Instructions for IRS Form 1097-btc - Bond Tax Credit 2018

January 1, 2018 "Instructions For Irs Form 1097-btc - Bond Tax Credit" contain the updated filing procedures for the IRS-issued Form 1097-BTC. Download your copy of the instructions by clicking the link below.

IRS Form 1097-BTC is tax form released and collected by the Internal Revenue Service of the United States.

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2018
Department of the Treasury
Internal Revenue Service
Instructions for Form
1097-BTC
Bond Tax Credit
Section references are to the Internal Revenue Code unless
distributing the credit must file Form 1097-BTC for each tax
otherwise noted.
credit distributed from the following tax credit bonds.
New clean renewable energy bonds.
Future Developments
Qualified energy conservation bonds.
Qualified zone academy bonds.
For the latest information about developments related to
Qualified school construction bonds.
Form 1097-BTC and its instructions, such as legislation
Clean renewable energy bonds.
enacted after they were published, go to
IRS.gov/
Build America bonds (Tax Credit).
Form1097BTC.
Repeal of sections 54, 54A-F, and
Filings of Form 1097-BTC with respect to a bond, by the
issuer or the issuer's agent, must be made on a separate
54AA
Form 1097-BTC for each bond.
Public Law Number 115-97, 131 Stat. 2054 (2017), repealed
For tax credit bonds issued with two or more maturities,
sections 54, 54A-F, and 54AA effective for bonds issued
each maturity must be reported separately on the Form
after December 31, 2017.
1097-BTC issued by the bond issuer or its agent.
What’s New
Recipients of Form 1097-BTC from the bond issuer or
agent, such as brokers, nominees, mutual funds, or
Repeal of authority to issue new tax credit bonds.
partnerships, who are further distributing the credit must file
Public Law 115-97, section 13404, repealed the authority to
only one Form 1097-BTC per recipient or account,
issue new tax credit bonds after December 31, 2017.
aggregating credit from all applicable bonds.
New online fillable format. Due to the very low volume of
Note. Issuers that elected to issue build America bonds
paper Forms 1097-BTC received and processed by the IRS
(Direct Pay) under section 54AA(g) or specified tax credit
each year, this form has been converted to an online fillable
bonds under section 6431(f) to receive a refundable credit
format. You may fill out the form, found online at
IRS.gov/
under section 6431(a) in lieu of tax credits under section 54A
Form1097BTC, and send Copy B to the recipient. For filing
should not file Form 1097-BTC.
with the IRS, follow your usual procedures for filing
electronically if you are filing 250 or more forms. If you are
Definitions
filing this form on paper due to a low volume of recipients, for
Tax credit bond. Generally, a tax credit bond is an
this form only, you may send in the black-and-white Copy A
obligation issued under sections 54, 54A, 54AA, 1397E, or
with a Form 1096 that you print from the IRS website.
1400N(l) that entitles the taxpayer holding such bond on one
Reminder
or more credit allowance dates occurring during any tax year
to a credit against the federal income tax imposed for that tax
In addition to these specific instructions, you should also use
year.
the 2018 General Instructions for Certain Information
Returns. Those general instructions include information
Qualified tax credit bond. Qualified tax credit bonds under
about the following topics.
section 54A include new clean renewable energy bonds
Who must file (nominee/middleman).
under section 54C, qualified energy conservation bonds
When and where to file.
under section 54D, qualified zone academy bonds under
Electronic reporting requirements.
section 54E, and qualified school construction bonds under
Corrected and voided returns.
section 54F.
Statements to recipients.
New clean renewable energy bond. An obligation issued
Taxpayer identification numbers (TINs).
before January 1, 2018, that is part of an issue, 100% of the
Backup withholding.
available project proceeds of which are to be used for capital
Penalties.
expenditures incurred by governmental bodies, public power
Other general topics.
providers, or cooperative electric companies for one or more
You can get the general instructions from
General
qualified renewable energy facilities, as defined in section
Instructions for Certain Information Returns
at
IRS.gov/
54C. The annual credit allowed is 70% of the annual credit
1099generalinstructions
or go to IRS.gov/Form1097BTC.
amount determined by applying 54A(b).
