name and taxpayer identification number of each
assignee.
• The total number of miles of the assignor's eligible
railroad track.
• The number of miles of eligible railroad track assigned
by the assignor for the tax year to the assignee.
• The total number of miles of eligible railroad track
assigned by the assignor for the tax year to all assignees.

QRTME during the tax year, you do not have to reduce
that QRTME by any amount of direct or indirect
reimbursement to which you are entitled from a Class II or
Class III railroad which made an assignment of eligible
railroad track to you.

Adjustments to Basis

Some or all of the QRTME paid or incurred by an eligible
taxpayer may be required to be capitalized as a tangible
asset or an intangible asset, if applicable. See
Regulations section 1.45G-1(e)(1).
Use the amount of RTMC to reduce the basis of a
qualifying railroad structure (including railroad track) asset
or intangible asset, if applicable. The reduction is limited
to the amount of QRTME capitalized for the asset. For
further details, see Regulations section 1.45G-1(e)(2).

Member of Controlled Group or
Business Under Common Control

Line 3c

For purposes of figuring the credit, all members of a
“controlled group of corporations” and all members of a
“group of businesses under common control” are treated
as a single taxpayer. See Regulations section 1.45G-1(f)
(2) for a definition of these terms. As a member, your
credit is determined on a proportionate basis to your share
of the aggregate QRTME taken into account by the group
for the RTMC. Enter your share of the credit on line 5.
Attach a statement showing how your share of the credit
was figured, and write “See Attached” next to the entry
space for line 5.

The following information must be provided for the
assignment in the form of a statement attached to the tax
return for the tax year for which the assignment is made.
• The total number of miles of eligible railroad track
assigned to the assignee for the assignee's tax year.
• Attestation that the assignee has in writing, and has
retained as part of the assignee's records for purposes of
Regulations section 1.6001-1(a), the following information
from each assignor.
1. The name and taxpayer identification number of
each assignor.
2. The effective date of each assignment (treated as
being made by the assignor at the end of its tax year) to
the assignee.
3. The number of miles of eligible railroad track
assigned by each assignor to the assignee for the tax year
of the assignee.

Specific Instructions
Line 1

Qualified railroad track maintenance expenditures must
be paid or incurred by an eligible taxpayer during the tax
year.

Notes

The payment by an eligible taxpayer, as an assignee, to
a Class II or Class III railroad, as an assignor, in exchange
for an assignment of miles of eligible railroad track for
purposes of the credit computation is treated as QRTME
paid or incurred by the assignee and not the assignor.

• The assignee cannot reassign miles.
• If the assignor, in its required statement (see the

instructions for line 3b above), assigns more miles than it
has at the end of its tax year, the excess will be used to
reduce each assignee's allocation in the same proportion
as the assignee's original allocation of miles bears in
relation to the total miles originally assigned.

Line 3a

(This line only applies to you if you are a Class II or Class
III railroad.)

Line 6

Enter the number of eligible railroad track miles (see
Eligible railroad track, earlier) owned or leased by you.

Enter total qualified railroad track maintenance credits
from:
• Schedule K-1 (Form 1065), Partner's Share of Income,
Deductions, Credits, etc., box 15 (code AJ); and
• Schedule K-1 (Form 1120-S), Shareholder's Share of
Income, Deductions, Credits, etc., box 13 (code AJ).

Line 3b

(This line only applies to you if you are a Class II or Class
III railroad.)
You must reduce on line 3b the number of miles of
eligible railroad track entered on line 3a that you assigned
to another eligible taxpayer for purposes of the credit
computation. You can only assign each mile of railroad
track once during your tax year. Each mile of railroad track
you assign is treated as being assigned on the last day of
your tax year.

Partnerships and S corporations report the above
credits on line 6. All other filers figuring a separate credit
on earlier lines also report the above credits on line 6. All
others not using earlier lines to figure a separate credit
can report the above credits directly on Form 3800, Part
III, line 4g.

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Instructions for Form 8900 (December 2023)

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.

h

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden
for individual and business taxpayers filing this form is approved under OMB control number 1545-0074 and 1545-0123
and is included in the estimates shown in the instructions for their individual and business income tax return. The
estimated burden for all other taxpayers who file this form is shown below.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 hr., 4 min.
0 hr., 53 min.
1 hr., 00 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.

Instructions for Form 8900 (December 2023)

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