Enter the qualified investment in integrated gasification combined cycle property placed in service during the tax year for projects described in section 48A(d)(3)(B)(i). Eligible property is any property that is part of a qualifying advanced coal project using an integrated gasification combined cycle and is necessary for the gasification of coal, including any coal handling and gas separation equipment.

Integrated gasification combined cycle is an electric generation unit that produces electricity by converting coal to synthesis gas, which in turn is used to fuel a combined cycle plant to produce electricity from both a combustion turbine (including a combustion turbine/fuel cell hybrid) and a steam turbine.

Enter the qualified investment in advanced coal-based generation technology property placed in service during the tax year for projects described in section 48A(d)(3)(B)(ii). Eligible property is any property that is part of a qualifying advanced coal project (defined earlier) not using an integrated gasification combined cycle.

Enter the qualified investment in advanced coal-based generation technology property placed in service during the tax year for projects described in section 48A(d)(3)(B)(iii). Eligible property is any certified property located in the United States and that is part of a qualifying advanced coal project (defined earlier) that has equipment that separates and sequesters at least 65% of the project's total carbon dioxide emissions. This percentage increases to 70% if the credits are later reallocated by the IRS.

The credit will be recaptured if a project fails to attain or maintain the carbon dioxide separation and sequestration requirements. For details, see section 48A(i) and Notice 2011-24, 2011-14 I.R.B. 603, available at IRS.gov/irb/2011-14_IRB#NOT-2011-24.

Basis reduction.

If property is financed in whole or in part by subsidized energy financing or by tax-exempt private activity bonds, figure the credit by using the basis of such property reduced under the rules described in Basis reduction for certain financing, earlier.

Eligible property.

Eligible property is property that is necessary for the production of property described in section 48C(c)(1)(A)(i), for which depreciation or amortization is available and is tangible personal property or other tangible property (not including a building or its structural components), but only if the property is used as an integral part of the qualifying advanced energy project.

Transitional rule.

Enter only the basis:

If you’re claiming the qualified gasification project property (defined in Qualifying gasification project, earlier), enter the qualified investment in qualifying gasification project property placed in service during the tax year for which credits were allocated or reallocated after October 3, 2008, and that includes equipment that separates and sequesters at least 75% of the project's carbon dioxide emissions. Qualified investment is the basis of eligible property placed in service during the tax year that is part of a qualifying gasification project.

For purposes of this credit, eligible property includes any property that is part of a qualifying gasification project and necessary for the gasification technology of such project. The IRS is required to recapture the benefit of any allocated credit if a project fails to attain or maintain these carbon dioxide separation and sequestration requirements. See section 48B(f) and IRS.gov/irb/2011-14_IRB#NOT-2011-24.

If you’re claiming the qualifying advanced energy property (defined in Qualifying advanced energy project, earlier), enter the qualified investment in qualifying advanced energy project property placed in service during the tax year. Qualified investment is the basis of eligible property placed in service during the tax year that is part of a qualifying advanced energy project.

If you’re claiming both the qualifying gasification project property and the qualifying advanced energy project property, add the qualified investment property for both and enter that amount on the dashed entry line before 6a.

Enter the qualified investment, other than line 6a, in qualifying gasification project property (defined earlier) placed in service during the tax year.

Exception.

Qualified property doesn't include a building or a portion of a building used for offices, administrative services, or other functions unrelated to manufacturing.

Enter the qualifying investment in advanced manufacturing facility (defined above) placed in service after 2022, and for any property the construction began prior to 2023, to the extent the basis attributable to the construction, reconstruction, or erection began after August 9, 2022.

Patrons, including cooperatives that are patrons in other cooperatives, enter the unused investment credit from the qualifying advanced coal project credit, qualifying gasification project credit, qualifying advanced energy project credit, or advanced manufacturing investment credit allocated from cooperatives. If you are a cooperative, see the instructions for Form 3800, Part III, line 1a, for allocating the investment credit to your patrons.