Qualified energy conservation bond. An obligation issued
Specific Instructions
before January 1, 2018, that is part of an issue, 100% of the
available project proceeds of which are to be used for one or
Issuers of certain tax credit bonds (or their agents) and
more qualified energy conservation purposes, as defined in
recipients of Form 1097-BTC from the bond issuer or agent,
section 54D. The annual credit allowed is 70% of the annual
such as mutual funds or partnerships, who are further
credit amount determined by applying 54A(b).
Feb 02, 2018
Cat. No. 54657F
2018
Department of the Treasury
Internal Revenue Service
Instructions for Form
1097-BTC
Bond Tax Credit
Section references are to the Internal Revenue Code unless
distributing the credit must file Form 1097-BTC for each tax
otherwise noted.
credit distributed from the following tax credit bonds.
New clean renewable energy bonds.
Future Developments
Qualified energy conservation bonds.
Qualified zone academy bonds.
For the latest information about developments related to
Qualified school construction bonds.
Form 1097-BTC and its instructions, such as legislation
Clean renewable energy bonds.
enacted after they were published, go to
IRS.gov/
Build America bonds (Tax Credit).
Form1097BTC.
Repeal of sections 54, 54A-F, and
Filings of Form 1097-BTC with respect to a bond, by the
issuer or the issuer's agent, must be made on a separate
54AA
Form 1097-BTC for each bond.
Public Law Number 115-97, 131 Stat. 2054 (2017), repealed
For tax credit bonds issued with two or more maturities,
sections 54, 54A-F, and 54AA effective for bonds issued
each maturity must be reported separately on the Form
after December 31, 2017.
1097-BTC issued by the bond issuer or its agent.
What’s New
Recipients of Form 1097-BTC from the bond issuer or
agent, such as brokers, nominees, mutual funds, or
Repeal of authority to issue new tax credit bonds.
partnerships, who are further distributing the credit must file
Public Law 115-97, section 13404, repealed the authority to
only one Form 1097-BTC per recipient or account,
issue new tax credit bonds after December 31, 2017.
aggregating credit from all applicable bonds.
New online fillable format. Due to the very low volume of
Note. Issuers that elected to issue build America bonds
paper Forms 1097-BTC received and processed by the IRS
(Direct Pay) under section 54AA(g) or specified tax credit
each year, this form has been converted to an online fillable
bonds under section 6431(f) to receive a refundable credit
format. You may fill out the form, found online at
IRS.gov/
under section 6431(a) in lieu of tax credits under section 54A
Form1097BTC, and send Copy B to the recipient. For filing
should not file Form 1097-BTC.
with the IRS, follow your usual procedures for filing
electronically if you are filing 250 or more forms. If you are
Definitions
filing this form on paper due to a low volume of recipients, for
Tax credit bond. Generally, a tax credit bond is an
this form only, you may send in the black-and-white Copy A
obligation issued under sections 54, 54A, 54AA, 1397E, or
with a Form 1096 that you print from the IRS website.
1400N(l) that entitles the taxpayer holding such bond on one
Reminder
or more credit allowance dates occurring during any tax year
to a credit against the federal income tax imposed for that tax
In addition to these specific instructions, you should also use
year.
the 2018 General Instructions for Certain Information
Returns. Those general instructions include information
Qualified tax credit bond. Qualified tax credit bonds under
about the following topics.
section 54A include new clean renewable energy bonds
Who must file (nominee/middleman).
under section 54C, qualified energy conservation bonds
When and where to file.
under section 54D, qualified zone academy bonds under
Electronic reporting requirements.
section 54E, and qualified school construction bonds under
Corrected and voided returns.
section 54F.
Statements to recipients.
