8912 Instructions for Form 8912

2016

Instructions for Form 8912

Department of the Treasury
Internal Revenue Service

Credit to Holders of Tax Credit Bonds
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

CAUTION

For the latest information about developments related to Form
8912 and its instructions, such as legislation enacted after they
were published, go to www.irs.gov/form8912.

General Instructions

QZABs issued after October 3, 2008, are considered
qualified tax credit bonds and the rules of sections 54A
and 54E apply.

Holders of BABs. A taxpayer holding a BAB on an interest
payment date can claim the credit by filing Form 8912. An
interest payment date is any date on which the bondholder of
record is entitled to a payment of interest under the bond.

Definitions

Purpose of Form

Use Form 8912 to claim the credit for the following tax credit
bonds.
Clean renewable energy bond (CREB).
New clean renewable energy bond (NCREB).
Qualified energy conservation bond (QECB).
Qualified zone academy bond (QZAB).
Qualified school construction bond (QSCB).
Build America bond (BAB).
Generally, in lieu of, or in addition to, receiving periodic
interest payments from the issuer, the holder of the bond is
allowed an income tax credit. The credit compensates the holder
for lending money to the issuer and functions as interest paid on
the bond. Build America bond holders receive taxable interest
from the issuer in addition to being allowed an annual income tax
credit.
Note. If the issuer of the bond makes an irrevocable election to
have section 54AA(g) (for a qualified build America bond under
section 54AA(g)(2)) or section 6431(f) (for a specified tax credit
bond under section 6431(f)(3)(A)) apply to the bonds and
receive a refundable credit under section 6431(a), no credit is
allowed to the holder under sections 54AA or 54A, respectively,
for that bond.

Who Can Claim the Credits

A taxpayer holding a CREB or qualified tax credit bond (a
qualified tax credit bond doesn't include a QZAB issued before
October 4, 2008) on one or more credit allowance dates can
claim the credit by filing Form 8912 for each tax year in which it
holds the bond on a credit allowance date.
Generally, the credit allowance dates are:
March 15,
June 15,
September 15, and
December 15.
The credit allowance date also includes the last day on which
the qualified tax credit bond is outstanding.
Holders of QZABs issued before October 4, 2008. An
eligible taxpayer holding a QZAB on the credit allowance date
can claim the credit by filing Form 8912. To be an eligible
taxpayer, the taxpayer must be a bank, insurance company, or
other corporation actively engaged in the business of lending
money. In addition, the shareholder of an S corporation may
claim the credit from a QZAB held by an S corporation that is an
eligible taxpayer. The credit allowance date is the last day of: (a)
the 1-year period beginning on the date the bond was issued
and (b) each successive 1-year period thereafter. See section
1397E (as in effect on October 3, 2008).
Sep 27, 2016

