PDF document

- 1 -

Userid: CPM Schema: instrx Leadpct: 100% Pt. size: 9 Draft Ok to Print
AH XSL/XML Fileid: … ions/i3468/2022/a/xml/cycle05/source (Init. & Date) _______

Page 1 of 18 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Department of the Treasury
Internal Revenue Service
2022

Instructions for Form 3468

Investment Credit

Section references are to the Internal Revenue Code unless
otherwise noted. General Instructions

Future Developments Purpose of Form
Use Form 3468 to claim the investment credit. The investment
For the latest information about developments related to Form credit consists of the following credits.
3468 and its instructions, such as legislation enacted after they • Rehabilitation.
were published, go to IRS.gov/Form3468. • Energy.
• Qualifying advanced coal project.
What’s New • Qualifying gasification project.
New advanced manufacturing investment credit. The • Qualifying advanced energy project.
Creating Helpful Incentives To Produce Semiconductors • Advanced manufacturing investment.
(CHIPS) Act of 2022, P.L. 117-167, Div. A, sec. 107, added a If you file electronically, you must send in a paper Form 8453,
new investment credit equal to 25% of the qualified investment U.S. Individual Income Tax Transmittal for an IRS e-file Return, if
in any advanced manufacturing facility for the primary purpose of attachments are required for Form 3468.
manufacturing of semiconductors or semiconductor
manufacturing equipment. This credit applies to property placed Investment Credit Property
in service after 2022, and, for any property the construction of Investment credit property is any depreciable or amortizable
which begins prior to 2023, only to the extent of the basis thereof property that qualifies for the rehabilitation credit, energy credit,
attributable to the construction, reconstruction, or erection after qualifying advanced coal project credit, qualifying gasification
August 9, 2022. See Advanced Manufacturing Investment project credit, qualifying advanced energy project credit, or
Credit, later. advanced manufacturing investment credit.
If properly elected, an eligible taxpayer, can treat the amount
of the credit attributable to any advanced manufacturing facility You can't claim a credit for property that is:
for the tax year as a payment against the tax. A partnership or S • Used mainly outside the United States (except for property
corporation can elect to receive a payment rather than a credit. described in section 168(g)(4));
See Deemed Payment, later. • Used by a governmental unit or foreign person or entity
(except for a qualified rehabilitated building leased to that
Inflation Reduction Act of 2022 (IRA 2022). IRA 2022 unit, person, or entity; and property used under a lease with
included several new or enhanced energy investment credits a term of less than 6 months);
effective for periods after 2022. Fiscal year filers may claim • Used for lodging or in the furnishing of lodging (see section
these credits for periods in 2023. IRA 2022 enacted the 50(b)(2) for exceptions); or
following. • Certain MACRS business property to the extent it has been
• Established new credits for energy storage technology, expensed under section 179.
qualified biogas property, and microgrid controllers.
• Established bonus credits for domestic content bonus Qualified Progress Expenditures
credit, energy communities, and certain solar and wind Qualified progress expenditures are those expenditures made
facilities in connection with low-income communities. before the property is placed in service and for which the
• Established an election to treat clean hydrogen production taxpayer has made an election to treat the expenditures as
facilities as energy properties. progress expenditures. Qualified progress expenditure property
• Established new rules regarding prevailing wage is any property that is being constructed by or for the taxpayer
requirements and apprenticeship requirements. and which (a) has a normal construction period of 2 years or
• Enhanced rules regarding qualifying advanced energy more, and (b) it is reasonable to believe that the property will be
project. Additional guidance related to qualifying advanced new investment credit property in the hands of the taxpayer
energy project will be posted at IRS.gov/Form3468 in the when it is placed in service. The placed-in-service requirement
coming weeks. doesn't apply to qualified progress expenditures.
• Established new rules for certain filers to elect to treat credit
amounts as deemed payments and rules related to the Qualified progress expenditures for:
transfer of certain credits for tax years beginning in 2023, • Self-constructed property means the amount that is properly
including short tax years beginning and ending in 2023. chargeable (during the tax year) to a capital account with
Additional guidance related to electing the deemed payment respect to that property; or
will be posted at IRS.gov/Form3468 in the coming weeks. • Non-self-constructed property means the lesser of: (a) the
See Energy Credit and lines 12a–12hh, later, for more amount paid (during the tax year) to another person for the
information. 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

Jan 30, 2023 Cat. No. 12277P

- 2 -

Page 2 of 18            Fileid: … ions/i3468/2022/a/xml/cycle05/source                                   12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

qualified progress expenditures for the rehabilitation credit, see          is subject to recapture to the same extent as if the transferor 
section 47(d).                                                              had disposed of the property at the later date.
For details on qualified progress expenditures for the                    3. A transaction to which section 381(a) applies (relating to 
advanced manufacturing investment credit, see section 48D(b)                certain acquisitions of the assets of one corporation by 
(5).                                                                        another corporation).
At-Risk Limit for Individuals and                                         4. A mere change in the form of conducting a trade or 
                                                                            business if:
Closely Held Corporations
                                                                             a. The property is retained as investment credit property in 
The cost or basis of property for investment credit purposes may                  that trade or business, and
be limited if you borrowed against the property and are protected 
against loss, or if you borrowed money from a person who is                  b. The taxpayer retains a substantial interest in that trade 
related or who has an interest (other than as a creditor) in the                  or business.
business activity. The cost or basis must be reduced by the                A mere change in the form of conducting a trade or business 
amount of the nonqualified nonrecourse financing related to the           includes a corporation that elects to be an S corporation and a 
property as of the close of the tax year in which the property is         corporation whose S election is revoked or terminated.
placed in service. If, at the close of a tax year following the year 
property was placed in service, the nonqualified nonrecourse               For more information, see the Instructions for Form 4255, 
financing for any property has increased or decreased, then the           Recapture of Investment Credit.
credit base for the property changes accordingly. The changes 
may result in an increased credit or a recapture of the credit in                 See section 46(g)(4) (as in effect on November 4, 1990), 
the year of the change. See sections 49 and 465 for details.               !      and related regulations, if you made a withdrawal from a 
                                                                          CAUTION capital construction fund set up under the Merchant 
Recapture of Credit                                                       Marine Act of 1936 to pay the principal of any debt incurred in 
You may have to refigure the investment credit and recapture all          connection with a vessel on which you claimed investment 
or a portion of it if:                                                    credit.
•    You dispose of investment credit property before the end of 
     5 full years after the property was placed in service                 Any required recapture is reported on Form 4255. For details, 
     (recapture period);                                                  see Form 4255.
•    You change the use of the property before the end of the 
     recapture period so that it no longer qualifies as investment 
     credit property;                                                     Specific Instructions
•    The business use of the property decreases before the end 
     of the recapture period so that it no longer qualifies (in whole             Generally, (a) an estate or trust whose entire qualified 
     or in part) as investment credit property;                            !      rehabilitation expenditures or bases in energy property 
•    Any building to which section 47(d) applies will no longer be        CAUTION are allocated to beneficiaries, (b) an S corporation, or (c) 
     a qualified rehabilitated building when placed in service;           a partnership doesn’t have to complete and attach Form 3468 to 
•    Any property to which section 48(b), 48A(b)(3), 48B(b)(3),           its tax return. However, if the estate or trust, S corporation, or 
     48C(b)(2), 48D(b)(5), or 48E(e) applies will no longer qualify       partnership is the owner of or passing through qualified 
     as investment credit property when placed in service;                rehabilitation expenditures for a certified historic structure, the 
•    Before the end of the recapture period, your proportionate           entity must complete lines 11h and 11i of the form and attach it 
     interest is reduced by more than 1/3 in an S corporation,            to its tax return even if the credit is not being claimed by the 
     partnership, estate, or trust that allocated the cost or basis       entity. See Shareholders of S Corporations, Partners of 
     of property to you for which you claimed a credit;                   Partnerships, and Beneficiaries of Estates and Trusts below for 
•    You return leased property (on which you claimed a credit)           information that the entity must provide when allocating the 
     to the lessor before the end of the recapture period;                credit.
•    A net increase in the amount of nonqualified nonrecourse 
     financing occurs for any property to which section 49(a)(1)          Shareholders of S Corporations, 
     applied;
•    A grant under section 1603 of the American Recovery and              Partners of Partnerships, and 
     Reinvestment Tax Act of 2009 (Section 1603 grant) was                Beneficiaries of Estates and Trusts
     made for section 48 property for which a credit was allowed          If you are a shareholder, partner, or beneficiary of the 
     for progress expenditures before the grant was made.                 designated pass-through entity, the entity will provide to you the 
     Recapture is applicable to those amounts previously                  information necessary to complete the following.
     included in the qualified basis for an energy credit, including        The qualified investment in qualifying advanced coal project 
     progress expenditures, that are also the basis for the               •
                                                                            property for lines 5a through 5c.
     Section 1603 grant;                                                    The qualified investment in qualifying gasification or 
•    A grant under section 9023 of the Patient Protection and             •
                                                                            advanced energy project property for lines 6a and 6b.
     Affordable Care Act was made for investment for which a                The information for line 7 less any amount for advanced 
     credit was determined under section 48D (as in effect before         •
                                                                            manufacturing investment credit that is treated as deemed 
     its repeal on March 23, 2018) before the grant was made; or            payment (if elected on line 10).
•    You engage in an applicable transaction, as defined in                 The information for lines 11b through 11g for the 
     section 50(a)(6)(D).                                                 •
                                                                            rehabilitation credit.
Exceptions to recapture.  Recapture of the investment credit              • The basis of energy property for lines 12a, 12b, 12c, 12e, 
doesn't apply to any of the following.                                      12h, 12k, 12q, 12t, 12w, 12y, 12z, 12bb,12cc, and 12dd.
                                                                          • The kilowatt capacity for lines 12f, 12i, 12l, and 12r.
1. A transfer due to the death of the taxpayer.                           • The megawatt capacity or horsepower for line 12u.
2. A transfer between spouses or incident to divorce under                • Lines 1 through 4 and lines 11h and 11i, if the lessor has 
     section 1041. However, a later disposition by the transferee           elected to treat the lessee as having acquired the property.

