IRS guidance on claiming investment tax credits for renewable energy

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 alternative energy facilities: *Solar *Wind; *Biomass (both closed- and open-loop); *Geothermal; *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.