Instructions for IRS Form 1097-BTC "Bond Tax Credit"

This document contains official instructions for IRS Form 1097-BTC, Bond Tax Credit - a tax form released and collected by the Internal Revenue Service (IRS), a subdivision of the U.S. Department of the Treasury. An up-to-date fillable IRS Form 1097-BTC is available for download through this link.

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Download Instructions for IRS Form 1097-BTC "Bond Tax Credit"

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2019
Department of the Treasury
Internal Revenue Service
Instructions for Form
1097-BTC
Bond Tax Credit
Section references are to the Internal Revenue Code unless
Recipients of Form 1097-BTC from the bond issuer or
otherwise noted.
agent, such as brokers, nominees, mutual funds, or
partnerships, who are further distributing the credit must file
Future Developments
only one Form 1097-BTC per recipient or account,
aggregating credit from all applicable bonds.
For the latest information about developments related to
Form 1097-BTC and its instructions, such as legislation
Note. Issuers that elected to issue build America bonds
enacted after they were published, go to
IRS.gov/
(Direct Pay) under section 54AA(g) or specified tax credit
Form1097BTC.
bonds under section 6431(f) to receive a refundable credit
Reminders
under section 6431(a) in lieu of tax credits under section 54A
should not file Form 1097-BTC.
In addition to these specific instructions, you also should use
the 2019 General Instructions for Certain Information
Definitions
Returns. Those general instructions include information
about the following topics.
Tax credit bond. Generally, a tax credit bond is an
Who must file.
obligation issued under sections 54, 54A, 54AA, 1397E, or
When and where to file.
1400N(l) that entitles the taxpayer holding such bond on one
Electronic reporting.
or more credit allowance dates occurring during any tax year
Corrected and voided returns.
to a credit against the federal income tax imposed for that tax
Statements to recipients.
year.
Taxpayer identification numbers (TINs).
Public Law Number 115-97, 131 Stat. 2054 (2017),
Backup withholding.
repealed sections 54, 54A-F, and 54AA effective for
!
Penalties.
bonds issued after December 31, 2017.
Other general topics.
CAUTION
Qualified tax credit bond. Qualified tax credit bonds under
You can get the general instructions from
General
section 54A include new clean renewable energy bonds
Instructions for Certain Information Returns
at
IRS.gov/
under section 54C, qualified energy conservation bonds
1099GeneralInstructions
or go to IRS.gov/Form1097BTC.
under section 54D, qualified zone academy bonds under
Online fillable forms. You may fill out the form, found
section 54E, and qualified school construction bonds under
online at IRS.gov/Form1097BTC, and send Copy B to the
section 54F.
recipient. For filing with the IRS, follow your usual procedures
New clean renewable energy bond. An obligation issued
for filing electronically if you are filing 250 or more forms. If
before January 1, 2018, that is part of an issue, 100% of the
you are filing this form on paper due to a low volume of
available project proceeds of which are to be used for capital
recipients, for this form only, you may send in the
expenditures incurred by governmental bodies, public power
black-and-white Copy A with a Form 1096 that you print from
providers, or cooperative electric companies for one or more
the IRS website.
qualified renewable energy facilities, as defined in section
Specific Instructions
54C. The annual credit allowed is 70% of the annual credit
amount determined by applying section 54A(b).
Issuers of certain tax credit bonds (or their agents) and
Qualified energy conservation bond. An obligation issued
recipients of Form 1097-BTC from the bond issuer or agent,
before January 1, 2018, that is part of an issue, 100% of the
such as mutual funds or partnerships, who are further
available project proceeds of which are to be used for one or
distributing the credit must file Form 1097-BTC for each tax
more qualified energy conservation purposes, as defined in
credit distributed from the following tax credit bonds.
section 54D. The annual credit allowed is 70% of the annual
New clean renewable energy bonds.
credit amount determined by applying section 54A(b).
Qualified energy conservation bonds.
Qualified zone academy bonds.