                                                                      -2-                         Instructions for Form 3468 (2022)

- 3 -

Page 3 of 18        Fileid: … ions/i3468/2022/a/xml/cycle05/source                                  12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

                                                                         For more information on the new allocation round for section 
Part I—Information Regarding the                                      48A credits, see Notice 2020-88, 2020-53 I.R.B. 1795, available 
Election To Treat the Lessee as the                                   at IRS.gov/irb/2020-53_IRB#NOT-2020-88.
Purchaser of Investment Credit                                        Basis.  Qualified investment for any tax year is the basis of 
                                                                      eligible property placed in service by the taxpayer during the tax 
Property                                                              year that is part of a qualifying advanced coal project. Eligible 
Generally, for purposes of eligibility for and figuring the amount    property is limited to property that can be depreciated or 
of the investment credit, a lessor of property may elect to treat     amortized and that was constructed, reconstructed, or erected 
the lessee as having acquired the property. Once the election is      and completed by the taxpayer; or that is acquired by the 
made, the lessee will be entitled to an investment credit for that    taxpayer if the original use of such property commences with the 
property for the tax year in which the property is placed in          taxpayer.
service and the lessor will not be entitled to such a credit.         Basis reduction for certain financing. If property is financed 
If the leased property is disposed of, or otherwise ceases to         in whole or in part by subsidized energy financing or by 
be investment credit property, the property will generally be         tax-exempt private activity bonds, the amount that you can claim 
subject to the recapture rules for early dispositions.                as basis is the basis that would otherwise be allowed multiplied 
                                                                      by a fraction that is 1 reduced by a second fraction, the 
The lessor will provide the lessee with all the information           numerator of which is that portion of the basis allocable to such 
needed to complete lines 11h and 11i, if applicable.                  financing or proceeds, and the denominator of which is the basis 
For information on making the election, see section 48(d) (as         of the property.
in effect on November 4, 1990) and related regulations. For              For example, if the basis of the property is $100,000 and the 
limitations, see sections 46(e)(3) and 48(d) (as in effect on         portion allocable to such financing or proceeds is $20,000, the 
November 4, 1990).                                                    fraction of the basis that you may claim the credit on is  /  (that 4 5
                                                                      is, 1 minus $20,000/$100,000).
Line 2
                                                                         Subsidized energy financing means financing provided under 
Enter the lessor's full address. Enter the address of the lessor's    a federal, state, or local program, a principal purpose of which is 
principal office or place of business. Include the suite, room, or    to provide subsidized financing for projects designed to 
other unit number after the street address. If the post office        conserve or produce energy.
doesn't deliver mail to the street address and the lessor has a 
P.O. box, show the box number instead.
                                                                      Line 5a
Do not use the address of the registered agent for the state in 
which the lessor is incorporated. For example, if a business is       Enter the qualified investment in integrated gasification 
incorporated in Delaware or Nevada and the lessor's principal         combined cycle property placed in service during the tax year for 
place of business is located in Little Rock, AR, you should enter     projects described in section 48A(d)(3)(B)(i). Eligible property is 
the Little Rock address.                                              any property that is part of a qualifying advanced coal project 
If the lessor receives its mail in care of a third party (such as     using an integrated gasification combined cycle and is 
an accountant or attorney), enter on the street address line “C/O”    necessary for the gasification of coal, including any coal 
followed by the third party's name and street address or P.O.         handling and gas separation equipment.
box.
                                                                         Integrated gasification combined cycle is an electric 
Part II—Qualifying Advanced Coal                                      generation unit that produces electricity by converting coal to 
                                                                      synthesis gas, which in turn is used to fuel a combined cycle 
Project Credit, Qualifying Gasification                               plant to produce electricity from both a combustion turbine 
                                                                      (including a combustion turbine/fuel cell hybrid) and a steam 
Project Credit, Qualifying Advanced                                   turbine.
Energy Project Credit, and Advanced 
                                                                      Line 5b
Manufacturing Investment Credit
                                                                      Enter the qualified investment in advanced coal-based 
Qualifying Advanced Coal Project Credit                               generation technology property placed in service during the tax 
A qualifying advanced coal project is a project that:                 year for projects described in section 48A(d)(3)(B)(ii). Eligible 
• Uses advanced coal-based generation technology (as                  property is any property that is part of a qualifying advanced coal 
  defined in section 48A(f)) to power a new electric generation       project (defined earlier) not using an integrated gasification 
  unit or to refit or repower an existing electric generation unit    combined cycle.
  (including an existing natural gas-fired combined cycle unit);
• Has fuel input that, when completed, will be at least 75%           Line 5c
  coal;
• Has an electric generation unit or units at the site that will      Enter the qualified investment in advanced coal-based 
  generate at least 400 megawatts;                                    generation technology property placed in service during the tax 
• Has a majority of the output that is reasonably expected to         year for projects described in section 48A(d)(3)(B)(iii). Eligible 
  be acquired or utilized;                                            property is any certified property located in the United States 
• Is to be constructed and operated on a long-term basis              and that is part of a qualifying advanced coal project (defined 
  when the taxpayer provides evidence of ownership or                 earlier) that has equipment that separates and sequesters at 
  control of a site of sufficient size;                               least 65% of the project's total carbon dioxide emissions. This 
• Will be located in the United States; and                           percentage increases to 70% if the credits are later reallocated 
• Includes equipment that separates and sequesters at least           by the IRS.
  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).
Instructions for Form 3468 (2022)                                  -3-

- 4 -

Page 4 of 18         Fileid: … ions/i3468/2022/a/xml/cycle05/source                              12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

The credit will be recaptured if a project fails to attain or                  The credit for 2-wheeled plug-in electric vehicles expired 
maintain the carbon dioxide separation and sequestration               !       on December 31, 2021. Unless new legislation is 
requirements. For details, see section 48A(i) and Notice               CAUTION passed, it's no longer eligible for a qualified plug-in 
2011-24, 2011-14 I.R.B. 603, available at IRS.gov/irb/                 electric drive motor vehicle credit.
2011-14_IRB#NOT-2011-24.
                                                                       A qualifying advanced energy project doesn't include any 
Qualifying Gasification or Advanced Energy                             portion of a project for the production of any property that is used 
                                                                       in the refining or blending of any transportation fuel (other than 
Project Credits                                                        renewable fuels).
Qualifying gasification project. A qualifying gasification             Eligible property.  Eligible property is property that is 
project is a project that:                                             necessary for the production of property described in section 
• Employs gasification technology (as defined in section               48C(c)(1)(A)(i), for which depreciation or amortization is 
  48B(c)(2)),                                                          available and is tangible personal property or other tangible 
• Is carried out by an eligible entity (as defined in section          property (not including a building or its structural components), 
  48B(c)(7)), and                                                      but only if the property is used as an integral part of the 
• Includes a qualified investment of which an amount not to            qualifying advanced energy project.
  exceed $650 million is certified under the qualifying                Transitional rule.  Enter only the basis:
  gasification program as eligible for credit.                         • Attributable to construction, reconstruction, or erection by 
The total amount of credits that may be allocated under the              the taxpayer after February 17, 2009;
qualifying gasification project program may not exceed $600            • Of property acquired and placed in service after February 
million.                                                                 17, 2009; and
                                                                       • Only to the extent of the qualified investment (as determined 
For more information on the qualifying gasification project              under section 46(c) and (d) as in effect on November 4, 
and the qualifying gasification program, see Notice 2009-23,             1990) with respect to qualified progress expenditures made 
2009-16 I.R.B. 802, available at IRS.gov/irb/                            after February 17, 2009.
2009-16_IRB#NOT-2009-23, which is amplified by Notice 
2014-81, 2014-53 I.R.B. 1001, available at IRS.gov/irb/                        For fiscal year filers claiming the qualifying advanced 
2014-53_IRB#NOT-2014-81. Also, see Notice 2011-24,                     !       energy project after 2022, additional guidance relating to 
2011-14 I.R.B. 603, available at IRS.gov/irb/                          CAUTION qualifying advanced energy project will be posted at 
2011-14_IRS#NOT-2011-24.                                               IRS.gov/Form3468 in the coming weeks.
Basis reduction.    If property is financed in whole or in part by 
subsidized energy financing or by tax-exempt private activity          Line 6a
bonds, figure the credit by using the basis of such property 
reduced under the rules described in Basis reduction for certain       If you’re claiming the qualified gasification project property 
financing, earlier.                                                    (defined in Qualifying gasification project, earlier), enter the 
Qualifying advanced energy project.  To be eligible for the            qualified investment in qualifying gasification project property 
qualifying advanced energy project credit, some or all of the          placed in service during the tax year for which credits were 
qualified investment in the qualifying advanced energy project         allocated or reallocated after October 3, 2008, and that includes 
must be certified by the IRS under section 48C(d).                     equipment that separates and sequesters at least 75% of the 
For more information on certification, see Notice 2009-72,             project's carbon dioxide emissions. Qualified investment is the 
2009-37 I.R.B. 325, available at IRS.gov/irb/                          basis of eligible property placed in service during the tax year 
2009-37_IRB#NOT-2009-72 and Notice 2013-12, 2013-10                    that is part of a qualifying gasification project.
I.R.B. 543, available at IRS.gov/irb/2013-10_IRB#NOT-2013-12.
                                                                       For purposes of this credit, eligible property includes any 
Qualifying advanced energy project means a project that                property that is part of a qualifying gasification project and 
re-equips, expands, or establishes a manufacturing facility for        necessary for the gasification technology of such project. The 
the production of:                                                     IRS is required to recapture the benefit of any allocated credit if a 
• Property designed to be used to produce energy from the              project fails to attain or maintain these carbon dioxide separation 
  sun, wind, geothermal deposits (within the meaning of                and sequestration requirements. See section 48B(f) and 
  section 613(e)(2)), or other renewable resources;                    IRS.gov/irb/2011-14_IRB#NOT-2011-24.
• Fuel cells, microturbines, or an energy storage system for 
  use with electric or hybrid-electric motor vehicles;
• Electric grids to support the transmission of intermittent           If you’re claiming the qualifying advanced energy property 
  sources of renewable energy, including storage of the                (defined in Qualifying advanced energy project, earlier), enter 
  energy;                                                              the qualified investment in qualifying advanced energy project 
• Property designed to capture and sequester carbon dioxide            property placed in service during the tax year. Qualified 
  emissions;                                                           investment is the basis of eligible property placed in service 
• Property designed to refine or blend renewable fuels or to           during the tax year that is part of a qualifying advanced energy 
  produce energy conservation technologies (including                  project.
  energy-conserving lighting technologies and smart grid 
  technologies);                                                       If you’re claiming both the qualifying gasification project 
• New qualified plug-in electric drive motor vehicles (as              property and the qualifying advanced energy project property, 
  defined in section 30D), or components that are designed             add the qualified investment property for both and enter that 
  specifically for use with those vehicles, including electric         amount on the dashed entry line before 6a.
  motors, generators, and power control units; and
• Other advanced energy property designed to reduce                    Line 6b
  greenhouse gas emissions.
                                                                       Enter the qualified investment, other than line 6a, in qualifying 
                                                                       gasification project property (defined earlier) placed in service 
                                                                       during the tax year.

