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

0.021

3

For Paperwork Reduction Act Notice, see instructions. Cat. No. 14954R Form 8835 (2008)

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 this amount on Form 3800, line 1f

Electricity Produced at Qualified Facilities Placed in Service Prior to October 23, 2004

13 Kilowatt-hours produced and sold (see instructions) 

14

15 Add lines 13 and 14

Part I

3 0.021 13

14

15

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

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

and solar

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

landfill gas, trash, hydropower, and for electricity produced and sold after October 3, 2008, 

from marine and hydrokinetic renewables

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

.

16

17

Phaseout adjustment (see instructions)

Subtract line 16 from line 15

16

17

$ 3

Part I 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)

18

19

20

Tons produced and sold (see instructions)

Phaseout adjustment (see instructions)

Subtract line 19 from line 18

18

19

20

23 Credit before reduction. Add lines 17, 20, 21, and 22 

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

26 Divide line 24 by line 25. Show as a decimal carried to at least 4 places

27 Multiply line 23 by the lesser of 1⁄2 or line 26 

28 Subtract line 27 from line 23

23

24

25

26

27

28

Refined coal produced at a qualified refined coal production facility

3 $6.061

$ 3

.

22 Tons produced and sold (see instructions) 3 $1.589 22

29

30

31

29

30

31

32

Add lines 28 and 29. Partnerships and S corporations, report this amount on Schedule K; all

others continue to line 31

Renewable electricity, refined coal, and Indian coal production credit included on line 30 from

passive activities (see instructions)

Part II renewable electricity, refined coal, and Indian coal production credit from partnerships,

S corporations, cooperatives, estates, and trusts

32 Subtract line 31 from line 30

2008

Part II

Steel industry fuel produced at a qualified refined coal production facility

21 Barrel-of-oil equivalents produced and sold after September 30, 2008 3 $2.00 21

Indian coal produced at a qualified Indian coal production facility
Form 8835 (2008) Page 2

33 Renewable electricity, refined coal, and Indian coal production credit allowed for 2008 from a

passive activity (see instructions) 33

35 Carryback of renewable electricity, refined coal, and Indian coal production credit from 2009 (see 

instructions)

36 Add lines 32 through 35. Cooperatives, estates, and trusts, go to line 37; all others, report this amount

on Form 3800, line 29e

34 Carryforward of renewable electricity, refined coal, and Indian coal production credit to 2008. 34

35

36

37 Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions) 37

38 Cooperatives, estates, and trusts. Subtract line 37 from line 36. Report this amount on Form 3800,

line 29e 38

Section references are to the Internal

Revenue Code.

Purpose of Form

How To Figure the Credit

General Instructions 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 $1.50 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 the $8.75

over the adjusted threshold price, there is a

phaseout adjustment on line 19.

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 below).

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 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.

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 below) is:

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.

Note. For calendar year 2008, the effective

credit rate for electricity, refined coal, and

Indian coal produced and sold is,

respectively, 2.1 cents per kWh, $6.061 per

ton, and $1.589 per ton; there is no phaseout

adjustment.

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.

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).

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.

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.

Part I

● 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.

Part II

● Wind facility placed in service after

10/22/04 and before 1/01/10. This does not

include any facility for which any qualified

What’s New

● Marine and hydrokinetic renewable energy

is a new qualifying resource for the

production of electricity.

● Steel industry fuel is a new qualifying

resource for refined coal.

● 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)(A);

or

● $1.50 per ton for the sale of Indian coal

produced.

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.

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.

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) for

exceptions.

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
Form 8835 (2008) Page 3

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. This

does not apply to a refined coal facility

producing steel industry fuel.

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 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.

● 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

1/01/11, and any other facility producing

qualified hydroelectric production described

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

8/8/05 and before 1/01/11.

Line 14

Enter the kilowatt-hours of electricity 

produced and sold at qualified facilities and

multiply by $.01. Fiscal filers with 2009 sales

must figure line 14 as explained under Fiscal

year taxpayers above.

Line 2 and Line 16

Calendar year filers enter zero on line 2 or line

16. Fiscal year filers with sales in 2009 also

enter zero if the published 2009 reference

price is equal to or less than the 2009

adjusted threshold price. See How To Figure

the Credit on page 2 to figure the adjustment.

Line 18

Enter the tons of refined coal (other than steel

industry fuel) produced and sold during 2008

from a qualified refined coal production

facility and multiply by $6.061. Fiscal filers

with 2009 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 2009 also enter

zero if the published 2009 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 

Part I and Part II

Figure any renewable electricity, refined coal,

and Indian coal production credit from your

trade or business on lines 1 through 8 or lines

13 through 27. Skip lines 1 through 8 or lines

13 through 27 if you are only claiming a credit

that was allocated to you from an

S corporation, partnership, cooperative,

estate, or trust.

Enter the kilowatt-hours of electricity 

produced at qualified facilities and multiply by

$.021. Fiscal year filers with 2009 sales may

have to refigure lines 1 and 13 as explained

under Fiscal year taxpayers above.

Line 1 and Line 13

file an amended return to refigure your credit.

Use Form 8835 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 13.

● 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 and Line 24

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 22

Enter the tons of Indian coal produced and

sold from a qualified Indian coal facility and

multiply by $1.589.

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, for

information on how to allocate the credit. Rev.

Proc. 2007-65 is available at

www.irs.gov/irb/2007-45_IRB/ar18.html.

Fiscal year taxpayers. If you have sales in

2008 and 2009 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

2009, 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.

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 10/22/04 and before 1/01/11.

● Closed-loop biomass facility modified to

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

placed in service before 1/01/11. See section

45(d)(2).

● Closed-loop biomass facility that is a new

unit placed in service after 10/3/08 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 1/01/11.

● Open-loop biomass facility using

agricultural livestock waste placed in service

after 10/22/04 and before 1/01/11, and the

nameplate capacity rating is not less than 150

kilowatts.

● Open-loop biomass facility that is a new

unit placed in service after 10/3/08 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 10/22/04 and before 1/01/11.

● 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 10/3/08.

● Landfill gas or trash facility using municipal

solid waste placed in service after 10/22/04

and before 1/01/11.

● A refined coal production facility originally

placed in service after 10/22/04 and before

1/01/10, or a facility producing steel industry

fuel (or any modification to such a facility)

placed in service before 1/01/10.

● Marine and hydrokinetic renewable energy

facility placed in service after 10/02/08 and

before 1/01/12.

● The period beginning on the later of the

date the facility was placed in service, the

date the modifications (described in section

45(e)(8)(D)(iii)) were placed in service, or

October 1, 2008, and ending on the later of

December 31, 2009, or 1 year after the date

the facility or modifications (described in

section 45(e)(8)(D)(iii)) were placed in service

for steel industry fuel.

Line 21

Enter the barrel-of-oil equivalents of steel

industry fuel produced and sold after

September 30, 2008 from a qualified refined

coal facility and multiply by $2.00.

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, and before tax year 2007, you should
Form 8835 (2008) Page 4

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 11 hr., 57 min.

Learning about the law 

or the form 1 hr., 5 min.

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 31

Enter the amount included on line 30 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 33

Enter the passive activity credit allowed for

the 2008 renewable electricity, refined coal,

and Indian coal production credit from

Form 8582-CR or Form 8810.

Line 35

Use only if you amend your 2008 return to

carry back an unused renewable electricity,

refined coal, and Indian coal production credit

from 2009.

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 37,

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).

Line 11 and Line 37

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.

Estates and trusts. Allocate the credit on line

10 or line 36 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 37.