Qualified zone academy bond. An obligation issued
Qualified school construction bonds.
before January 1, 2018, that is part of an issue, 100% of the
Clean renewable energy bonds.
available project proceeds of which are to be used for a
Build America bonds (Tax Credit).
qualified purpose with respect to a qualified zone academy
established by an eligible local education agency, as
Filings of Form 1097-BTC with respect to a bond, by the
provided in section 54E; or an obligation that is part of an
issuer or the issuer's agent, must be made on a separate
issue, 95% or more of the proceeds of which are to be so
Form 1097-BTC for each bond.
used and issued before October 4, 2008, as provided in
For tax credit bonds issued with two or more maturities,
section 1397E.
each maturity must be reported separately on the Form
1097-BTC issued by the bond issuer or its agent.
Oct 09, 2018
Cat. No. 54657F
2019
Department of the Treasury
Internal Revenue Service
Instructions for Form
1097-BTC
Bond Tax Credit
Section references are to the Internal Revenue Code unless
Recipients of Form 1097-BTC from the bond issuer or
otherwise noted.
agent, such as brokers, nominees, mutual funds, or
partnerships, who are further distributing the credit must file
Future Developments
only one Form 1097-BTC per recipient or account,
aggregating credit from all applicable bonds.
For the latest information about developments related to
Form 1097-BTC and its instructions, such as legislation
Note. Issuers that elected to issue build America bonds
enacted after they were published, go to
IRS.gov/
(Direct Pay) under section 54AA(g) or specified tax credit
Form1097BTC.
bonds under section 6431(f) to receive a refundable credit
Reminders
under section 6431(a) in lieu of tax credits under section 54A
should not file Form 1097-BTC.
In addition to these specific instructions, you also should use
the 2019 General Instructions for Certain Information
Definitions
Returns. Those general instructions include information
about the following topics.
Tax credit bond. Generally, a tax credit bond is an
Who must file.
obligation issued under sections 54, 54A, 54AA, 1397E, or
When and where to file.
1400N(l) that entitles the taxpayer holding such bond on one
Electronic reporting.
or more credit allowance dates occurring during any tax year
Corrected and voided returns.
to a credit against the federal income tax imposed for that tax
Statements to recipients.
year.
Taxpayer identification numbers (TINs).
Public Law Number 115-97, 131 Stat. 2054 (2017),
Backup withholding.
repealed sections 54, 54A-F, and 54AA effective for
!
Penalties.
bonds issued after December 31, 2017.
Other general topics.
CAUTION
Qualified tax credit bond. Qualified tax credit bonds under
You can get the general instructions from
General
section 54A include new clean renewable energy bonds
Instructions for Certain Information Returns
at
IRS.gov/
under section 54C, qualified energy conservation bonds
1099GeneralInstructions
or go to IRS.gov/Form1097BTC.
under section 54D, qualified zone academy bonds under
Online fillable forms. You may fill out the form, found
section 54E, and qualified school construction bonds under
online at IRS.gov/Form1097BTC, and send Copy B to the
section 54F.
recipient. For filing with the IRS, follow your usual procedures
New clean renewable energy bond. An obligation issued
for filing electronically if you are filing 250 or more forms. If
before January 1, 2018, that is part of an issue, 100% of the
you are filing this form on paper due to a low volume of
available project proceeds of which are to be used for capital
recipients, for this form only, you may send in the
expenditures incurred by governmental bodies, public power
black-and-white Copy A with a Form 1096 that you print from
providers, or cooperative electric companies for one or more
the IRS website.
qualified renewable energy facilities, as defined in section
Specific Instructions
54C. The annual credit allowed is 70% of the annual credit
amount determined by applying section 54A(b).
Issuers of certain tax credit bonds (or their agents) and
Qualified energy conservation bond. An obligation issued
recipients of Form 1097-BTC from the bond issuer or agent,
before January 1, 2018, that is part of an issue, 100% of the
such as mutual funds or partnerships, who are further
available project proceeds of which are to be used for one or
distributing the credit must file Form 1097-BTC for each tax
more qualified energy conservation purposes, as defined in
credit distributed from the following tax credit bonds.
section 54D. The annual credit allowed is 70% of the annual
New clean renewable energy bonds.
credit amount determined by applying section 54A(b).