                                                                   -4-                     Instructions for Form 3468 (2022)

- 5 -

Page 5 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Advanced Manufacturing Investment Credit equal to the amount of the credit. See the special rule for
The advanced manufacturing investment credit is equal to 25% partnerships and S corporations, later.
of the qualified investment in any advanced manufacturing Requesting the deemed payment. A deemed payment
facility for an eligible taxpayer for the tax year. election will be made no later than the due date of the tax return
Qualified investment. The qualified investment for any (including extensions of time to file) for the tax year for which the
advanced manufacturing facility is the basis of any qualified election is made. The election can’t be made earlier than May 8,
property placed in service by the taxpayer during the tax year 2023. The deemed payment election is irrevocable.
and after 2022 that is part of an advanced manufacturing facility. Payment application date. The deemed payment will be
treated as made on the later of either the due date of the tax
Advanced manufacturing facility. Advanced manufacturing return (determined without regard to extensions) or the date the
facility means a facility whose primary purpose is the return is filed.
manufacturing of semiconductors or semiconductor
manufacturing equipment. Additional information. If you choose to elect to treat the
advanced manufacturing investment credit as a payment under
Eligible taxpayer. An eligible taxpayer is a taxpayer who isn't a section 48D(d)(1) or 48D(d)(2)(A), guidance regarding the
foreign entity of concern (as defined in section 9901(6) of P. L. election, including a detailed list of all required information, will
116-283), and hasn't made an applicable transaction (as defined be provided at a later date. Please consult this guidance when
in section 50(a)) during the tax year. completing Form 3468 and making the deemed payment
Qualified property. Qualified property includes any building or election.
its structural components and all of the following. For the latest guidance related to electing the deemed
• Property that is tangible property. payment, go to IRS.gov/Form3468.
• Property that is allowed depreciation or amortization. Attachment. Attach a statement to your return with
• Property that is constructed, reconstructed, or erected by information regarding the deemed payment election. The
the taxpayer or acquired by the taxpayer if the original use of attached information statement should be named
the property commences with the taxpayer. “CHIPS22DPE.” For example, if you attach a PDF, the name of
• Property that is integral to the operation of the advanced the PDF should be “CHIPS22DPE.”
manufacturing facility.
Excessive payment. With respect to the property for the tax
Exception. Qualified property doesn't include a building or a year for which the deemed payment is made, an excess
portion of a building used for offices, administrative services, or payment is the following.
other functions unrelated to manufacturing. • The amount treated as a payment by section 48D(d)(1) or
Coordination with rehabilitation credit. The qualified the amount of payment made by section 48D(d)(2)(A), over
investment with respect to any advanced manufacturing facility • The amount of the credit that would be allowed per section
for any tax year shall not include the portion of the basis of any 48D(a).
property that is attributable to qualified rehabilitation Addition to tax. If any amount treated as a payment is
expenditures (as defined in section 47(c)(2)). determined to be an excessive payment, the tax imposed for the
Certain progress expenditure rules made applicable. Rules tax year that the determination is made will be increased by the
similar to the rules of section 46(c)(4) and 46(d) (as in effect on following.
the day before the date of the enactment of P.L. 101-158) shall • The amount of the excessive payment, plus
apply for purposes of the advanced manufacturing investment • 20% of the excessive payment.
credit. The 20% addition to tax will not apply if the taxpayer
demonstrates that the excessive payment resulted from
Line 7 reasonable cause.
Basis reduction and recapture. Rules similar to the rules of
Enter the qualifying investment in advanced manufacturing sections 50(a) and 50(c) will apply with respect to the amount
facility (defined above) placed in service after 2022, and for any treated as a payment made by the taxpayer under section
property the construction began prior to 2023, to the extent the 48D(d)(1), and any payment made under section 48D(d)(2)(A).
basis attributable to the construction, reconstruction, or erection See Recapture of Credit, earlier, for more information.
began after August 9, 2022.
You must reduce the basis by the amount of the credit
Credit From Cooperatives determined.
Line 9 Application to partnerships and S corporations. If a
partnership or S corporation makes an election under section
Patrons, including cooperatives that are patrons in other 48D(d)(1):
cooperatives, enter the unused investment credit from the • The Secretary will make a payment to the partnership or S
qualifying advanced coal project credit, qualifying gasification corporation equal to the amount of the credit. For more
project credit, qualifying advanced energy project credit, or information, see Treatment of payments to partnerships and
advanced manufacturing investment credit allocated from S corporations below.
cooperatives. If you are a cooperative, see the instructions for • The credit will be reduced to zero for all purposes of the
Form 3800, Part III, line 1a, for allocating the investment credit to Internal Revenue Code. No double benefit will be allowed.
your patrons. • Any payment will be treated as tax exempt income for
purposes of sections 705 and 1366.
Deemed Payment • A partner's distributive share of the tax exempt income will
be based on the partner's distributive share of the otherwise
A taxpayer can make an election with respect to an Advanced applicable credit for the tax year.
Manufacturing Investment Credit to treat the credit as a deemed
payment. The deemed payment will be applied against the tax Application at partner and shareholder level. In the case
imposed for the tax year for which the credit was determined, of any property held directly by a partnership or S corporation,
no election by any partner or shareholder will be allowed with

Instructions for Form 3468 (2022) -5-

- 6 -

Page 6 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

respect to any credit determined under section 48D(a) with rehabilitation expenditures during a self-selected 24-month
respect to such property. period that ends with or within your tax year are more than
Treatment of payments to partnerships and S the greater of $5,000 or your adjusted basis in the building
corporations. Deemed payments will be treated in the same and its structural components. Figure adjusted basis on the
manner as a refund due from a credit provision. first day of the 24-month period or the first day of your
holding period, whichever is later. If you are rehabilitating
Line 10 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.”
Add lines 5d, 6c, 7, and 9. Enter this amount on line 10 and on
Form 3800, Part III, line 1a. However, if you elected to treat the 3. Depreciation must be allowable with respect to the building.
amount of credit on line 7 as a deemed payment per section Depreciation isn't allowable if the building is permanently
48D(d)(1), enter the total less the amount treated as a deemed retired from service. If the building is damaged, it isn't
payment on Form 3800, Part III, line 1a. As a result, Form 3468, considered permanently retired from service where the
line 10, and Form 3800, Part III, line 1a, may not match taxpayer repairs and restores the building and returns it to
depending on your election. actual service within a reasonable period of time.
4. The building must have been placed in service before the
Use the table below to see what line on your tax return you
beginning of rehabilitation. This requirement is met if the
enter the deemed payment amount per section 48D(d)(1). On
building was placed in service by any person at any time
the dotted line next to the line on the tax return write
before the rehabilitation began.
“CHIPS22DPE.” If there is not a dotted line after the entry space
to make this entry, put an asterisk next to the line number and 5. For a building under the transition rule, (a) at least 75% of
put a footnote at the bottom of the page indicating the line the external walls must be retained with 50% or more kept
number and write “CHIPS22DPE.” in place as external walls, and (b) at least 75% of the
existing internal structural framework of the building must be
Form Line Number retained in place.
1065 Line 28 Qualified rehabilitation expenditures. To be qualified
1120 Schedule J, line 20d rehabilitation expenditures, your expenditures must meet all six
1120-F Line 5j of the following requirements.
1120-REIT Line 25f(1) 1. The expenditures must be for (a) nonresidential real
property, (b) residential rental property (but only if a certified
1120-RIC Line 29f historic structure; see Regulations section 1.48-1(h)), or (c)
1120-S Line 23d 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.
Part III—Rehabilitation Credit and 3. The expenditures must be capitalized and depreciated
Energy Credit using the straight line method.
4. The expenditures can't include the costs of acquiring or
Rehabilitation Credit enlarging any building.
You are allowed a credit for qualified rehabilitation expenditures 5. If the expenditures are in connection with the rehabilitation
made for any qualified rehabilitated building. You must reduce of a certified historic structure or a building in a registered
your basis by the amount of the credit determined for the tax historic district, the rehabilitation must be certified by the
year. See Regulations section 1.47-7. Secretary of the Interior as being consistent with the historic
If the adjusted basis of the building is determined in whole or character of the property or district in which the property is
in part by reference to the adjusted basis of a person other than located. This requirement doesn't apply to a building in a
the taxpayer, see Regulations section 1.48-12(b)(2)(viii) for registered historic district if (a) the building isn't a certified
additional information that must be attached. historic structure; (b) the Secretary of the Interior certifies
that the building isn't of historic significance to the district;
Qualified rehabilitated building. To be a qualified and (c) if the certification in (b) occurs after the rehabilitation
rehabilitated building, your building must meet all five of the began, the taxpayer certifies in good faith that the taxpayer
following requirements. wasn't aware of that certification requirement at the time the
1. The building must be a certified historic structure. A certified rehabilitation began.
historic structure is any building (a) listed in the National 6. The expenditures can't include any costs allocable to the
Register of Historic Places, or (b) located in a registered part of the property that is (or may reasonably be expected
historic district (as defined in section 47(c)(3)(B)) and to be) tax-exempt use property (as defined in section 168(h)
certified by the Secretary of the Interior as being of historic except that “50%” shall be substituted for “35%” in
significance to the district. Certification requests are made paragraph (1)(B)(iii)). This exclusion doesn't apply for
through your State Historic Preservation Officer on National line 11d.
Park Service (NPS) Form 10-168, Historic Preservation
Certification Application. The request for certification should Line 11
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, For credit purposes, the expenditures are generally taken into
later. account for the tax year in which the qualified rehabilitated
building is placed in service. However, with certain exceptions,
2. The building must be substantially rehabilitated. A building you may elect to take the expenditures into account for the tax
is considered substantially rehabilitated if your qualified year in which they were paid (or, for a self-rehabilitated building,

-6- Instructions for Form 3468 (2022)