Payment application date.

The deemed payment will be treated as made on the later of either the due date of the tax return (determined without regard to extensions) or the date the return is filed.

Attachment.

Attach a statement to your return with information regarding the deemed payment election. The attached information statement should be named “CHIPS22DPE.” For example, if you attach a PDF, the name of the PDF should be “CHIPS22DPE.”

Application at partner and shareholder level.

In the case of any property held directly by a partnership or S corporation, no election by any partner or shareholder will be allowed with respect to any credit determined under section 48D(a) with respect to such property.

Treatment of payments to partnerships and S corporations.

Deemed payments will be treated in the same manner as a refund due from a credit provision.

Add lines 5d, 6c, 7, and 9. Enter this amount on line 10 and on Form 3800, Part III, line 1a. However, if you elected to treat the amount of credit on line 7 as a deemed payment per section 48D(d)(1), enter the total less the amount treated as a deemed payment on Form 3800, Part III, line 1a. As a result, Form 3468, line 10, and Form 3800, Part III, line 1a, may not match depending on your election.

Use the table below to see what line on your tax return you enter the deemed payment amount per section 48D(d)(1). On the dotted line next to the line on the tax return write “CHIPS22DPE.” If there is not a dotted line after the entry space to make this entry, put an asterisk next to the line number and put a footnote at the bottom of the page indicating the line number and write “CHIPS22DPE.”

For credit purposes, the expenditures are generally taken into account for the tax year in which the qualified rehabilitated building is placed in service. However, with certain exceptions, you may elect to take the expenditures into account for the tax year in which they were paid (or, for a self-rehabilitated building, when capitalized) if (a) the normal rehabilitation period for the building is at least 2 years, and (b) it is reasonable to expect that the building will be a qualified rehabilitated building when placed in service. For details, see section 47(d). To make this election, check the box on line 11a. The credit, as a percent of expenditures paid or incurred during the tax year for any qualified rehabilitated building, depends on the type of structure and its location.

If you are claiming a credit for a certified historic structure on line 11f or 11g, enter the assigned NPS project number on line 11h. If the qualified rehabilitation expenditures are from an S corporation, partnership, estate, or trust, enter on line 11h the EIN of the pass-through entity instead of the assigned NPS project number, and skip line 11i.

The lessor will provide the lessee with the NPS project number to enter on line 11h.

Enter the date of the final certification of completed work received from the Secretary of the Interior on line 11i. If the final certification hasn't been received by the time the tax return is filed for a year in which the credit is claimed, attach a copy of the first page of NPS Form 10-168, Historic Preservation Certification Application (Part 2—Description of Rehabilitation), with an indication that it was received by the Department of the Interior or the State Historic Preservation Officer, together with proof that the building is a certified historic structure (or that such status has been requested). After the final certification of completed work has been received, file Form 3468 with the first income tax return filed after receipt of the certification and enter the assigned NPS project number and the date of the final certification of completed work on the appropriate lines on the form. Also, attach an explanation and indicate the amount of credit claimed in prior years.

If you fail to receive final certification of completed work prior to the date that is 30 months after the date that you filed the tax return on which the credit was claimed, you must submit a written statement to the IRS stating that fact before the last day of the 30th month. You will be asked to consent to an agreement under section 6501(c)(4) extending the period of assessment for any tax relating to the time for which the credit was claimed.

Mail to:

You must retain a copy of the final certification of completed work as long as its contents may be needed for the administration of any provision of the Internal Revenue Code.

If the final certification is denied by the Department of the Interior, the credit is disallowed for any tax year in which it was claimed, and you must file an amended return if necessary. See Regulations section 1.48-12(d)(7)(ii) for details.

Recapture.

If a credit was determined with respect to a property for any tax year ending before the grant is made:

Treatment of grants.

Any grant will not be included in the gross income or alternative minimum taxable income of the taxpayer, but will be taken into account in determining the basis of the property to which the grant relates, except that the basis of such property will be reduced under section 50(c) in the same manner as a credit allowed.