Qualified energy conservation bonds.
Qualified zone academy bonds.
Qualified zone academy bond. An obligation issued
Qualified school construction bonds.
before January 1, 2018, that is part of an issue, 100% of the
Clean renewable energy bonds.
available project proceeds of which are to be used for a
Build America bonds (Tax Credit).
qualified purpose with respect to a qualified zone academy
established by an eligible local education agency, as
Filings of Form 1097-BTC with respect to a bond, by the
provided in section 54E; or an obligation that is part of an
issuer or the issuer's agent, must be made on a separate
issue, 95% or more of the proceeds of which are to be so
Form 1097-BTC for each bond.
used and issued before October 4, 2008, as provided in
For tax credit bonds issued with two or more maturities,
section 1397E.
each maturity must be reported separately on the Form
1097-BTC issued by the bond issuer or its agent.
Oct 09, 2018
Cat. No. 54657F
Statement to Recipient
Qualified school construction bond. An obligation issued
before January 1, 2018, that is part of an issue, 100% of the
If required to file Form 1097-BTC, you must furnish a
available project proceeds of which are to be used for the
statement to the recipient quarterly for each credit amount
construction, rehabilitation, or repair of a public school facility
indicated on or before the 15th day of the 2nd calendar
or for the acquisition of land on which such a facility is to be
month after the close of the calendar quarter in which the
constructed with the proceeds, as provided in section 54F.
credit was allowed.
Clean renewable energy bond. An obligation issued after
Quarterly Furnishing Dates
December 31, 2005, and before January 1, 2010, that is part
of an issue, 95% or more of the proceeds of which are used
for capital expenditures incurred by qualified borrowers for
Reporting period:
To recipient (on or before):
one or more qualified projects, as defined in section 54.
1
Quarter: January–March
May 15*
st
Build America bond (Tax Credit). An obligation issued
2
Quarter: April–June
August 15*
nd
after February 17, 2009, and before January 1, 2011, issued
3
Quarter: July–September
November 15*
rd
by a state or local government (excluding private activity
Annual/4
Quarter: October–
February 15*
bonds under section 141) as defined in section 54AA(d).
th
December
Who Must Receive Form 1097-BTC
*Dates may change due to weekends or holidays.
Each person who is allowed a tax credit as a holder, directly
or indirectly, of a tax credit bond or a stripped credit coupon
For the first 3 quarters, report to the recipient only the
on one or more credit allowance dates during the calendar
amounts for the months of the applicable quarter. Box 1
year in an amount of at least $10 must be issued Form
should not be completed and box 6 is optional.
1097-BTC.
You are not required to furnish a separate report solely for
Credit Allowance Dates
the 4th quarter because the 4th quarter amounts are reported
The tax credit from tax credit bonds or stripped credit
with the annual filing. For the annual filing, report the credits
coupons is allowed on each credit allowance date for which
for each month in boxes 5a–5l; report the total of those
the bond was outstanding or to which the stripped credit
amounts in box 1; and complete the rest of the form as
coupon corresponds. For qualified tax credit bonds and
applicable. Furnish the annual filing to the recipient by
clean renewable energy bonds, the credit allowance dates
February 18, 2020.
are March 15, June 15, September 15, December 15, and
If any amounts previously furnished for the first 3 quarters
the last day on which the bond is outstanding. For bonds
need to be corrected, report the correct amounts for the
issued during the 3-month period ending on a credit
annual reporting and explain the correction to the recipient;
allowance date, the amount of the credit is determined
no explanation is required for the IRS filing.