- 7 -

Page 7 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

when capitalized) if (a) the normal rehabilitation period for the If you fail to receive final certification of completed work prior
building is at least 2 years, and (b) it is reasonable to expect that to the date that is 30 months after the date that you filed the tax
the building will be a qualified rehabilitated building when placed return on which the credit was claimed, you must submit a
in service. For details, see section 47(d). To make this election, written statement to the IRS stating that fact before the last day
check the box on line 11a. The credit, as a percent of of the 30th month. You will be asked to consent to an agreement
expenditures paid or incurred during the tax year for any under section 6501(c)(4) extending the period of assessment for
qualified rehabilitated building, depends on the type of structure any tax relating to the time for which the credit was claimed.
and its location.
Transitional rule for amounts paid or incurred after 2017. Mail to:
The 10% credit for pre-1936 buildings no longer applies and the Internal Revenue Service
20% credit for a certified historic structure is generally modified Technical Services
to allow 100% of qualified rehabilitation expenditures ratably 31 Hopkins Plaza, Room 1108
over a 5-year period for amounts paid or incurred after 2017. For Baltimore, MD 21201
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 You must retain a copy of the final certification of completed
historic structure (under section 47(a), as in effect before work as long as its contents may be needed for the
December 22, 2017). The transitional rule applies to amounts administration of any provision of the Internal Revenue Code.
paid or incurred as follows.
If the final certification is denied by the Department of the
In the case of qualified rehabilitation expenditures with Interior, the credit is disallowed for any tax year in which it was
respect to any building (a) owned or leased by the taxpayer claimed, and you must file an amended return if necessary. See
during the entirety of the period after 2017; and (b) with respect Regulations section 1.48-12(d)(7)(ii) for details.
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 Energy Credit
60-month period applicable under section 47(c)(1)(B)(ii)), which
begins no later than 180 days after December 22, 2017, the The energy credit for the tax year is the energy percentage of the
transitional rule applies to expenditures paid or incurred after the basis of each energy property placed in service during the tax
end of the tax year in which the 24-month period (or the year. The energy properties include the following.
60-month period) ends. • Geothermal energy property.
• Solar energy property to generate electricity, or solar energy
If you have more than one property that qualifies for the property to illuminate.
rehabilitation credit, attach a schedule showing the type of • Qualified fuel cell property.
property (pre-1936 building or certified historic structure), NPS • Qualified microturbine property.
number, date of final certification, and the partnership employer • Combined heat and power system property.
identification number (EIN), if applicable. Also, indicate if the • Qualified small wind energy property.
transitional rule applies. • Waste energy recovery property.
• Geothermal heat pump system property.
Line 11h • Energy storage technology property.
• Qualified biogas property.
If you are claiming a credit for a certified historic structure on • Microgrid controllers property.
line 11f or 11g, enter the assigned NPS project number on
IRA 2022 added to the energy properties under section
line 11h. If the qualified rehabilitation expenditures are from an S
48 the items energy storage technology, qualified biogas
corporation, partnership, estate, or trust, enter on line 11h the CAUTION!
property, and microgrid controllers. Fiscal year filers
EIN of the pass-through entity instead of the assigned NPS
may be eligible to claim these credits for qualified energy
project number, and skip line 11i.
property placed in service after 2022.
The lessor will provide the lessee with the NPS project
number to enter on line 11h. To qualify as energy property, property must:
1. Meet the performance and quality standards, if any, that
Line 11i have been prescribed by regulations and are in effect at the
time the property is acquired;
Enter the date of the final certification of completed work
received from the Secretary of the Interior on line 11i. If the final 2. Be property for which depreciation (or amortization in lieu of
certification hasn't been received by the time the tax return is depreciation) is allowable; and
filed for a year in which the credit is claimed, attach a copy of the 3. Be property either:
first page of NPS Form 10-168, Historic Preservation
Certification Application (Part 2—Description of Rehabilitation), a. The construction, reconstruction, or erection of which is
with an indication that it was received by the Department of the completed by the taxpayer; or
Interior or the State Historic Preservation Officer, together with b. Acquired by the taxpayer if the original use of such
proof that the building is a certified historic structure (or that such property commences with the taxpayer.
status has been requested). After the final certification of
completed work has been received, file Form 3468 with the first Property will not include any property that is part of a
income tax return filed after receipt of the certification and enter production credit under section 45 for the tax year or any prior
the assigned NPS project number and the date of the final tax year.
certification of completed work on the appropriate lines on the Energy property doesn't include any property acquired before
form. Also, attach an explanation and indicate the amount of February 14, 2008, or to the extent of basis attributable to
credit claimed in prior years. 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.
Instructions for Form 3468 (2022) -7-

- 8 -

Page 8 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

You must reduce the basis of energy property by 50% of the Qualified interconnection property. Qualified
energy credit determined. interconnection property is, with respect to an energy project
that isn't a microgrid controller, any tangible property that:
You must reduce the basis of energy property used for Is part of an addition, modification, or upgrade to a
•
figuring the credit by any amount attributable to qualified transmission or distribution system that is required at or
rehabilitation expenditures. beyond the point at which the energy project interconnects
Basis reduction. If energy property (acquired before 2009, or to such transmission or distribution system in order to
to the extent of its basis attributable to construction, accommodate such interconnection;
reconstruction, or erection before 2009) is financed in whole or • Is either constructed, reconstructed, or erected by the
in part by subsidized energy financing or by tax-exempt private taxpayer, or that the cost with respect to the construction,
activity bonds, reduce the basis of such property under the rules reconstruction, or erection of such property is paid or
described in Basis reduction for certain financing, earlier. For incurred by the taxpayer; and
property acquired after 2008, and for basis attributable to • The original use, pursuant to an interconnection agreement,
construction, reconstruction, or erection after 2008, there is no commences with a utility.
basis reduction for property financed by subsidized energy Interconnection agreement. Interconnection agreement
financing or by tax-exempt private activity bonds. means an agreement with a utility for the purposes of
Credit reduced for tax-exempt bonds. The amount of the interconnecting the energy property owned by the taxpayer to
credit with respect to any facility for any tax year will be reduced the transmission or distribution system of the utility.
by the amount that is the product of the amount so determined Utility. For the purposes of section 48(a)(8)(D), utility means
for such year and the lesser of one of the following. the owner or operator of an electrical transmission or distribution
• 15%, or system that is subject to the regulatory authority of any the
• A fraction, which the numerator is the sum for the tax year following.
and all prior tax years, of proceeds of an issue of any • A state or political subdivision thereof.
obligations the interest on which is exempt from tax under • Any agency or instrumentality of the United States.
section 103 and that is used to provide financing for the • A public service or public utility commission or other similar
qualified facility over the denominator, which is the body of any state or political subdivision thereof.
aggregate amount of additions to the capital account for the • The governing or ratemaking body of an electric
qualified facility for the tax year and all prior tax years as of cooperative.
the close of the tax year. Special rule for interconnection property. In the case of
The credit reduced for tax-exempt bonds, above, expenses paid or incurred for interconnection property, amounts
otherwise chargeable to capital account with respect to such
CAUTION energy property, the construction of which begins after
! applies to construction, reconstruction, or erection of an expenses will be reduced under rules similar to the rules of
August 16, 2022. section 50(c)(3).
Increased credit amount for energy projects. In the case of
Coordination with Department of Treasury grants. In the any energy project that satisfies the requirements of Project
case of any property where the Secretary makes a grant under requirements below, the amount of the credit determined will be
section 1603 of the American Recovery and Reinvestment Tax equal to an amount multiplied by 5. For purposes of the previous
Act of 2009, no credit will be determined under section 48 or statement, the form has already been adjusted to show 30% or
section 45 with respect to the property for the tax year in which 10%, as applicable for tax year 2022. See Notice 2022-61 for
the grant is made or any subsequent tax year. more information.
Recapture. If a credit was determined with respect to a Energy project. Energy project means a project consisting of
property for any tax year ending before the grant is made: one or more energy properties that are part of a single project.
• The tax imposed on the taxpayer for the tax year in which Project requirements. A project meets the project
the grant is made will be increased by the credit amount requirements if it is one of the following.
allowed under section 38, A project with a maximum net output of less than 1
• The general business carryforwards under section 39 will be •
megawatt of electrical (as measured in alternating current)
adjusted to recapture the portion of the credit that was not or thermal energy.
allowed, and A project the construction of which begins before January
• The amount of the grant will be determined without regard to •
29, 2023, with respect to prevailing wage and
any reduction in the basis of the property by the credit. apprenticeship requirements.
Treatment of grants. Any grant will not be included in the • A project that satisfies the prevailing wage and
gross income or alternative minimum taxable income of the apprenticeship requirements.
taxpayer, but will be taken into account in determining the basis
of the property to which the grant relates, except that the basis of For fiscal year filers, the project of which construction
such property will be reduced under section 50(c) in the same ! begins on January 29, 2023, or later, the credit amounts
manner as a credit allowed. CAUTION are 6% or 2% respectively, unless the prevailing wage
and apprenticeship requirements are satisfied or the project has
Interconnection property. In general, energy property shall a maximum net output of less than 1 megawatt of electrical or
include amounts paid or incurred by the taxpayer for qualified thermal energy.
interconnection property in connection with the installation of
energy property placed in service after 2022 (as defined in Prevailing wage requirements. In general, the taxpayer shall
section 48(a)(3)) that: ensure, with respect to any energy project, that any laborers and
• Has a maximum net output of not greater than 5 megawatts mechanics employed by the taxpayer or any contractor or
(as measured in alternating current), to provide for the subcontractor shall be paid wages at rates not less than the
transmission or distribution of the electricity produced or prevailing rates for construction, alteration, or repair of a similar
stored by such property; and character in the locality in which the project is located as most
• Are properly chargeable to the capital account of the recently determined by the Secretary of Labor, in accordance
taxpayer. with subchapter IV of chapter 31 of title 40, United States Code.

