Use the following procedures for non-refundable credit inquiries from a taxpayer.

When a taxpayer inquires by telephone:

Follow this table for all taxpayer inquiries regarding non-refundable credits. Refer to subsections in this section for specific credit information and procedures.

If written documentation is required, advise taxpayer to send it to the site receiving the contact.

Math verify the form or schedule, if one is required.

If the form, schedule, or documentation is incomplete and cannot be perfected with available information, follow claim processing in IRM 21.5.3.4, General Claims Procedures.

If the credit requires a qualifying child, use CC INOLES to verify the name control, TIN, and date of birth of the qualifying child.

Estimated tax penalty is not changed when applying a non-refundable credit.

Adjust the tax account with Transaction Code (TC) 29X, Reason Code 036, (RC 035 for Education credits), and the appropriate Source Code and blocking series.

If a taxpayer paid someone to care for his/her child, spouse, or dependent, the taxpayer may be able to reduce his/her tax by claiming the Child and Dependent Care Credit on his/her federal income tax return.

A completed Form 2441, Child and Dependent Care Credit, must be submitted when claiming the credit.

Taxpayer must file a joint return, if married, unless an exception applies.

Taxpayer must furnish a valid TIN for every qualifying person. This number may be:

A qualifying person is a taxpayer's:

Effective for Tax Year 2006 and subsequent years, Notice 2005-42 allows a taxpayer to carry over unused dependent care benefits to be used in a grace period in the following year.

See Publication 17, Your Federal Income Tax For Individuals, and/or Publication 503, Child and Dependent Care Expenses, for detailed information.

If a taxpayer and/or spouse is age 65 or older at the end of the tax year or any age if retired on permanent and total disability and have taxable disability income, the taxpayer may be able to reduce his/her tax by claiming the Credit for the Elderly or Permanently and Totally Disabled on his/her federal income tax return.

Schedule R (Form 1040) as a write-in on Line 53 or Schedule 3 (Form 1040A) must be submitted.

When adjusting the tax account:

See Publication 17, Your Federal Income Tax (For Individuals), Publication 524, Credit for the Elderly or the Disabled, or Publication 554, Tax Guide for Seniors, for detailed information.

Taxpayer may claim an education credit for qualified tuition and related expenses paid to an eligible educational institution, including accredited colleges, universities, and vocational schools.

A taxpayer can elect, for any year, only one of the credits for each student.

If a taxpayer claims an exemption for a dependent who is an eligible student, then only that taxpayer can claim a credit for the student's qualified education expenses.

Taxpayers cannot claim the credit if:

Students under age 24 do not qualify for the refundable credit if all the following apply:

The credit may be for expenses of taxpayer, taxpayer's spouse, or taxpayer's eligible dependent claimed on taxpayer's return.

All students claimed on Form 8863 must have a valid Taxpayer Identification Number (TIN). A valid TIN includes an SSN, ITIN or ATIN.

Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), must be submitted.

For Tax Year 2005 or 2006, the Gulf Opportunity Zone Act of 2005, temporarily expanded the Hope and Lifetime learning credits for students attending (i.e., enrolled and paying tuition at) an eligible education institution located in the Gulf Opportunity Zone.

For Tax Year 2008 and 2009, the Heartland Disaster Tax Relief Act of 2008, temporarily expanded the Hope and Lifetime learning credits for students attending an eligible education institution located in the Midwestern disaster area.

See Publication 970, Tax Benefits for Education, for more information.

To qualify for the credit, taxpayer must have paid or accrued income tax in a foreign country or U.S. possession.

Taxpayer may claim the credit against U.S. income tax or deduct the foreign tax as an itemized deduction.

If the change in the credit is the result of a refund of foreign taxes paid, manually compute and assess interest per IRM 20.2, Interest. Contact taxpayer to determine the refund date, if necessary.

Form 1116, Foreign Tax Credit, must be submitted unless all of the taxpayer's foreign source income is passive and total creditable foreign taxes are not more than $300 ($600 if married filing a joint return).

Reassign all claims for the foreign tax credit to IMF International. Send through the Correspondence Imaging System (CIS) via IMF International, or mail to:
2970 Market Street
1 D08.113
Philadelphia, PA 19104

When adjusting the tax account:

See Form 1116, Foreign Tax Credit, Publication 17, Your Federal Income Tax (For Individuals), and Publication 514, Foreign Tax Credit for Individuals, for detailed information.

To qualify for the credit, taxpayers must be engaged in the domestic production and sale of liquid, gaseous or solid synthetic fuels produced from coal, or of gas produced from biomass, per IRC Section 45K.

