The 2009 Stimulus legislation (ARRA) permits owners of PTC facilities, such as wind, biomass, and others, to elect a 30-percent tax credit, based on the cost of the facility, at the time the project is placed in service, rather than the 10-year PTC, which is calculated based on sales of electricity. Last week, the IRS issued Notice 2009-52, which explains the process for making this election.
The election to claim the ITC in lieu of the PTC applies to the following types of renewable energy facilities:
- Biomass (both closed- and open-loop);
- Landfill gas;
- Trash facilities;
- Qualified hydropower; and
- Marine and hydrokinetic.
To qualify, a taxpayer must claim the ITC with respect to qualified property that is an integral part of the facility on a completed Form 3468. Form 3468 must be filed with the taxpayer’s income tax return for the year in which the property is placed in service.
A separate election must be made for each qualifying facility. At this time; however, there is no guidance on how to define a "qualifying facility."