-8- Instructions for Form 3468 (2022)

- 9 -

Page 9 of 18          Fileid: … ions/i3468/2022/a/xml/cycle05/source                                      12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Questions regarding the applicability of a wage determination           and percentage of such recapture shall be determined under 
or its listed classifications and wage rates should be directed to      rules similar to the rules of section 50(a).
the Department of Labor, Wage, and Hour Division via email at 
                                                                        Apprenticeship requirements.      Regarding the construction of 
IRAprevailingwage@dol.gov.
                                                                        any qualified facility, apprenticeship requirements are as follows.
Laborers, mechanics, contractors, or subcontractors.                    • Taxpayers shall ensure that the applicable percentage of 
Any laborers and mechanics employed by the taxpayer or any                the total labor hours of the construction, alteration, or repair 
contractor or subcontractor in the construction of such energy            work (including such work performed by any contractor or 
project, and for the 5-year period beginning on the date such             subcontractor), subject to apprentice to journeyworker ratio, 
project is originally placed in service, the alteration or repair of      be performed by qualified apprentices. For construction that 
such project, shall be paid prevailing wages.                             begins before 2023, the ratio is 10%; and for construction 
Subject to recapture, for purposes of any determination in the            that begins in 2023, the ratio is 12.5%.
construction of such energy credit for the tax year in which the        • Apprenticeship requirements for 
energy project is placed in service, the taxpayer shall be                apprentice-to-journeyworker ratios shall be subject to any 
deemed to satisfy the requirement for the alteration or repair of         applicable requirements for apprentice-to-journeyworker 
such project, at the time such project is placed in service.              ratios of the Department of Labor or the applicable state 
Correction and penalty for failure to satisfy wage                        apprenticeship agency.
requirements. In the case of any taxpayer that fails to satisfy         • With regard to participation, each taxpayer, contractor, or 
the prevailing wage requirements mentioned above, the                     subcontractor who employs four or more individuals to 
taxpayer shall be deemed to have satisfied the requirement with           perform construction, alteration, or repair work shall employ 
respect to any laborer or mechanic who was paid at a rate below           one or more qualified apprentices to perform such work.
the prevailing wage rate, if the following are completed.               Registered apprenticeship programs can be located using the 
1. The taxpayer makes payment to such laborer or mechanic               Office of Apprenticeship’s partner finder tool, available at https://
  in an amount equal to the sum of the following.                       www.apprenticeship.gov/partner-finder and through the 
                                                                        applicable State Apprenticeship Agency, https://
  a. An amount equal to the difference between (i) the                  www.apprenticeship.gov/about-us/state-offices.
  amount of wages paid to such laborer or mechanic                      Exception. A taxpayer will not be treated as failing to satisfy 
  during such period, and (ii) the amount of wages                      the requirements described above, if the taxpayer:
  required to be paid to such laborer or mechanic during 
  such period, plus                                                     1. Satisfies a good faith effort; or
  b. Interest on the amount determined under item (i) at the            2. In the case of any failure by the taxpayer to satisfy the 
  underpayment rate established under section 6621(a)                     percentage of total labor hours and participation above, with 
  (2) (determined by substituting “6%” for “3%”) for the                  respect to the construction, alteration, or repair work on any 
  period described in item (i), and                                       qualified facility where construction began in 2023, makes 
                                                                          payment to the Secretary of a penalty in an amount equal to 
2. Makes payment to the Secretary of a penalty in an amount               the product of:
  equal to the product of the following.
                                                                          a. $50, multiplied by
  a. $5,000, multiplied by
                                                                          b. The total labor hours for which the requirement 
  b. The total number of laborers and mechanics who were                    described in such subparagraph was not satisfied with 
  paid wages at a rate below the prevailing wage                            respect to the construction, alteration, or repair work on 
  requirement rate for any period during such year.                         such qualified facility.
Deficiency procedures don't apply.      Subchapter B of                 Good faith effort. For purposes of the exception above, a 
chapter 63 (relating to deficiency procedures for income, estate,       taxpayer will be deemed to have satisfied the requirements 
gift, and certain excise taxes) will not apply with respect to the      under this paragraph with respect to a qualified facility if the 
assessment or collection of any penalty imposed.                        taxpayer has requested qualified apprentices from a registered 
Intentional disregard. If the Secretary determines that any             apprenticeship program, as defined in section 3131(e)(3)(B), 
failure described in Correction and penalty for failure to satisfy      and either of the following apply.
wage requirements, earlier, was due to intentional disregard of         • The request has been denied, provided that such denial is 
the prevailing wage requirements, then the following changes              not the result of a refusal by the taxpayer or any contractors 
will occur.                                                               or subcontractors engaged in the performance of 
• In number 1 above, "the sum" with “three times the sum,”                construction, alteration, or repair work with respect to such 
  and                                                                     qualified facility to comply with the established standards 
• In number 2a above, "$5,000" with “$10,000.”                            and requirements of the registered apprenticeship program; 
Limitation on period for payment.     Pursuant to rules issued            or
by the Secretary, in the case of a final determination by the           • The registered apprenticeship program fails to respond to 
Secretary with respect to any failure by the taxpayer to satisfy          such request within 5 business days after the date on which 
the prevailing wage requirements, the Correction and penalty for          such registered apprenticeship program received such 
failure to satisfy wage requirements, described above, will not           request.
apply unless the payments are made by the taxpayer on or                Intentional disregard. If the Secretary determines that any 
before 180 days after the date of such determination.                   failure described in good faith effort is due to intentional 
Recapture.  The Secretary shall provide guidance for                    disregard to satisfy the requirements for the percentage of total 
recapturing the benefit of any increase in the credit allowed with      labor hours and participation, earlier, Exception 2 shall be 
respect to any project that doesn't satisfy the prevailing wage         applied by substituting “$500” for “$50” in 2a, earlier.
requirements (after Correction and penalty for failure to satisfy       Labor hours. Labor hours means the total number of hours 
wage requirements is applied) for the 5-year period beginning on        devoted to the performance of construction, alteration, or repair 
the date the project was originally placed in service, the              work by any individual employed by the taxpayer or by any 
alteration or repair (but which doesn’t cease to be investment          contractor or subcontractor; however, it excludes any hours 
credit property within the meaning of section 50(a)). The period        worked by foremen, superintendents, owners, or persons 
Instructions for Form 3468 (2022)                                    -9-

- 10 -

Page 10 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

employed in a bona fide executive, administrative, or Fuel cell power plant. Fuel cell power plant means an
professional capacity (within the meaning of those terms in part integrated system comprised of a fuel cell stack assembly or
541 of title 29, Code of Federal Regulations). linear generator assembly, and associated balance of plant
Qualified apprentice. A qualified apprentice is an individual components that converts a fuel into electricity using
who is employed by the taxpayer or by any contractor or electrochemical or electromechanical means.
subcontractor and who is participating in a registered Linear generator assembly. Linear generator assembly
apprenticeship program, as defined in section 3131(e)(3)(B). doesn’t include any assembly that contains rotating parts.
Qualified fuel cell property that uses electromechanical
Line 12a ! process or a fuel cell power plant that is comprised of a
CAUTION linear generator assembly are for property placed in
Geothermal energy. Geothermal energy property is equipment service after 2022.
that uses geothermal energy to produce, distribute, or use
energy derived from a geothermal deposit (within the meaning of
section 613(e)(2)). For electricity produced by geothermal Enter the basis, attributable to periods after 2005 and before
power, equipment qualifies only up to, but not including, the October 4, 2008, of any qualified fuel cell property placed in
electrical transmission stage. service during the tax year, if the property was acquired after
Enter the basis of any property placed in service during the 2005 and before October 4, 2008, or to the extent of basis
tax year that uses geothermal energy. attributable to construction, reconstruction, or erection by the
taxpayer after 2005 and before October 4, 2008.
Line 12b
Line 12f
Solar energy. Solar energy property is property that has the
following. Enter the applicable number of kilowatts of capacity attributable
1. Equipment that uses solar energy to illuminate the inside of to the basis on line 12e. This entry must be a whole number.
a structure using fiber-optic distributed sunlight.
Line 12h
2. Electrochromic glass that uses electricity to change its light
transmittance properties in order to heat or cool a structure,
if placed in service after 2022. Enter the basis, attributable to periods after October 3, 2008,
and the construction of which began before 2020 or after 2021,
3. Equipment that uses solar energy to: of any qualified fuel cell property placed in service during the tax
a. Generate electricity, year.

b. Heat or cool (or provide hot water for use in) a structure, For a definition of qualified fuel cell property, see Line 12e,
or earlier. Also, see When construction begins, later.
c. Provide solar process heat (but not to heat a swimming
pool). Basis is attributable to periods after October 3, 2008, if the
property was acquired after October 3, 2008, or to the extent of
Enter the basis, attributable to periods after 2005 and the basis attributable to construction, reconstruction, or erection by
construction of which began before 2020 or after 2021, if the the taxpayer after October 3, 2008.
property was acquired by the taxpayer or the basis is attributable For fiscal year filers, the project of which construction
to construction, reconstruction, or erection by the taxpayer. See ! begins on January 29, 2023, or later, see Increased
When construction begins, later. CAUTION credit amount for energy projects, earlier, for information
For fiscal year filers, the project of which construction regarding project requirements.
! begins on January 29, 2023, or later, see Increased
CAUTION credit amount for energy projects, earlier, for information
Line 12i
regarding project requirements.
Enter the applicable number of kilowatts of capacity attributable
Line 12c to the basis on line 12h. This entry must be a whole number.