New clean renewable energy bond. An obligation issued
Taxpayer identification numbers (TINs).
before January 1, 2018, that is part of an issue, 100% of the
Backup withholding.
available project proceeds of which are to be used for capital
Penalties.
expenditures incurred by governmental bodies, public power
Other general topics.
providers, or cooperative electric companies for one or more
You can get the general instructions from
General
qualified renewable energy facilities, as defined in section
Instructions for Certain Information Returns
at
IRS.gov/
54C. The annual credit allowed is 70% of the annual credit
1099generalinstructions
or go to IRS.gov/Form1097BTC.
amount determined by applying 54A(b).
Qualified energy conservation bond. An obligation issued
Specific Instructions
before January 1, 2018, that is part of an issue, 100% of the
available project proceeds of which are to be used for one or
Issuers of certain tax credit bonds (or their agents) and
more qualified energy conservation purposes, as defined in
recipients of Form 1097-BTC from the bond issuer or agent,
section 54D. The annual credit allowed is 70% of the annual
such as mutual funds or partnerships, who are further
credit amount determined by applying 54A(b).
Feb 02, 2018
Cat. No. 54657F
Penalties for Failure To File
Qualified zone academy bond. An obligation issued
before January 1, 2018, that is part of an issue, 100% of the
There are penalties for failure to file correct information
available project proceeds of which are to be used for a
returns by the due date and for failure to furnish correct
qualified purpose for a qualified zone academy established
payee statements. See part O in the 2018 General
by an eligible local education agency, as provided in section
Instructions for Certain Information Returns for details. The
54E; or an obligation that is part of an issue, 95% or more of
failure to file Forms 1097-BTC also includes the requirement
the proceeds of which are to be so used and issued before
to file electronically. For more information on penalties for
October 4, 2008, as provided in section 1397E.
failure to file electronically, see part F in the 2018 General
Instructions for Certain Information Returns.
Qualified school construction bond. An obligation issued
before January 1, 2018, that is part of an issue, 100% of the
Statement to Recipient
available project proceeds of which are to be used for the
If required to file Form 1097-BTC, you must furnish a
construction, rehabilitation, or repair of a public school facility
statement to the recipient quarterly for each credit amount
or for the acquisition of land on which such a facility is to be
indicated on or before the 15th day of the 2nd calendar
constructed with the proceeds, as provided in section 54F.
month after the close of the calendar quarter in which the
Clean renewable energy bond. An obligation issued after
credit was allowed.
December 31, 2005, and before January 1, 2010, that is part
of an issue, 95% or more of the proceeds of which are used
Quarterly Furnishing Dates
for capital expenditures incurred by qualified borrowers for
one or more qualified projects, as defined in section 54.
Reporting period:
To recipient (on or before):
Build America bond (Tax Credit). An obligation issued
1
Quarter: January – March
May 15*
st
after February 17, 2009, and before January 1, 2011, issued
2
Quarter: April – June
August 15*
by a state or local government (excluding private activity
nd
bonds under section 141) as defined in section 54AA(d).
3
Quarter: July – September
November 15*
rd
Annual/4
Quarter: October –
February 15*
Who Must Receive Form 1097-BTC
th
December
Each person who is allowed a tax credit as a holder, directly
*Dates may change due to weekends or holidays
or indirectly, of a tax credit bond or a stripped credit coupon
on one or more credit allowance dates during the calendar
year in an amount of at least $10 must be issued Form
For the first 3 quarters, report to the recipient only the
1097-BTC.
amounts for the months of the applicable quarter. Box 1
should not be completed and box 6 is optional.
Credit Allowance Dates
You are not required to furnish a separate report solely for
The tax credit from tax credit bonds or stripped credit
the 4th quarter because the 4th quarter amounts are reported
coupons is allowed on each credit allowance date for which
with the annual filing. For the annual filing, report the credits
the bond was outstanding or to which the stripped credit
for each month in boxes 5a–5l; report the total of those
coupon corresponds. For qualified tax credit bonds and
amounts in box 1; and complete the rest of the form as
clean renewable energy bonds, the credit allowance dates
applicable. Furnish the annual filing to the recipient by
are March 15, June 15, September 15, December 15, and
February 15, 2019.
