Form

Department of the Treasury

Internal Revenue Service

Renewable Electricity Production Credit OMB No. 1545-1362

 Attach to your tax return.

Attachment

Sequence No. 95

Current Year Credit

Electricity produced by qualified closed-loop biomass facility or qualified poultry waste

facility:

1 Kilowatt-hours produced and sold (see instructions)

2 Phaseout adjustment (see instructions)

3 Credit for electricity produced by closed-loop biomass or poultry waste facility. Subtract line 2 from line 1

Electricity produced by qualified wind facility:

4 Kilowatt-hours produced and sold (see instructions)

5 Phaseout adjustment (see instructions)

6 Credit for electricity produced by wind facility. Subtract line 5 from line 4

7 Total credit before reduction. Add lines 3 and 6

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 8 by line 9. Show as a decimal carried to at least 4 places

11 Multiply line 7 by line 10

12 Subtract line 11 from line 7

13 Renewable electricity

production credits

from pass-through

entities:

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

a Shareholder Schedule K-1 (Form 1120S), lines 12d, 12e, or 13

b Partner Schedule K-1 (Form 1065), lines 12c, 12d, or 13

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

14 Current year credit. Add lines 12 and 13

Part I

0.018







For Paperwork Reduction Act Notice, see page 3. Cat. No. 14954R Form 8835 (2003)

8835



Name(s) shown on return Identifying number

1

2

3

4

5

6

7

8

9

10

11

12

13

14



$

$

0.018

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

● Individuals. Enter the amount from Form 1040, line 41

15

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

●

●

18a 18a

Credit for child and dependent care expenses (Form 2441, line 11) 18b

Credit for the elderly or the disabled (Schedule R (Form 1040), line 24)

b

18d

Foreign tax credit

d

e 18e

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

18f f

18g g

Credit for fuel from a nonconventional source

h

Qualified electric vehicle credit (Form 8834, line 20)

Add lines 18a through 18l 18m

Net income tax. Subtract line 18m from line 17. If zero, skip lines 20 through 23 and enter -0- on line 24 19

16 Alternative minimum tax (see instructions) 16

19

Tentative minimum tax (see instructions)

20 20

Enter 25% (.25) of the excess, if any, of line 20 over $25,000 (see instructions)

22

Subtract line 23 from line 19. If zero or less, enter -0-

23 23

Credit allowed for the current year. Enter the smaller of line 14 or line 24 here and on Form 1040,

line 52; Form 1120, Schedule J, line 6d; Form 1120-A, Part I, line 2a; Form 1041, Schedule G, line

2c; or the applicable line of your return. If line 24 is smaller than line 14, see instructions 25

Mortgage interest credit (Form 8396, line 11)

c 18c

15 Regular tax before credits:

17 Add lines 15 and 16 17

21

Enter the greater of line 21 or line 22

21

22

i

Adoption credit (Form 8839, line 18) 18h

District of Columbia first-time homebuyer credit (Form 8859, line 11) 18i

j

k

l

Child tax credit (Form 1040, line 49)

Education credits (Form 8863, line 18)

18j

18k

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

Net regular tax. Subtract line 18m from line 15. If zero or less, enter -0-

24 24



25

.

18l

Credit for qualified retirement savings contributions (Form 8880, line 14)

m

2003
Form 8835 (2003) Page 2

Section references are to the Internal Revenue Code.

Purpose of Form

Qualified energy resources means closed-loop biomass,

poultry waste, and wind.

Closed-loop biomass means the use of any organic

material from a plant that is planted exclusively for use at a

qualified facility to produce electricity. It does not include the

use of any waste materials (such as scrap wood, manure, or

municipal or agricultural waste) or standing timber.

A qualified facility is a facility placed in service before

2004 that is:

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.

Specific Instructions

Figure any renewable electricity production credit from your

trade or business on lines 1 through 12. Skip lines 1 through

12 if you are only claiming a credit that was allocated to you

from an S corporation, partnership, estate, or trust.

How To Figure the Credit

Line 4

Use Form 8835 to claim the renewable electricity production

credit. The credit is allowed only for the sale of electricity

produced in the United States or U.S. possessions from

qualified energy resources at a qualified facility (see

Definitions below).

Fiscal year taxpayers. If you have sales in 2003 and 2004

and the credit rate on line 1 or 4 or the phaseout adjustment

on line 2 or 5 is different for 2004, 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 lines 1 and 2 or lines 4

and 5. Attach the computations to Form 8835 and write “FY”

in the margin.

Line 1

Line 2

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 below). The credit is proportionately phased out

over a 3-cent range when the reference price exceeds the

8-cent threshold price. Both the 1.5-cent credit rate and the

8-cent threshold price 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. 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 above the

adjusted threshold price, there is a phaseout adjustment on

lines 2 and 5.

The credit is also reduced for any government grants,

subsidized financing, and other credits. See the instructions

for line 8 for details.