For Tax Year 2006 and subsequent, the credit is claimed as a general business credit on Form 3800, General Business Credit.

For Tax Year 2005 the credit is figured on Form 8907.

For Tax Year 2004 and prior, the taxpayer must include a credit computation with the claim; a specific form/schedule is not required.

When adjusting the tax account:

To qualify for the credit, the taxpayer must have placed a qualified plug-in electric or electric vehicle into service during the tax year.

Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit, must be submitted. (The credit must be carried to Form 3800, General Business Credit, for purposes of figuring the allowable general business credit.)

Notice 2009–58 allows manufacturers to certify to the IRS that a particular vehicle meets the requirements of §30 of the Internal Revenue Code. Taxpayers purchasing such vehicles can rely on the domestic manufacturer's certification that indicates a particular make, model, and model year of a vehicle qualifies as a plug-in electric motor vehicle under §30, and that specifies the amount of the credit allowable with respect to the vehicle.

To qualify for the credit, the taxpayer must have placed a qualified plug-in electric or electric vehicle in service during the tax year. The credit is for both business use and personal use of a qualified vehicle.

Form 8834, Qualified Plug-In Electric or Electric Vehicle Credit, must be submitted. For business uses, the credit must be carried to Form 3800, General Business Credit, for purposes of figuring the allowable general business credit. For personal uses, the amount of line 23 of the form is carried to line 53 of the Form 1040 (line 50 of Form 1040NR) to claim the credit.

When adjusting the tax account:

See Form 8834, Qualified Plug-In Electric or Electric Vehicle Credit, or Publication 17, Your Federal Income Tax (For Individuals), for detailed information.

The investment credit consists of the sum of the rehabilitation credit, energy credit, qualifying advanced coal project credit, qualifying therapeutic discovery project credit, qualifying advanced energy project credit and qualifying gasification project credit.

Form 3800, General Business Credit, must also be filed if two or more credits are claimed.

Section 9023, Qualifying Therapeutic Discovery Project, of the Patient Protection and Affordable Care Act, PL 111-148, added new IRC 48D. The provision added the Qualifying Therapeutic Discovery Project Credits to the investment credit for qualified investment in qualified therapeutic discovery projects made in 2009 and 2010. See Notice 2010-45, IRB 2010-23, for more specific information on the Qualifying Therapeutic Discovery Project Credits.

Section 9023 also provides that if the amount of the credit exceeds the amount allowable, the excess must be recaptured. Form 4255, Recapture of Investment Credit, should be filed along with Form 1040X to report the recapture.

When adjusting the tax account:

See Form 3468, Investment Credit, for detailed information.

To qualify for the credit, the taxpayer must have paid or incurred wages for employees who are certified as members of a targeted group and who began work after September 30, 1996 and before January 1, 2011.

PL 112–56 extends the credit for those employers hiring qualified veterans on or before December 31, 2012. For more information, see IRM 21.7.4.4.8.3.2.6, Form 5884, Work Opportunity Credit - Section 261, Returning Heroes and Wounded Warriors Work Opportunity Tax Credits, of the VOW to Hire Heroes Act of 2011, Title II, subtitle D, of Pub. L. No. 112-056.

For Tax Year 2005 and prior, Form 5884, Work Opportunity Credit, must be submitted. (The credit must be carried to Form 3800 if two or more credits are claimed.)

When adjusting the tax account:

See Form 5884, Work Opportunity Credit, and instructions for detailed information.

Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit, is used to claim the credit for alcohol cellulosic biofuel fuels used, or sold for use, as fuel in a trade or business. See IRM 21.7.4.4.8.3.3, Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit , for more information.

The credits are effective for fuels sold or used after December 31, 2004. For prior year credits, see previous versions of the Form 6478 and instructions. These credits expired on December 31, 2011.

Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit, must be submitted. (For Tax Year 2004 and prior the credit must be carried to Form 3800 if two or more credits are claimed.)

When adjusting the tax account:

See Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit, and its instructions for detailed information.

To qualify for the credit, taxpayer must have qualified research expenses paid or incurred in carrying on an active trade or business.

For Tax Year 2006 and subsequent, the credit must be claimed as a general business credit on Form 3800, General Business Credit.

Unless a taxpayer's only source of credit is from a pass-through entity, Form 6765, Credit for Increasing Research Activities, must be submitted.

For taxable years including a research credit suspension period, a portion of the research credit may be suspended. See IRM 21.7.4.4.8.3.4.1, Research Credit Suspension Periods, for information and procedures involving the suspension periods.