ratably based on the portion of the 3-month period during
For the report furnished to the recipient (quarterly or
which the bond is outstanding. The same ratable
annual), you may use Copy B or your own substitute
determination of credit applies when a bond is redeemed or
statement reporting all the same applicable information (the
matures. For build America bonds (Tax Credit), the credit
reporting for the first 3 quarters may be furnished
allowance dates are the interest payment dates. For qualified
zone academy bonds issued before October 4, 2008, the
electronically). See Pub. 1179 for specific rules about
credit allowance date is the last day of the 1-year period
providing substitute statements to recipients.
beginning on the issue date of the bond and each
The IRS encourages Form 1097-BTC issuers to provide
anniversary of such day thereafter.
the credit information to the recipient monthly if applicable,
and as soon after the end of the month in which a credit
The tax credit allowed to holders of any tax credit bonds or
arises as possible.
stripped credit coupons is treated as interest which is
included in gross income and must be reported as interest
For more information about the requirement to furnish a
income on a Form 1099-INT or Form 1099-OID, as
statement to the recipient, see part M in the 2019 General
applicable. For more information on reporting the tax credit
Instructions for Certain Information Returns.
treated as interest income paid from tax credit bonds, see the
Bond issuer. If issuing the Form 1097-BTC as an issuer of
Instructions for Forms 1099-INT and 1099-OID.
the bond or its agent, box 2a of the form will always reflect
code “C” and box 2b must reflect the CUSIP number for the
When To File
bond or stripped coupon, unless a CUSIP number was not
File Copy A of Form 1097-BTC with the IRS by February 28,
issued for the bond. See the instructions for boxes
2a
and
2020 (March 31, 2020, if filed electronically). See
Statement
2b.
to
Recipient, later, for furnishing statements to recipients.
Form 1097-BTC Issuer's Name, Address, and
Penalties for Failure To File
Telephone Number
There are penalties for failure to file correct information
Enter the name, street address, city or town, state or
returns by the due date and for failure to furnish correct
province, country, ZIP or foreign postal code, and telephone
payee statements. See part O in the 2019 General
number of the entity issuing the Form 1097-BTC.
Instructions for Certain Information Returns for details.
Failure to file Forms 1097-BTC also includes failure to file
Enter the entity's true name (as set forth in the legal
electronically, when required. For more information on
documents creating it). Enter the address of the entity's
penalties for failure to file electronically, see part F in the
principal office or place of business. Include the suite, room,
2019 General Instructions for Certain Information Returns.
or other unit number after the street address. If the post office
-2-
Instructions for Form 1097-BTC (2019)
does not deliver mail to the street address and the entity has
the bond, or are an entity or a person that received or should
a P.O. box, show the box number instead.
have received a 2019 Form 1097-BTC for credit(s) that was
or should have been reported and that is distributing part or
Note. Do not use the address of the registered agent for the
all of that credit to others.
state in which the entity is incorporated. For example, if a
Box 1. Total
business is incorporated in Delaware or Nevada and the
corporation's principal office is located in Little Rock, AR, the
Enter the total amount of credits distributed to the recipient
corporation should enter the Little Rock address.
with respect to the amounts reported in boxes 5a–5l for the
If the entity receives its mail in care of a third party (such
calendar year.
as an accountant or an attorney), enter for the street address
This box should be only filled out when filing Copy A and
“C/O” followed by the third party's name and street address
when the annual statement (Copy B of the form) is sent to the
or P.O. box.
recipient. See
Statement to
Recipient, earlier.
Form 1097-BTC Issuer's TIN
Box 2a. Code
Enter the Form 1097-BTC issuer's TIN, such as an employer
Enter the unique identification number code. Enter “C” for
identification number (EIN). Do not truncate the Form
CUSIP number, “A” for account number, and “O” if the unique
1097-BTC issuer's TIN. An issuer that does not have an EIN
identification number is not an account number or a CUSIP
should apply for one. See Form SS-4, Application for
number, such as a self-provided identification number. If you
Employer Identification Number, and its separate
checked the first box under Form 1097-BTC issuer, and a
instructions, available at IRS.gov. Applications can be
CUSIP number is assigned to the bond(s), enter “C.” If no
submitted online, by phone, fax, or mail.