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CREB. A CREB is any bond issued after 2005 and before 2010
by a qualified issuer, the proceeds of which are used for capital
expenditures incurred by a qualified borrower for a qualified
project. In addition, the bond must be designated by the issuer
as a CREB under section 54. An issuer can make such a
designation only if it applied for and received a CREB allocation
from the IRS.
A qualified issuer is either a:
Cooperative electric company—a mutual or cooperative
electric company described in section 501(c)(12) or section
1381(a)(2)(C), or a not-for-profit electric utility that has received
a loan or loan guarantee under the Rural Electrification Act,
Clean renewable energy bond lender—a lender that is a
cooperative which is owned by, or has outstanding loans to, 100
or more cooperative electric companies and is in existence on
February 1, 2002, including any affiliated entity which is
controlled by such lender, or
Governmental body—any state, territory, possession of the
United States, the District of Columbia, Indian tribal government,
and any political subdivision thereof.
A qualified borrower is a mutual or cooperative electric
company described in section 501(c)(12) or section 1381(a)(2)
(C), or a governmental body.
A qualified project is any qualified facility (as determined
under section 45(d) without regard to paragraph (10) and to any
placed-in-service date) owned by a qualified borrower.
Qualified tax credit bond. A qualified tax credit bond means a
new clean renewable energy bond, qualified energy
conservation bond, qualified zone academy bond (issued after
October 3, 2008), or qualified school construction bond that is a
part of an issue that meets the requirements of section 54A(d)
(2), (3), (4), (5), and (6).
NCREB. An NCREB is any bond issued after October 3, 2008,
by a qualified issuer as a new clean renewable energy bond
and 100% of the available project proceeds are used for capital
expenditures incurred by governmental bodies, public power
providers, or cooperative electric companies for one or more
qualified renewable energy facilities.
A qualified issuer is a public power provider, a cooperative
electric company, a governmental body, a clean renewable
energy bond lender, or a not-for-profit electric utility that has
received a loan or loan guarantee under the Rural Electrification
Act.
A clean renewable energy bond lender is a lender that is a
cooperative that is owned by, or has outstanding loans to, 100 or
more cooperative electric companies and is in existence on
February 1, 2002, and includes any affiliated entity that is
controlled by that lender.

Cat. No. 57584P

on line 13, and not on line 18. For example, if you own an
interest in a partnership, and the partnership reports your share
of bond tax credits earned by the partnership on a Schedule K-1
(Form 1065) as well as on a Form 1097-BTC, don't double-count
these amounts. Include the amount reported to you on Form
1097-BTC by the partnership in Part III, line 13, and not in Part
IV, line 18.

A cooperative electric company is a mutual or cooperative
electric company described in section 501(c)(12) or section
1381(a)(2)(C).
A governmental body is any state or Indian tribal
government, or any political subdivision thereof.
A public power provider is a state utility with a service
obligation, as defined in section 217 of the Federal Power Act
(as in effect on October 3, 2008).
A qualified renewable energy facility is a qualified facility
(as determined under section 45(d) without regard to paragraphs
(8) and (10) and to any placed-in-service date) owned by a
public power provider, a governmental body, or a cooperative
electric company.

Line 3
Enter the amount of the credit carryforward (from prior years)
that is attributable to a qualified tax credit bond or a BAB. Credits
attributable to a CREB, or a QZAB issued before October 4,
2008, can't be carried forward.

QECB. A QECB is any bond issued after October 3, 2008, by a
state or local government as a qualified energy conservation
bond and 100% of the available project proceeds are used for
one or more qualified conservation purposes. See section 54D(f)
for the definition of qualified conservation purposes.

Line 5
Estates and trusts must allocate any CREB credit on line 4
between the estate or trust and the beneficiaries in the same
proportion as income was allocated and enter the beneficiaries'
share on line 5.

QZAB. A QZAB is any bond issued by a state or local
government as a qualified zone academy bond and 100% of the
available project proceeds are used to improve certain eligible
public schools (for QZABs issued before October 4, 2008, 95%
or more of the proceeds are used to improve certain eligible
public schools).

Part II—Allowable Credit

The credit allowed for the current year may be limited based on
your tax liability. Use Part II to figure the allowable credit.

Line 10b

QSCB. A QSCB is any bond issued after February 17, 2009, by
a state or local government as a qualified school construction
bond and 100% of the available project proceeds are used for
the construction, rehabilitation, or repair of a public school facility
or for the acquisition of land on which the bond-financed facility
is to be constructed.
BAB. A BAB is any bond (other than a private activity bond)
issued after February 17, 2009, and before January 1, 2011, by
an issuer who makes an irrevocable election to have the rules of
section 54AA apply and, except for that election, the interest on
the bond would have been excludable under section 103.

Enter the total allowable credit, if any, from your tax return as
follows.
Individuals. Enter the amount from Form 1040, lines 49 through
54 (Form 1040NR, lines 47 through 51). Don't include any
general business credit claimed on Form 3800, or any prior year
minimum tax.
Estates and trusts. Enter the total of any write-in credits from
Form 1041, Schedule G, line 2e.
Corporations. Enter the amount from Form 1120, Schedule J,
line 5b (or the applicable line of your return).

