IRS Form 3468 - Investment Credit

This part gathers detailed information about each facility or property for which the investment credit is claimed.

Qualified property includes any building or its structural components, along with the following:

Qualified property does not include buildings or portions of buildings used for offices, administrative services, or other non-manufacturing functions.

The details you need to report include the facility's technical description, location, dates of construction commencement and service placement, and compliance with specific requirements like prevailing wage and apprenticeship standards.

Specific to Fom 990-T Filers: Tax-exempt and governmental entities making an elective payment election under section 6417 must complete Part I for each facility or property and attach Form 3468 to Form 990-T. This ensures proper reporting of credits against unrelated business taxable income (UBTI).

Section A–Qualifying Advanced Coal Project Credit Under Section 48A: Addresses the Qualifying Advanced Coal Project Credit, applicable to projects that utilize advanced coal-based generation technologies to reduce air pollutants.

Section B–Qualifying Gasification Project Credit Under Section 48B: Pertains to the Qualifying Gasification Project Credit, for projects converting various materials into synthesis gas for producing energy or chemicals.

This part deals with credits for investments in advanced energy projects, such as those that re-equip, expand, or establish manufacturing facilities for the production of renewable energy equipment, energy storage systems, and other advanced energy properties.

Investment credits cannot be claimed under section 48C for a facility or property if credits have already been claimed under section 45X.

The Section 48D Advanced Manufacturing Investment Credit is a federal tax incentive to boost domestic semiconductor manufacturing and related supply chains in the U.S. This credit was established under the CHIPS Act of 2022 to encourage investments in semiconductor production and critical manufacturing infrastructure.

The credit equals 25% of the qualified investment in the facility.

You can elect to treat this credit as a payment of tax under section 48D(d).

Section A—Qualified Clean Electricity Facilities: This section calculates the investment credit by applying a 30% or 6% base rate and adding potential 10% or 2% bonuses for domestic content, energy community status, and low-income community projects.

Section B—Qualified Energy Storage Technology: This section calculates the energy storage investment credit by entering the qualified investment amount, applying the 30% or 6% credit rate, and determining the base credit. Additional 10% or 2% bonuses may apply.

Section C—Totals, Credit Reduction for Subsidized Energy Financing or Private Activity Bonds, and Credit Phaseout: This section calculates the final investment credit by summing eligible amounts, applying reductions for subsidized financing if applicable, and adjusting for elective payment elections under Section 6417. The final credit, including any unused cooperative credits, is reported on Form 3800, Part III, Line 1v.

Section A – Geothermal Energy Credit: Calculates the credit for geothermal energy investments, applying a 30% or 6% base rate, with possible 10% or 2% bonuses for domestic content and energy community status. The final credit is the sum of eligible lines.

Section B – Solar Energy Credit: Applies a 30% or 6% base credit for solar energy investments, with an additional 10% or 20% bonuses for low-income communities and 10% or 2% for domestic content and energy community status. The total credit is summed from applicable lines.

Section C – Qualified Fuel Cell Property: Calculates the credit for fuel cell property investments, applying a 30% or 6% base rate, with a cap of $1,000 per kW (pre-2008) or $3,000 per kW (post-2008). Additional 10% or 2% bonuses may apply.

Section D – Qualified Microturbine Property: Determines the credit for microturbine property investments using a 10% or 2% base rate, with potential bonuses. The final credit is capped at $200 per kW and is the smaller of two calculated values.

Section E – Combined Heat and Power System Property: Applies a 30% or 6% base credit for heat and power system investments, with bonuses for domestic content and energy community status. The credit cannot be claimed for properties exceeding specific capacity limits.

Section F – Qualified Small Wind Energy Property: Provides a 30% or 6% base credit for small wind energy projects, with an additional 10% or 20% low-income community bonuses and 10% or 2% domestic content and energy community bonuses.

Section G – Waste Energy Recovery Property: Calculates the credit for waste energy recovery projects using a 30% or 6% base rate, plus applicable low-income community and domestic content bonuses. The total credit is summed from qualifying lines.

Section H – Geothermal Heat Pump Systems: Determines the credit for geothermal heat pump systems, applying a 30% or 6% base rate, plus 10% or 2% bonuses for domestic content and energy community eligibility.

Section I – Energy Storage Technology Property: Applies a 30% or 6% base credit for energy storage technology, with 10% or 20% low-income community bonuses and 10% or 2% domestic content bonuses if installed with solar or wind energy property.

Section J – Qualified Biogas Property: Provides a 30% or 6% base credit for biogas property investments, with 10% or 2% bonuses for domestic content and energy community eligibility.

Section K – Microgrid Controllers Property: Calculates the credit for microgrid controllers, applying a 30% or 6% base rate, plus 10% or 2% bonuses for domestic content and energy community eligibility.

Section L – Qualified Investment Credit Facility Property: Applies a 30% or 6% base credit for investment credit facilities, with 10% or 2% low-income community bonuses and 10% or 2% domestic content and energy community bonuses.

Section M – Clean Hydrogen Production Facilities as Energy Property: Determines the credit for clean hydrogen production facilities under section 45V(b)(2), with credit rates ranging from 6% to 30%, depending on hydrogen production classification. Verification by an unrelated party is required.

Section N – Totals and Credit Reduction for Tax-Exempt Bonds: Finalizes the total investment credit by summing all sections and applying reductions for tax-exempt bonds and elective payments under Section 6417. The final credit is reported on 3800 Form , Part III, Line 4a.

The Rehabilitation Credit, Section 47 of the Internal Revenue Code, provides a tax credit for restoring and rehabilitating qualified buildings, particularly historic structures.

This credit helps incentivize the preservation of older buildings while maintaining their historic significance.

Your credit percentage depends on the property type: 10% for pre-1936 buildings, 20% for certified historic structures under the transition rule, and 4% for certified historic structures with post-2017 expenditures.