Notice

If you downloaded this form prior to January 

2006, you may want to download it again as we 

made the following correction. The caption for 

line 14 of Section B now reads “Multiply line 10 

by the lesser of 1⁄2 or line 13.” It formerly and 

incorrectly read “Multiply line 12 by the lesser of 1⁄2 

or line 13.” 
Form

Department of the Treasury

Internal Revenue Service

Renewable Electricity and Refined Coal

Production Credit

O

 Attach to your tax return.

A

S

Current Year Credit

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 other credits allowed for the project for this and all prior tax years

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

11

Multiply line 3 by line 6

12

Subtract line 7 from line 3

13

Section A credits

from pass-through

entities:

14

Current year credit. Add lines 8 and 9

Part I

0.018



For Paperwork Reduction Act Notice, see page 4. Cat. No. 14954R 

8835



Name(s) shown on return Identifying num

1

2

3

4

5

6

7

8

9

10

11

12

13

$

Part II Allowable Credit (See Who must file Form 3800 to find out if you complete Part II or file F

15

a 14a

b Credits from Form 1040, lines 47 through 53 14b

Foreign tax credit

Possessions tax credit (Form 5735, line 17 or 27)

Credit for fuel from a nonconventional source

Qualified electric vehicle credit (Form 8834, line 20)

Add lines 14a through 14e

21

Net income tax. Subtract line 14f from line 13. If zero, skip lines 16 through 19 and enter -0-

on line 20

16

Alternative minimum tax (see instructions)

19 19

Tentative minimum tax (see instructions)

16

20

Enter 25% (.25) of the excess, if any, of line 16 over $25,000

(see instructions)

Subtract line 19 from line 15. If zero or less, enter -0-

Credit allowed for the current year. Enter the smaller of line 10 or line 20. Report the total of

this amount and the amount from Section B, line 40, on Form 1040, line 54; Form 1120, Schedule

J, line 6d; Form 1120-A, Part I, line 2; Form 1041, Schedule G, line 2c; or the applicable line of

your return. If line 20 is smaller than line 10, see instructions 

15

Regular tax before credits (see instructions)

17

Add lines 11 and 12

20

21

Enter the greater of line 17 or line 18

17

18

c

d

e

14c

14d

Net regular tax. Subtract line 14f from line 11. If zero or less,

enter -0-

14e

f

Section A. Electricity produced at qualified facilities placed in service prior to October 23, 2

Caution:

14f

18

If you also have credits from qualified facilities placed in service after October 22, 2004,

complete Section A and then complete Section B below.

Current Year Credit

1 Kilowatt-hours produced and sold (see instructions)

2 Kilowatt-hours produced and sold after October 22, 2004, and before January 1, 2005

3

4

Kilowatt-hours produced and sold after December 31, 2004

Add lines 1, 2, and 3

Part I

0.018



 1

2

3

4

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

Electricity produced at qualified facilities using wind, closed-loop biomass not modified

for co-fire purposes, geothermal, and solar

Electricity produced at qualified facilities using open-loop biomass (cellulosic or

agricultural livestock waste), small irrigation power, landfill gas, and trash combustion

(see instructions) 0.018

(see instructions)  .009

If you are a— Then enter the credit(s) from—

a Shareholder Schedule K-1 (Form 1120S), box 13, code G, H, or V

b Partner Schedule K-1 (Form 1065), box 15, code G, H, or U

c Beneficiary Schedule K-1 (Form 1041), line 14 

(Rev. December 2005)
5

6

7

8

9

Phaseout adjustment (see instructions)

24

Subtract line 5 from line 4

30

Tons produced and sold (see instructions)

31

Phaseout adjustment (see instructions)

32

Subtract line 8 from line 7

If you are a— Then enter the credit(s) from—

a Shareholder Schedule K-1 (Form 1120S), box 13, code G, H, or V

b Partner Schedule K-1 (Form 1065), box 15, code G, H, or U

c Beneficiary Schedule K-1 (Form 1041), line 14

33

Add lines 15, 22, and 23

5

6

7

8

9

24

30

31

32



Part II Allowable Credit

34

a 33a

b Credits from Form 1040, lines 47 through 53 33b

Foreign tax credit

Possessions tax credit (Form 5735, line 17 or 27)