CUSIP number is assigned to the bond(s), and you checked
Truncating Recipient's TIN on Recipient
the first box under Form 1097-BTC issuer, use the account
number as the unique identifier and enter “A” or “O” if you are
Statements
using any other unique identifying number. See
Box 2b.
Pursuant to Regulations section 301.6109-4, all filers of this
Unique Identifier
next.
form may truncate a recipient's TIN (social security number
(SSN), employer identification number (EIN), individual
Box 2b. Unique Identifier
taxpayer identification number (ITIN), or adoption taxpayer
The unique identification number is assigned by the Form
identification number (ATIN)) on recipient statements.
1097-BTC issuer and is limited to 39 alphanumeric
Truncation is not allowed on any documents the filer files with
characters. It can be the CUSIP number, account number, or
the IRS. A filer's TIN may not be truncated on any form. See
any other unique identification number by which you track the
part J in the 2019 General Instructions for Certain Information
bond transactions.
Returns.
For a bond issuer (or its agent) filing the 2019 Form
Recipient's TIN
1097-BTC for a bond, the unique identification number must
Enter the TIN of the recipient of the distributed (or stripped)
start with the CUSIP number(s), if available, and may be
credit from the tax credit bond. Do not truncate the recipient's
expanded by the account number or any other self-provided
TIN on the form filed with the IRS. Truncation of the
number(s). If a CUSIP number was not issued for the bond,
recipient's TIN is allowed on the statement to the recipient.
the bond issuer may use or devise its own unique identifier,
See the 2019 General Instructions for Certain Information
preferably the account number or other reference number by
Returns.
which you track and account for the bond transaction. A
recipient of a Form 1097-BTC that issues its own Form
Recipient's Name
1097-BTC to further distribute the credit may use or devise
Enter the name of the recipient of the distributed (or stripped)
its own unique identifier using whatever means it deems
credit from the tax credit bond. If not an individual, enter the
best.
entity's true name (as set forth in the legal documents
Box 3. Bond Type
creating it).
Enter code “101” for clean renewable energy bonds issued
Recipient's Street Address (Including Apt. No.)
under section 54. Enter code “199” for all other bonds.
Enter the street address, city or town, state or province,
Multiple bond types can be entered on one Form
country, and ZIP or foreign postal code of the recipient's
1097-BTC, other than clean renewable energy
TIP
principal residence, office, or place of business. Include the
bonds. Credits from clean renewable energy bonds
apartment, suite, room, or other unit number after the street
must be reported on a separate Form 1097-BTC.
address. If the post office does not deliver mail to the street
address and the entity has a P.O. box, show the box number
Box 4.
instead.
Reserved.
Note. Do not use the address of the registered agent for the
state in which the recipient is incorporated.
Boxes 5a–5l.
If the recipient receives its mail in care of a third party
Enter the amount of credit allowed for each month during the
(such as an accountant or an attorney), enter for the street
calendar year, calculated by using STEPS 1 and 2, following.
address “C/O” followed by the third party's name and street
STEP 1. For each recipient, multiply the outstanding face
address or P.O. box.
amount of the qualified tax credit bond, clean renewable
Check, as applicable, whether you are the issuer of the
energy bond, or qualified zone academy bond issued before
bond (or its agent) filing the initial 2019 Form 1097-BTC for
October 4, 2008, by the applicable credit rate. The
-3-
Instructions for Form 1097-BTC (2019)
outstanding face amount of the bond is the face amount of
determined in STEP 1 in box 5l and 100% (1.0) of the credit
the bond minus any principal that has been paid. The credit
amount determined in STEP 1 in box 1.
rate for the qualified tax credit bond, clean renewable energy
However, the 25% will be prorated for any credit
bond, or qualified zone academy bond issued before
allowance date if a clean renewable energy bond or qualified
October 4, 2008, is the rate published on the Treasury Direct
tax credit bond is issued, redeemed, or matures during the
website under “IRS Tax Credit Bond Rates” at
3-month period ending on a credit allowance date with
TreasuryDirect.gov/govt/rates/rates_irstcb.htm
for the first
respect to which you are reporting the credit. The percentage
day on which there is a binding contract in writing for the sale
of credit allowed for that credit allowance date is prorated for
or exchange of the bond.