Note: For calendar year 2003, per Notice 2003-29, 2003-20

I.R.B. 917, the credit is 1.8 cents per kWh and there is no

phaseout adjustment.

Credit period means the 10-year period beginning on the

date the facility was originally placed in service.

Example. If the reference price is 10.0¢ and the adjusted

threshold price is 9.0¢, reduce the credit by 1/3 ((10.0¢ –

9.0¢) ÷ 3¢ = 1⁄3 = .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. This also applies to line 5 of

the form.

Definitions

General Instructions

Poultry waste means poultry manure and litter, including

wood shavings, straw, rice hulls, and other bedding material

for the disposition of manure.

● A taxpayer-owned facility originally placed in service after

1992 that uses closed-loop biomass to produce electricity;

● A taxpayer-owned facility originally placed in service after

1993 that used wind to produce electricity (see Rev. Rul.

94-31, 1994-1 C.B. 16, for details); or

● A facility of the taxpayer originally placed in service after

1999 that uses poultry waste to produce electricity. If a

governmental unit owns the facility, the lessor or operator of

the facility is eligible for the credit.

Enter the kilowatt-hours of electricity produced and sold

during 2003 from a facility using closed-loop biomass or

poultry waste as the renewable resource and multiply by

$.018. Fiscal year filers with 2004 sales must figure line 1 as

explained under Fiscal year taxpayers above.

Calendar year filers enter zero on line 2. Fiscal year filers

with sales in 2004 also enter zero if the published 2004

reference price is equal to or less than the 2004 adjusted

threshold price. See How To Figure the Credit to figure the

adjustment.

Enter the kilowatt-hours of electricity produced and sold

during 2003 that qualify for the credit from a qualified wind

facility and multiply by $.018. Fiscal year filers with 2004

sales must figure line 4 as explained under Fiscal year

taxpayers above. Generally, no credit is allowed for

electricity produced at a qualified wind facility placed in

service after June 30, 1999, and sold to a utility under a

contract originally entered into before 1987 (whether or not

the contract was amended after 1986). See section 45(d)(7)

for exceptions and more details.

Part I—Current Year Credit

Line 5

Calendar year filers enter zero on line 5. Fiscal year filers

with sales in 2004 also enter zero if the published 2004

reference price is equal to or less than the 2004 adjusted

threshold price. See How To Figure the Credit to figure the

adjustment.

Line 8

● Grants provided by the United States, a state, or political

subdivision of a state for the project;

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

Caution: At the time this form was issued, Congress was

considering legislation that would also allow this credit with

respect to electricity produced at qualified facilities placed

in service after 2003. See What’s Hot in Tax Forms,

Pubs, and Other Tax Products at

www.irs.gov/formspubs/index.html to find out if this

legislation was enacted.
Form 8835 (2003) Page 3

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.

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.

Part II—Allowable Credit

Who must file Form 3800. You must file Form 3800 if you

have:

Line 22

Line 21

Line 25

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.

● Individuals: Form 6251, line 33.

● Corporations: Form 4626, line 12.

● Estates and trusts: Form 1041, Schedule I, line 54.

Estates and trusts. Allocate the line 14 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

line 14 entry, 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.

Recordkeeping 11 hr., 28 min.

Learning about the law

or the form 24 min.

Preparing and sending

the form to the IRS 36 min.

● A renewable electricity production credit from a passive

activity,

● More than one credit included in the general business

credit (other than a credit from Form 8844 or 8884), or

● A carryback or carryforward of any of those credits.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated

average time is:

Line 16

● Individuals: Form 6251, line 35.

● Corporations: Form 4626, line 14.

● Estates and trusts: Form 1041, Schedule I, line 56.

Enter the alternative minimum tax (AMT) from the following line

of the appropriate form or schedule.

Although you may not owe AMT, you generally must still

compute the tentative minimum tax (TMT) to figure your

credit. For a small corporation exempt from the AMT under

section 55(e), enter zero. Otherwise, complete and attach the

applicable AMT form or schedule. Enter on line 22 the TMT

from the line shown below.

See section 38(c)(4) for special rules that apply to married

couples filing separate returns, controlled groups, regulated

investment companies, real estate investment trusts, and

estates and trusts.

If you cannot use all of the credit because of the tax liability

limit (line 24 is smaller than line 14), carry the unused credit

back 1 year then forward up to 20 years. See the instructions

for Form 3800 for details.

The credit allowed for the current year may be limited based

on your tax liability. Use Part II to figure the allowable credit

unless you must file Form 3800, General Business Credit.

See the instructions for Form 3800 to find out which

credits are included in the general business credit.

Line 14

S corporations and partnerships. Allocate the line 14 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.”

Pass-through entities should report the amount on line 14 as

follows.

● 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

● The amount of any other credit allowable for any property

that is part of the project.