Essential documentation guidance and form requirements for tax credit compliance and transfers.
Specific IRS forms are required for claiming and transferring tax credits. Below is a list of key forms associated with renewable energy tax credits:
| Form | Purpose | Applicable Credits |
|---|---|---|
| Form 3800 | General Business Credit - Used to aggregate all eligible business credits | All business credits, including transferred credits |
| Form 3468 | Investment Credit - Used for claiming the Investment Tax Credit (ITC) | Section 48 (ITC) for solar, wind, geothermal, etc. |
| Form 8835 | Renewable Electricity Production Credit | Section 45 Production Tax Credit (PTC) |
| Form 8911 | Alternative Fuel Vehicle Refueling Property Credit | Section 30C credits for EV charging infrastructure |
| Form 7207 | Advanced Manufacturing Production Credit | Section 45X for manufacturing components |
| Form 8912 | Credit to Holders of Tax Credit Bonds | Various tax credit bonds |
In addition to these specific credit forms, both parties involved in a tax credit transfer must include documentation to substantiate the validity of the transferred credits.
A transfer election statement is a critical document required for executing a tax credit transfer under Section 6418. This statement must be attached to both the transferor's and transferee's tax returns for the applicable tax year.
While the IRS has not provided an official form, below is a basic structure that meets the requirements:
SECTION 6418 TRANSFER ELECTION STATEMENT Tax Year: [Year] Registration Number: [IRS Registration Number] TRANSFEROR INFORMATION: Name: [Transferor Legal Name] Address: [Transferor Address] Taxpayer ID: [Transferor EIN/TIN] TRANSFEREE INFORMATION: Name: [Transferee Legal Name] Address: [Transferee Address] Taxpayer ID: [Transferee EIN/TIN] CREDIT INFORMATION: Type of Credit: [e.g., Section 48 Investment Tax Credit] Credit Property Description: [Brief description] Total Credit Amount Determined: $[Amount] Specified Credit Portion Transferred: $[Amount] Transferor's Taxable Year: [Year] Transferee's First Year to Claim Credit: [Year] PAYMENT INFORMATION: Cash Consideration Amount: $[Amount] Date of Payment: [Date] STATEMENTS AND REPRESENTATIONS: 1. The transferor and transferee certify that they are not related persons within the meaning of IRC §§ 267(b) or 707(b)(1). 2. The transferor represents that all requirements of Section 6418, the regulations, and the applicable Code provisions have been or will be satisfied. 3. Both parties acknowledge the recapture requirements under Section 6418(g)(3) and related regulations. 4. The transferor certifies that the required minimum documentation has been provided to the transferee, including [list specific documentation provided]. Under penalties of perjury, I declare that I have examined this election statement and, to the best of my knowledge and belief, it is true, correct, and complete. Transferor Signature: ___________________________ Date: ___________ Printed Name and Title: ________________________ Transferee Signature: ___________________________ Date: ___________ Printed Name and Title: ________________________
The transferor must provide the transferee with "required minimum documentation" to validate the existence and eligibility of the credit. This documentation serves as protection for the transferee in case of IRS examination.
Before making a transfer election, the transferor must complete the IRS pre-filing registration process and obtain a registration number for each credit property intended for transfer.
Visit the IRS.gov registration portal to begin the process.
Complete all required fields and submit the registration to the IRS for processing.
Receive a unique registration number that must be included on the transfer election statement and tax return.
Registration must be completed before filing the tax return that includes the transfer election. Plan accordingly to ensure sufficient time for registration processing.
Maintaining proper documentation is critical for both parties in a tax credit transfer. Consider these best practices to ensure compliance and minimize risk.
Organize all required documentation in a structured package with clear labeling and indexing. Create a table of contents and ensure all documents are properly organized by category.
Keep original records in addition to copies provided to the transferee. Have a secure archiving system with both physical and digital copies where appropriate.
Maintain a log of all communications, document exchanges, and transaction steps. Record dates, participants, and outcomes of key meetings or discussions.
Maintain secure digital copies of all documentation with appropriate backup procedures and access controls. Consider encryption for sensitive financial or taxpayer information.
Consider third-party verification of critical documentation for high-value transfers to ensure accuracy and completeness.
Establish a process for regular compliance checks, especially for credits subject to ongoing requirements.
Develop a standardized checklist to ensure all required documentation is assembled and verified before finalizing any transfer.
Need help with documentation? Our team can assist with document review and preparation for your tax credit projects.
Contact us