Credit for fuel from a nonconventional source

Qualified electric vehicle credit (Form 8834, line 20)

Add lines 33a through 33e

40

Net income tax. Subtract line 33f from line 32. If zero, skip lines 35 through 38 and enter

-0- on line 39

35

Alternative minimum tax (see instructions)

35

39

Enter 25% (.25) of the excess, if any, of line 35 over $25,000 (see instructions)

Subtract line 38 from line 37. If zero or less, enter -0-

Credit allowed for the current year. Enter the smaller of line 29 or line 39. Report this amount

and the amount from Section A, line 21 (if any) on Form 1040, line 54; Form 1120, Schedule J,

line 6d; Form 1120-A, Part I, line 2; Form 1041, Schedule G, line 2c; or the applicable line of

your return. If line 40 is smaller than line 29, see instructions 

34

Regular tax before credits (see instructions)

36

Add lines 30 and 31

39

40

36

c

d

e

33c

33d

Net regular tax. Subtract line 33f from line 30. If zero or less, enter -0-

33e

f 33f

Form 8835 (2004) 

10 Credit before reduction. Add lines 6 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 other credits allowed for the project for this and all prior tax years

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

23 Section B credits

from pass-through

entities:

10

11

12

13

14

15

$ 

Refined coal produced at a qualified refined coal production facility

 $5.351

$ 

Electricity produced at qualified closed-loop biomass facilities modified to co-fire with

coal, with other biomass, or both

16 Thermal content of closed-loop biomass used in the facilities

17 Thermal content of all fuels used in the facilities 

18 Divide line 16 by line 17. Show as a decimal carried to at least two places

16

17

18

19 Kilowatt-hours produced and sold (see instructions)  0.018 19

20 Multiply line 19 by line 18 20

21 Phaseout adjustment (see instructions) $  21

22 Subtract line 21 from line 20 22

23

25 Renewable electricity and refined coal production credit included on line 24 from passive activities

(see instructions) 25

26 Subtract line 25 from line 24 26

27 Renewable electricity and refined coal production passive activity credit allowed for 2004

(see instructions) 27

28 Carryback of renewable electricity and refined coal production credit from 2005 (see instructions) 28

29 Current year credit. Add lines 26 through 28 29

37 Subtract line 36 from line 34. If zero or less, enter -0- 37

38 General business credit (see instructions) 38
Form 8835 (2004) 

Section references are to the Internal Revenue

Code.

Purpose of Form

How To Figure the Credit

Definitions

General Instructions

What’s New

The following are new qualifying resources and

facilities for the production of electricity.

● Open-loop biomass used in an open-loop

biomass facility.

● Geothermal energy used in a geothermal

facility.

● Solar energy used in a solar facility.

● Small irrigation power used in small

irrigation power facility.

● Municipal solid waste used in a landfill gas

facility.

● Municipal solid waste used in a trash

combustion facility.

A new, separate resource and facility not

used in the production of electricity is refined

coal from a refined coal production facility.

Use Form 8835 to claim the renewable

electricity and refined coal production credit.

The credit is allowed only for the sale of

electricity or refined coal produced in the

United States or U.S. possessions from

qualified energy resources at a qualified

facility (see Definitions below).

Note. For calendar year 2004 the credit for

electricity and refined coal produced and sold

is, respectively, 1.8 cents per kWh and $5.351

per ton; there is no phaseout adjustment for

either.

Generally, the credit is 1.5 cents per kilowatthour (kWh) for the sale of electricity produced

by the taxpayer from qualified energy

resources at a qualified facility during the

credit period (see Definitions below). The 1.5

cents credit amount is reduced by 1⁄2 for openloop biomass, small irrigation, landfill gas and

trash combustion facilities. In the case of a

closed-loop biomass facility, the 1.5 cent

amount is multiplied by the ratio of the thermal

content of the closed-loop biomass used in

the facility to the thermal content of all fuels

used in the facility. 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).