Enter the basis of property using solar illumination, Line 12k
electrochromic glass, or solar energy placed in service during
the tax year and the construction of which began in 2020 or Enter the basis of property using qualified fuel cell energy placed
2021. in service during the tax year and the construction of which
began in 2020 or 2021. See When construction begins, later.
For the definition of solar illumination, electrochromic glass,
or solar energy property, see the instructions to Line 12b, earlier. Line 12l

Line 12e Enter the applicable number of kilowatts of capacity attributable
to the basis on line 12k. This entry must be a whole number.
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 fuel cell plant with a linear Line 12q
generator assembly) of electricity using an electrochemical or Qualified microturbine property. Qualified microturbine
electromechanical process and has electricity-only generation property is a stationary microturbine power plant that has a
efficiency greater than 30%. See section 48(c)(1) for further nameplate capacity of less than 2,000 kilowatts and has an
details. electricity-only generation efficiency of not less than 26% at

-10- Instructions for Form 3468 (2022)

- 11 -

Page 11 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

International Standard Organization conditions. See section Energy efficiency percentage. The energy efficiency
48(c)(2) for further details. percentage of a combined heat and power system property is
Stationary microturbine power plant. Stationary the fraction—where the numerator is the total useful electrical,
microturbine power plant means an integrated system thermal, and mechanical power produced by the system at
comprised of a gas turbine engine, a combustor, a recuperator normal operating rates, and expected to be consumed in its
or regenerator, a generator or alternator, and associated normal application, and the denominator is the lower heating
balance of plant components that converts a fuel into electricity value of the fuel sources for the system. The energy efficiency
and thermal energy. It also includes all secondary components percentage is determined on a Btu basis.
located between the existing infrastructure for fuel delivery and
Combined heat and power system property doesn't include
the existing infrastructure for power distribution, including
property used to transport the energy source to the facility or to
equipment and controls for meeting relevant power standards,
distribute energy produced by the facility.
such as voltage, frequency, and power factors.
Biomass systems. Systems designed to use biomass for at
Enter the basis, attributable to periods after 2005, of any least 90% of the energy source are eligible for a credit that is
qualified microturbine property placed in service during the tax reduced in proportion to the degree to which the system fails to
year, if the property was acquired after 2005, or to the extent of meet the efficiency standard. For more information, see section
basis attributable to construction, reconstruction, or erection by 48(c)(3)(D).
the taxpayer after 2005.
Enter the basis, attributable to periods after October 3, 2008,
Line 12t of any qualified combined heat and power system property
placed in service during the tax year, if the property was
Combined heat and power system property. Combined heat acquired after October 3, 2008, or to the extent of basis
and power system property means property comprising a attributable to construction, reconstruction, or erection by the
system that: taxpayer after October 3, 2008. For property placed in service
1. Uses the same energy source for the simultaneous or after 2022, multiply the basis by 30% (0.30) instead of 10%
sequential generation of electrical power, mechanical shaft (0.10).
power, or both; in combination with the generation of steam For fiscal year filers, the project of which construction
or other forms of useful thermal energy (including heating ! begins on January 29, 2023, or later, see Increased
and cooling applications). CAUTION credit amount for energy projects, earlier, for information
regarding project requirements.
2. Determines an energy efficiency percentage on a Btu basis.
3. Has energy efficiency percentage of which exceeds 60%
and it produces: Line 12w
a. At least 20% of its total useful energy in the form of Qualified small wind energy property. Qualified small wind
thermal energy that isn't used to produce electrical or energy property means property that uses a qualifying small
mechanical power (or a combination thereof), and wind turbine to generate electricity. For this purpose, a qualifying
small wind turbine means a wind turbine that has a nameplate
b. At least 20% of its total useful energy in the form of capacity of not more than 100 kilowatts. For details, see section
electrical or mechanical power (or a combination 48(c)(4). In addition, for small wind energy property acquired or
thereof). placed in service (in the case of property constructed,
For details, see section 48(c)(3). reconstructed, or erected) after February 2, 2015, see Notice
2015-4, 2015-5 I.R.B. 407, available at IRS.gov/irb/
Note. Taxpayers cannot take a credit for both combined heat 2015-05_IRB#NOT-2015-4, as modified by Notice 2015-51,
and power system property and waste energy recovery property 2015-31 I.R.B. 133, available at IRS.gov/irb/
for the same property. Taxpayers must elect not to treat such 2015-31_IRB#NOT-2015-51, for performance and quality
property as combined heat and power system property for standards that small wind energy property must meet to qualify
section 48 purposes. for the energy credit.

Limitation. In the case of combined heat and power system Enter the basis, attributable to periods after October 3, 2008,
property with an electrical capacity in excess of the applicable and before 2009, of any qualified small wind energy property
capacity placed in service during the tax year, the credit for that placed in service during the tax year, if the property was
year shall be equal to the amount that bears the same ratio to acquired after October 3, 2008, and before 2009, or to the extent
the credit, as the applicable capacity bears to the capacity of of basis attributable to construction, reconstruction, or erection
such property. by the taxpayer after October 3, 2008, and before 2009.
Applicable capacity. Applicable capacity means the
following:
• 15 megawatts; Line 12x
• A mechanical energy capacity of more than 20,000
horsepower; or Enter the smaller of the basis you entered on line 12w or $4,000.
• An equivalent combination of electrical and mechanical
energy capacities. Line 12y
Maximum capacity. Combined heat and power system
property shall not include any property comprising a system if: For the definition of qualified small wind energy property, see the
• The system has a capacity in excess of 50 megawatts, instructions for Line 12w, earlier.
• A mechanical energy capacity in excess of 67,000
horsepower, or Enter the basis, attributable to periods after 2008 and the
• An equivalent combination of electrical and mechanical construction of which began before 2020 or after 2021, of any
energy capacities. qualified small wind energy property placed in service during the
tax year, if the property was acquired by the taxpayer or the
Instructions for Form 3468 (2022) -11-

- 12 -

Page 12 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

basis is attributable to construction, reconstruction, or erection Line 12dd
by the taxpayer. See When construction begins, later.
Qualified investment credit facility property. Qualified
For fiscal year filers, the project of which construction investment credit facility property is property that:
! begins on January 29, 2023, or later, see Increased • Is tangible personal property or other tangible property (not
CAUTION credit amount for energy projects, earlier, for information
including a building or its structural components), but only if
regading project requirements. the property is used as an integral part of the qualified
investment credit facility;
Line 12z • Is constructed, reconstructed, erected, or acquired by the
taxpayer;
For the definition of qualified small wind energy property, see the • Depreciation or amortization is allowable; and
instructions for Line 12w, earlier. • The original use begins with the taxpayer.
See section 48(a)(5) for details.
Enter the basis of property using qualified small wind energy
property placed in service during the tax year and the Note. The transitional rules of section 48(m) (as in effect on
construction of which began in 2020 or 2021. See When November 4, 1990) apply to offshore wind facilities for periods
construction begins, later. 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
Line 12bb facilities at section 48(a)(5)(E), does not apply to qualified
Waste energy recovery property. Qualified waste energy offshore wind facilities.
recovery property means property that generates electricity Qualified investment credit facility. A qualified investment
solely from heat from buildings or equipment if the primary credit facility is a facility that:
purpose of such building or equipment is not the generation of 1. Is one of the following qualified facilities that is placed in
electricity. The term “waste energy recovery property” shall not service after 2008. See When construction begins below.
include any property that has a capacity in excess of 50
megawatts. For details, see section 48(c)(5). a. Wind facility under section 45(d)(1).
Note. Taxpayers cannot take a credit for both combined heat b. Closed-loop biomass facility under section 45(d)(2).
and power system property and waste energy recovery property c. Open-loop biomass facility under section 45(d)(3).
for the same property. Taxpayers must elect not to treat such
property as combined heat and power system property for d. Geothermal or solar energy facility under section 45(d)
section 48 purposes. (4).
e. Landfill gas facility under section 45(d)(6).
Note. The transitional rules of section 48(m) (as in effect on
November 4, 1990) apply to waste energy recovery property for f. Trash facility under section 45(d)(7).
periods after 2020. g. Qualified hydropower facility under section 45(d)(9).
Enter the basis of waste energy recovery property placed in h. Marine and hydrokinetic renewable energy facility under
service during the tax year and multiply the basis of property that section 45(d)(11);
uses waste energy recovery property by 30%. i. Is a qualified offshore wind facility. See Notice 2021-5,
For fiscal year filers, the project of which construction 2021-03 I.R.B. 479, available at IRS.gov/irb/
2021-03_IRB#NOT-2021-5, for more information on
CAUTION credit amount for energy projects, earlier, for information
! begins on January 29, 2023, or later, see Increased beginning of construction requirements applied to
regarding project requirements. offshore and federal land projects.
2. No credit has been allowed under section 45 for that facility
Line 12cc (see Note below); and
3. An irrevocable election was made to treat the facility as
Geothermal heat pump systems. Geothermal heat pump energy property.
systems constitute equipment that uses the ground or ground
water as a thermal energy source to heat a structure or as a Note. If a taxpayer retrofits an energy property that previously
thermal energy sink to cool a structure. For details, see section received a credit under section 45 by satisfying the 80/20 Rule
48(a)(3)(A)(vii). provided in section 7.05 of Notice 2018-59, 2018-28 I.R.B. 196,
available at IRS.gov/irb/2018-28_IRB#NOT-2018-59, the
Enter the basis, attributable to periods after October 3, 2008, taxpayer may claim an investment tax credit based on its
of any geothermal heat pump system placed in service during investment. However, if the energy property is within the
the tax year, if the property was acquired after October 3, 2008, recapture period for the section 45 credit, the taxpayer may have
or to the extent of basis attributable to construction, to recapture all or part of such section 45 credit accordingly.
reconstruction, or erection by the taxpayer after October 3, Qualified offshore wind facility. For purposes of section
2008. If any property was placed in service during 2022, multiply 48(a)(5), qualified offshore wind facility means a qualified facility
the basis of the property that uses geothermal heat pump (within the meaning of section 45(d)(1)) that is located in the
systems by 10%. If any property was placed in service after inland navigable waters of the United States or in the coastal
2022, multiply the basis of property that uses geothermal heat waters of the United States.
pump systems by 30%.
When construction begins. Two methods can be used to
For fiscal year filers, the project of which construction establish that construction of a qualified facility has begun.
! begins on January 29, 2023, or later, see Increased
CAUTION credit amount for energy projects, earlier, for information 1. Physical Work Test is satisfied when physical work of a
regarding project requirements. significant nature begins and other requirements provided

-12- Instructions for Form 3468 (2022)