When adjusting the tax account:

See Form 6765, Credit for Increasing Research Activities, for detailed information.

To qualify for the credit, taxpayers must own residential rental buildings providing low-income housing.

For Tax Year 2006 and subsequent, the credit must be claimed as a general business credit on Form 3800, General Business Credit. Generally, the Form 8586 must also be filed unless the taxpayer is exempt from filing this form. See Form 8586 for details.

Form 8609, Low-Income Housing Credit Allocation and Certification, is issued by the state or local housing credit agency authorized to make credit allocations. A building owner is required to make a one-time submission of this form to the Low-income Housing Credit Unit at the Philadelphia Campus to the address specified in the instructions of the form.

When adjusting the tax account:

See Form 8586, Low Income Housing Credit, and Form 8609, Low-Income Housing Credit Allocation and Certification, for detailed information.

To qualify for the credit, the taxpayer must own an operating mineral interest and have qualified enhanced oil recovery costs.

For Tax Year 2006 and subsequent, the credit is completely phased out. Any credit carried over from years prior to 2006 must be claimed as a general business credit on Form 3800, General Business Credit.

For Tax Year 2005 and prior, Form 8830, Enhanced Oil Recovery Credit, must be submitted to claim the credit. (The credit must be carried to Form 3800, General Business Credit, if two or more credits are claimed.)

When adjusting the tax account:

See Form 8830, Enhanced Oil Recovery Credit, for detailed information.

To qualify for the credit, the taxpayer must have an eligible small business which has eligible access expenditures.

If Form 8826, Disabled Access Credit, is filed with an amended return, one of the following must be present on the original return in order to allow the credit:

If these schedules or items are not present, disallow the credit and use the following language when explaining the disallowance:
"We have not allowed your claim for the Disabled Access Credit. The Disabled Access Credit is a business credit. There is no indication of business ownership or activity based on the information for the tax year."

For Tax Year 2006 and subsequent, the credit must be claimed as a general business credit on Form 3800, General Business Credit.

When adjusting the tax account:

See Form 8826, Disabled Access Credit, for detailed information.

To qualify for the credit, taxpayer must sell electricity produced in the U.S. or U.S. possessions from qualified energy resources at a qualified facility to an unrelated person.

For Tax Year 2006 and subsequent, the credit, which is figured in Part II of Form 8835, can be claimed as a general business credit on Form 3800, General Business Credit. For Tax Year 2006 and subsequent, the credit is figured in Part II of the Form 8835.

When adjusting the tax account:

See Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit, for detailed information.

To qualify for the credit, taxpayer must be an employer who pays wages and health insurance costs for American Indians who are qualified employees.

For Tax Year 2006 and subsequent, the credit can be claimed as a general business credit on Form 3800, General Business Credit.

When adjusting the tax account:

See Form 8845, Indian Employment Credit, for detailed information.

To qualify for the credit, the taxpayer must be an employer and have:

For Tax Year 2006 and subsequent, the credit can be claimed as a general business credit on Form 3800, General Business Credit.

When adjusting the tax account:

See Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips, for detailed information.

The credit is 50 percent of the qualified testing expenses paid or incurred by the taxpayer during the taxable year.

For Tax Year 2006 and subsequent, the credit must be claimed as a general business credit on Form 3800, General Business Credit.

When adjusting the tax account:

See Form 8820, Orphan Drug Credit, for detailed information.

To qualify for the credit, the taxpayer must have made qualified contributions to selected community development corporations.

For Tax Year 2006 and subsequent, the credit must be claimed as a general business credit on Form 3800, General Business Credit.

When adjusting the tax account:

See Form 8847, Credit for Contributions to Selected Community Development Corporations, for detailed information.

To qualify for the credit, the taxpayer must have made payments into the Trans-Alaska Pipeline Liability Fund.

There is no supporting schedule or form for this credit. Taxpayer must claim credit on Form 3800, General Business Credit.

See IRM 21.7.4.4.8.3.16, Trans-Alaska Pipeline Liability Fund Credit, for more details.

When adjusting the tax account:

To qualify for the credit, taxpayer must have paid or incurred qualified wages, which can include certain training or educational expenses, to a qualified empowerment zone employee who lives and works in an empowerment zone.

Form 8844, Empowerment Zone and Renewal Community Employment Credit, must be submitted. Beginning with 2008 tax returns, the data on Form 8844 (for IMF) is carried to Form 3800.

When adjusting the tax account:

See Form 8844, Empowerment Zone and Renewal Community Employment Credit, for detailed information.