the number of days the bond was outstanding during the
The credit rate for qualified zone academy bonds issued
3-month period.
before July 1, 1999, is 110% (1.10) of the long-term
See
Caution
regarding the repeal of sections 54, 54A, and
applicable federal rate (AFR), compounded annually, for the
54AA, earlier.
month and year the bond is issued. The IRS announces the
Example 2. A qualified zone academy bond that you
long-term AFR monthly in a series of revenue rulings
issued matures on March 23, 2019. Since the bond was not
published in the Internal Revenue Bulletin.
outstanding for the entire 3-month period on June 15, 2019,
For build America bonds (Tax Credit), multiply by 35%
the prorated portion of the 25% is figured by dividing (a) the
(0.35) the amount of interest payable with respect to the
number of days the bond was outstanding beginning on the
interest payment date for which you are filing Form
day after the prior (March 15) credit allowance date and
1097-BTC or sending a statement to the credit recipient.
ending on March 23, 2019, by (b) the number of days
Enter the credit amount so determined in boxes 5a–5l for the
included in the 3-month period beginning on the day after the
month in which the interest payment date occurred. Thus, if
prior (March 15) credit allowance date and ending on the
the interest payment dates for a build America bond are June
next (June 15) credit allowance date. See Proration
30 and December 31, enter the credit amounts in boxes 5f
calculation below.
and 5l.
Proration calculation
For qualified zone academy bonds issued before October
4, 2008, enter the amount so determined in the box 5 that
corresponds to the credit allowance date. When filing the
8 days (number of days from March
annual Form 1097-BTC with the IRS, enter the same amount
16 through March 23)
= 0.087 X 0.25 = 2% (0.02)
in box 1.
92 days (number of days from
March 16 through June 15)
STEP 2. For qualified tax credit bonds or clean renewable
energy bonds only, multiply the credit amount so determined
in STEP 1 by 25% (0.25) for each credit allowance date you
Thus, for the credit allowance date with respect to the
hold a qualified tax credit bond or clean renewable energy
3-month period in which the bond matures, you would
bond during your tax year. Enter the credit amount
multiply the credit amount determined in STEP 1 by the
determined in STEP 2 in the box for the month in which the
prorated percentage. In Example 2, for the 2nd quarter
credit allowance date occurred.
reporting period for 2019, due to the recipient by August 15,
Example 1. You issued a qualified energy conservation
you would enter the amount determined by multiplying 2%
bond on March 15, 2017. For the Form 1097-BTC statement
(0.02) with the credit amount determined in STEP 1 in box 5f.
for the March 15, 2019, credit allowance date, due to the
You would carry the same percentage to the Total annual
recipient by May 15, you would enter 25% (0.25) of the
credit reported in box 1 for the annual/4th quarter reporting
amount computed in STEP 1 in 5c. For the Form 1097-BTC
period filed with the IRS and sent to the recipient. Thus, in
statement for the June 15, 2019, credit allowance date, due
Example 2, you would enter in box 1 “27%” (0.27) of the
to the recipient by August 15, you would enter 25% (0.25) of
amount determined in STEP 1.
the amount computed in STEP 1 in box 5f. For the Form
Note. For new clean renewable energy bonds issued under
1097-BTC statement for the September 15, 2019, credit
section 54C and qualified energy conservation bonds issued
allowance date, due to the recipient by November 15, you
under section 54D, report the credit amount after the 70%
would enter 25% (0.25) of the amount computed in STEP 1 in
limit has been applied.
5i. For the annual Form 1097-BTC and December 15, 2019,
credit allowance date, due to the recipient by February 18
Box 6. Comments
and to the IRS by February 28, 2020 (March 31, 2020, if filed
electronically), enter 25% (0.25) of the credit amount
Enter any additional information.
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Instructions for Form 1097-BTC (2019)
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