- 13 -

Page 13 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

in section 4 of IRS.gov/irb/2018-28_IRB#NOT-2018-59 are Line 12hh—Other Energy Credits and Special
met. Adjustments
2. Five Percent Safe Harbor is satisfied when a taxpayer
pays or incurs (within the meaning of Regulations section Energy storage technology. Energy storage technology is:
1.461-1(a)(1) and (2)) five percent or more of the total cost • Property (other than property primarily used in the
of the energy property and meets other requirements transportation of goods or individuals and not for the
provided in section 5 of IRS.gov/irb/ production of electricity) that receives, stores, and delivers
2018-28_IRB#NOT-2018-59. energy for conversion to electricity (or, in the case of
hydrogen that stores energy), and has a nameplate capacity
Although both methods can be used, only one method is of not less than 5 kilowatt hours; and
needed to establish that construction of a qualified facility has • Thermal energy storage property.
begun. For energy property the construction of which begins Modifications of certain property. In the case of any
after 2018, as determined under the Physical Work Test or the energy storage technology property, otherwise described above,
Five Percent Safe Harbor, construction will be deemed to have that was either (1) placed in service before August 16, 2022, and
begun on the date the taxpayer first satisfies one of the two that has a capacity of less than 5 kilowatt hours and is modified
methods. The requirements to begin construction may be to where the property (after the modification) has a nameplate
modified in certain limited circumstances involving significant capacity of at least 5 kilowatt hours; or (2) is modified in a
national security concerns. See Notice 2019-43, 2019-31 I.R.B. manner that increases the nameplate capacity to at least 5
487, available at IRS.gov/irb/2019-31_IRB#NOT-2019-43, for kilowatt hours, then the modified property will be treated as
details. Also, see Notice 2020-41, 2020-25 I.R.B. 954, available energy storage technology, except for the treatment of the basis
at IRS.gov/irb/2020-25_IRB#NOT-2020-41, on tax relief for of the existing property prior to the modification.
delays caused by COVID-19. Additionally, see Notice 2021-05,
2021-3 I.R.B. 479 for more information on the beginning of Thermal energy storage property. Thermal energy storage
construction requirements applied to offshore and federal lands property is property comprising a system that:
projects. • Is directly connected to a heating, ventilation, or air
conditioning system;
Additional information. The election to treat a qualified Removes heat from, or adds heat to, a storage medium for
facility as energy property is made by claiming the energy credit •
subsequent use; and
with respect to qualified investment credit facility property by Provides energy for the heating or cooling of the interior of a
completing Form 3468 and attaching it to your timely filed •
residential or commercial building.
income tax return (including extensions) for the tax year that the
property is placed in service. You must make a separate election Thermal energy storage property doesn’t include:
for each qualified facility that is to be treated as a qualified • A swimming pool,
investment credit facility. You must also attach a statement to • Combined heat and power system property, or
Form 3468 that includes the following information. • A building or its structural components.
1. Your name, address, taxpayer identification number, and Enter the basis on Line 12hh Worksheet, line 1, attributable to
telephone number. periods after 2022, of any energy storage technology property
2. For each qualified investment credit facility, include the placed in service during the tax year, to the extent of basis
following. attributable to construction, reconstruction, or erection by the
taxpayer after August 16, 2022. Attach to your return a statement
a. A detailed technical description of the facility, including with the description of how you calculated the credit. See
generating capacity. Additional information, later, for more information.
b. A detailed technical description of the energy property Qualified biogas property. Qualified biogas property means
placed in service during the tax year as an integral part property comprising a system that:
of the facility, including a statement that the property is
an integral part of such facility. 1. Converts biomass (as defined in section 45K(c)(3), as in
effect on August 16, 2022), into a gas that:
c. The date that the energy property was placed in
service. a. Consists of not less than 52% methane by volume, or
d. An accounting of your basis in the energy property. b. Is concentrated by such system into a gas that consists
of not less than 52% methane, and
e. A depreciation schedule reflecting your remaining basis
in the energy property after the energy credit is claimed. 2. Captures such gas for sale or productive use, and not for
disposal via combustion.
3. A statement that you haven't and won’t claim a Section
1603 grant for new investment in the property for which you Qualified biogas property includes any property that is part of
are claiming the energy credit. a system that cleans or conditions gas, described above.
Enter the basis on Line 12hh Worksheet, line 2, attributable to
4. A declaration, applicable to the statement and any periods after 2022, of any qualified biogas energy property
accompanying documents, signed by you, or signed by a placed in service during the tax year, to the extent of basis
person currently authorized to bind you in such matters that attributable to construction, reconstruction, or erection by the
state the following: “Under penalties of perjury, I declare taxpayer after August 16, 2022. Attach to your return a statement
that I have examined this statement, including with the description of how you calculated the credit. See
accompanying documents, and to the best of my Additional information, later, for more information.
knowledge and belief, the facts presented in support of this
statement are true, correct, and complete.” Microgrid controller. Microgrid controller means equipment
that is:
Enter the basis of any qualified investment credit facility • Part of a qualified microgrid, and
property, placed in service during the tax year, the construction • Designed and used to monitor and control the energy
of which began after 2016. resources and loads on such microgrid.

Instructions for Form 3468 (2022) -13-

- 14 -

Page 14 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Qualified microgrid. Qualified microgrid is an electrical 1. 2%, in the case of any energy project that doesn't satisfy the
system that: requirements of section 48(a)(9)(B).
1. Includes equipment that is capable of generating not less 2. 10%, in the case of any energy project that does satisfy the
than 4 kilowatts and not greater than 20 megawatts of requirements of section 48(a)(9)(B).
electricity;
Energy community. Energy community means the following.
2. Is capable of operating:
1. A brownfield site (as defined in subparagraphs (A), (B), and
a. In connection with the electrical grid and as a single (D)(ii)(III) of section 101(39) of the Comprehensive
controllable entity with respect to such grid, Environmental Response, Compensation, and Liability Act
b. Independently (and disconnected) from such grid, and of 1980 (42 U.S.C. 9601(39)));
3. Is not part of a bulk-power system (as defined in section 2. A metropolitan statistical area or non-metropolitan statistical
215 of the Federal Power Act (16 U.S.C. 824o)). area that:
Enter the basis on Line 12hh Worksheet, line 3, attributable to a. Has (or, at any time during the period beginning after
periods after 2022, of any qualified microgrid controller property 2009, had) .17% or greater direct employment or 25%
placed in service during the tax year, to the extent of basis or greater local tax revenues related to the extraction,
attributable to construction, reconstruction, or erection by the processing, transport, or storage of coal, oil, or natural
taxpayer after August 16, 2022. Attach to your return a statement gas (as determined by the Secretary); and
with the description of how you calculated the credit. See b. Has an unemployment rate at or above the national
Additional information, later, for more information. average unemployment rate for the previous year (as
Domestic content bonus credit amount. In the case of any determined by the Secretary); or
energy project that satisfies the requirement below, the energy 3. A census tract, or is directly adjoining to any census tract in
percentage shall be increased by the applicable credit rate which:
increase.
Applicable credit rate increase. The applicable credit rate a. After 1999, a coal mine has closed; or
increase shall be the one of the following. b. After 2009, a coal-fired electric generating unit has been
1. 2%, in the case of an energy project that doesn't satisfy the retired.
requirements below. Enter the increase in credit rate for energy communities on
2. 10%, in the case of an energy project that does satisfy the Line 12hh Worksheet, line 5. Attach to your return a statement
requirements below. with the description of how you calculated the credit. See
Additional information, later, for more information.
Requirement. The requirement is satisfied with respect to
Certain solar and wind facilities placed in service in con-
any qualified facility, if the taxpayer certifies to the Secretary (at
nection with low-income communities. A qualified solar or
such time and in such form and manner as the Secretary may
wind facility must receive an allocation of the environment justice
prescribe) that any steel, iron, or manufactured product that is a
solar and wind capacity limitation for a taxpayer with an interest
component of the facility (upon completion of construction) was
in such qualified facility to be eligible to claim an energy
produced in the United States.
percentage increase under section 48(e) with respect to eligible
In the case of steel or iron, the manufacturing processes must property which is part of such facility. Guidance regarding the
take place in the United States, except metallurgical processes section 48(e) program and how the taxpayer can apply for an
involving refinement of steel additives. The steel and iron allocation of the environmental justice solar and wind capacity
requirements apply to all construction materials made primarily limitation will be provided at a later date. Please consult this
of steel or iron and used in infrastructure projects such as transit guidance when completing Form 3468.
or maintenance facilities, rail lines, and bridges. These items
For the latest guidance related to certain solar and wind
include, but are not limited to, structural steel or iron, steel or iron
facilities in connection with low-income communities, go to
beams and columns, or running rail and contact rail. These
IRS.gov/Form3468.
requirements don't apply to steel or iron used as components or
subcomponents of other manufactured products or rolling stock, Energy percentage increase with respect to eligible property
or to bimetallic power rail incorporating steel or iron components. and limitation:
In the case of manufactured products that are components of • 10%, in the case of a facility located in a low-income
community (as defined in section 45D(e)) or on Indian land
a qualified facility, upon completion of construction the
(as defined in section 2601(2) of the Energy Policy Act of
manufactured products will be deemed to have been produced
1992 (25 U.S.C. 3501(2))); or
in the United States if at least 40% of steel and iron (20% in the
case of an offshore wind facility) of the total costs of all the • 20%, in the case of a facility that is part of a qualified
low-income residential building project or a qualified
manufactured products of the facility are attributable to
low-income economic benefit project.
manufactured products (including components) that are mined,
produced, or manufactured in the United States. The increase in the credit will not exceed the amount that
bears the same ratio to the amount of the increase of the
Enter the domestic content bonus credit amount on the following.
Line 12hh Worksheet, line 4. Attach to your return a statement • The environmental justice solar and wind capacity limitation
with the description of how you calculated the credit. See allocated to such facility bears to
Additional information, later, for more information. • The total megawatt nameplate capacity of such facility, as
Increase in credit rate for energy communities. In the case measured in direct current.
of any energy project that is placed in service within an energy Qualified solar and wind facility. Qualified solar and wind
community (defined below), the energy percentage shall be facility with respect to low-income communities means any
increased by the applicable credit rate increase.
Applicable credit rate increase. The applicable credit rate
increase shall be equal to one of the following.