To qualify for the credit taxpayer must have paid or incurred wages to an employee who:

For Tax Year 2006 and subsequent, the credit can be claimed as a general business credit on Form 3800, General Business Credit, only from partnerships, S-Corporations or Estates and Trusts.

When adjusting the tax account:

See Form 8861, Welfare-to-Work Credit, and its instructions for detailed information.

If more than one of the credits listed on Form 3800, General Business Credit, are claimed, the total credit must be summarized on Form 3800 and if applicable, the appropriate credit form must be attached.

If attached, Form 8582–CR, Passive Activity Credit Limitations, must be math verified.

For Tax Year 1997 and prior, excess business credits may be carried back three years and then carried forward fifteen years. Credits arising in 1998 and subsequent, may only be carried back one year and then carried forward twenty years as a result of the Restructuring and Reform Act of 1998 (IRS RRA 98).

Form 3800, General Business Credit, must be math verified.

When adjusting the tax account:

See Form 3800, General Business Credit, and its instructions for detailed information.

To qualify for the credit, the taxpayer must have:

Form 8801, Credit for Prior Year Minimum Tax - Individuals, Estates, and Trusts, may be attached but is not required in most cases.

When adjusting the tax account:

Beginning in Tax Year 2007, if a taxpayer has any unused minimum tax credit carryforward from 2004 or earlier years, he/she may qualify for a refund of that credit amount. See IRM 21.6.3.4.2.10, Refundable Credit for Prior Year Minimum Tax - Individuals, Estates, and Trusts, Form 8801, for information on the refundable portion of this credit.

See Form 8801, Credit for Prior Year Minimum Tax - Individuals, Estates, and Trusts, for detailed information.

Beginning with the 1998 tax year, a credit is allowed for each qualifying child under age 17. The credit amounts will increase according to the following:

A portion of the child tax credit may be refundable. See IRM 21.6.3.4.2.8, Form 8812, Additional Child Tax Credit, for additional information.

A taxpayer who paid qualified expenses to adopt an eligible child and the adoption became final during the tax year may be able to reduce their tax liability by claiming the Adoption Credit on Form 8839, Qualified Adoption Expenses. This is not a refundable credit for tax periods prior to 2010.

Taxpayers are also entitled to claim a credit for qualified adoption expenses paid during the immediately preceding tax year, if the child was a citizen or resident of the U.S. when the adoption process began. In the case of a child with special needs, the credit can be claimed in the year the adoption is final even if no qualified expenses are paid.

If the taxpayer is unable to provide complete information in Part I, Form 8839, Qualified Adoption Expenses, because they were unsuccessful or the adoption was not final by the end of the tax year, they are instructed to complete what information they can on line 1 and to enter "See Attached Statement" in the columns for which they do not have information. They are instructed to enter the name and address of any agency or agent (such as an attorney) that assisted in the attempted adoption on the bottom of page 2. If this information is incomplete, follow instructions in IRM 21.5.3.4, General Claims Procedures.

The eligible child must be:

All tax year 2009 and prior adoption credit claims will be worked at the Andover Campus. Control to category SPC1. Reassign through CIS to IDRS number 0830105044.

When adjusting the tax account:

Taxpayers may file amended returns for earlier periods to release carryforward of the adoption credit.

When working an adoption credit carryforward case, determine if all tax periods are controlled to the earliest tax period first and worked by one employee. Work the case as follows:

If a statute period claim comes in showing no change in tax liability or refundable credits and only a carryforward:

If a statute period claim comes in requesting a change in tax liability or refundable credits, follow procedures in IRM 25.6.1, Statute of Limitations Processes and Procedures.

If the statute period claims are returned to Accounts Management, process as follows:

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To qualify for the credit, a taxpayer must have a mortgage credit certificate (MCC) issued under a qualified MCC program in connection with the taxpayer's principal residence.

Form 8396 must be submitted and math verified.

When adjusting the tax account:

See Form 8396, Mortgage Interest Credit, Publication 17, Your Federal Income Tax (For Individuals), or Publication 530, Tax Information for Homeowners, for detailed information.

A taxpayer who bought a home in the District of Columbia (D.C.) may be able to reduce his/her tax by claiming the District of Columbia First-Time Homebuyer Credit on his/her federal income tax return.

When adjusting the tax account:

See Form 8859, District of Columbia First-Time Homebuyer Credit, or Publication 17, Your Federal Income Tax (For Individuals), for detailed information.

The Energy Policy Act of 2005 provides for a Nonbusiness Energy Property Credit and a Residential Energy Efficient Property Credit to qualified taxpayers who made energy efficient purchases.