Specific Instructions

Line 10c

Separate entries and calculations are required for each bond
with a different issuance date or a different credit rate.

If you are filing Form 3800, General Business Credit, enter the
credit from Form 3800.

Part I—Current Year Credit

Line 12

Complete Part(s) III and IV before completing Part I and
TIP Part II. See the instructions for Parts III and IV for more
information.

If you don't have an entry space for these credits on your tax
return, include the allowable credit on the “Total credits” line with
the applicable notation (for example, “CREB” or “QECB”).
Holders of a CREB, or a QZAB issued before October 4,
2008. If you can't use all of the credit from Part I because of the
tax liability limit (for example, line 12 is smaller than line 4), you
can deduct the unused credit for the current tax year. However,
you can choose to deduct the unused credit in the next tax year
instead of the current tax year.
Because a current year deduction may further reduce the tax
liability limit, you may need to refigure the tax liability limit and
the unallowed credit. Refigure the unallowed credit until it equals
the deduction. It may be necessary to use the “trial and error”
method.

Line 1
Enter the total from Part III, line 14. This amount is the total bond
credits reported to you on Form(s) 1097-BTC.

Line 2
Enter the amount from Part IV, line 20. This amount is the total
bond credits from bonds held by you or your nominee(s) and not
reported to you on Form(s) 1097-BTC. This amount may also
include bond credits reported to you from a pass-through entity
(partnership, S corporation, estate, trust, regulated investment
company, and real estate investment trust) that weren't reported
to you on Form(s) 1097-BTC.

Holders of a qualified tax credit bond or a BAB. If you can't
use all of the credit from Part I (for example, line 12 is smaller
than line 4), you may carry the unused portion of the credit to the
next tax year and add it to any credit allowable to the holder of
the same bond in the next tax year. A holder of a qualified tax
credit bond or BAB can't deduct any unused credit.

Note. You may receive Form(s) 1097-BTC from a pass-through
entity reporting your share of bond tax credits. The entity may
also report your share of bond tax credits on a form/schedule/
statement other than the Form(s) 1097-BTC. In such a case,
don't double-count amounts reported to you. Include any amount
reported to you on Form(s) 1097-BTC from a pass-through entity

Limitation on credit from pass-through entities. For a
CREB held by a pass-through entity, the credit included in line 1
(for a credit received from a pass-through entity that issued a
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Form 1097-BTC) and line 2 (for a credit received from a
pass-through entity that didn't issue a Form 1097-BTC) is limited
to the amount of tax attributable to your taxable income from
your interest in the pass-through entity distributing the credit.
Figure the credit limitation separately for each interest in a
pass-through entity using the following limitation formula.

Line 11 x

For a new clean renewable energy bond or a qualified
energy conservation bond, the credit is limited to 70%
CAUTION (0.70) of the total credit figured for the tax year. The
amount reported in boxes 5a-5l of Form 1097-BTC and that is
included in line 14 shouldn't exceed 70% of the credit figured
under section 54A(b) for these bonds.

!

Taxable income for the year attributable to your interest in the
pass-through entity

Part IV—Bond credits from bonds held by you
and/or your nominee not reported to you on
Form 1097-BTC

Taxable income for the year

Complete and attach a Part IV for each bond you held or bond
credits received from a pass-through entity that weren't reported
to you on Form(s) 1097-BTC. Complete and attach as many
copies of Part IV as you need to claim the credit(s) for each bond
you held directly or through a nominee and for which you didn't
receive a Form 1097-BTC. Also, complete a separate Part IV for
each bond credit passed through to you from a pass-through
entity for which a Form 1097-BTC wasn't issued. If multiple
copies of Part IV are completed, enter the total of all Parts IV,
lines 20, on Part I, line 2.