-14- Instructions for Form 3468 (2022)

- 15 -

Page 15 of 18 Fileid: … ions/i3468/2022/a/xml/cycle05/source 12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

facility that generates electricity solely from property described in produce in the Election to treat clean hydrogen production
the following: facilities as energy property, described earlier.
• Wind facility property defined in section 45(d)(1); Qualified clean hydrogen. Qualified clean hydrogen means
• Solar energy property to generate electricity defined in hydrogen that is produced through a process that results in a
section 48(a)(3)(i); or lifecycle greenhouse gas emissions rate of not greater than 4
• Qualified small wind energy property defined in section kilograms of CO2e per kilogram of hydrogen.
48(a)(3)(vi).
Additional requirements for qualified clean hydrogen.
The property has to meet the following: Qualified clean hydrogen also requires the following.
• A maximum net output of less than 5 megawatts (as • Hydrogen is produced in the United States (as defined in
measured in alternating current); and section 638(1)) or a possession of the United States (as
• Is located in a low-income community (as defined in section defined in section 638(2)).
45D(e)) or on Indian land (as defined in section 2601(2) of • Hydrogen is produced in the ordinary course of a trade or
the Energy Policy Act of 1992 (25 U.S.C. 3501(2))), or is business of the taxpayer.
part of a qualified low-income residential building project or • Hydrogen is produced for sale or use.
a qualified low-income economic benefit project. • The production and sale or use of such hydrogen is verified
Eligible property. Eligible property means energy property by an unrelated party.
that is part of the following facilities. Provisional emissions rate. In the case of any hydrogen for
• Wind facility property described in section 45(d)(1) for which which a lifecycle greenhouse gas emissions rate has not been
an election was made to treat qualified facilities as energy determined for purposes of this section, a taxpayer producing
property. such hydrogen may file a petition with the Secretary for
• Solar energy property to generate electricity described in determination of the lifecycle greenhouse gas emissions rate
section 48(a)(3)(A)(i). with respect to such hydrogen.
• Qualified small wind energy property described in section Regulations. The Secretary shall issue guidance to carry out
48(a)(3)(A)(vi). the purposes of this section, including guidance to recapture any
• Energy storage technology described in section 48(a)(3)(A) credit allowed that exceeds the amount of the credit that would
(ix)) installed in connection with the above facility properties. have been allowed if the expected production were consistent
Enter the amount attributable to certain solar and wind with the actual verified production (or all of the credit so allowed
facilities placed in service in connection with low-income in the absence of such verification).
communities on Line 12hh Worksheet, line 6. Attach to your Enter the amount of clean hydrogen production facilities that
return a statement with the description of how you calculated the will be treated as energy property on Line 12hh Worksheet,
credit. See Additional information, later, for more information. line 7. Attach to your return a statement with the description of
Election to treat clean hydrogen production facilities as how you calculated the credit. See Additional information below
energy property. In the case of any qualified property (as for more information.
defined in section 48(a)(5)(D)) that is part of a specified clean Additional information. You must attach a statement to Form
hydrogen production facility, such property will be treated as 3468 that includes the following information.
energy property for purposes of this section, and the energy
percentage with respect to such property is as follows. 1. Your name, address, taxpayer identification number, and
• 1.2%, in the case of a facility that is designed and telephone number.
reasonably expected to produce qualified clean hydrogen, 2. For each qualified investment credit facility property, include
described in section 45V(b)(2)(A). the following.
• 1.5%, in the case of a facility that is designed and
reasonably expected to produce qualified clean hydrogen a. A detailed technical description of the facility, including
that is described in section 45V(b)(2)(B). generating capacity.
• 2%, in the case of a facility that is designed and reasonably
b. A detailed technical description of the energy property
expected to produce qualified clean hydrogen that is
placed in service during the tax year as an integral part
described in section 45V(b)(2)(C).
of the facility, including a statement that the property is
• 6%, in the case of a facility that is designed and reasonably
an integral part of such facility.
expected to produce qualified clean hydrogen that is
described in section 45V(b)(2)(D). c. The date that the energy property was placed in
Denial of production credit. No credit will be allowed under service.
section 45V or section 45Q for any tax year with respect to any d. An accounting of your basis in the energy property.
specified clean hydrogen production facility or any carbon
capture equipment included at such facility. e. A depreciation schedule reflecting your remaining basis
Specified clean hydrogen production facility. Specified in the energy property after the energy credit is claimed.
clean hydrogen production facility means any qualified clean 3. A statement that you haven't and won’t claim a Section
hydrogen production facility to include the following. 1603 grant for new investment in the property for which you
• Owned by the taxpayer. are claiming the energy credit.
• Produces qualified clean hydrogen.
• The construction of which began before 2033. 4. A declaration, applicable to the statement and any
• Is placed in service after 2022. accompanying documents, signed by you, or signed by a
• No credit has been allowed under section 45V or 45Q. person currently authorized to bind you in such matters that
• The taxpayer makes an irrevocable election. state the following: “Under penalties of perjury, I declare
• An unrelated third party has verified (in such form or manner that I have examined this statement, including
as the Secretary may prescribe) that such facility produces accompanying documents, and to the best of my
hydrogen through a process that results in lifecycle knowledge and belief, the facts presented in support of this
greenhouse gas emissions that are consistent with the statement are true, correct, and complete.”
hydrogen that the facility was designed and expected to

Instructions for Form 3468 (2022) -15-

- 16 -

Page 16 of 18              Fileid: … ions/i3468/2022/a/xml/cycle05/source                                                     12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Line 12hh Worksheet
Use the following worksheet to calculate the amount to be entered on Form 3468, line 12hh. This worksheet is generally applicable for 
property placed in service after 2022.
1. Energy storage technology property basis * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               × 30% (0.30) 1.  
2. Qualified biogas property basis * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        × 30% (0.30) 2.  
3. Microgrid controller basis * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     × 30% (0.30) 3.  
4. Domestic content bonus credit **
   4a. Doesn't satisfy requirements in section 45(b)(9)(B). List the line numbers from the 
       Form 3468 used for this calculation.
        
       Add the basis in property for the line numbers you entered on line 4a of the 
       worksheet. Enter the total basis amount and multiply by the applicable credit rate 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   × 2% (0.02)  4a.  
   4b. Satisfies requirements in section 45(b)(9)(B). List the line numbers from the Form 
       3468 used for this calculation.
        
       Add the basis in property for the line numbers you entered on line 4b of the 
       worksheet. Enter the basis amount and multiply by the applicable credit rate 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   × 10% (0.10) 4b.  
5. Energy communities **
   5a. Doesn't satisfy requirements in section 48(a)(9)(B). List the line numbers from the 
       Form 3468 used for this calculation.
        
       Add the basis in property for the line numbers you entered on line 5a of the 
       worksheet. Enter the total basis amount and multiply by the applicable credit rate 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   × 2% (0.02)  5a.  
   5b. Satisfies requirements in section 48(a)(9)(B). List the line numbers from the Form 
       3468 used for this calculation.
        
       Add the basis in property for the line numbers you entered on line 5b of the 
       worksheet. Enter the total basis and multiply by the applicable credit rate 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   × 10% (0.10) 5b.  
6. Certain solar and wind facilities in connection with low-income communities **
   6a. Facility located in a low-income community per section 45D(e). List the line numbers 
       from the Form 3468 used for this calculation.
        
       Add the basis in property for the line numbers you entered on line 6a of the 
       worksheet. Enter the total basis amount and multiply by the energy percentage 
       increase  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  × 10% (0.10) 6a.  
   6b. Facility located in a low-income community on Indian land per section 2601(2) of the 
       Energy Policy Act of 1992 (25 U.S.C. 3501(2)). List the line numbers from the Form 
       3468 used for this calculation.
        
       Add the basis in property for the line numbers you entered on line 6b of the 
       worksheet. Enter the total basis amount and multiply by the energy percentage 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   × 10% (0.10) 6b.  
   6c. Qualified low-income residential building project facility. List the line numbers from 
       the Form 3468 used for this calculation. 
        
       Add the basis in property for the line numbers you entered on line 6c of the 
       worksheet. Enter the total basis amount and multiply by the energy percentage 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   × 20% (0.20) 6c.  
   6d. Qualified low-income economic benefit project. List the line numbers from the Form 
       3468 used for this calculation.
        
       Add the basis in property for the line numbers you entered on line 6d of the 
       worksheet. Enter the total basis amount and multiply by the energy percentage 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   × 20% (0.20) 6d.  

* For fiscal year filers, the project of which construction begins on January 29, 2023, or later, the credit amounts are 6% and 2% respectively, unless the prevailing wage 
and apprenticeship requirements are satisfied or the project has a maximum net output of less than 1 megawatt of electrical or thermal energy. See Increased credit 
amount for energy projects, earlier, for information regarding project requirements.
** Each percent applies to a unique property. One property cannot have the different percent added on within a line.

                                                    -16-                                                                      Instructions for Form 3468 (2022)

- 17 -

Page 17 of 18              Fileid: … ions/i3468/2022/a/xml/cycle05/source                                                    12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Line 12hh Worksheet, continued
7. Clean hydrogen production facilities as energy property **
   7a. Facility that is designed and reasonably expected to produce qualified clean 
       hydrogen per section 45V(b)(2)(A). List the line numbers from the Form 3468 used 
       for this calculation.
        
       Add the basis in property for the line numbers you entered on line 7a of the 
       worksheet. Enter the total basis amount and multiply by the energy percentage 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  × 1.2% (0.012) 7a.  

   7b. Facility that is designed and reasonably expected to produce qualified clean 
       hydrogen per section 45V(b)(2)(B). List the line numbers from the Form 3468 used 
       for this calculation.
        
       Add the basis in property for the line numbers you entered on line 7b of the 
       worksheet. Enter the total basis amount and multiply by the energy percentage 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  × 1.5% (0.015) 7b.  

   7c. Facility that is designed and reasonably expected to produce qualified clean 
       hydrogen per section 45V(b)(2)(C). List the line numbers from the Form 3468 used 
       for this calculation.
        
       Add the basis in property for the line numbers you entered on line 7c of the 
       worksheet. Enter the total basis amount and multiply by the energy percentage 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  × 2% (0.02)                                   7c.  

   7d. Facility that is designed and reasonably expected to produce qualified clean 
       hydrogen per section 45V(b)(2)(D). List the line numbers from the Form 3468 used 
       for this calculation.
        
       Add the basis in property for the line numbers you entered on line 7d of the 
       worksheet. Enter the total basis amount and multiply by the energy percentage 
       increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  × 6% (0.06)                                   7d.  

8. Total. Combine lines 1 through 7. Enter this amount on Form 3468, line 12hh . . . . . . . . .                             . . . . . . . . . . . . . . . . . . . . . . . 8.  

* For fiscal year filers, the project of which construction begins on January 29, 2023, or later, the credit amounts are 6% and 2% respectively, unless the prevailing wage 
and apprenticeship requirements are satisfied or the project has a maximum net output of less than 1 megawatt of electrical or thermal energy. See Increased credit 
amount for energy projects, earlier, for information regarding project requirements.
** Each percent applies to a unique property. One property cannot have the different percent added on within a line.

Instructions for Form 3468 (2022)                            -17-

- 18 -

Page 18 of 18             Fileid: … ions/i3468/2022/a/xml/cycle05/source                                                               12:00 - 30-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Line 13                                                                                  rehabilitation credit or energy credit allocated from cooperatives. 
                                                                                         If you are a cooperative, see the instructions for Form 3800, Part 
Patrons, including cooperatives that are patrons in other                                III, line 1a, for allocating the investment credit to your patrons.
cooperatives, enter the unused investment credit from the 

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.

                                                                                   -18-                                          Instructions for Form 3468 (2022)

PDF file checksum: 112452983

(Plugin #1/9.12/13.0)