Form

Department of the Treasury

Internal Revenue Service

Renewable Electricity, Refined Coal,

and Indian Coal Production Credit

OMB No. 1545-1362

© Attach to your tax return.

Attachment

Sequence No. 95

1 Kilowatt-hours produced and sold (see instructions) 

2 Phaseout adjustment (see instructions)

3

4

5

6

7

Credit before reduction. Subtract line 2 from line 1

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

8

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)

9

Total of additions to the capital account for the project for this and all prior tax years

10

Divide line 4 by line 5. Show as a decimal carried to at least 4 places

Multiply line 3 by line 6

12

Subtract line 7 from line 3

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

0.02

3

For Paperwork Reduction Act Notice, see instructions. Cat. No. 14954R Form 8835 (2007)

8835

3

Name(s) shown on return Identifying number

1

2

3

4

5

6

7

8

9

10

11

12

$

Cooperatives, estates, and trusts. Subtract line 11 from line 10. Report the credit on 

Form 3800, line 1f

Section A. Electricity produced at qualified facilities placed in service prior to October 23, 2004

Current Year Credit

1 Kilowatt-hours produced and sold (see instructions) 

2

3 Add lines 1 and 2

Part I

3 0.02 1

2

3

Section B. Electricity and refined coal produced at qualified facilities placed in service after

October 22, 2004, and Indian coal produced at facilities placed in service after August 8, 2005

Electricity produced at qualified facilities using wind, closed-loop biomass, geothermal,

and solar

Electricity produced at qualified facilities using open-loop biomass, small irrigation power, 

landfill gas, trash combustion, and hydropower

Kilowatt-hours produced and sold (see instructions) 3 .01

.

4

5

Phaseout adjustment (see instructions)

Subtract line 4 from line 3

4

5

$ 3

Section A renewable electricity production credit from partnerships, S corporations, cooperatives, 

estates, and trusts

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

6

7

8

Tons produced and sold (see instructions)

Phaseout adjustment (see instructions)

Subtract line 7 from line 6

6

7

8

10 Credit before reduction. Add lines 5, 8, and 9

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

11 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)

12 Total of additions to the capital account for the project for this and all prior tax years

13 Divide line 11 by line 12. Show as a decimal carried to at least 4 places

14 Multiply line 10 by the lesser of 1⁄2 or line 13 

15 Subtract line 14 from line 10

10

11

12

13

14

15

Refined coal produced at a qualified refined coal production facility

3 $5.877

$ 3

.

9 Tons produced and sold (see instructions) 3 $1.544 9

Indian Coal produced at a qualified Indian coal production facility

16

17

18

16

17

18

19

2007

Add lines 15 and 16. Partnerships and S corporations, report this amount on Schedule K; all

others continue to line 18

Renewable electricity, refined coal, and Indian coal production credit included on line 17 from

passive activities (see instructions)

Section B renewable electricity, refined coal, and Indian coal production credit from partnerships, 

S corporations, cooperatives, estates, and trusts

19 Subtract line 18 from line 17
26

27

28

29a

26

27

28

Part II Allowable Credit

30

29a Credits from Form 1040, lines 47 through 50 and 52 through 54 (or

Form 1040NR, lines 44, 45, and 47 through 49)

b Foreign tax credit 29b

Credits from Forms 5735 and 8834 

Non-business alternative motor vehicle credit (Form 8910, line 18) 

Non-business alternative fuel vehicle refueling property credit (Form 8911, line 19) 

Add lines 29a through 29e

36

Net income tax. Subtract line 29f from line 28. If zero, skip lines 31 through 34 and enter-0- on line 35

31

Alternative minimum tax (see instructions)

31

35

Enter 25% (.25) of the excess, if any, of line 31 over $25,000 (see instructions)

Subtract line 34e from line 33. If zero or less, enter -0-

Credit allowed for the current year. Cooperatives, estates, and trusts. Enter the smaller of line 25

or line 35. Report this amount on Form 1041, Schedule G, line 2c; or Form 1120-C, Schedule J, line 5c. 

