Rate Change.   For tax years beginning after 2009, the applicable rate for the Domestic Production Activities Deduction (DPAD) described below under Purpose of Form has increased from 6% to 9%.

Oil-related qualified production activities income.   Section 199(d)(9) limits the DPAD of taxpayers with oil-related qualified production activities income for tax years beginning after 2009. See Oil-related qualified production activities income on page 3.

Cooperatives.   New instructions have been added for cooperatives with both patronage and nonpatronage income or losses. See Allocation of patronage and nonpatronage income and deductions on page 2, and the instructions for line 25 on page 11, for more information.

Future revisions of Form 8903.   The IRS will revise the December 2010, version of Form 8903 only when necessary. Continue to use the 2010 version of Form 8903 for tax years beginning after 2009 until a new revision is issued.

Activities in Puerto Rico.   The section 199 deduction for certain domestic production activities in Puerto Rico has been extended through tax years beginning before January 1, 2012. See Domestic Production Gross Receipts (DPGR) and Form W-2 Wages for more information about activities in Puerto Rico.