the last day on which the bond is outstanding. For bonds
issued during the 3-month period ending on a credit
If any amounts previously furnished for the first 3 quarters
allowance date, the amount of the credit is determined
need to be corrected, report the correct amounts for the
ratably based on the portion of the 3-month period during
annual reporting and explain the correction to the recipient;
which the bond is outstanding. The same ratable
no explanation is required for the IRS filing.
determination of credit applies when a bond is redeemed or
matures. For build America bonds (Tax Credit), the credit
For the report furnished to the recipient (quarterly or
allowance dates are the interest payment dates. For qualified
annual), you may use Copy B or your own substitute
zone academy bonds issued before October 4, 2008, the
statement reporting all the same applicable information (the
credit allowance date is the last day of the 1-year period
reporting for the first 3 quarters may be furnished
beginning on the issue date of the bond and each
electronically). See Pub. 1179 for specific rules about
anniversary of such day thereafter.
providing substitute statements to recipients.
The tax credit allowed to holders of any tax credit bonds or
The IRS encourages Form 1097-BTC issuers to provide
stripped credit coupons is treated as interest which is
the credit information to the recipient monthly if applicable,
included in gross income and must be reported as interest
and as soon after the end of the month in which a credit
income on a Form 1099-INT or Form 1099-OID, as
arises as possible.
applicable. For more information on reporting the tax credit
For more information about the requirement to furnish a
treated as interest income paid from tax credit bonds, see the
statement to the recipient, see part M in the 2018 General
Instructions for Forms 1099-INT and 1099-OID.
Instructions for Certain Information Returns.
When To File
Bond Issuer. If issuing the Form 1097-BTC as an issuer of
File Copy A of Form 1097-BTC with the IRS by February 28,
the bond or its agent, box 2a of the form will always reflect
2019 (April 1, 2019, if filed electronically). See
Statement to
code “C” and box 2b must reflect the CUSIP number for the
Recipient, later, for furnishing statements to recipients.
bond or stripped coupon, unless a CUSIP number was not
issued for the bond. See the instructions for boxes
2a
and
2b.
-2-
Instructions for Form 1097-BTC (2018)
Form 1097-BTC Issuer's Name, Address, and
address and the entity has a P.O. box, show the box number
instead.
Telephone Number
Enter the name, street address, city or town, state or
Note. Do not use the address of the registered agent for the
province, country, ZIP or foreign postal code, and telephone
state in which the recipient is incorporated.
number of the entity issuing the Form 1097-BTC.
If the recipient receives its mail in care of a third party
(such as an accountant or an attorney), enter for the street
Enter the entity's true name (as set forth in the legal
address “C/O” followed by the third party's name and street
documents creating it). Enter the address of the entity's
address or P.O. box.
principal office or place of business. Include the suite, room,
or other unit number after the street address. If the post office
Check, as applicable, whether you are the issuer of the
does not deliver mail to the street address and the entity has
bond (or its agent) filing the initial 2018 Form 1097-BTC for
a P.O. box, show the box number instead.
the bond, or are an entity or a person that received or should
have received a 2018 Form 1097-BTC for credit(s) that was
Note. Do not use the address of the registered agent for the
or should have been reported and that is distributing part or
state in which the entity is incorporated. For example, if a
all of that credit to others.
business is incorporated in Delaware or Nevada and the
corporation's principal office is located in Little Rock, AR, the
Box 1. Total
corporation should enter the Little Rock address.
Enter the total amount of credits distributed to the recipient
If the entity receives its mail in care of a third party (such
with respect to the amounts reported in boxes 5a–5l for the
as an accountant or an attorney), enter for the street address
calendar year.
“C/O” followed by the third party's name and street address
or P.O. box.
This box should be only filled out when filing Copy A and
when the annual statement (Copy B of the form) is sent to the
Form 1097-BTC Issuer's TIN
recipient. See
Statement to
Recipient, earlier.
