2023 Instructions for Form 3468

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2023

Instructions for Form 3468

Investment Credit

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless

otherwise noted.

Future Developments

For the latest information about developments related to Form

3468 and its instructions, such as legislation enacted after they

were published, go to IRS.gov/Form3468.

What’s New

2023 Form 3468. The form has been redesigned to support the

provisions created by the Inflation Reduction Act of 2022 (IRA

2022) and the Creating Helpful Incentives to Produce

Semiconductors Act of 2022 (CHIPS 2022).

Facility Information. Form 3468 and its instructions were

changed to require separate information and computation of

investment tax credit for each facility or property placed in

service in 2023. See Part I—Facility Information.

Tax-exempt and governmental entities. For tax years

beginning after 2022, applicable entities (such as certain

tax-exempt and governmental entities) can elect to treat certain

investment credits as a payment of income tax. See Applicable

Entities, later.

Transfer of certain investment tax credits. For tax years

beginning after 2022, eligible taxpayers, partnerships, and S

corporations can elect to transfer all or part of the credit amount

otherwise allowed as a general business credit to an unrelated

third-party buyer in exchange for cash. Eligible taxpayers don’t

include applicable entities. See

Credit Transfers, later.

Elective payment for advanced manufacturing investment

credit. For a facility placed in service after 2022, eligible

taxpayers, partnerships, and S corporations can elect to treat

advanced manufacturing investment credit under CHIPS 2022

as a payment of tax. See

Elective Payment Under Section

48D(d), later.

Pre-filing registration. The IRS has established a pre-filing

registration process that must be completed prior to electing

payment or transfer of the investment credit figured in Parts III,

IV, and VI. See

Pre-filing Registration Requirement For Payments

and Transfers, later.

Reminders

Advanced manufacturing investment credit. CHIPS 2022

added a new investment credit equal to 25% of the qualified

investment in any advanced manufacturing facility for the primary

purpose of the manufacturing of semiconductors or

semiconductor manufacturing equipment under section 48D.

This credit applies to property placed in service after 2022, and,

for any property that construction of which begins prior to 2023,

only to the extent of the basis attributable to the construction,

reconstruction, or erection after August 9, 2022. This credit is

figured in Part IV.

New and modified energy investment credits. IRA 2022

modified and extended the following.

•

Section 48C provides a tax credit of up to 30% of the

qualified investment in an advanced energy project that

meets the prevailing wage and apprenticeship requirements.

IRA 2022 provides $10 billion of allocations, directs a

minimum share to section 48C(e) energy communities

census tracts, and expands eligibility to new types of

qualifying advanced energy projects. This credit is figured in

Part III.

•

Section 48 provides an energy credit for investment in

energy property. This credit amount can be increased by 5

times for projects meeting prevailing wage and

apprenticeship requirements or project requirements,

including energy storage technology property, qualified

biogas property, microgrid controllers property, and clean

hydrogen production facilities elected to be treated as

energy property. This credit is figured in Part VI.

•

Section 48 also provides 3 bonus credits if certain

conditions are met.

• The energy credit is increased by up to 10% for

projects meeting certain domestic content requirements

for steel, iron, and manufactured products.

• The energy credit is increased by up to 10% if located

in an energy community.

• The energy credit is increased by up to 20% on certain

solar and wind facilities placed in service in connection

with low-income communities.

•

The energy credit and any increased or bonus amounts are

figured in sections A-M of Part VI. See Lines 7 and 8, Line 9,

Line 10, and Lines 11 and 12, for the requirements to claim

these increased bonus amounts.

General Instructions

Purpose of Form

Use a separate Form 3468 to enter information and amounts in

the appropriate parts to claim a credit for each investment

property and any unused investment credit amount from

cooperatives.

Complete a separate Form 3468 to claim an investment credit

for each facility or property. You must complete Part I to report

facility or property information and the appropriate part (Part II–

VII) to compute your investment credit for such facility or

property.

•

Part II—Qualifying Advanced Coal Project Credit, section A;

•

Part II—Qualifying Gasification Project Credit, section B;

•

Part III—Qualifying Advanced Energy Project Credit;

•

Part IV—Advanced Manufacturing Investment Credit;

•

Part VI—Energy Credit, sections A through N; or

•

Part VII—Rehabilitation Credit.

Patrons, including cooperatives that are patrons in other

cooperatives, file a separate Form 3468 to enter any unused

qualifying advanced coal project credit, qualifying gasification

project credit, qualifying advanced energy project credit,

advanced manufacturing investment credit, energy credit, or

rehabilitation credits allocated from cooperatives. Enter “Unused

Investment Credit from Cooperatives” on a separate Form 3468,

Part I, line 1, and enter the total unused amounts (if any) on the

applicable part below.

•

Part II, line 6.

•

Part III, line 2.

•

Part IV, line 2.

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•

Part VI, section N, line 31.

•

Part VII, line 2.

Note. If you are an individual and file electronically, you must

send in a paper Form 8453, U.S. Individual Income Tax

Transmittal for an IRS e-file Return, if attachments are required

for Form 3468.

Investment Credit Property

Investment credit property is any depreciable or amortizable

property that qualifies for the qualifying advanced coal project

credit, qualifying gasification project credit, qualifying advanced

energy project credit, advanced manufacturing investment credit,

energy credit, or rehabilitation credit.

You can't claim a credit for property that is:

•

Used mainly outside the United States (except for property

described in section 168(g)(4));

•

Used by a governmental unit or foreign person or entity (see

exceptions below);

•

Used for lodging or in the furnishing of lodging (see section

50(b)(2) for exceptions); or

•

Certain MACRS business property to the extent it has been

expensed under section 179.

Exceptions

•

Investment credit property used by a governmental unit or

foreign person or entity for a qualified rehabilitated building

leased to that unit, person, or entity; and property used

under a lease with a term of less than 6 months;

•

A tax-exempt organization or governmental entity which is

generally unable to claim an investment credit must

complete and attach Form 3468 and Form 3800 to Form

990-T, or other applicable income tax return, to claim a

section 48C credit or section 48 credit for which an election

is made under section 6417 for any tax year. See the

Instructions for Form 3800, at

IRS.gov/Form3800.

Qualified Progress Expenditures

Qualified progress expenditures are those expenditures made

before the property is placed in service and for which the

taxpayer has made an election to treat the expenditures as

progress expenditures. Qualified progress expenditure property

is any property that is being constructed by or for the taxpayer

and which (a) has a normal construction period of 2 years or

more, and (b) it is reasonable to believe that the property will be

new investment credit property in the hands of the taxpayer

when it is placed in service. The placed-in-service requirement

doesn't apply to qualified progress expenditures.

Qualified progress expenditures for:

•

Self-constructed property means the amount that is properly

chargeable (during the tax year) to a capital account with

respect to that property; or

•

Non-self-constructed property means the lesser of (a) the

amount paid (during the tax year) to another person for the

construction of the property; or (b) the amount that

represents the proportion of the overall cost to the taxpayer

of the construction by the other person, which is properly

attributable to that portion of the construction that is

completed during the tax year.

For more information on qualified progress expenditures, see

section 46(d) (as in effect on November 4, 1990). For details on

qualified progress expenditures for the rehabilitation credit, see

section 47(d).

For details on qualified progress expenditures for the

advanced manufacturing investment credit, see section 48D(b)

(5).

At-Risk Limit for Individuals and

Closely Held Corporations

The cost or basis of property for investment credit purposes may

be limited if you borrowed against the property and are protected

against loss, or if you borrowed money from a person who is

related or who has an interest (other than as a creditor) in the

business activity. The cost or basis must be reduced by the

amount of the nonqualified nonrecourse financing related to the

property as of the close of the tax year in which the property is

placed in service. If, at the close of a tax year following the year

property was placed in service, the nonqualified nonrecourse

financing for any property has increased or decreased, then the

credit base for the property changes accordingly. The changes

may result in an increased credit or a recapture of the credit in

the year of the change. See sections 49 and 465 for details.

Recapture of Credit

You may have to refigure the investment credit and recapture all

or a portion of it if:

•

You dispose of investment credit property before the end of

5 full years after the property was placed in service

(recapture period);

•

You change the use of the property before the end of the

recapture period so that it no longer qualifies as investment

credit property;

•

The business use of the property decreases before the end

of the recapture period so that it no longer qualifies (in whole

or in part) as investment credit property;

•

Any building to which section 47(d) applies will no longer be

a qualified rehabilitated building when placed in service;

•

Any property to which section 48(b), 48A(b)(3), 48B(b)(3),

48C(b)(2), or 48D(b)(5) applies will no longer qualify as

investment credit property when placed in service;

•

Before the end of the recapture period, your proportionate

interest is reduced by more than 1/3 in an S corporation,

partnership, estate, or trust that allocated the cost or basis of

property to you for which you claimed a credit;

•

You return leased property (on which you claimed a credit)

to the lessor before the end of the recapture period;

•

A net increase in the amount of nonqualified nonrecourse

financing occurs for any property to which section 49(a)(1)

applied;

•

You engage in an applicable transaction, as defined in

section 50(a)(6)(D).

Exceptions to recapture. Recapture of the investment credit

doesn't apply to any of the following.

1. A transfer due to the death of the taxpayer.

2. A transfer between spouses or incident to divorce under

section 1041. However, a later disposition by the transferee

is subject to recapture to the same extent as if the transferor

had disposed of the property at the later date.

3. A transaction to which section 381(a) applies (relating to

certain acquisitions of the assets of one corporation by

another corporation).

4. A mere change in the form of conducting a trade or

business if:

a. The property is retained as investment credit property in

that trade or business, and

b. The taxpayer retains a substantial interest in that trade

or business.

A mere change in the form of conducting a trade or business

includes a corporation that elects to be an S corporation and a

corporation whose S election is revoked or terminated.

Instructions for Form 3468 (2023)

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Any required recapture is reported on Form 4255, Recapture

of Investment Credit. For more information, see the form and

instructions for Form 4255.

See section 46(g)(4) (as in effect on November 4, 1990),

and related regulations, if you made a withdrawal from a

capital construction fund set up under the Merchant

Marine Act of 1936 to pay the principal of any debt incurred in

connection with a vessel on which you claimed investment

credit.

Specific Instructions

S Corporations, Partnerships,

Estates, and Trusts

Complete and attach a separate Form 3468 to your return for

each facility or property that you use in your trade or business,

even if the following apply.

1. You cannot claim the credit,

2. You didn’t elect to treat section 48D credit as a payment

under section 48D(d), or

3. You didn’t elect to transfer section 48C credit or section 48

credit (or portion of such credits) under section 6418.

To figure the cost or basis of each facility or property to pass

through to the individual shareholders, partners, or beneficiaries,

complete required facility information lines of Part I and only the

following.

•

Part II, lines 1a, 2a, 3a, 4a, 5a, and 6 (if applicable).

•

Part III, lines 1a, 1d, 1e, and 2 (if applicable).

•

Part IV, lines 1a, 1b, and 2 (if applicable).