Qualified interconnection property.

Qualified interconnection property is, with respect to an energy project that isn't a microgrid controller, any tangible property that:

Interconnection agreement.

Interconnection agreement means an agreement with a utility for the purposes of interconnecting the energy property owned by the taxpayer to the transmission or distribution system of the utility.

Utility.

For the purposes of section 48(a)(8)(D), utility means the owner or operator of an electrical transmission or distribution system that is subject to the regulatory authority of any the following.

Special rule for interconnection property.

In the case of expenses paid or incurred for interconnection property, amounts otherwise chargeable to capital account with respect to such expenses will be reduced under rules similar to the rules of section 50(c)(3).

Energy project.

Energy project means a project consisting of one or more energy properties that are part of a single project.

Project requirements.

A project meets the project requirements if it is one of the following.

Laborers, mechanics, contractors, or subcontractors.

Any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the construction of such energy project, and for the 5-year period beginning on the date such project is originally placed in service, the alteration or repair of such project, shall be paid prevailing wages.

Subject to recapture, for purposes of any determination in the construction of such energy credit for the tax year in which the energy project is placed in service, the taxpayer shall be deemed to satisfy the requirement for the alteration or repair of such project, at the time such project is placed in service.

Correction and penalty for failure to satisfy wage requirements.

In the case of any taxpayer that fails to satisfy the prevailing wage requirements mentioned above, the taxpayer shall be deemed to have satisfied the requirement with respect to any laborer or mechanic who was paid at a rate below the prevailing wage rate, if the following are completed.

Deficiency procedures don't apply.

Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) will not apply with respect to the assessment or collection of any penalty imposed.

Intentional disregard.

If the Secretary determines that any failure described in Correction and penalty for failure to satisfy wage requirements, earlier, was due to intentional disregard of the prevailing wage requirements, then the following changes will occur.

Limitation on period for payment.

Pursuant to rules issued by the Secretary, in the case of a final determination by the Secretary with respect to any failure by the taxpayer to satisfy the prevailing wage requirements, the Correction and penalty for failure to satisfy wage requirements, described above, will not apply unless the payments are made by the taxpayer on or before 180 days after the date of such determination.

Recapture.

The Secretary shall provide guidance for recapturing the benefit of any increase in the credit allowed with respect to any project that doesn't satisfy the prevailing wage requirements (after Correction and penalty for failure to satisfy wage requirements is applied) for the 5-year period beginning on the date the project was originally placed in service, the alteration or repair (but which doesn’t cease to be investment credit property within the meaning of section 50(a)). The period and percentage of such recapture shall be determined under rules similar to the rules of section 50(a).

Exception.

A taxpayer will not be treated as failing to satisfy the requirements described above, if the taxpayer:

Good faith effort.

For purposes of the exception above, a taxpayer will be deemed to have satisfied the requirements under this paragraph with respect to a qualified facility if the taxpayer has requested qualified apprentices from a registered apprenticeship program, as defined in section 3131(e)(3)(B), and either of the following apply.

Intentional disregard.

If the Secretary determines that any failure described in good faith effort is due to intentional disregard to satisfy the requirements for the percentage of total labor hours and participation, earlier, Exception 2 shall be applied by substituting “$500” for “$50” in 2a, earlier.

Labor hours.

Labor hours means the total number of hours devoted to the performance of construction, alteration, or repair work by any individual employed by the taxpayer or by any contractor or subcontractor; however, it excludes any hours worked by foremen, superintendents, owners, or persons employed in a bona fide executive, administrative, or professional capacity (within the meaning of those terms in part 541 of title 29, Code of Federal Regulations).

Qualified apprentice.

A qualified apprentice is an individual who is employed by the taxpayer or by any contractor or subcontractor and who is participating in a registered apprenticeship program, as defined in section 3131(e)(3)(B).