Enter the Form 1097-BTC issuer's TIN, such as an employer
identification number (EIN). Do not truncate the Form
Box 2a. Code
1097-BTC issuer's TIN. An issuer that does not have an EIN
Enter the unique identification number code. Enter “C” for
should apply for one. See Form SS-4, Application for
CUSIP number, “A” for account number, and “O” if the unique
Employer Identification Number, and its separate
identification number is not an account number or a CUSIP
instructions, available at IRS.gov. Applications can be
number, such as a self-provided identification number. If you
submitted online, by phone, fax, or mail.
checked the first box under Form 1097-BTC issuer, and a
CUSIP number is assigned to the bond(s), enter “C.” If no
Truncating Recipient's TIN on Recipient
CUSIP number is assigned to the bond(s) and you checked
Statements
the first box under Form 1097-BTC issuer, use the account
Pursuant to Treasury Regulations section 301.6109-4, all
number as the unique identifier and enter “A” or “O” if you are
filers of this form may truncate a recipient's TIN (social
using any other unique identifying number. See
Box 2b.
security number (SSN), employer identification number
Unique Identifier
next.
(EIN), individual taxpayer identification number (ITIN), or
Box 2b. Unique Identifier
adoption taxpayer identification number (ATIN)) on recipient
statements. Truncation is not allowed on any documents the
The unique identification number is assigned by the Form
filer files with the IRS. A filer's TIN may not be truncated on
1097-BTC issuer and is limited to 39 alphanumeric
any form. See part J in the 2018 General Instructions for
characters. It can be the CUSIP number, account number, or
Certain Information Returns.
any other unique identification number by which you track the
bond transactions.
Recipient's TIN
For a bond issuer (or its agent) filing the 2018 Form
Enter the TIN of the recipient of the distributed (or stripped)
1097-BTC for a bond, the unique identification number must
credit from the tax credit bond. Do not truncate the recipient's
start with the CUSIP number(s), if available, and may be
TIN on the form filed with the IRS. Truncation of the
expanded by the account number or any other self-provided
recipient's TIN is allowed on the statement to the recipient.
number(s). If a CUSIP number was not issued for the bond,
See the 2018 General Instructions for Certain Information
the bond issuer may use or devise its own unique identifier,
Returns.
preferably the account number or other reference number by
Recipient's Name
which you track and account for the bond transaction. A
recipient of a Form 1097-BTC that issues its own Form
Enter the name of the recipient of the distributed (or stripped)
1097-BTC to further distribute the credit may use or devise
credit from the tax credit bond. If not an individual, enter the
its own unique identifier using whatever means it deems
entity's true name (as set forth in the legal documents
best.
creating it).
Box 3. Bond Type
Recipient's Street Address (Including Apt. No.)
Enter code “101” for clean renewable energy bonds issued
Enter the street address, city or town, state or province,
under section 54. Enter code “199” for all other bonds.
country, and ZIP or foreign postal code of the recipient's
principal residence, office, or place of business. Include the
Multiple bond types can be entered on one Form
apartment, suite, room, or other unit number after the street
1097-BTC, other than clean renewable energy
TIP
address. If the post office does not deliver mail to the street
bonds. Credits from clean renewable energy bonds
must be reported on a separate Form 1097-BTC.
-3-
Instructions for Form 1097-BTC (2018)
Box 4.
allowance date, due to recipient by November 15, you would
enter 25% (0.25) of the amount computed in STEP 1 in 5i.
Reserved.
For the annual Form 1097-BTC and December 15, 2018,
credit allowance date, due to recipient by February 15 and to
Boxes 5a–5l.
the IRS by February 28, 2019 (April 1, 2019, if filed
Enter the amount of credit allowed for each month during the
electronically), enter 25% (0.25) of the credit amount
calendar year, calculated by using STEPS 1 and 2, following.
determined in STEP 1 in box 5l and 100% (1.0) of the credit
STEP 1. For each recipient, multiply the outstanding face
amount determined in STEP 1 in box 1.