If in the current tax year you had no taxable income attributable
to a particular interest in a pass-through entity, you can't claim
any CREB credit this tax year for that interest.
All taxpayers (other than estates and trusts). For line 12,
add the line 1 and line 2 credits separately figured for each
interest in a pass-through entity (as limited by the formula above
for each such interest) to the total credit on line 4 not attributable
to that pass-through entity. Enter on line 12 the smaller of this
result or the amount on line 11. This limitation only applies to a
CREB credit received from a pass-through entity.
Estates and trusts. For line 12, add the line 1 and line 2
credits separately figured for each interest in a pass-through
entity (as limited by the formula above for each such interest) to
the total credit on line 6 not attributable to that pass-through
entity. Enter on line 12 the smaller of this result or the amount on
line 11. This limitation only applies to a CREB credit received
from a pass-through entity.

Note. If you are reporting a bond credit received from a
pass-through entity, complete lines 15a and 15b and enter the
credit amount on line 18, column (f).

Line 15a
Enter the bond issuer's name and address. If the credit was
received from a pass-through entity, enter the name of the entity
distributing the bond credit.

Part III—Bond credit(s) reported to you on
Form(s) 1097-BTC

Line 15b

Part III is used to list and total credits that are reported to you on
Form(s) 1097-BTC. Complete and attach as many copies of Part
III as needed to list the credits you are reporting for the current
tax year. Don't include credit amounts previously claimed on any
of your returns. If multiple copies of Part III are completed, enter
the total of all Parts III, lines 14, on Part I, line 1.

Enter the bond issuer's employer identification number. If the
credit was received from a pass-through entity, enter the
employer identification number of the pass-through entity
distributing the credit.

Line 13, Column (b1)

If the bond was redeemed, sold, or otherwise disposed of, enter
the date.

Line 17

Enter the Form 1097-BTC issuer's federal identification number
shown on Form 1097-BTC.

Line 18, Column (a)
Enter the CUSIP number of the bond. If there is no CUSIP
number, enter the principal payment dates of the bond. For
CREBs, enter the CUSIP number and principal payment dates.
For BABs, enter the CUSIP number and interest payment dates.

Line 13, Column (b2)
Enter the unique identifier shown in box 2b of Form 1097-BTC.

Line 13, Column (c)

Line 18, Column (b)

Enter the amount shown in box 1 of any Form 1097-BTC you
receive.

!

CAUTION

Enter the face amount of the CREB, qualified tax credit bond, or
QZAB (issued before October 4, 2008) minus any payment of
principal received. For a BAB, enter the amount of interest
payable.

If you receive Form(s) 1097-BTC from any pass-through
entity reporting your share of bond credits, report the
credit on Part III, line 13.

Line 18, Column (c)

Note. Fiscal year filers should use information from applicable
boxes 5a through 5l, Form 1097-BTC, to claim the credit for their
fiscal tax year.

The credit rate for the CREB, qualified tax credit bond, and
QZAB (issued before October 4, 2008) is the rate published on
the Treasury Direct website under “IRS Tax Credit Bond Rates”
at www.treasurydirect.gov/govt/rates/rates_irstcb.htm for the
first day on which there is a binding contract in writing for the
sale or exchange of the bond.

Line 14
Add the amounts listed on line 13, column (c) and enter the total
on line 14. If you complete and attach one copy of Part III, enter
the amount from line 14 on line 1. If you complete and attach
multiple copies of Part III, add the amounts entered for all lines
14 and enter the total on line 1.

The credit rate for QZABs issued before July 1, 1999, is
110% of the long-term applicable federal rate (AFR),
compounded annually, for the month and year the bond is
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amount of the credit in column (f). You must complete lines 15a
and 15b.

issued. The IRS announces the long-term AFR monthly in a
series of revenue rulings published in the Internal Revenue
Bulletin.