•

Part VI, lines 1a, 3a, 3e, 5a, 5f, 5o, 7a, 7j, 9a, 9b, 11a, 11d,

11h, 13a, 15a, 17a, 17e, 19a, 21a, 23a, 23e, 25a, 25d, 25g,

25j, 29a, and 31 (if applicable).

•

Part VII, lines 1a through 1g, 1k, and 2 (if applicable).

Attach a statement to Schedule K-1 that provides this

necessary information and distributive share of amounts that

each partner, shareholder, and beneficiary will need to compute

their share of the credit related to investment property on their

Form 3468. See the instructions for Form 1065, U.S. Return of

Partnership Income; Form 1120-S, U.S. Income Tax Return for

an S Corporation; Form 1041, U.S. Income Tax Return for

Estates and Trusts; and Schedules K and K-1 for details.

If you reported any unused investment credits allocated from

cooperatives on a Form 3468, Part I, line 1, “Unused Investment

Credit from Cooperatives,” see the reporting instructions for

Schedules K and K-1 of Form 1120-S, Form 1065, or Form 1041.

Note. If you’re electing a payment under section 48D, Part IV; or

electing to transfer a credit under section 48C, Part III; or electing

a payment or transferring under section 48, Part VI, you must

also report the current credit amount for such facility or property

on the applicable total line of Form 3468 and the applicable line

of Form 3800, Part III.

This information and the partner's, shareholder's, or

beneficiary's distributive share of amounts should not

include any investment credits for which an elective

payment election was made under section 48D(d) or a transfer

election was made under section 6418.

If you elected to treat section 48D credit as a payment under

section 48D(d)(2)(A) or elected to transfer section 48C credit or

section 48 credit (or a portion of such credits) under section

6418(c), you must complete all applicable parts and lines of

Form 3468 (including the registration number on line 2a of Part I)

CAUTION

to compute the credit amount with respect to the facility or

property.

You must report any credit amount for a facility or property on

Part III, line 3; Part IV, line 3; or Part VI, line 32 of Form 3468, on

the applicable lines of Form 3800, Part III, and attach both to

your return.

See the Instructions for Form 3800 for determining credits

allowed (in the case of estates and trusts), reporting of elective

payment amount of section 48D credit and transferred amount

and non-transferred amount (if any) of section 48C and section

48 credits on Schedules K and K-1 of Form 1065, Form 1120-S,

and Form 1041.

Applicable Entities

For tax years beginning after 2022, applicable entities as defined

under section 6417(d)(1)(A) that generally don't benefit from

income tax credits can elect to treat the business credit under

sections 48C and 48 as a payment of income tax. Resulting

overpayments may result in refunds.

Applicable entities making the elective payment election for

the investment credits under section 48C or section 48 must file

the following.

•

Form 3468 with any required statements;

•

Form 3800, General Business Credit; and

•

Form 990-T, Exempt Organization Business Income Tax

Return, or other applicable tax return.

For a discussion of what is an applicable entity, see

Applicable entity making elective payment election on IRA 2022

credits in the Instructions for Form 3800. For more information on

elective payment elections under section 6417, see Elective

Payment of Certain Business Credits Under Section 6417 or

Section 48D in the Instructions for Form 3800.

Elective Payment Under Section

48D(d)

For qualified property placed in service after 2022 that is part of

an advanced manufacturing facility, a taxpayer can elect to treat

the credit as a payment against tax. A partnership or S

corporation can elect to receive the credit as a payment. The

following must be filed with your return to make an elective

payment election under section 48D.

•

Form 3468; and

•

Form 3800.

For more information on elective payment elections under

section 48D see Elective Payment of Certain Business Credits

Under Section 6417 or Section 48D in the Instructions for Form

3800.

Credit Transfers

For tax years beginning after 2022, under section 6418, eligible

taxpayers, partnerships, and S corporations can elect to transfer

all or part of the credit figured in Part III and Part VI to an

unrelated third-party buyer in exchange for cash. For more

information on credit transfers, see Transfer of Eligible Credits

Under Section 6418 in the Instructions for Form 3800.

Pre-filing Registration Requirement

For Payments and Transfers

Before you file your tax return, if you intend to make an elective

payment election or transfer election on Form 3800 for the credit

in Part III, IV, or VI, you must complete a pre-filing registration for

each property or facility. To register, go to IRS.gov/Register for

elective payment or transfer of credits. See Pub. 5884, Inflation

Reduction Act (IRA) and CHIPS Act of 2022 (CHIPS) Pre-Filing

Registration Tool. Also see Registering For and Making Elective

Instructions for Form 3468 (2023)

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Payment and Transfer Elections in the Instructions for Form

3800.

Part I—Facility Information

If you’re claiming an investment credit with respect to a facility or

property, use the table below to enter the facility information that

corresponds to your credit(s).

If You Are Completing. . . Then Complete Part I . . .

Part II Lines 1–5, and 14

Part III Lines 1–5, and 8

Part IV Lines 1–5, and 14

Part VI Lines 1–14 (and Line A for credit

figured in section M)

Part VII Lines 1–5, and 14

Line A

Provisional emissions rate. Indicate that you petitioned the

Secretary for a provisional emissions rate (PER) by checking the

box on Line A of Part I. As part of the process to petition for a

PER, you must have submitted an application to the DOE for an

emissions value that you used to figure your energy credit for a

clean hydrogen production facility. See

Election to treat clean

hydrogen production facilities as energy property, later, for

reporting requirements.

Line 1

For Part II, Part III, and Part VI filers. Enter a detailed

technical description of the facility or property that is an integral

part of such facility.

For Part IV filers. Enter a detailed technical description of the

manufacturing process(es) and end product(s) for the advanced

manufacturing investment credit.

For Part VII filers. Enter a detailed description of the

rehabilitated building.

Note. If the owner of the facility in Part II, III, IV, VI, or VII is

different from the filer, also include the owner name and taxpayer

identification number in the description.

Line 2a

If applicable, enter your pre-filing registration number for the

facility or property that you received from the IRS prior to making

an election under section 48D(d), section 6417, or section 6418.

Lines 3a and 3b

On line 3a, enter the address of the facility or property. If there is

no address, enter the longitude and latitude coordinates of the

facility or property on line 3b.

Lines 7 and 8

Notice 2022-61 explains how filers receive increased tax credit

amounts under section 48C and section 48 by meeting the

prevailing wage and apprenticeship requirements. The notice

also provides guidance for determining the beginning of

construction of a section 48 energy project. See

Notice 2022-61,

2022-52 I.R.B. 560.

If you are claiming a credit in Part III or Part VI, see

information below about which box to check.

Filers Completing Part III

For an increased tax credit under section 48C, a taxpayer must

meet the prevailing wage and apprenticeship requirements with

respect to any qualified advanced energy project.

As part of a section 48C(e) application, an applicant must

confirm that it intends to meet the prevailing wage and

apprenticeship requirements by filing the “Initial PWA

Confirmation” statement with the Department of Energy (DOE).

When the taxpayer notifies the DOE that it has placed the project

in service, the taxpayer must also confirm that it met the

prevailing wage and apprenticeship requirements by filing the

“Final PWA Confirmation” statement with the DOE.

If a taxpayer doesn't provide an Initial and Final PWA

Confirmation statement to the DOE, the taxpayer will be required

to claim the section 48C credit at the 6% credit rate and the

remainder of the section 48C credits allocated to the project will

be forfeited.

See Notice 2022-61 and Notice 2023-18 for more detailed

information. Also see Frequently asked questions about the

prevailing wage and apprenticeship under the Inflation Reduction

Act.

Prevailing wage requirements. In general, the taxpayer must

ensure that laborers and mechanics employed by the taxpayer

(or contractor or subcontractor) in the re-equipping, expansion,

or establishment of a manufacturing facility are paid wages at

rates not less than the prevailing rates for construction,

alteration, or repair of similar character in the locality in which the

project is located, as most recently determined by the Secretary

of Labor.

See Notice 2022-61 and Notice 2023-18 for more

information.

Apprenticeship requirements. Each taxpayer (or contractor or

subcontractor) who employs four or more workers to perform

construction, alteration, or repair work on a facility must employ

one or more qualified apprentices from a registered

apprenticeship program.

A minimum percentage of the total labor hours of the

construction, alteration, or repair work must be performed by the

qualified apprentices. This percentage is:

•

10% for facilities beginning construction before 2023,

•

12.5% for facilities beginning construction in 2023, and

•

15% for facilities beginning construction in 2024 or after.

Taxpayers (or contractors or subcontractors) must also

ensure that any applicable ratios of apprentices to

journeyworkers established by the registered apprenticeship

program are met. An exception may apply when a taxpayer (or

contractor or subcontractor) has requested qualified apprentices

from a registered apprenticeship program and no apprentices

are available. See sections 48C(e)(6), 45(b)(8), Notice 2022-61,

and Notice 2023-18 for more detailed information.

Lines 7 and 8. For line 7, check box 7c. For line 8, check

box 8a or 8c, as appropriate.

Filers Completing Part VI

For an increased tax credit under section 48(a)(9)(A)(i), a

taxpayer needs to meet one of the project requirements in an

energy project.

See Notice 2022-61 for more information. Also see

Frequently asked questions about the prevailing wage and

apprenticeship under the Inflation Reduction Act.

Instructions for Form 3468 (2023)

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Energy project. An energy project is a project consisting of one

or more energy properties that are part of a single project under

section 48.

A project meets the project requirements if it's any of the

following.

1. It has a maximum net output of less than 1 megawatt of

electrical (as measured in alternating current) or thermal

energy;

2. Construction began before January 29, 2023; or

3. The energy project meets the prevailing wage and

apprenticeship requirements in sections 48(a)(10)(A) and

(11).

Beginning of construction. There are two methods that can

be used to establish that construction of a qualified facility has

started, the physical work test and the 5% safe harbor. Although

both methods can be used, only one method is needed to

establish that construction of a qualified facility has begun.

See Notice 2018-59, 2018-28 I.R.B. 196, and Notice

2022-61, 2022-52 I.R.B. 560, or its successor for more

information.

Physical work test. Under this test, construction of a facility

begins when physical work of a significant nature begins,

provided that the filer maintains a continuous program of

construction.

5% safe harbor. Using this safe harbor, construction of a

facility will be considered as having begun if:

1. A taxpayer pays or incurs (within the meaning of

Regulations section 1.461-1(a)(1) and (2)) 5% or more of

the total cost of the facility, and

2. Thereafter, the taxpayer makes continuous efforts to

complete the facility.

Prevailing wage requirements. In general, the taxpayer must

ensure, with respect to any energy project, that laborers and

mechanics employed by the taxpayer or its contractor or

subcontractor (and for the 5-year period beginning on the date

such project is placed in service, the alteration or repair of the

project) are paid the prevailing wages, which includes basic

hourly rate and any fringe benefits rate, established by the

Secretary of Labor when performing construction, alteration, or

repair of a qualified facility, project, or property. See Notice

2022-61 for more information.

Apprenticeship requirements. Each taxpayer (or contractor or

subcontractor) who employs four or more workers to perform

construction, alteration, or repair work on a facility must employ

one or more qualified apprentices from a registered

apprenticeship program.