The Nonbusiness Energy Property Credit provides taxpayers a credit for improving the energy efficiency of an existing home.

The Residential Energy Efficient Property Credit provides taxpayers a credit for adding qualified solar electric property, solar water heating equipment, small wind energy property, geothermal heat pump property, or a fuel cell power plant to his/her existing and newly constructed homes in the United States.

When adjusting the tax account:

See Form 5695, Residential Energy Credits, for detailed information.

A taxpayer and/or spouse (if married filing jointly) who made one of the items below may be able to reduce his/her tax by claiming the Credit for Qualified Retirement Savings Contributions on his/her federal income tax return:

An eligible individual must be:

When adjusting the tax account:

See Form 8880, Credit for Qualified Retirement Savings Contributions, or Publication 17, Your Federal Income Tax (For Individuals), for detailed information.

For information concerning the Credit for Small Employer Pension Plan Startup Costs, see IRM 21.7.4.4.8.3.19, Form 8881, Credit for Small Employer Pension Plan Startup Costs.

For information concerning the Credit for Employer-Provided Childcare Facilities and Services, see IRM 21.7.4.4.8.3.18, Form 8882, Credit for Employer-Provided Childcare Facilities and Services.

For information concerning the New Markets Credit, see IRM 21.7.4.4.8.3.20, Form 8874, New Markets Credit.

Eligible holders of qualified zone academy bonds use Form 8860, Qualified Zone Academy Bond Credit, to claim the qualified zone academy bond credit.

Form 8860 must be attached and math verified.

When adjusting the tax account:

Refer to IRM 21.7.4.4.8.3.17, Form 8860, Qualified Zone Academy Bond Credit, or Form 8860, Qualified Zone Academy Bond Credit, for detailed information.

The Jobs and Growth Tax Relief Reconciliation Act of 2003 directed the Treasury to advance payment of an increase to the 2003 Child Tax Credit (CTC) to eligible taxpayers.

The IRS processed Advance Child Tax Credit checks based on original return data from posted Tax Year 2002 returns.

Notice 1319, Notice of Advance Payment of Increase of the 2003 Child Tax Credit, was mailed to all taxpayers who received the advance payment.

Form 8864, Biodiesel and Renewable Diesel Fuels Credit, is used to claim a credit for the tax year in which the sale or use occurs. The credit consists of:

For Tax Year 2006 and subsequent years the credit can be claimed as a general business credit on Form 3800, General Business Credit.

When adjusting the tax account:

See Form 8864, Biodiesel and Renewable Diesel Fuels Credit, for detailed information.

Form 8896, Low Sulfur Diesel Fuel Production Credit, generally is 5 cents for every gallon of low sulfur diesel fuel produced at a particular facility by a qualified small business refiner during the taxable year.

For Tax Year 2006 and subsequent, the credit can be claimed as a general business credit on Form 3800, General Business Credit.

When adjusting the tax account:

See Form 8896, Low Sulfur Diesel Fuel Production Credit, for detailed information.

Form 8900, Qualified Railroad Track Maintenance Credit, generally is 50 percent of the qualified railroad track maintenance expenditures paid or incurred by an eligible taxpayer during the taxable year.

For Tax Year 2006 and subsequent, the credit must be claimed as a general business credit on Form 3800, General Business Credit.

When adjusting the tax account:

See Form 8900, Qualified Railroad Track Maintenance Credit, for detailed information.

Form 8910, Alternative Motor Vehicle Credit, is used to claim a credit for the purchase of new qualifying alternative motor vehicles placed in service after December 31, 2008. Except for qualified fuel cell motor vehicles, this credit is not available after 2010, or for plug-in electric conversions made after 2011.

The credit can be claimed as a general business credit on Form 3800, General Business Credit, if the vehicle is property that is subject to an allowance for depreciation.

When adjusting the tax account:

See Form 8910, Alternative Motor Vehicle Credit, for detailed information.

Form 8911, Alternative Fuel Vehicle Refueling Property Credit, is used to claim a tax credit for a portion of the cost of qualified alternative fuel vehicle refueling property placed in service after December 31, 2005, and before January 1, 2012 (January 1, 2015, for hydrogen related property). The refueling property may be used in the taxpayer's trade or business or installed at the taxpayer's principal residence.

The credit can be claimed as a general business credit on Form 3800, General Business Credit, if the property is subject to an allowance for depreciation.

When adjusting the tax account:

See Form 8911, Alternative Fuel Vehicle Refueling Property Credit, for detailed information.