Line 20

The credit rate for a BAB is 35%.

Bond credit. Enter the total amounts from all Parts IV, lines 20,
on Part I, line 2.

Line 18, Column (e)

Interest income. The current year credit on line 4 (or for
estates and trusts, line 6) is deemed to be a payment of qualified
stated interest (as defined in Regulations section 1.1273-1(c))
and as such is treated as taxable interest income paid on the
credit allowance date, or for BABs, the interest payment date. If
the holder is on the accrual method, the holder must accrue the
credit amount as taxable interest income on the credit allowance
date or interest payment date.
If a holder of a tax credit bond sells the bond between credit
allowance dates (or for BABs, interest payment dates), part of
the sales price is treated as accrued interest to the date of the
sale and must be reported as interest income. If a holder
purchases a bond between credit allowance dates or interest
payment dates, the interest accrued as of the date of the
purchase (as reflected in the purchase price) isn't included as
interest when the purchaser receives the value of the credit (and
the deemed payment of interest) on the next credit allowance
date or interest payment date. Instead, the payment of the
deemed interest is treated as a return of capital to the extent of
the accrued interest at the time of purchase and reduces the
holder’s basis in the bond.

Generally, enter 25% for each credit allowance date you hold a
CREB, or qualified tax credit bond during your tax year. Enter
100% for a BAB, or a QZAB issued before October 4, 2008.
Example. Your tax year begins December 1, 2016, and ends
November 30, 2017. You purchased a QECB on March 15,
2017, the issue date of the bond, and held it through the end of
the tax year ending November 30, 2017. You would enter 50%
computed by including the day after the bond was issued as the
first day on which the credit accrues, as follows.

Credit allowance date

%

June 15, 2017

25

September 15, 2017

25
50

However, the 25% will be prorated if a CREB or qualified tax
credit bond is issued, redeemed, or matures during the 3-month
period ending on a credit allowance date with respect to which
you are claiming the credit. The percentage of credit allowed for
that credit allowance date is prorated for the number of days the
bond was outstanding during the 3-month period.

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.

Example. Your tax year begins December 1, 2016, and ends
November 30, 2017. You purchased a QECB on March 23,
2017, the issue date of the bond. Since the bond wasn't held for
the entire 3-month period ending on June 15, 2017, the prorated
portion of the 25% is figured by dividing (a) the number of days
the bond was outstanding beginning on the day after the date
the bond was issued and ending on the next credit allowance
date by (b) the number of days included in the 3-month period
beginning on the day after the credit allowance date and ending
on the next credit allowance date. See below.
84 days (number of days from March
24 through June 15)
92 days (number of days from March
16 through June 15)

You are not required to provide the information requested on
a form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records
relating to a form or its instructions must be retained as long as
their contents may become material in the administration of any
Internal Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated burden
for individual taxpayers filing this form is approved under OMB
control number 1545-0074 and is included in the estimates
shown in the instructions for their individual income tax return.
The estimated burden for business taxpayers filing this form is
approved under OMB control number 1545-0123 and is included
in the estimates shown in the instructions for the business tax
return. The estimated burden for all other taxpayers who file this
form is shown below.

= .913 x 25% = 23%

You would enter 48% computed as follows.

Credit allowance date

%

June 15, 2017

23

September 15, 2017

25

Recordkeeping . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . .
Preparing and sending the form to the IRS

. . . . . . . .
. . . . . . . .
. . . . . . . .

9 hr., 34 min.
1 hr., 59 min.
2 hr., 13 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.

48

Generally, for bonds issued during the 3-month period ending on
a credit allowance date, the sum of the prorated credit amounts
for the first credit allowance date and the last credit allowance
date should equal 25% of the annual credit allowance.

Line 18, Column (f)
This amount is the income tax credit to the holder of a tax credit
bond. If the bond credit is from a pass-through entity, enter the
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