A minimum percentage of the total labor hours of the

construction, alteration, or repair work must be performed by the

qualified apprentices. This percentage is:

•

12.5% for facilities beginning construction in 2023, and

•

15% for facilities beginning construction in 2024 or after.

Taxpayers (or contractors or subcontractors) must also

ensure that any applicable ratios of apprentices to

journeyworkers established by the registered apprenticeship

program are met. An exception may apply when a taxpayer (or

contractor or subcontractor) has requested qualified apprentices

from a registered apprenticeship program and no apprentices

are available. See Notice 2022-61 for more information.

Lines 7 and 8. For line 7, if you are completing section M,

check box 7c. If completing any other section of Part VI, check

the applicable box.

For line 8, check box 8b or 8c, as appropriate.

Increased Credit Amount Statement

If you checked the box on line 7a or 8b to claim an increased tax

credit amount in Part VI, you must also attach a statement for

each facility or property, at the time of filing your return. The

statement should include the following.

1. Your name, taxpayer identification number, the facility

description (including the owner information, if different from

the filer), and, if applicable, the IRS-issued registration

number from Part I, line 2a.

2. For the facility or property that began construction before

January 29, 2023, indicate that you met the continuity

requirement under the physical work test or the 5% safe

harbor to establish the beginning of construction.

3. For the facility or property that began construction on or

after January 29, 2023, include the following.

a. The applicable wage determinations (as defined below).

b. The wages paid (including any correction payments as

defined in section 45(b)(7)(B)(i)(l)) and hours worked for

each of the laborer or mechanic classifications engaged

in the construction of the facility or property.

c. The number of workers who received correction

payments.

d. The wages paid and hours worked by qualified

apprentices for each of the laborer or mechanic

classifications engaged in the construction of the facility

or property.

e. The total labor hours for the construction of the facility or

property by any laborer or mechanic employed by the

taxpayer or any contractor or subcontractor.

4. A declaration, applicable to the statement and any

accompanying documents, signed by you, or signed by a

person currently authorized to bind you in such matters, in

the following form: “Under penalties of perjury, I declare that

I have examined this statement, including accompanying

documents, and to the best of my knowledge and belief, the

facts presented in support of this statement are true,

correct, and complete.”

Applicable wage determinations. Applicable wage

determinations are the wage listed for a particular classification

of laborer or mechanic for the type of construction and the

geographic area, or other applicable wage as determined by the

Secretary of Labor. See Notice 2022-61 for more information.

Line 9

Notice 2023-38 proposes rules for how filers receive a domestic

content bonus credit amount for certain investments in section

48 energy projects. This notice describes certain rules regarding

the domestic content bonus credit requirements, related

recordkeeping, and certification requirements. It also describes a

safe harbor regarding the classification of certain components in

representative types of qualified facilities, energy projects, or

energy storage technologies. See

Notice 2023-38, 2023-22

I.R.B. 872.

Domestic content bonus credit amount. Section 48(a)(12)

section 48 energy project by increasing the energy percentage

provided in section 48(a)(2), by 10% if the domestic content

requirement is met and the requirement in either 2a, 2b, or 2c,

below, is also met.

1. The domestic content requirement is met with respect to

any energy project under Notice 2023-38, if the taxpayer

certified to the Secretary (see Domestic Content

Instructions for Form 3468 (2023)

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Certification Statement, later) that any steel, iron, or

manufactured product that is a component of the facility

(upon completion of construction) was produced in the

United States. A qualified facility meets the domestic

content requirement if the steel or iron requirements and the

manufacturing products requirements are met. See Notice

2023-38 for definitions and more information.

2. Any of the following requirements is met:

a. The energy project has a maximum net output of less

than 1 megawatt of electrical (as measured in

alternating current or thermal energy);

b. Construction of the energy project began before

January 29, 2023; or

c. The energy project meets the prevailing wage and

apprenticeship requirements in sections 48(a)(10)(A)

and (11).

Note. If the domestic content requirement in 2a, 2b, or 2c,

above, is met, the energy percentage provided in section 48(a)

(2) is increased by 2% instead of 10%.

Line 9. Check the appropriate box on line 9. If you checked

line 9c, you can’t claim the domestic content bonus credit

amount.

Domestic Content Certification Statement

If you checked line 9a or 9b to claim a domestic content bonus

credit amount in Part VI, you must also attach a domestic content

certification statement to Form 3468 at the time of filing your

return, for each applicable project. The domestic content

certification statement should include the following.

1. Your name and taxpayer identification number shown on the

return.

2. The facility description (including the owner information, if

different from the filer) and the IRS-issued registration

number (if applicable) of the applicable project from Part I,

line 2a.

3. A statement that any steel, iron, or manufactured product

that is a component of the facility (upon completion of

construction) was produced in the United States (as

determined under section 661 of Title 49, Code of Federal

Regulations).

4. A declaration, applicable to the statement and any

accompanying documents, signed by you, or signed by a

person currently authorized to bind you in such matters, in

the following form: “Under penalties of perjury I declare that

I have examined the information contained in this Domestic

Content Certification Statement and to the best of my

knowledge and belief, it is true, correct, and complete.”

Line 10

Notice 2023-29 proposes rules on how filers receive the energy

community bonus credit rate for certain investments in section

48 energy property. The notice describes certain rules for

determining what constitutes an energy community as defined in

section 45(b)(11)(B) and as adopted by section 48(a)(14) and for

determining whether an energy project, or an energy storage

technology is located in an energy community. See

Notice

2023-29, 2023-29 I.R.B. 1.

Notice 2023-45 clarifies section 5.02(3) of Notice 2023-29

which describes requirements for a brownfield site safe harbor

for projects with a nameplate capacity of not greater than 5

megawatts in alternating current. This notice also describes a

prior modification that was made via an online update pertaining

to the special rule for beginning of construction under section

4.01(2) of Notice 2023-29. See Notice 2023-45, 2023-29 I.R.B.

317.

Notice 2023-47 has information that taxpayers may use to

determine whether they meet certain requirements under the

Statistical Area Category or the Coal Closure Category as

described in Notice 2023-29 to qualify for energy community

bonus credit rates under section 48. See

Notice 2023-47,

2023-29 I.R.B. 318.

Energy community bonus credit rate. An energy community

bonus credit rate increase is allowed under section 48(a)(14) for

an energy project eligible for the credit under section 48 that is

placed in service during the tax year within an energy community

(EC Project). For energy property that is part of an EC Project,

the energy percentage of the basis of each energy property

under section 48(a)(2) is increased by 2% if none of the following

requirements are met, and by 10% if any one of the following

requirements is met:

1. The energy project has a maximum net output of less than 1

megawatt of electrical (as measured in alternating current)

or thermal energy;

2. Construction of the energy project began before January

29, 2023; or

3. The energy project meets the prevailing wage and

apprenticeship requirements in sections 48(a)(10)(A) and

(11).

Energy community categories. Energy community means the

following:

1. A brownfield site as defined in subparagraphs (A), (B), and

(D)(ii)(III) of section 101(39) of the Comprehensive

Environmental Response, Compensation, and Liability Act

of 1980 (42 U.S.C. 9601(39));

2. A metropolitan statistical or non-metropolitan statistical area

that:

a. Has (or, at any time during the period beginning after

2009, had) .17% or greater direct employment or 25%

or greater local tax revenues related to the extraction,

processing, transport, or storage of coal, oil, or natural

gas (as determined by the Secretary); and

b. Has an unemployment rate at or above the national

average unemployment rate for the previous year (as

determined by the Secretary); or

3. A census tract, or a census tract directly adjoining to such

census tract in which:

a. After 1999, a coal mine has closed; or

b. After 2009, a coal-fired electric generating unit has been

retired.

Line 10. Check the appropriate box on line 10. If you checked

the box on line 10c, you can’t claim the energy community bonus

credit amount.

Lines 11 and 12

If you received an allocation and a control number under the

low-income community program, you may increase the amount

of your energy credit for a qualified solar or wind facility

computed in Part VI, sections B, F, I, or L. Only filers who applied

for and received an allocation of environmental justice solar and

wind capacity limitation and properly placed in service a

qualified solar or wind facility are eligible to claim an increased

credit.

Notice 2023-17 establishes the program to allocate

environmental justice solar and wind capacity limitation, as

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required under section 48(e). This notice also provides initial

program guidance for potential applicants for allocations of

calendar year 2023 capacity limitation. See Notice 2023-17,

2023-10 I.R.B. 505.

Rev. Proc. 2023-27 provides the process under section 48(e)

to apply for an allocation of environmental justice solar and wind

capacity limitation. See Rev. Proc. 2023-27, 2023-35 I.R.B. 655

and Regs 1.48(e)-1.

Low-income communities bonus credit amount. Section

48(e) provides a low-income community bonus credit for certain

qualified solar and wind facility energy projects by increasing the

energy percentage provided in section 48(a)(2), by either 10% or

20%, depending on the category of the facility.

Energy percentage. The increased energy percentage with

respect to categories of eligible property and limitation is:

Percentage For a . . .

10%

Facility that is located in a low-income

community (as defined in section 45D(e))

10%

Facility that is located on Indian land (as

defined in section 2601(2) of the Energy Policy

Act of 1992 (25 U.S.C. 3501(2)))

20%

Facility that is part of a qualified low-income

residential building project

20%

Facility that is a qualified low-income economic

benefit project

Credit reduction. The increase in the credit will not exceed the

amount that bears the same ratio as the environmental justice

solar and wind capacity limitation allocated to such facility, bears

to the total megawatt nameplate capacity of such facility, as

measured in direct current or in the case of wind, alternating

current will be treated as direct current.

Eligible property and requirements. For purposes of this

increase, eligible energy property includes:

•

Wind facility property defined in section 45(d)(1) for which

an election was made to treat qualified facilities as energy

property;

•

Solar energy property to generate electricity defined in

section 48(a)(3)(i);

•

Qualified small wind energy property defined in section

48(a)(3)(vi); and

•

Energy storage technology described in section 48(a)(3)(A)

(ix) installed in connection with the above facility properties.

The property also has to meet the following eligibility

requirements:

1. A maximum net output of less than 5 megawatts as

measured in alternating current; and

2. The facility is one of the following:

a. Located in a low-income community (as defined in

section 45D(e));

b. On Indian land (as defined in section 2601(2) of the

Energy Policy Act of 1992 (25 U.S.C. 3501(2)));

c. Is part of a qualified low-income residential building

project; or

d. A qualified low-income economic benefit project.

Lines 11 and 12. Check the appropriate box on line 11. If you

checked the box on line 11a, 11b, 11c, or 11d, you must enter

the section 48(e) control number on line 11e. Check the

appropriate box on line 12 and enter the nameplate capacity or

storage capacity installed in connection with your property.

Line 14

Generally, for purposes of eligibility for and figuring the amount of

the investment credit, a lessor of property may elect to treat the

lessee as having acquired the property. Once the election is

made, the lessee will be entitled to an investment credit for that

property for the tax year in which the property is placed in

service and the lessor will not be entitled to such a credit.

If the leased property is disposed of or otherwise ceases to

be investment credit property, the property will generally be

subject to the recapture rules for early dispositions.