Enter the basis, attributable to periods after 2005 and the construction of which began before 2020 or after 2021, if the property was acquired by the taxpayer or the basis is attributable to construction, reconstruction, or erection by the taxpayer. See When construction begins, later.

Enter the basis of property using solar illumination, electrochromic glass, or solar energy placed in service during the tax year and the construction of which began in 2020 or 2021.

For the definition of solar illumination, electrochromic glass, or solar energy property, see the instructions to Line 12b, earlier.

Qualified fuel cell property that uses electromechanical process or a fuel cell power plant that is comprised of a linear generator assembly are for property placed in service after 2022.

Enter the basis, attributable to periods after 2005 and before October 4, 2008, of any qualified fuel cell property placed in service during the tax year, if the property was acquired after 2005 and before October 4, 2008, or to the extent of basis attributable to construction, reconstruction, or erection by the taxpayer after 2005 and before October 4, 2008.

Enter the applicable number of kilowatts of capacity attributable to the basis on line 12e. This entry must be a whole number.

Enter the basis, attributable to periods after October 3, 2008, and the construction of which began before 2020 or after 2021, of any qualified fuel cell property placed in service during the tax year.

For a definition of qualified fuel cell property, see Line 12e, earlier. Also, see When construction begins, later.

Basis is attributable to periods after October 3, 2008, if the property was acquired after October 3, 2008, or to the extent of basis attributable to construction, reconstruction, or erection by the taxpayer after October 3, 2008.

Enter the applicable number of kilowatts of capacity attributable to the basis on line 12h. This entry must be a whole number.

Enter the basis of property using qualified fuel cell energy placed in service during the tax year and the construction of which began in 2020 or 2021. See When construction begins, later.

Enter the applicable number of kilowatts of capacity attributable to the basis on line 12k. This entry must be a whole number.

Enter the basis, attributable to periods after 2005, of any qualified microturbine property placed in service during the tax year, if the property was acquired after 2005, or to the extent of basis attributable to construction, reconstruction, or erection by the taxpayer after 2005.

Enter the basis, attributable to periods after October 3, 2008, of any qualified combined heat and power system property placed in service during the tax year, if the property was acquired after October 3, 2008, or to the extent of basis attributable to construction, reconstruction, or erection by the taxpayer after October 3, 2008. For property placed in service after 2022, multiply the basis by 30% (0.30) instead of 10% (0.10).

For fiscal year filers, the project of which construction begins on January 29, 2023, or later, see Increased credit amount for energy projects, earlier, for information regarding project requirements.

Enter the basis, attributable to periods after October 3, 2008, and before 2009, of any qualified small wind energy property placed in service during the tax year, if the property was acquired after October 3, 2008, and before 2009, or to the extent of basis attributable to construction, reconstruction, or erection by the taxpayer after October 3, 2008, and before 2009.

Enter the smaller of the basis you entered on line 12w or $4,000.

For the definition of qualified small wind energy property, see the instructions for Line 12w, earlier.

Enter the basis, attributable to periods after 2008 and the construction of which began before 2020 or after 2021, of any qualified small wind energy property placed in service during the tax year, if the property was acquired by the taxpayer or the basis is attributable to construction, reconstruction, or erection by the taxpayer. See When construction begins, later.

For fiscal year filers, the project of which construction begins on January 29, 2023, or later, see Increased credit amount for energy projects, earlier, for information regading project requirements.

For the definition of qualified small wind energy property, see the instructions for Line 12w, earlier.

Enter the basis of property using qualified small wind energy property placed in service during the tax year and the construction of which began in 2020 or 2021. See When construction begins, later.

Enter the basis of waste energy recovery property placed in service during the tax year and multiply the basis of property that uses waste energy recovery property by 30%.

Enter the basis, attributable to periods after October 3, 2008, of any geothermal heat pump system placed in service during the tax year, if the property was acquired after October 3, 2008, or to the extent of basis attributable to construction, reconstruction, or erection by the taxpayer after October 3, 2008. If any property was placed in service during 2022, multiply the basis of the property that uses geothermal heat pump systems by 10%. If any property was placed in service after 2022, multiply the basis of property that uses geothermal heat pump systems by 30%.