If line 35 is smaller than line 25, see instructions. All others. Enter the smaller of line 23 or line 35. Report 

this amount on Form 1040, line 55; Form 1040NR, line 50; Form 1120, Schedule J, line 5c; or the

applicable line of your return. If line 35 is smaller than line 23, see instructions

30

Regular tax before credits (see instructions)

32

Add lines 26 and 27

35

36

32

c

d

e

29c

29d

Net regular tax. Subtract line 29f from line 26. If zero or less, enter -0-

29e

f 29f

Form 8835 (2007) Page 2

20 Renewable electricity, refined coal, and Indian coal production credit allowed for 2007 from a

passive activity (see instructions) 20

22 Carryback of renewable electricity, refined coal, and Indian coal production credit from 2008 (see 

instructions)

23 Add lines 19 through 22. Cooperatives, estates, and trusts, go to line 24; all others, go to Part II

33 Subtract line 32 from line 30. If zero or less, enter -0- 33

21 Carryforward of renewable electricity, refined coal, and Indian coal production credit to 2007. 21

22

23

Part I Continued

24 Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions) 24

25 Cooperatives, estates, and trusts. Subtract line 24 from line 23. Use this amount to complete Part II 25

Section references are to the Internal

Revenue Code.

Purpose of Form

How To Figure the Credit

General Instructions 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, and the reference price of fuel used as a

feedstock 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 of Section A and line 4 of

Section B. 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 the $8.75 over the

adjusted threshold price, there is a phaseout

adjustment on line 7 of Section B.

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 on

page 3).

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 Section A 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.

34a General business credit (Form 3800, line 19) 34a

b Empowerment zone and renewal community employment credit (Form 8844, line 26) 34b

Work opportunity credit (Form 5884, line 22)

Alcohol fuels credit (Form 6478, line 24)

Add lines 34a through 34d

c

d

34c

34d

e 34e

What’s New

The Tax Technical Corrections Act of 2007

removed the additional credit limitation for a

closed-loop biomass facility modified to

co-fire with coal, other biomass, or both

based on the ratio of the thermal content of

the closed-loop biomass to the thermal

content of all fuels used at the facility. Thus,

the lines used to figure the additional

limitation are eliminated from the form.

You may have to file an amended return if

you claimed a credit for a closed-loop

biomass facility modified to co-fire with coal,

other biomass, or both after October 21,

2004. See the instructions for line 1. Generally, the credit is 1.5 cents per

kilowatt-hour (kWh) for the sale of electricity

produced by the taxpayer from qualified

energy resources at a qualified facility during

the credit period (see Definitions on page 3).

The 1.5 cents credit amount is reduced by 1⁄2

for open-loop biomass, small irrigation, landfill

gas, trash combustion, and hydropower

facilities. The credit is $4.375 per ton for the

sale of refined coal produced at a qualified

facility during the credit period; see section

45(e)(8)(A). The credit is $1.50 per ton for the

sale of Indian coal produced at a qualified

facility during the credit period.
Form 8835 (2007) Page 3

Definitions

Section A 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.

Resources means wind, closed-loop biomass,

poultry waste, open-loop biomass, geothermal

energy, solar energy, small irrigation power,

municipal solid waste, hydropower production,

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

2006-88, 2006-42 I.R.B. 686, 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 a liquid, gaseous, or solid

fuel produced from coal or high carbon fly ash

meeting the requirements of section 45(c)(7).

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 broken down by form section.

Section A

● 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.

Section B

● Wind facility placed in service after 10/22/04

and before 1/1/09.

● Closed-loop biomass facility placed in

service after 10/22/04 and before 1/1/09.

● Closed-loop biomass facility modified to

co-fire with coal or other biomass (or both),

placed in service before 1/1/09See section

● Open-loop biomass facility using cellulosic

waste placed in service before 1/1/09.

● Open-loop biomass facility using agricultural

livestock waste placed in service after

10/22/04 and before 1/1/09 and the nameplate

capacity rating is not less than 150 kilowatts.

● Geothermal energy facility placed in service

after 10/22/04 and before 1/1/09.

● 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 1/1/09.

● Landfill gas or trash combustion facility

using municipal solid waste placed in service

after 10/22/04 and before 1/1/09.

● A refined coal production facility originally

placed in service after 10/22/04 and before

1/1/09.

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.

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.

● 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.

● 5 years for an open-loop biomass facility

using agricultural livestock waste, geothermal,

solar energy, small irrigation power, landfill

gas, or trash combustion 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.

● 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.

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

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).

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.

● Indian coal production facility placed in

service before 1/1/09.

● 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 1/1/2006.

● 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

1/1/09 and any other facility producing

qualified hydroelectric production described in

section 45(c)(8) placed in service after 8/8/05

and before 1/1/09.

Note. For calendar year 2007, the effective

credit rate for electricity, refined coal, and

Indian coal produced and sold is, respectively,

2.0 cents per kWh, $5.877 per ton and $1.544

per ton; there is no phaseout adjustment.

Line 2, Section B only

Enter the kilowatt-hours of electricity produced

and sold at qualified facilities and multiply by

$.01. Fiscal filers with 2008 sales must figure

line 2 as explained under Fiscal year taxpayers

above.