The lessor will provide the lessee with all the information

needed to complete Part VII, lines 1a through 1g, and 1k, if

applicable.

For information on making the election, see section 48(d) (as

in effect on November 4, 1990) and related regulations. For

limitations, see sections 46(e)(3) and 48(d) (as in effect on

November 4, 1990).

Line 14b

Enter the lessor's full address on line 14b. Enter the address of

the lessor's principal office or place of business. Include the

suite, room, or other unit number after the street address. If the

post office doesn't deliver mail to the street address and the

lessor has a P.O. box, show the box number instead.

Do not use the address of the registered agent for the state in

which the lessor is incorporated. For example, if a business is

incorporated in Delaware or Nevada and the lessor's principal

place of business is located in Little Rock, AR, you should enter

the Little Rock address.

If the lessor receives its mail in care of a third party (such as

an accountant or attorney), enter on the street address line “C/O”

followed by the third party's name and street address or P.O. box.

Part II—Qualifying Advanced Coal

Project Credit and Qualifying

Gasification Project Credit

Section A—Qualifying Advanced Coal Project

Credit Under Section 48A

A qualifying advanced coal project is a project that:

•

Uses advanced coal-based generation technology (as

defined in section 48A(f)) to power a new electric generation

unit or to refit or repower an existing electric generation unit

(including an existing natural gas-fired combined cycle unit);

•

Has fuel input that, when completed, will be at least 75%

coal;

•

Has an electric generation unit or units at the site that will

generate at least 400 megawatts;

•

Has a majority of the output that is reasonably expected to

be acquired or utilized;

•

Is to be constructed and operated on a long-term basis

when the taxpayer provides evidence of ownership or

control of a site of sufficient size;

•

Will be located in the United States; and

•

Includes equipment that separates and sequesters at least

65% (70% in the case of an application for reallocated

credits) of the project's total carbon dioxide emissions for

project applications described in section 48A(d)(2)(A)(ii).

For more information on the new allocation round for section

48A credits, see Notice 2020-88, 2020-53 I.R.B. 1795.

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Basis. The qualified investment for any tax year is the basis of

eligible property placed in service by the taxpayer during the tax

year that is part of a qualifying advanced coal project. Eligible

property is limited to property that can be depreciated or

amortized and that was constructed, reconstructed, or erected

and completed by the taxpayer; or that is acquired by the

taxpayer if the original use of such property commences with the

taxpayer.

Basis reduction for certain financing. If property is financed

in whole or in part by subsidized energy financing or by

tax-exempt private activity bonds, the amount that you can claim

as basis is the basis that would otherwise be allowed multiplied

by a fraction that is 1 reduced by a second fraction, the

numerator of which is that portion of the basis allocable to such

financing or proceeds, and the denominator of which is the basis

of the property.

For example, if the basis of the property is $100,000 and the

portion allocable to such financing or proceeds is $20,000, the

fraction of the basis that you may claim the credit on is

/5 (that

is, 1 minus $20,000/$100,000).

Subsidized energy financing means financing provided under

a federal, state, or local program, a principal purpose of which is

to provide subsidized financing for projects designed to

conserve or produce energy.

Line 1a

Enter the qualified investment in integrated gasification

combined cycle property placed in service during the tax year for

projects described in section 48A(d)(3)(B)(i). Eligible property is

any property that is part of a qualifying advanced coal project

using an integrated gasification combined cycle and is

necessary for the gasification of coal, including any coal

handling and gas separation equipment.

Integrated gasification combined cycle is an electric

generation unit that produces electricity by converting coal to

synthesis gas, which in turn is used to fuel a combined cycle

plant to produce electricity from both a combustion turbine

(including a combustion turbine/fuel cell hybrid) and a steam

turbine.

Line 2a

Enter the qualified investment in advanced coal-based

generation technology property placed in service during the tax

year for projects described in section 48A(d)(3)(B)(ii). Eligible

property is any property that is part of a qualifying advanced coal

project (defined earlier) not using an integrated gasification

combined cycle.

Line 3a

Enter the qualified investment in advanced coal-based

generation technology property placed in service during the tax

year for projects described in section 48A(d)(3)(B)(iii). Eligible

property is any certified property located in the United States

and that is part of a qualifying advanced coal project (defined

earlier) that has equipment that separates and sequesters at

least 65% of the project's total carbon dioxide emissions. This

percentage increases to 70% if the credits are later reallocated

by the IRS.

The credit will be recaptured if a project fails to attain or

maintain the carbon dioxide separation and sequestration

requirements. For details, see section 48A(i) and Notice

2011-24, 2011-14 I.R.B. 603.

Section B—Qualifying Gasification Project

Credit Under Section 48B

A qualifying gasification project is a project that:

•

Employs gasification technology (as defined in section

48B(c)(2)),

•

Is carried out by an eligible entity (as defined in section

48B(c)(7)), and

•

Includes a qualified investment of which an amount not to

exceed $650 million is certified under the qualifying

gasification program as eligible for credit.

The total amount of credits that may be allocated under the

qualifying gasification project program may not exceed $600

million.

For more information on the qualifying gasification project and

the qualifying gasification program, see Notice 2009-23,

2009-16 I.R.B. 802, which is amplified by Notice 2014-81,

2014-53 I.R.B. 1001. Also, see Notice 2011-24, 2011-14 I.R.B.

603.

Basis reduction. If property is financed in whole or in part by

subsidized energy financing or by tax-exempt private activity

bonds, figure the credit by using the basis of such property

reduced under the rules described in Basis reduction for certain

financing, earlier.

Line 4a

Enter the qualified investment in qualifying gasification project

property placed in service during the tax year for which credits

were allocated or reallocated after October 3, 2008, and that

includes equipment that separates and sequesters at least 75%

of the project's carbon dioxide emissions. Qualified investment is

the basis of eligible property placed in service during the tax

year that is part of a qualifying gasification project.

For purposes of this credit, eligible property includes any

property that is part of a qualifying gasification project and

necessary for the gasification technology of such project. The

IRS is required to recapture the benefit of any allocated credit if a

project fails to attain or maintain these carbon dioxide separation

and sequestration requirements. See section 48B(f) and

Notice

2011-14, 2011-11 I.R.B. 554.

Line 5a

Enter the qualified investment, other than any amount included in

line 4a, in qualifying gasification project property (defined earlier)

placed in service during the tax year.

Line 6

Patrons, including cooperatives that are patrons in other

cooperatives, enter the unused investment credit from the

qualifying advanced coal project credit or qualifying gasification

project credit allocated from cooperatives. If you are a

cooperative, see the instructions for Form 3800, Part III, line 1a,

for allocating the investment credit to your patrons.

See General Instructions for filing Form 3468 to report

any unused credits from cooperatives.

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Part III—Qualifying Advanced Energy

Project Credit Under Section 48C

Qualifying advanced energy project means a project that:

•

Re-equips, expands, or establishes an industrial or a

manufacturing facility for the production or recycling of

specified advanced energy property;

•

Re-equips any industrial or manufacturing facility, with

equipment designed to reduce greenhouse gas emissions

by at least 20% through the installation of:

• Low- or zero-carbon process heat systems;

• Carbon capture, transport, utilization, and storage

systems;

• Energy efficiency and reduction in waste from

industrial processes; or

• Any other industrial technology designed to reduce

greenhouse gas emissions, as determined by the

Secretary;

•

Re-equips, expands or establishes an industrial facility for

the processing, refining or recycling of critical materials (as

defined in section 7002(a) of the Energy Act of 2020);

•

The Secretary has certified per section 48C(e)(3) that part

or all of the qualified investment in the qualifying advanced

energy project is eligible for a section 48C credit; and

•

The project does not include any portion of a project for the

production of any property that is used in the refining or

blending of any transportation fuels (other than renewable

fuels).

Specified advanced energy property. The term specified

advanced energy property means any of the following:

•

Property designed for use in the production of energy from

the sun, water, wind, geothermal deposits (within the

meaning of section 613(e)(2)), or other renewable

resources;

•

Fuel cells, microturbines, or energy storage systems and

components;

•

Electric grid modernization equipment or components;

•

Property designed to capture, remove, use, or sequester

carbon oxide emissions;

•

Equipment designed to refine, electrolyze, or blend any fuel,

chemical, or product which is renewable, or low-carbon and

low-emission;

•

Property designed to produce energy conservation

technologies (including residential, commercial, and

industrial applications);

•

Light-, medium-, or heavy-duty electric or fuel cell vehicles,

as well as technologies, components, or materials for such

vehicles, and associated charging or refueling infrastructure;

•

Hybrid vehicles with a gross vehicle weight rating of not less

than 14,000 pounds as well as technologies, components,

or materials for such vehicles; or

•

Other advanced energy property designed to reduce

greenhouse gas emissions as may be determined by the

Secretary.

Eligible property. Eligible property is property that:

•

Is necessary for the production or recycling of property

described in section 48C(c)(1)(A)(i); re-equipping an

industrial or manufacturing facility described in section

48C(c)(1)(A)(ii); or re-equipping, expanding, or establishing

an industrial facility described in section 48C(c)(1)(A)(iii);

•

Which depreciation or amortization is allowable;

•

Is tangible personal property or other tangible property (not

including a building or its structural components), but only if

the property is used as an integral part of the qualifying

advanced energy project; and

•

Was not placed in service prior to being awarded an

allocation of section 48C credits under the section 48(c)

program. See Notice 2023-44, 2023-25 I.R.B. 924.

Certification. To be eligible for the qualifying advanced energy

project credit, some or all of the qualified investment in the

qualifying advanced energy project must be certified by the IRS

under section 48C(d). See Notice 2023-18, 2023-10 I.R.B. 508,

for more information on the certification and program.

See Notice 2023-44 for additional guidance for applicants

seeking section 48C credit allocations in the qualifying advanced

energy project credit allocation program under IRA 2022. See

Notice 2023-44, 2023-25 I.R.B. 924.

Line 1a

Enter the qualified investment in qualifying advanced energy

project property placed in service during the tax year. Qualified

investment is the basis of eligible property placed in service

during the tax year that is part of a qualifying advanced energy

project.

Line 1b

If you met the prevailing wage and apprenticeship requirements

described earlier, and the certification for prevailing wage and

apprenticeship requirements was met, as part of the 48C(e)

application per Notice 2023-18, section 5.07, then enter 30%.

Otherwise, enter 6%.

Line 1d

Enter your 48C allocation control number for the qualifying

advanced energy property.

Line 2

Patrons, including cooperatives that are patrons in other

cooperatives, enter the unused investment credit from the

qualifying advanced energy property credit allocated from

cooperatives. If you are a cooperative, see the instructions for

Form 3800, Part III, line 1d, for allocating the investment credit to

your patrons.

See General Instructions for filing Form 3468 to report

any unused credits from cooperatives.

Line 3

If you’re a partnership or S corporation requesting an election to

transfer a qualifying advanced energy credit with respect to a

project (or portion of) under section 6418(c), you must report the

total credit amount on line 3 and Form 3800, Part III, line 1d.