amount of the qualified tax credit bond, clean renewable
However, the 25% will be prorated for any credit
energy bond, or qualified zone academy bond issued before
allowance date if a clean renewable energy bond or qualified
October 4, 2008, by the applicable credit rate. The
tax credit bond is issued, redeemed, or matures during the
outstanding face amount of the bond is the face amount of
3-month period ending on a credit allowance date with
the bond minus any principal that has been paid. The credit
respect to which you are reporting the credit. The percentage
rate for the qualified tax credit bond, clean renewable energy
of credit allowed for that credit allowance date is prorated for
bond, or qualified zone academy bond issued before
the number of days the bond was outstanding during the
October 4, 2008, is the rate published on the Treasury Direct
3-month period.
website under “IRS Tax Credit Bond Rates” at
Example 2. A qualified zone academy bond that you
TreasuryDirect.gov/govt/rates/rates_irstcb.htm
for the first
issued matures on March 23, 2018. Since the bond was not
day on which there is a binding contract in writing for the sale
outstanding for the entire 3-month period on June 15, 2018,
or exchange of the bond.
the prorated portion of the 25% is figured by dividing (a) the
The credit rate for qualified zone academy bonds issued
number of days the bond was outstanding beginning on the
before July 1, 1999, is 110% (1.10) of the long-term
day after the prior (March 15) credit allowance date and
applicable federal rate (AFR), compounded annually, for the
ending on March 23, 2018, by (b) the number of days
month and year the bond is issued. The IRS announces the
included in the 3-month period beginning on the day after the
long-term AFR monthly in a series of revenue rulings
prior (March 15) credit allowance date and ending on the
published in the Internal Revenue Bulletin.
next (June 15) credit allowance date. See Proration
For build America bonds (Tax Credit), multiply by 35%
calculation below.
(0.35) the amount of interest payable with respect to the
interest payment date for which you are filing Form
Proration calculation
1097-BTC or sending a statement to the credit recipient.
Enter the credit amount so determined in boxes 5a–5l for the
8 days (number of days from March
month in which the interest payment date occurred. Thus, if
16 through March 23)
the interest payment dates for a build America bond are June
= 0.087 X 0.25 = 2% (0.02)
92 days (number of days from
30 and December 31, enter the credit amounts in boxes 5f
March 16 through June 15)
and 5l.
For qualified zone academy bonds issued before October
Thus, for the credit allowance date with respect to the
4, 2008, enter the amount so determined in the box 5 that
3-month period in which the bond matures, you would
corresponds to the credit allowance date. When filing the
multiply the credit amount determined in STEP 1 by the
annual Form 1097-BTC with the IRS, enter the same amount
prorated percentage. In Example 2, for the 2nd quarter
in box 1.
reporting period for 2018, due to recipient by August 15, you
STEP 2. For qualified tax credit bonds or clean renewable
would enter the amount determined by multiplying 2% (0.02)
energy bonds only, multiply the credit amount so determined
with the credit amount determined in STEP 1 in box 5f. You
in STEP 1 by 25% (0.25) for each credit allowance date you
would carry the same percentage to the Total annual credit
hold a qualified tax credit bond or clean renewable energy
reported in box 1 for the annual/4th quarter reporting period
bond during your tax year. Enter the credit amount
filed with the IRS and sent to the recipient. Thus, in
determined in STEP 2 in the box for the month in which the
Example 2, you would enter in box 1 “27%” (0.27) of the
credit allowance date occurred.
amount determined in STEP 1.
Example 1. You issued a qualified energy conservation
Note. For new clean renewable energy bonds issued under
bond on March 15, 2017. For the Form 1097-BTC statement
section 54C and qualified energy conservation bonds issued
for the March 15, 2018, credit allowance date, due to
under section 54D, report the credit amount after the 70%
recipient by May 15, you would enter 25% (0.25) of the
limit has been applied.
amount computed in STEP 1 in 5c. For the Form 1097-BTC
statement for the June 15, 2018, credit allowance date, due
Box 6. Comments
to recipient by August 15, you would enter 25% (0.25) of the
amount computed in STEP 1 in box 5f. For the Form
Enter any additional information.
1097-BTC statement for the September 15, 2018, credit
-4-
Instructions for Form 1097-BTC (2018)

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