Additional information.

The election to treat a qualified facility as energy property is made by claiming the energy credit with respect to qualified investment credit facility property by completing Form 3468 and attaching it to your timely filed income tax return (including extensions) for the tax year that the property is placed in service. You must make a separate election for each qualified facility that is to be treated as a qualified investment credit facility. You must also attach a statement to Form 3468 that includes the following information.

Enter the basis of any qualified investment credit facility property, placed in service during the tax year, the construction of which began after 2016.

Enter the basis on Line 12hh Worksheet, line 1, attributable to periods after 2022, of any energy storage technology property placed in service during the tax year, to the extent of basis attributable to construction, reconstruction, or erection by the taxpayer after August 16, 2022. Attach to your return a statement with the description of how you calculated the credit. See Additional information, later, for more information.

Qualified microgrid.

Qualified microgrid is an electrical system that:

Applicable credit rate increase.

The applicable credit rate increase shall be the one of the following.

Requirement.

The requirement is satisfied with respect to any qualified facility, if the taxpayer certifies to the Secretary (at such time and in such form and manner as the Secretary may prescribe) that any steel, iron, or manufactured product that is a component of the facility (upon completion of construction) was produced in the United States.

In the case of steel or iron, the manufacturing processes must take place in the United States, except metallurgical processes involving refinement of steel additives. The steel and iron requirements apply to all construction materials made primarily of steel or iron and used in infrastructure projects such as transit or maintenance facilities, rail lines, and bridges. These items include, but are not limited to, structural steel or iron, steel or iron beams and columns, or running rail and contact rail. These requirements don't apply to steel or iron used as components or subcomponents of other manufactured products or rolling stock, or to bimetallic power rail incorporating steel or iron components.

In the case of manufactured products that are components of a qualified facility, upon completion of construction the manufactured products will be deemed to have been produced in the United States if at least 40% of steel and iron (20% in the case of an offshore wind facility) of the total costs of all the manufactured products of the facility are attributable to manufactured products (including components) that are mined, produced, or manufactured in the United States.

Applicable credit rate increase.

The applicable credit rate increase shall be equal to one of the following.

Energy community.

Energy community means the following.

Denial of production credit.

No credit will be allowed under section 45V or section 45Q for any tax year with respect to any specified clean hydrogen production facility or any carbon capture equipment included at such facility.

Specified clean hydrogen production facility.

Specified clean hydrogen production facility means any qualified clean hydrogen production facility to include the following.

Qualified clean hydrogen.

Qualified clean hydrogen means hydrogen that is produced through a process that results in a lifecycle greenhouse gas emissions rate of not greater than 4 kilograms of CO2e per kilogram of hydrogen.

Additional requirements for qualified clean hydrogen.

Qualified clean hydrogen also requires the following.

Provisional emissions rate.

In the case of any hydrogen for which a lifecycle greenhouse gas emissions rate has not been determined for purposes of this section, a taxpayer producing such hydrogen may file a petition with the Secretary for determination of the lifecycle greenhouse gas emissions rate with respect to such hydrogen.

Regulations.

The Secretary shall issue guidance to carry out the purposes of this section, including guidance to recapture any credit allowed that exceeds the amount of the credit that would have been allowed if the expected production were consistent with the actual verified production (or all of the credit so allowed in the absence of such verification).

Line 12hh Worksheet

Use the following worksheet to calculate the amount to be entered on Form 3468, line 12hh. This worksheet is generally applicable for property placed in service after 2022.

Line 12hh Worksheet, continued

Patrons, including cooperatives that are patrons in other cooperatives, enter the unused investment credit from the rehabilitation credit or energy credit allocated from cooperatives. If you are a cooperative, see the instructions for Form 3800, Part III, line 1a, for allocating the investment credit to your patrons.