Part IV—Advanced Manufacturing

Investment Credit Under Section 48D

The advanced manufacturing investment credit is equal to 25%

of the qualified investment with respect to any advanced

manufacturing facility of an eligible taxpayer in the tax year.

Eligible taxpayer. An eligible taxpayer is a taxpayer who isn't a

foreign entity of concern (as defined in section 9901(6) of P. L.

116-283), and hasn't made an applicable transaction (as defined

in section 50(a)) during the tax year.

Qualified investment. The qualified investment for any

advanced manufacturing facility is the basis of any qualified

property placed in service by the taxpayer during the tax year

that is part of an advanced manufacturing facility.

Advanced manufacturing facility. Advanced manufacturing

facility means a facility whose primary purpose is the

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manufacturing of semiconductors or semiconductor

manufacturing equipment.

Qualified property. Qualified property includes any building or

its structural components and all of the following.

•

Property that is tangible property.

•

Property that is allowed depreciation or amortization.

•

Property that is constructed, reconstructed, or erected by

the taxpayer or acquired by the taxpayer if the original use of

the property commences with the taxpayer.

•

Property that is integral to the operation of the advanced

manufacturing facility.

Exception. Qualified property doesn't include a building or a

portion of a building used for offices, administrative services, or

other functions unrelated to manufacturing.

Coordination with rehabilitation credit. The qualified

investment with respect to any advanced manufacturing facility

for any tax year can’t include the portion of the basis of any

property that is attributable to qualified rehabilitation

expenditures (as defined in section 47(c)(2)).

Certain progress expenditure rules made applicable. Rules

similar to the rules of section 46(c)(4) and 46(d) (as in effect on

the day before the date of the enactment of P.L. 101-158) apply

for purposes of the advanced manufacturing investment credit.

Line 1b

Enter the basis in qualified property as part of the advanced

manufacturing facility (defined above) placed in service during

the tax year.

The basis of property placed in service during the tax

year, but the construction of which began prior to 2023,

includes the portion of basis attributable to the

construction, reconstruction, or erection after August 9, 2022.

Line 2

Patrons, including cooperatives that are patrons in other

cooperatives, enter the unused investment credit from the

advanced manufacturing investment credit allocated from

cooperatives. If you are a cooperative, see the instructions for

Form 3800, Part III, line 1o, for allocating the investment credit to

your patrons.

See General Instructions for filing Form 3468 to report

any unused credits from cooperatives.

Line 3

If you are a partnership or S corporation requesting elective

payment with respect to the advanced manufacturing investment

credit under section 48D(d)(2)(A), you must report the credit

amount on line 3 and Form 3800, Part III, line 1o.

Part VI—Energy Credit Under Section

The energy credit for the tax year is the energy percentage of the

basis of each energy property placed in service during the tax

year. The energy properties include the following.

•

Geothermal energy property.

•

Solar energy property to generate electricity, or solar energy

property to illuminate.

•

Qualified fuel cell property.

•

Qualified microturbine property.

•

Combined heat and power system property.

•

Qualified small wind energy property.

•

Waste energy recovery property.

•

Geothermal heat pump system property.

CAUTION

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•

Energy storage technology property.

•

Qualified biogas property.

•

Microgrid controllers property.

•

Qualified investment credit facility treated as energy

property under section 48(a)(5).

•

Clean hydrogen production facility treated as energy

property under section 48(a)(15).

Property requirements. To qualify as energy property as

defined in section 48(a)(3), it must:

1. Meet the performance and quality standards, if any, that

have been prescribed by regulations and are in effect at the

time the property is acquired;

2. Be property for which depreciation (or amortization in lieu of

depreciation) is allowable; and

3. Be property either:

a. The construction, reconstruction, or erection of which is

completed by the taxpayer; or

b. Acquired by the taxpayer if the original use of such

property commences with the taxpayer.

Energy property doesn’t include any property that is part of a

production credit under section 45 for the tax year or any prior

tax year.

Energy property doesn't include any property acquired before

February 14, 2008, or to the extent of basis attributable to

construction, reconstruction, or erection before February 14,

2008, that is public utility property, as defined by section 46(f)(5)

(as in effect on November 4, 1990), and related regulations.

You must reduce the basis of energy property by 50% of the

energy credit determined.

You must reduce the basis of energy property used for

figuring the credit by any amount attributable to qualified

rehabilitation expenditures.

Basis reduction. If energy property (acquired before 2009, or

to the extent of its basis attributable to construction,

reconstruction, or erection before 2009) is financed in whole or in

part by subsidized energy financing or by tax-exempt private

activity bonds, reduce the basis of such property under the rules

described in

Basis reduction for certain financing, earlier.

For energy property which was constructed, reconstructed, or

erected after August 16, 2022, see the instructions for section N

to reduce the amount of the credit with respect to any facility for

tax-exempt bonds.

Coordination with Department of Treasury grants. In the

case of any property where the Secretary makes a grant under

section 1603 of the American Recovery and Reinvestment Tax

Act of 2009, no credit will be determined under section 48 or

section 45 with respect to the property for the tax year in which

the grant is made or any subsequent tax year.

Recapture. If a credit was determined with respect to a

property for any tax year ending before the grant is made:

•

The tax imposed on the taxpayer for the tax year in which

the grant is made will be increased by the credit amount

allowed under section 38,

•

The general business carryforwards under section 39 will be

adjusted to recapture the portion of the credit that was not

allowed, and

•

The amount of the grant will be determined without regard to

any reduction in the basis of the property by the credit.

Treatment of grants. Any grant will not be included in the

gross income or alternative minimum taxable income of the

taxpayer, but will be taken into account in determining the basis

of the property to which the grant relates, except that the basis of

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such property will be reduced under section 50(c) in the same

manner as a credit allowed.

Interconnection property. For purposes of determining the

energy credit, energy property shall include amounts paid or

incurred by the taxpayer for qualified interconnection property in

connection with the installation of energy property placed in

service during the tax year that:

•

Has a maximum net output of not greater than 5 megawatts

(as measured in alternating current), to provide for the

transmission or distribution of the electricity produced or

stored by such property; and

•

Are properly chargeable to the capital account of the

taxpayer.

Qualified interconnection property. Qualified

interconnection property is, with respect to an energy project that

isn't a microgrid controller, any tangible property that:

•

Is part of an addition, modification, or upgrade to a

transmission or distribution system that is required at or

beyond the point at which the energy project interconnects

to such transmission or distribution system in order to

accommodate such interconnection;

•

Is either constructed, reconstructed, or erected by the

taxpayer, or that the cost with respect to the construction,

reconstruction, or erection of such property is paid or

incurred by the taxpayer; and

•

The original use, pursuant to an interconnection agreement,

commences with a utility.

Interconnection agreement. Interconnection agreement

means an agreement with a utility for the purposes of

interconnecting the energy property owned by the taxpayer to

the transmission or distribution system of the utility.

Utility. For the purposes of section 48(a)(8), utility means the

owner or operator of an electrical transmission or distribution

system that is subject to the regulatory authority of any the

following.

•

A state or political subdivision thereof.

•

Any agency or instrumentality of the United States.

•

A public service or public utility commission or other similar

body of any state or political subdivision thereof.

•

The governing or ratemaking body of an electric

cooperative.

Special rule for interconnection property. In the case of

expenses paid or incurred for interconnection property, amounts

otherwise chargeable to a capital account with respect to such

expenses will be reduced under rules similar to the rules of

section 50(c).

Section A—Geothermal Energy Credit

Geothermal energy. Geothermal energy property is used to

produce, distribute, or use energy derived from a geothermal

deposit (within the meaning of section 613(e)(2)). For electricity

produced by geothermal power, equipment qualifies only up to,

but not including, the electrical transmission stage.

Line 1b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 1d

Enter your applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 1d blank, skip line 1e,

and go to line 1f.

Line 1f

Enter your applicable energy community bonus credit

percentage. See Energy community bonus credit rate, in Part I,

line 10, for more information.

If the facility or property was not placed in service within an

energy community, leave line 1f blank, skip line 1g, and go to

line 2.

Section B—Solar Energy Credit

Solar energy. Solar energy property is property that has the

following.

1. Equipment that uses solar energy to illuminate the inside of

a structure using fiber-optic distributed sunlight.

2. Electrochromic glass that uses electricity to change its light

transmittance properties in order to heat or cool a structure.

3. Equipment that uses solar energy to:

a. Generate electricity,

b. Heat or cool (or provide hot water for use in) a structure,

c. Provide solar process heat (but not to heat a swimming

pool).

Line 3b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 3d

Enter your applicable low-income community bonus credit

percentage in connection with your solar energy facility.

However, if you checked the box for Part I, line 11f; or Part I,

line 12e (in relation to Part I, lines 11a, 11b, 11c, or 11d) you do

not qualify for the low-income community bonus credit in

connection with a solar energy facility. Enter -0- (zero) on lines

3d and 3j, and go to line 3k.

See Low-income communities bonus credit amount, in Part I,

lines 11 and 12, earlier, for more information.

Line 3k

Enter the applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 3k blank, skip line 3l,

and go to line 3m.

Line 3m

Enter the applicable energy community bonus credit percentage.

See

Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

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If the facility or property was not placed in service within an

energy community, leave line 3m blank, skip line 3n, and go to

line 4.

Section C—Qualified Fuel Cell Property

Qualified fuel cell property. Qualified fuel cell property is a

fuel cell power plant that has a nameplate capacity of at least 0.5

kilowatts (1 kilowatt in the case of a fuel cell plant with a linear

generator assembly) of electricity using an electrochemical or

electromechanical process and has electricity-only generation

efficiency greater than 30%. See section 48(c)(1) for further

details.

Fuel cell power plant. Fuel cell power plant means an

integrated system comprised of a fuel cell stack assembly or

linear generator assembly, and associated balance of plant

components that converts a fuel into electricity using

electrochemical or electromechanical means.

Linear generator assembly. Linear generator assembly

doesn’t include any assembly that contains rotating parts.

Qualified fuel cell property that uses electromechanical

process or a fuel cell power plant that is comprised of a

linear generator assembly are for property placed in

service after 2022.

Line 5a

Enter the basis, attributable to periods after 2005 and before

October 4, 2008, of any qualified fuel cell property placed in

service during the tax year, if the property was acquired after

2005 and before October 4, 2008, or to the extent of basis

attributable to construction, reconstruction, or erection by the

taxpayer after 2005 and before October 4, 2008.

Line 5c

Enter the applicable number of kilowatts of capacity attributable

to the basis on line 5a. This entry must be a whole number.

Line 5f

Enter the basis, attributable to periods after October 3, 2008,

and the construction of which began before 2021 or after 2022,

of any qualified fuel cell property placed in service during the tax

year.

See Qualified fuel cell property and Beginning of

construction, earlier.

Basis is attributable to periods after October 3, 2008, if

the property was acquired after October 3, 2008, or to

the extent of basis attributable to construction,

reconstruction, or erection by the taxpayer after October 3, 2008.

Line 5g

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 5i

Enter your applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

CAUTION

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 5i blank, skip line 5j,

and go to line 5l.

Line 5l

Enter the applicable energy community bonus credit percentage.