Line 2, Section A (Line 4,

Section B)

Calendar year filers enter zero on lines 2 and

4. Fiscal year filers with sales in 2008 also

enter zero if the published 2008 reference

price is equal to or less than the 2008 adjusted

threshold price. See How To Figure the Credit

on page 2 to figure the adjustment.

Line 6, Section B only

Enter the tons of refined coal produced and

sold during 2007 from a qualified refined coal

production facility and multiply by $5.877.

Fiscal filers with 2008 sales must figure line 6

as explained under Fiscal year taxpayers

above.

Line 7, Section B only

Calendar year filers enter zero on line 7. Fiscal

year filers with sales in 2008 also enter zero if

the published 2008 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.

Specific Instructions for 

Section A and Section B

Note. Where line references between Section

A and B differ, the Section B line references

are in parentheses.

Figure any renewable electricity, refined

coal, and Indian coal production credit from

your trade or business on lines 1 through 8

(lines 1 through 15 of Section B). Skip lines 1

through 8 (lines 1 through 15 of Section B) 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

2007 and 2008 and the credit rate on line 1

(lines 1, 2, 6 or 9) or the phaseout adjustment

on line 2 (lines 4 or 7) is different for 2008,

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)—line 1 (lines 1, 2, 6 or 9)—or

the phaseout adjustment line(s)—line 2 (lines 4

or 7). Attach the computations to Form 8835

and write “FY” in the margin.

Enter the kilowatt-hours of electricity produced

at qualified facilities and multiply by $.02.

Fiscal year filers with 2008 sales may have to

refigure line 1 as explained under Fiscal year

taxpayers above.

Part I—Current Year Credit

Line 1

If you claimed the credit for a closed-loop

biomass facility modified to co-fire with coal,

other biomass, or both after October 21, 2004,

you should file an amended return to refigure

your credit. Use Form 8835, Section B, line 1,

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 1 of Section B.
Form 8835 (2007) Page 4

● 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

Line 4, Section A (Line 11,

Section B)

Enter the sum, for this and all prior tax years,

of:

● The amount of any federal tax credit

allowable for any property that is part of the

project.

Line 18, Section B

Enter the amount included on line 17 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 8810, Corporate Passive Activity

Loss and Credit Limitations (for corporations).

Line 20, Section B

Enter the passive activity credit allowed for the

2007 renewable electricity, refined coal, and

Indian coal production credit from

Form 8582-CR or Form 8810.

Estates and trusts. Allocate the credit on line

10 (line 23 of Section B) between the estate or

trust and the beneficiaries in the same

proportion as income was allocated and enter

the beneficiaries’ share on line 11 (line 24 of

Section B).

Part II—Allowable Credit

The credit allowed for the current year may be

limited based on your tax liability. If you are

completing Section B, you must complete

Part II to figure the allowable credit. If you are

completing Section A, you must file

Form 3800, General Business Credit, to figure

the allowable credit.

Line 26, Section B

Enter the regular tax before credits from

the following line of the appropriate form or

schedule.

● Individuals. Enter the amount from

Form 1040, line 44 (or Form 1040NR, line 41).

● Corporations. Enter the amount from

Form 1120, Schedule J, line 2, or the

applicable line of your return.

● Estates and trusts. Enter the sum of the

amounts from Form 1041, Schedule G,

lines 1a and 1b, or the amount from the

applicable line of your return.

Line 27, Section B

Enter the alternative minimum tax (AMT) from

the following line of the appropriate form or

schedule.

● Individuals. Enter the amount from

Form 6251, line 35.

● Corporations. Enter the amount from

Form 4626, line 14.

● Estates and trusts. Enter the amount from

Form 1041, Schedule I, line 56.

Line 29c, Section B

Enter any American Samoa economic

development credit and any qualified electric

vehicle credit allowed for the current year.

Line 36, Section B

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 18 hr., 10 min.

Learning about the law 

or the form 1 hr.

Preparing 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.

Line 22, Section B

Use only if you amend your 2007 return to

carry back an unused renewable electricity,

refined coal, and Indian coal production credit

from 2008.

If you cannot use all of the credit because of

the tax liability limit, carry any unused current

year credit back 1 year and then forward up to

20 years.

Line 9, Section B only

Enter the tons of Indian coal produced and

sold from a qualified Indian coal facility and

multiply by $1.544.

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 24,

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.

Line 11, Section A (Line 24,

Section B)

Line 32, Section B

See section 38(c)(5) for special rules that apply

to married couples filing separate returns,

controlled groups, regulated investment

companies, real estate investment trusts, and

estates and trusts.

Line 10, Section A (Line 17,

Section B)

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.