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¢) 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.

Qualified energy resources means wind,

closed-loop biomass, poultry waste,

open-loop biomass, geothermal energy, solar

energy, small irrigation power, municipal solid

waste, and refined 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 cellulosic or

agricultural livestock waste materials as

defined in section 45(c)(3).

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

synthetic 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 a refined

coal production facility, refined coal. The

facilities are broken down by form section.

Section A

● Poultry waste facility placed in service after

12/31/99 and before 1/1/04.

● 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 1/1/06.

● Closed-loop biomass facility placed in

service after 10/22/04 and before 1/1/06.

● Closed-loop biomass facility modified to

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

placed in service before 1/1/06. See section

45(d)(2).

● Open-loop biomass facility using cellulosic

waste placed in service before 1/1/06.

● Open-loop biomass facility using agricultural

livestock waste placed in service after

10/22/04 and before 1/1/06 and the nameplate

capacity rating is not less than 150 kilowatts.

● Geothermal energy faci

after 10/22/04 and before 

● Solar energy facility plac

10/22/04 and before 1/1/06

● Small irrigation power fa

after 10/22/04 and before 1

● Landfill gas or trash com

municipal solid waste place

10/22/04 and before 1/1/06

● A refined coal production 

placed in service after 10/2

1/1/09.

A qualified facility does not 

that qualifies for the credit 

producing fuel from a nonc

the current or any prior tax 

Credit period is:

● 10 years for a wind, poul

closed-loop biomass (not m

purposes), or refined coal p

beginning on the date the f

service.

● 5 years for an open-loop 

using cellulosic waste, beg

facility was placed in servic

10/22/04.

● 5 years for an open-loop 

agricultural livestock waste

energy, small irrigation pow

trash combustion facility, b

the facility was placed in se

● 10 years for a closed-loo

modified to co-fire with coa

both), beginning on the dat

placed in service but not ea

United States and U.S. po

the seabed and subsoil of t

areas that are adjacent to t

over which the United State

rights according to internat

Who Can Take th

Generally, the owner of the 

the credit. In the case of clo

and open-loop biomass fac

not the producer of the elec

the operator of the facility i

credit. If a governmental un

waste facility, the lessee or 

facility is eligible for the cre

Specific Instruct

Section A and Se

Note. Where line reference

and B differ, the Section B 

parentheses.

Figure any renewable ele

coal production credit from 

business on lines 1 through 

22 of Section B). Skip lines 

through 22 of Section B) if 

a credit that was allocated 

corporation, partnership, es

Fiscal year taxpayers. If y

2004 and 2005 and the cre

(lines 1, 2, 7, or 19 of Secti

phaseout adjustment on lin

of Section B) is different fo

separate computations for 

respective sales, credit rate

adjustment for each calend

total of the two computatio

line(s)—line 1 of Section A 

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 lines 5

and 21 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



See section 45 for more details.

the threshold price, but not more than the

$8.75 over the adjusted threshold price, there

is a phaseout adjustment on line 8 of Section

B.
Form 8835 (2004) 

● 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

Part I—Current Year Credit

Line 1 (Lines 2 and 19, Section B)

Enter the kilowatt-hours of electricity produced

at qualified facilities and multiply by $.018.

Fiscal year filers with 2005 sales may have to

refigure lines 1, 2, and 19 as explained under

Fiscal year taxpayers above.

Line 3, Section B only

Enter the kilowatt-hours of electricity produced

and sold at qualified facilities during 2005 and

multiply by the credit amount determined for

2005. Fiscal filers with 2005 sales must figure

lines 1, 2, and 19 as explained under Fiscal

year taxpayers above.

Line 2, Section A (Lines 5 and 21,

Section B)

Calendar year filers enter zero on lines 2, 5, and

21. Fiscal year filers with sales in 2005 also enter

zero if the published 2005 reference price is

equal to or less than the 2005 adjusted threshold price. See How To Figure the Credit to

figure the adjustment.

Line 7, Section B only

Enter the tons of refined coal produced and

sold during 2004 from a qualified refined coal

production facility and multiply by $5.351.