See

Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

If the facility or property was not placed in service within an

energy community, leave line 5l blank, skip line 5m, and go to

line 5n.

Line 5o

Enter the applicable number of kilowatts of capacity attributable

to the basis on line 5f. This entry must be a whole number.

Section D—Qualified Microturbine Property

Qualified microturbine property. Qualified microturbine

property is a stationary microturbine power plant that has a

nameplate capacity of less than 2,000 kilowatts and has an

electricity-only generation efficiency of not less than 26% at

International Standard Organization conditions. See section

48(c)(2) for further details.

Stationary microturbine power plant. Stationary

microturbine power plant means an integrated system comprised

of a gas turbine engine, a combustor, a recuperator or

regenerator, a generator or alternator, and associated balance of

plant components that converts a fuel into electricity and thermal

energy. It also includes all secondary components located

between the existing infrastructure for fuel delivery and the

existing infrastructure for power distribution, including equipment

and controls for meeting relevant power standards, such as

voltage, frequency, and power factors.

Line 7a

Enter the basis, attributable to periods after 2005, of any

qualified microturbine property placed in service during the tax

year, if the property was acquired after 2005, or to the extent of

basis attributable to construction, reconstruction, or erection by

the taxpayer after 2005.

Line 7b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 7d

Enter your applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 7d blank, skip line 7e,

and go to line 7g.

Line 7g

Enter the applicable energy community bonus credit percentage.

See Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

Instructions for Form 3468 (2023)

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If the facility or property was not placed in service within an

energy community, leave line 7g blank, skip line 7h, and go to

line 7i.

Line 7j

Enter the applicable number of kilowatts of capacity attributable

to the basis on line 7a. This entry must be a whole number.

Section E—Combined Heat and Power System

Property

Combined heat and power system property. Combined heat

and power system property means property comprising a system

that:

1. Uses the same energy source for the simultaneous or

sequential generation of electrical power, mechanical shaft

power, or both; in combination with the generation of steam

or other forms of useful thermal energy (including heating

and cooling applications); and

2. Has an energy efficiency percentage determined on a

British thermal unit (BTU) basis over 60% and it produces:

a. At least 20% (determined on a BTU basis) of its total

useful energy in the form of thermal energy that isn't

used to produce electrical and/or mechanical power,

and

b. At least 20% (determined on a BTU basis) of its total

useful energy in the form of electrical and/or mechanical

power.

For details, see section 48(c)(3).

Taxpayers cannot take a credit for both combined heat

and power system property and waste energy recovery

property for the same property. Taxpayers must elect not

to treat such property as combined heat and power system

property for section 48 purposes.

Limitation. In the case of combined heat and power system

property with an electrical capacity in excess of the applicable

capacity placed in service during the tax year, the credit for that

year shall be equal to the amount that bears the same ratio to the

credit as the applicable capacity bears to the capacity of such

property.

Applicable capacity. Applicable capacity means the

following:

•

15 megawatts;

•

A mechanical energy capacity of more than 20,000

horsepower; or

•

An equivalent combination of electrical and mechanical

energy capacities.

Maximum capacity. Combined heat and power system

property shall not include any property comprising a system if:

•

The system has a capacity of more than 50 megawatts,

•

A mechanical energy capacity of more than 67,000

horsepower, or

•

An equivalent combination of electrical and mechanical

energy capacities.

Energy efficiency percentage. The energy efficiency

percentage of a combined heat and power system property is

the fraction of which the numerator is the total useful electrical,

thermal, and mechanical power produced by the system at

normal operating rates (and expected to be consumed in its

normal application), and the denominator is the lower heating

value of the fuel sources for the system.

CAUTION

Combined heat and power system property doesn't include

property used to transport the energy source to the facility or to

distribute energy produced by the facility.

Biomass systems. Systems designed to use biomass for at

least 90% of the energy source are eligible for a credit that is

reduced in proportion to the degree to which the system fails to

meet the efficiency standard. For more information, see section

48(c)(3)(D).

Line 9d

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 9f

Enter your applicable domestic content bonus credit percentage.

See

Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 9f blank, skip line 9g,

and go to line 9h.

Line 9h

Enter the applicable energy community bonus credit percentage.

See

Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

If the facility or property was not placed in service within an

energy community, leave line 9h blank, skip line 9i, and go to

line 10.

Section F—Qualified Small Wind Energy

Property

Qualified small wind energy property. Qualified small wind

energy property means property that uses a qualifying small

wind turbine to generate electricity. For this purpose, a qualifying

small wind turbine means a wind turbine that has a nameplate

capacity of not more than 100 kilowatts. For details, see section

48(c)(4). In addition, for small wind energy property acquired (or

placed in service in the case of property constructed,

reconstructed, or erected) after February 2, 2015, see

Notice

2015-4, 2015-5 I.R.B. 407, as modified by Notice 2015-51,

2015-31 I.R.B. 133, for performance and quality standards that

small wind energy property must meet to qualify for the energy

credit.

Line 11a

Enter the basis, attributable to periods after October 3, 2008,

and before 2009, of any qualified small wind energy property

placed in service during the tax year, if the property was

acquired after October 3, 2008, and before 2009, or to the extent

of basis attributable to construction, reconstruction, or erection

by the taxpayer after October 3, 2008, and before 2009.

Line 11d

Enter the basis, attributable to periods after 2008 and the

construction of which began before 2021 or after 2022, of any

qualified small wind energy property placed in service during the

tax year, if the property was acquired by the taxpayer or the basis

is attributable to construction, reconstruction, or erection by the

taxpayer.

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See Beginning of construction, earlier.

Line 11e

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 11g

Enter your applicable low-income community bonus credit

percentage in connection with your small wind energy facility.

However, if you checked the box for Part I, line 11f, or you

checked the box for Part I, line 12e (in relation to Part I, lines 11a,

11b, 11c, or 11d) you don't qualify for the low-income community

business credit in connection with a small energy wind facility.

Enter -0- (zero) on lines 11g and 11m, and go to line 11n.

See Low-income communities bonus credit amount, earlier,

for more information.

Line 11n

Enter your applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 11n blank, skip

line 11o, and go to line 11p.

Line 11p

Enter the applicable energy community bonus credit percentage.

See

Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

If the facility or property was not placed in service within an

energy community, leave line 11p blank, skip line 11q, and go to

line 12.

Section G—Waste Energy Recovery Property

Waste energy recovery property. Qualified waste energy

recovery property means property that generates electricity

solely from heat from buildings or equipment if the primary

purpose of such building or equipment is not the generation of

electricity. The term “waste energy recovery property” shall not

include any property that has a capacity in excess of 50

megawatts. For details, see section 48(c)(5).

Taxpayers cannot take a credit for both combined heat

and power system property and waste energy recovery

property for the same property. Taxpayers must elect not

to treat such property as combined heat and power system

property for section 48 purposes.

Note. The transitional rules of section 48(m) (as in effect on

November 4, 1990) apply to waste energy recovery property for

periods after 2020.

Line 13b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

CAUTION

Line 13d

Enter your applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 13d blank, skip

line 13e, and go to line 13f.

Line 13f

Enter the applicable energy community bonus credit percentage.

See Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

If the facility or property was not placed in service within an

energy community, leave line 13f blank, skip line 13g, and go to

line 14.

Section H—Geothermal Heat Pump Systems

Geothermal heat pump systems. Geothermal heat pump

systems constitute equipment that uses the ground or ground

water as a thermal energy source to heat a structure or as a

thermal energy sink to cool a structure. For details, see section

48(a)(3)(A)(vii).

Line 15b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 15d

Enter your applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 15d blank, skip

line 15e, and go to line 15f.

Line 15f

Enter the applicable energy community bonus credit percentage.

See Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

If the facility or property was not placed in service within an

energy community, leave line 15f blank, skip line 15g, and go to

line 16.

Section I—Energy Storage Technology Property

Energy storage technology. Energy storage technology is:

•

Property (other than property primarily used in the

transportation of goods or individuals and not for the

production of electricity) that receives, stores, and delivers

energy for conversion to electricity (or, in the case of

hydrogen, stores energy), and has a nameplate capacity of

not less than 5 kilowatt hours; and

•

Thermal energy storage property.

Modifications of certain property. In the case of any

energy storage technology property described above that was

either (1) placed in service before August 16, 2022, and that has

a capacity of less than 5 kilowatt hours and is modified to where

the property has a nameplate capacity of at least 5 kilowatt

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hours; or (2) is modified in a manner that increases the

nameplate capacity to at least 5 kilowatt hours, the modified

property will be treated as energy storage technology property,

except for the treatment of the basis of the existing property prior

to the modification.

Thermal energy storage property. Thermal energy storage

property is property comprising a system that:

•

Is directly connected to a heating, ventilation, or air

conditioning system;

•

Removes heat from, or adds heat to, a storage medium for

subsequent use; and

•

Provides energy for the heating or cooling of the interior of a

residential or commercial building.

Thermal energy storage property doesn’t include:

•

A swimming pool,

•

Combined heat and power system property, or

•

A building or its structural components.

Line 17a

Enter the basis of any energy storage technology property

placed in service during the tax year, to the extent of basis

attributable to construction, reconstruction, or erection by the

taxpayer.

Line 17b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 17d

Enter your applicable low-income community bonus credit

percentage in connection with your solar or wind facility.

However, if you checked the box for Part I, line 11f, or you

checked the box for Part I, line 12e (in relation to Part I, lines 11a,

11b, 11c, or 11d) you don't qualify for the low-income community

business credit in connection to a solar or wind energy facility.

Enter -0- (zero) on lines 17d and 17j and go to line 17k.

See Low-income communities bonus credit amount,

described in Part I, lines 11 and 12, earlier, for more information.

Line 17k

Enter your applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 17k blank, skip line 17l,

and go to line 17m.

Line 17m

Enter the applicable energy community bonus credit percentage.

See Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

If the facility or property was not placed in service within an

energy community, leave line 17m blank, skip line 17n, and go to

line 18.

Section J—Qualified Biogas Property

Qualified biogas property. Qualified biogas property is

property comprising a system that:

Converts biomass (as defined in section 45K(c)(3), as in

effect on August 16, 2022), into a gas that:

a. Consists of not less than 52% methane by volume, or

b. Is concentrated by such system into a gas that consists

of not less than 52% methane, and

2. Captures such gas for sale or productive use, and not for

disposal by means of combustion.

Qualified biogas property includes any property, described

above, that is part of a system that cleans or conditions gas.

Line 19a

Enter the basis of any qualified biogas energy property placed in

service during the tax year, to the extent of basis attributable to

construction, reconstruction, or erection by the taxpayer.

Line 19b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 19d

Enter your applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 19d blank, skip

line 19e, and go to line 19f.

Line 19f

Enter the applicable energy community bonus credit percentage.

See Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

If the facility or property was not placed in service within an

energy community, leave line 19f blank, skip line 19g, and go to

line 20.

Section K—Microgrid Controllers Property

Microgrid controller. Microgrid controller means equipment

that is:

•

Part of a qualified microgrid, and

•

Designed and used to monitor and control the energy

resources and loads on such microgrid.

Qualified microgrid. A qualified microgrid is an electrical

system that:

1. Includes equipment that is capable of generating not less

than 4 kilowatts and not more than 20 megawatts of

electricity;

2. Is capable of operating:

a. In connection with the electrical grid and as a single

controllable entity with respect to such grid,

b. Independently (and disconnected) from such grid, and

3. Is not part of a bulk-power system (as defined in section 215

of the Federal Power Act (16 U.S.C. 824o)).

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Line 21a

Enter the basis of any qualified microgrid controller property

placed in service during the tax year, to the extent of basis

attributable to construction, reconstruction, or erection by the

taxpayer.

Line 21b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 21d

Enter your applicable domestic content bonus credit percentage.

See

Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 21d blank, skip

line 21e, and go to line 21f.

Line 21f

Enter the applicable energy community bonus credit percentage.

See Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

If the facility or property was not placed in service within an

energy community, leave line 21f blank, skip line 21g, and go to

line 22.

Section L—Qualified Investment Credit Facility

Property

Qualified investment credit facility property. Qualified

investment credit facility property is property:

•

That is tangible personal property or other tangible property

(not including a building or its structural components), but

only if the property is used as an integral part of the qualified

investment credit facility;

•

That is constructed, reconstructed, erected, or acquired by

the taxpayer;

•

With respect to which depreciation or amortization is

allowable; and

•

For which the original use begins with the taxpayer.

See section 48(a)(5) for details.

Note. The transitional rules of section 48(m) (as in effect on

November 4, 1990) apply to offshore wind facilities for periods

after 2016. Under the transitional rules of section 48(m) (as in

effect on November 4, 1990), the phaseout of the section 48

credit provided for other types of qualified investment credit

facilities under section 48(a)(5)(E), does not apply to qualified

offshore wind facilities.

Qualified investment credit facility. A qualified investment

credit facility is a facility that:

1. Is one of the following qualified facilities that is placed in

service after 2008. See

Beginning of construction, earlier.

a. Wind facility under section 45(d)(1).

b. Closed-loop biomass facility under section 45(d)(2).

c. Open-loop biomass facility under section 45(d)(3).

d. Geothermal or solar energy facility under section 45(d)

(4).

e. Landfill gas facility under section 45(d)(6).

Trash facility under section 45(d)(7).

g. Qualified hydropower facility under section 45(d)(9).

h. Marine and hydrokinetic renewable energy facility under

section 45(d)(11).

i. Is a qualified offshore wind facility. See Notice 2021-5,

2021-03 I.R.B. 479, for more information on beginning

of construction requirements applied to offshore and

federal land projects.

2. No credit has been allowed under section 45 for that facility

(see

Note below); and

3. An irrevocable election was made to treat the facility as

energy property.

Note. If a taxpayer retrofits an energy property that previously

received a credit under section 45 by meeting the 80/20 Rule

provided in section 7.05 of

Notice 2018-59, 2018-28 I.R.B. 196,

the taxpayer may claim an investment tax credit based on its

investment. However, if the energy property is within the

recapture period for the section 45 credit, the taxpayer may have

to recapture all or part of such section 45 credit accordingly.

Qualified offshore wind facility. For purposes of section

48(a)(5), qualified offshore wind facility means a qualified facility

(within the meaning of section 45(d)(1)) that is located in the

inland navigable waters of the United States or in the coastal

waters of the United States.

Section 48(a)(5) Election Statement

If you are electing to treat a qualified investment credit facility as

energy property, you must attach an election statement to Form

3468 for each qualified facility. The election statement must

include the following information.

1. Your name and taxpayer identification number shown on the

return.

2. For each qualified facility, include the following:

a. The facility description (including the owner information,

if different from the filer) and the IRS-issued registration

number (if applicable) of the qualified facility from Part I,

line 2a.

b. An accounting of your basis in the energy property.

c. A depreciation schedule reflecting your remaining basis

in the energy property after the energy credit is claimed.

3. A statement that you haven’t and won’t claim a section 1603

grant for new investment in the property for which you are

claiming the energy credit.

4. A declaration, applicable to the statement and any

accompanying documents, signed by you, or signed by a

person currently authorized to bind you in such matters that

states the following: “Under penalties of perjury, I declare

that I have examined this statement, including

accompanying documents, and to the best of my knowledge

and belief, the facts presented in support of this statement

are true, correct, and complete.”

Line 23b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

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Line 23d

Enter your applicable low-income community bonus credit

percentage in connection with your wind facility. However, if you

checked the box for Part I, line 11f, or you checked the box for

Part I, line 12e (in relation to Part I, lines 11a, 11b, 11c, or 11d)

you don't qualify for the low-income community bonus credit in

connection with a wind facility. Enter -0- (zero) on lines 23d and

23j and go to line 23k.

See Low-income communities bonus credit amount, in Part I,

lines 11 and 12, earlier, for more information.

Line 23k

Enter your applicable domestic content bonus credit percentage.

See Domestic Content Certification Statement, in Part I, line 9,

earlier, for more information.

If the facility or property did not meet the requirements for the

domestic content bonus credit, leave line 23k blank, skip line 23l,

and go to line 23m.

Line 23m

Enter the applicable energy community bonus credit percentage.

See Energy community bonus credit rate, in Part I, line 10,

earlier, for more information.

If the facility or property was not placed in service within an

energy community, leave line 23m blank, skip line 23n, and go to

line 24.

Section M—Clean Hydrogen Production

Facilities as Energy Property

Election to treat clean hydrogen production facilities as en-

ergy property. In the case of any qualified property (as defined

in section 48(a)(5)(D)) that is part of a specified clean hydrogen

production facility, such property will be treated as energy

property for purposes of this section, and the energy percentage

with respect to such property is as follows.

•

1.2% in the case of a facility that is designed and reasonably

expected to produce qualified clean hydrogen that is

described in section 45V(b)(2)(A).

•

1.5% in the case of a facility that is designed and reasonably

expected to produce qualified clean hydrogen that is

described in section 45V(b)(2)(B).

•

2% in the case of a facility that is designed and reasonably

expected to produce qualified clean hydrogen that is

described in section 45V(b)(2)(C).

•

6% in the case of a facility that is designed and reasonably

expected to produce qualified clean hydrogen that is

described in section 45V(b)(2)(D).

Denial of production credit. No credit will be allowed under

section 45V or section 45Q for any tax year with respect to any

specified clean hydrogen production facility or any carbon

capture equipment included at such facility.

Specified clean hydrogen production facility. Specified

clean hydrogen production facility means any qualified clean

hydrogen production facility that meets the following.

•

Owned by the taxpayer.

•

Produces qualified clean hydrogen.

•

Construction begins before 2033.

•

Is placed in service after 2022.

•

No credit has been allowed under section 45V or 45Q.

•

The taxpayer makes an irrevocable election to treat clean

hydrogen production facility as energy property under

section 48(a)(15).

•

An unrelated third party has verified (in such form or manner

as the Secretary may prescribe) that such facility produces

hydrogen through a process that results in lifecycle

greenhouse gas emissions that are consistent with the

hydrogen that the facility was designed and expected to

produce as specified in the Section 48(a)(15) Election

Statement, described below.

Qualified clean hydrogen. Qualified clean hydrogen means

hydrogen that is produced through a process that results in a

lifecycle greenhouse gas emissions rate of not greater than 4

kilograms of CO2e per kilogram of hydrogen.

Qualified clean hydrogen also requires the following.

•

Hydrogen is produced in the United States (as defined in

section 638(1)) or a territory of the United States (as defined

in section 638(2)).

•

Hydrogen is produced in the ordinary course of a trade or

business of the taxpayer.

•

Hydrogen is produced for sale or use.

•

The production and sale or use of such hydrogen is verified

by an unrelated party.

Section 48(a)(15) Election Statement

If you are electing to treat qualified property that is part of a

specified clean hydrogen production facility as energy property,

you must attach a statement to Form 3468 for each qualified

facility. The election statement must include the following

information.

1. Your name and taxpayer identification number shown on the

return.

2. For each qualified facility, include the following:

a. The facility description (including the owner information,

if different from the filer) and the IRS-issued registration

number (if applicable) of the qualified facility from Part I,

line 2a.

b. The lifecycle greenhouse gas (GHG) emission rate of

the facility for the tax year.

c. A copy of the required verification report and if you are

petitioning for a provisional emissions rate, a copy of the

documentation obtained from the Department of Energy

providing an emissions value.

3. An attestation that the facility produced hydrogen through a

process that results in a lifecycle GHG emissions rate that is

consistent with, or lower than, the lifecycle GHG emissions

rate of the hydrogen that such facility was designed and

expected to produce.

4. A statement that you haven’t and won’t claim a section 45V

or 45Q credit for the facility which you are claiming the

energy credit.

5. A declaration, applicable to the statement and any

accompanying documents, signed by you, or signed by a

person currently authorized to bind you in such matters that

states the following: “Under penalties of perjury, I declare

that I have examined this statement, including

accompanying documents, and to the best of my knowledge

and belief, the facts presented in support of this statement

are true, correct, and complete.”

Line 25a

Enter the basis of property placed in service during the tax year

for the facility that is designed and reasonably expected to

produce, through a process, qualified clean hydrogen that results

in a lifecycle greenhouse gas emission rate no greater than 4

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kilograms of CO2e per kilogram of hydrogen and not less than

2.5 kilograms as described in section 45V(b)(2)(A).

Line 25b

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 25d

Enter the basis of property placed in service during the tax year

for the facility that is designed and reasonably expected to

produce, through a process, qualified clean hydrogen that results

in a lifecycle greenhouse gas emission rate less than 2.5

kilograms of CO2e per kilogram of hydrogen and not less than

1.5 kilograms as described in section 45V(b)(2)(B).

Line 25e

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 25g

Enter the basis of property placed in service during the tax year

for the facility that is designed and reasonably expected to

produce, through a process, qualified clean hydrogen that results

in a lifecycle greenhouse gas emission rate less than 1.5

kilograms of CO2e per kilogram of hydrogen and not less than

0.45 kilograms as described in section 45V(b)(2)(C).

Line 25h

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Line 25j

Enter the basis of property placed in service during the tax year

for the facility that is designed and reasonably expected to

produce, through a process, qualified clean hydrogen that results

in a lifecycle greenhouse gas emission rate less than 0.45

kilograms of CO2e per kilogram of hydrogen as described in

section 45V(b)(2)(D).

Line 25k

Enter your applicable energy percentage. See Increased Credit

Amount Statement, in Part I, lines 7 and 8, earlier, for more

information.

Section N—Totals and Credit Reduction for Tax

Exempt

Line 28

If proceeds of tax-exempt bonds were used to finance your

facility, continue to line 29. If proceeds were not used to finance

your facility, skip lines 29a through 29e, and go to line 30.

Line 29

Credit reduced for tax-exempt bonds. The amount of the

credit with respect to any facility for any tax year will be reduced

by the amount that is the product of the amount so determined

for such year and the lesser of one of the following.

•

15%, or

•

A fraction, which the numerator is the sum for the tax year

and all prior tax years, of proceeds of an issue of any

obligations the interest on which is exempt from tax under

section 103 and that is used to provide financing for the

qualified facility over the denominator, which is the

aggregate amount of additions to the capital account for the

qualified facility for the tax year and all prior tax years as of

the close of the tax year.

Note. The credit reduced for tax-exempt bonds, lines 29a

through 29e, applies to construction, reconstruction, or erection

of an energy property which began after August 16, 2022.

Line 31

Patrons, including cooperatives that are patrons in other

cooperatives, enter the unused investment credit from the

energy credit allocated from cooperatives. If you are a

cooperative, see the instructions for Form 3800, Part III, line 4a,

for allocating the investment credit to your patrons.

See General Instructions for filing Form 3468 to report

any unused credits from cooperatives.

Line 32

Elective payment phaseout for applicable entities. If you

are making an elective payment election for a facility whose

construction began in calendar year 2024, and the facility does

not satisfy the rules of section 48(a)(12)(B) or does not have a

maximum net output of less than 1 megawatt (as measured in

alternating current), multiply line 30 by 90% (0.90) and enter the

amount on line 32.

Exception to elective payment phaseout. For facilities

whose construction began during calendar year 2024, Notice

2024-09 provides transitional procedures to claim the statutory

exceptions to the elective payment phaseout related to the

domestic content requirement.

To substantiate your claim of exception to the elective

payment phaseout, you must complete and attach a statement to

Form 3468. The statement must say, under penalties of perjury,

that you have reviewed the requirements for the increased cost

exception and the non-availability exception under section 45(b)

(10)(D), and have made a good faith determination that the

qualified facility meets the requirements for the increased cost

exception and/or the non-availability exception, as applicable.

The statement must be signed by a person with the legal

authority to bind the applicable entity in federal tax matters. For

more information, see

Notice 2024-09, 2024-02 I.R.B. 358.

Partnership or S corporation. If you are a partnership or S

corporation electing to transfer the energy credit with respect to

a facility or property (or portion of) under section 6418(c), you

must report the total credit amount with respect to your facility on

line 32 and Form 3800, Part III, line 4a.

Part VII—Rehabilitation Credit Under

Section 47

You are allowed a credit for qualified rehabilitation expenditures

made for any qualified rehabilitated building. You must reduce

your basis by the amount of the credit determined for the tax

year. See Regulations section 1.47-7.

If the adjusted basis of the building is determined in whole or

in part by reference to the adjusted basis of a person other than

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the taxpayer, see Regulations section 1.48-12(b)(2)(viii) for

additional information that must be attached.

Qualified rehabilitated building. To be a qualified

rehabilitated building, your building must meet all five of the

following requirements.

1. The building must be a certified historic structure. A

certified historic structure is any building:

a. Listed in the National Register of Historic Places, or

b. Located in a registered historic district (as defined in

section 47(c)(3)(B)) and certified by the Secretary of the

Interior as being of historic significance to the district.

Certification requests are made through your State

Historic Preservation Officer on National Park Service

(NPS) Form 10-168, Historic Preservation Certification

Application. The request for certification should be made

prior to physical work beginning on the building. For

pre-1936 buildings under the transition rule, see

Transitional

rule for amounts paid or incurred after 2017, later.

2. The building must be substantially rehabilitated. A

building is considered substantially rehabilitated if your

qualified rehabilitation expenditures during a self-selected

24-month period that ends with or within your tax year are

more than the greater of $5,000 or your adjusted basis in

the building and its structural components. Figure adjusted

basis on the first day of the 24-month period or the first day

of your holding period, whichever is later. If you are

rehabilitating the building in phases under a written

architectural plan and specifications that were completed

before the rehabilitation began, substitute “60-month period”

for “24-month period.”

3. Depreciation must be allowable with respect to the

building. Depreciation isn't allowable if the building is

permanently retired from service. If the building is damaged,

it isn't considered permanently retired from service where

the taxpayer repairs and restores the building and returns it

to actual service within a reasonable period of time.

4. The building must have been placed in service before

the beginning of rehabilitation. This requirement is met if

the building was placed in service by any person at any time

before the rehabilitation began.

5. For a building under the transition rule:

a. At least 75% of the external walls must be retained with

50% or more kept in place as external walls, and

b. At least 75% of the existing internal structural framework

of the building must be retained in place.

Qualified rehabilitation expenditures. To be qualified

rehabilitation expenditures, your expenditures must meet all six

of the following requirements.

1. The expenditures must be for:

a. Nonresidential real property,

b. Residential rental property (but only if a certified historic

structure; see Regulations section 1.48-1(h)), or

c. Real property that has a class life of more than 12.5

years.

2. The expenditures must be incurred in connection with the

rehabilitation of a qualified rehabilitated building.

3. The expenditures must be capitalized and depreciated

using the straight line method.

4. The expenditures can't include the costs of acquiring or

enlarging any building.

If the expenditures are in connection with the rehabilitation

of a certified historic structure or a building in a registered

historic district, the rehabilitation must be certified by the

Secretary of the Interior as being consistent with the historic

character of the property or district in which the property is

located. This requirement doesn't apply to a building in a

registered historic district if:

a. The building isn't a certified historic structure;

b. The Secretary of the Interior certifies that the building

isn't of historic significance to the district; and

c. If the certification in (b) occurs after the rehabilitation

began, the taxpayer certifies in good faith that the

taxpayer wasn't aware of that certification requirement

at the time the rehabilitation began.

6. The expenditures can't include any costs allocable to the

part of the property that is (or may reasonably be expected

to be) tax-exempt use property (as defined in section 168(h)

except that “50%” shall be substituted for “35%” in

paragraph (1)(B)(iii)). This exclusion doesn't apply for

line 1f.

Line 1a

Check the appropriate box whether there was any charitable

conservation contribution deduction under section 170(h)

claimed for the property on which you are claiming a credit for a

certified historic structure.

Line 1b

If you checked “Yes” to line 1a, you must provide the NPS project

number. The NPS project number is assigned:

•

By NPS to a certified historic structure;

•

To a building on a property that has multiple buildings which

is individually listed in the National Register of Historic

Places referenced in section 170(h)(4)(C)(i); or

•

To a building that is in a historic district referenced in section

170(h)(4)(C)(ii).

If the property is a single building individually listed in the

National Register of Historic Places, enter five zeros (“00000”) in

the NPS project number field. For more details on the NPS

project number for easements on certified historic structures,

see the Instructions for Form 8283, Noncash Charitable

Contributions. For more information on charitable conservation

contribution deduction of certified historic structures, see Pub.

526, Charitable Contributions.

Line 1c

For credit purposes, the expenditures are generally taken into

account for the tax year in which the qualified rehabilitated

building is placed in service. However, with certain exceptions,

you may elect to take the expenditures into account for the tax

year in which they were paid (or, for a self-rehabilitated building,

when capitalized) if:

•

The normal rehabilitation period for the building is at least 2

years, and

•

It is reasonable to expect that the building will be a qualified

rehabilitated building when placed in service.

For details, see section 47(d). To make this election, check

the box on line 1c. The credit, as a percent of expenditures paid

or incurred during the tax year for any qualified rehabilitated

building, depends on the type of structure and its location.

Lines 1h, 1i, and 1j

Transitional rule for amounts paid or incurred after 2017.

The 10% credit for pre-1936 buildings no longer applies and the

20% credit for a certified historic structure is generally modified

to allow 100% of qualified rehabilitation expenditures ratably

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over a 5-year period for amounts paid or incurred after 2017. For

qualified rehabilitation expenditures paid or incurred during the

transitional period stated below, the taxpayer can claim the 10%

credit for pre-1936 buildings and the 20% credit for a certified

historic structure (under section 47(a), as in effect before

December 22, 2017). The transitional rule applies to amounts

paid or incurred as follows.

In the case of qualified rehabilitation expenditures with

respect to any building (a) owned or leased by the taxpayer

during the entirety of the period after 2017; and (b) with respect

to the 24-month period selected by the taxpayer under section

47(c)(1)(B)(i) (as in effect after December 21, 2017) (or the

60-month period applicable under section 47(c)(1)(B)(ii)), which

begins no later than 180 days after December 22, 2017, the

transitional rule applies to expenditures paid or incurred after the

end of the tax year in which the 24-month period (or the

60-month period) ends.

If you have more than one property that qualifies for the

rehabilitation credit, attach a schedule showing the type of

property (pre-1936 building or certified historic structure), NPS

number, date of final certification, and the partnership employer

identification number (EIN), if applicable. Also, indicate if the

transitional rule applies.

Line 1k

If you are claiming a credit for a certified historic structure on

line 1i or 1j, enter the assigned NPS project number on line 1k.

If the qualified rehabilitation expenditures are from an S

corporation, partnership, estate, or trust, enter on line 1k the EIN

of the pass-through entity instead of the assigned NPS project

number, and skip the second line assigned for the date on

line 1k.

The lessor will provide the lessee with the NPS project

number to enter on line 1k.

For the second line on line 1k, enter the date of the final

certification of completed work received from the Secretary of

the Interior.

Certification of completed work not received by time of fil-

ing. If the final certification hasn't been received by the time the

tax return is filed for a year in which the credit is claimed, attach

a copy of the first page of NPS Form 10-168, Historic

Preservation Certification Application (Part 2—Description of

Rehabilitation), with an indication that it was received by the

Department of the Interior or the State Historic Preservation

Officer, together with proof that the building is a certified historic

structure (or that such status has been requested).

After the final certification of completed work has been

received, file Form 3468 with the first income tax return filed after

receipt of the certification and enter the assigned NPS project

number and the date of the final certification of completed work

on the appropriate lines on the form. Also, attach an explanation

and indicate the amount of credit claimed in prior years.

Failure to receive final certification of completed work with-

in 30 months. If you didn’t receive final certification of

completed work prior to the date that is 30 months after the date

that you filed the tax return on which the credit was claimed, you

must submit, before the last day of the 30th month, a written

statement to the IRS stating that fact. You will be asked to

consent to an agreement under section 6501(c)(4) extending the

period of assessment for any tax relating to the time for which

the credit was claimed.

Mail the written statement to:

Internal Revenue Service

Technical Services

31 Hopkins Plaza, Room 1108

Baltimore, MD 21201

Final certification of completed work. You must retain a copy

of the final certification of completed work as long as its contents

may be needed for the administration of any provision of the

Code.

If the final certification is denied by the Department of

the Interior, the credit is disallowed for any tax year in

which it was claimed, and you must file an amended

return if necessary. See Regulations section 1.48-12(d)(7)(ii) for

details.

Line 2

Patrons, including cooperatives that are patrons in other

cooperatives, enter the unused investment credit from the

rehabilitation investment credit allocated from cooperatives. If

you are a cooperative, see the instructions for Form 3800, Part

III, line 4k, for allocating the investment credit to your patrons.

See General Instructions for filing Form 3468 to report

any unused credits from cooperatives.

CAUTION

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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

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 ........................................................................ 18 hr., 39 min.

Learning about the law or the form........................................................... 6 hr., 21 min.

Preparing and sending the form to the IRS ..................................................... 10 hr., 55 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 3468 (2023)