IRS Form 8835 · 2025 tax year
Form 8835 when you sell a §45 credit
A production credit is earned year by year, so it is sold year by year too. Each year needs a registration number for the facility, a Form 8835 and an election on that year's return.
Verified · page reviewed 11 Oct 2026
This page follows the 2025 Form 8835 instructions, the latest final version when we checked. Use the version for the tax year you are filing. Whether a facility still earns the §45 credit at all is covered on the §45 page.
The form, in brief
- One form per facility. Use a separate Form 8835 for each qualified facility. Part I reports the facility; Part II calculates the credit[1].
- What you can sell. You can elect to transfer all or part of the credit figured in Part II to an unrelated buyer for cash[1].
- Registration. Before you file, complete pre-filing registration for each facility you will make a transfer election for[1], and enter the number on Part I, line 1[1]. A registration number is valid only for the tax year it was obtained for; renew it for each later year[2].
Each facility, each year
The statute requires the §45 transfer election to be made separately for each facility and for each tax year of the 10-year period that starts when the facility was originally placed in service[3]. In practice, every year you sell you need:
- a renewed registration number for the facility[2];
- that year’s Form 8835 for the facility;
- the election on that year’s original return, filed by its due date including extensions[4];
- a transfer election statement with that year’s buyer, attached by both parties to their returns[2].
Credit rates for 2025
For calendar year 2025, the IRS gives these rates per kilowatt-hour of electricity produced and sold[1]:
| Facility placed in service | Resources | Rate |
|---|---|---|
| Before 2022 | Wind, closed-loop biomass, geothermal | 3.0¢ |
| Before 2022 | Open-loop biomass, landfill gas, trash, qualified hydropower, marine and hydrokinetic | 1.5¢ |
| After 2021 | Wind, closed-loop biomass, geothermal, solar | 0.6¢ |
| After 2021 | Open-loop biomass, landfill gas, trash, qualified hydropower, marine and hydrokinetic | 0.3¢ |
| After 2022 | Qualified hydropower, marine and hydrokinetic | 0.6¢ |
For a facility placed in service after 2021, three lines can raise the amount[1]:
-
Increased amount (×5). The credit is multiplied by 5 if the facility meets any one of these tests[1]:
- its maximum net output is under 1 MW (AC);
- its construction began before 29 January 2023;
- it meets the prevailing wage and apprenticeship requirements.
You check box 8a, 8b or 8c in Part I and attach a statement for each facility; Part II, line 9 does the multiplication[1]. Only the prevailing wage and apprenticeship route (box 8c) requires Form 7220, one per facility[1][5].
-
Domestic content (+10%). Line 10 adds 10 percent of the line 9 amount and needs a domestic content certification statement[1].
-
Energy community (+10%). Line 11 adds 10 percent of the line 9 amount for a facility in an energy community[1].
The buyer is paying for the bonuses too, so expect to hand over the documentation behind them[2].
Partnerships, S corporations and buyers
- A selling partnership or S corporation reports the total credit for the facility on Form 3800, Part III, line 1f or 4e, and not on Schedule K[1].
- A partner or shareholder whose only credit is an allocated §45 credit skips Form 8835 and reports it directly on Form 3800, Part III, line 1f or 4e[1].
- If the Schedule K-1 shows code BC (Form 1065 box 15, or Form 1120-S box 13), the credit was bought, and the transferee rules in the Form 3800 instructions apply[1].
- The buyer reports the purchased credit on its own Form 3800, not on Form 8835. See Form 3800.
Where the transfer itself is reported
Form 8835 only figures the credit. The sale is reported on Form 3800, Part III, column (f): a negative amount for the seller and a positive amount for the buyer[2]. See Form 3800 and the list of forms by credit.