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Business Tax

IRS Again Updates 2020 Form 3468, Investment Credit

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

The IRS has again updated the 2020 Form 3468, Investment Credit. The new updates reflect the changes made to the energy credit by The Taxpayer Certainty and Disaster Relief Tax Act of 2020 (TCDTRA; PL 116-260).

Background—TCDRTA.

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTRA; PL 116-260) extended deadlines for placing in service certain energy property; added a new credit for waste energy recovery property; and provided special rules for offshore wind facilities. (Instructions to Form 3468)

TCDTRA also reduced, to 26%, the credit for:

  • Solar illumination and solar energy property,
  • Fuel cell property, and
  • Qualified small wind property the construction of which begins in 2020, 2021, or 2022. (Instructions to Form 3468)

TCDTRA also reduced, to 40%, the investment credit for wind facilities the construction of which begins in 2020 or 2021. (Instructions to Form 3468)

Background—Form 3468.

Form 3468 is used to compute the investment credit; the investment credit is composed of various credits including the business energy credit. The original final 2020 version of Form 3468 was issued before TCDTRA was enacted. The IRS has already issued online updates to the 2020 Form 3468. See CAA, 2021 extension of energy credit phasedown obsoletes certain form lines (02/17/2021).

More updates to 2020 Form 3468.

The IRS, on its website, has again updated Form 3468 to reflect the changes to the energy credit made by the TCDTRA. Below is a summary of energy credit changes to the 2020 Form 3468:

Line 12d is obsolete. Use line 12c to report energy property placed in service during the tax year and the construction of which begins in 2021.

Lines 12n, 12o, and 12p are obsolete. Use lines 12k, 12l, and 12m to report fuel cell property placed in service during the tax year and the construction of which begins in 2021.

Line 12aa is obsolete. Use line 12z to report small wind energy property placed in service during the tax year and the construction of which begins in 2021.

Use line 12z to report basis of waste energy recovery property placed in service during the tax year and the construction of which begins in 2021 or 2022.

Use line 12gg for basis of wind facility property placed in service during the tax year and the construction of which begins during 2020 or 2021.

your research on the business energy credit, see FTC2d/FIN ¶L-16401.

 

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