Fiscal filers with 2005 sales must figure line 7

as explained under Fiscal year taxpayers

above.

Line 8, Section B only

Calendar year filers enter zero on line 8. Fiscal

year filers with sales in 2005 also enter zero if

the published 2005 reference price is equal to

or less than 1.7 times the 2002 reference

price. See How To Figure the Credit to figure

the adjustment.

Line 4, Section A (Line 11, Section B)

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

of:

● The amount of any other credit allowable for

any property that is part of the project.

Line 25, Section B only

Enter the amount included on line 24 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 27, Section B only

Enter the passive activity credit allowed for the

2004 renewable electricity and refined coal

production credit from Form 8582-CR or

Form 8810.

Line 10, Section A (Line 29, Section B)

Pass-through entities should report the

amount on lines 10 and 29 as follows.

S corporations and partnerships. Allocate

the line 10 (line 29 of Section B) credit to the

shareholders or partners. Attach Form 8835 to

the S corporation or partnership return, and

show on Schedule K-1 each shareholder’s or

partner’s credit. Electing large partnerships

include this credit in “general credits.”

Estates and trusts. Allocate the line 10 (line

29 of Section B) credit between the estate or

trust and the beneficiaries in proportion to the

income allocated to each. On the dotted line

to the left of the entry space, enter the estate

or trust’s share of the credit. Label it “1041

portion” and use it in Part II (or on Form 3800,

if required) to figure the credit to claim on

Form 1041.

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, use Part II to figure the

allowable credit unless you must file Form

3800, General Business Credit.

● A renewable electricity production credit

from a passive activity (in Section A),

● More than one credit included in the general

business credit (other than a credit from Form

8844, Form 8884, or Section B of Form 8835),

or

● A carryback or carryforward of any of those

credits.

See the instructions for Form 3800 to find out

which credits are included in the general business credit.

Line 11, Section A (Line 30, 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 43.

● Corporations. Enter the amount from Form

1120, Schedule J, line 3; Form 1120-A, Part I,

line 1; 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 12, Section A (Line 31, 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 17, Section A (Line 36, Section B)

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

to married couples filing separate returns,

Line 18, Section A only

Although you may not owe 

must still compute the tent

(TMT) to figure your credit. 

corporation exempt from th

55(e), enter zero. Otherwise

the applicable AMT form o

line 18 the TMT from the lin

● Estates and trusts: For

line 54.

● Individuals: Form 6251

● Corporations: Form 462

Line 38, Section B only

● The amount from the la

separate general busines

● Form 8884, line 21.

● Form 8844, line 24.

Enter the amount of all ot

for the current year includ

business credit. If you are 

enter the amount from lin

plus the following.

Line 21, Section A (Line 

If you are completing Sec

use all of the credit becau

limit (line 20 is smaller tha

unused credit back 1 yea

20 years.

Paperwork Reduction A

for the information on this 

the Internal Revenue laws 

States. You are required 

information. We need it to 

complying with these law

figure and collect the righ

You are not required to 

information requested on 

subject to the Paperwork 

unless the form displays 

number. Books or record

or its instructions must be 

their contents may becom

administration of any Inte

Generally, tax returns and 

are confidential, as requir

The time needed to co

form will vary depending 

circumstances. The estim

is:

Recordkeeping 

Learning about the law 

or the form 

Preparing and sending

the form to the IRS 

If you have comments 

accuracy of these time es

suggestions for making th

would be happy to hear f

instructions for the tax re

form is filed.

Section B)—or the phaseout adjustment

line(s)—line 2 of Section A (lines 5, 8, or 21 of

Section B). Attach the computations to Form

8835 and write “FY” in the margin.

Line 28, Section B only

Use only if you amend your 2004 return to

carry back an unused renewable electricity or

refined coal production credit from 2005.

If you are completing 

cannot use all of the cr

tax liability limit (line 39 

line 29), you cannot car

back; you must carry th

forward for 20 years.

controlled groups, regulate

companies, real estate inv

estates and trusts.

Who must file Form 3800. You must file

Form 3800 if you have: