Section references are to the Internal Revenue Code, unless otherwise noted. If your 2023 tax return form is not available at the time you are required to file a return for a short tax year that begins in 2023 and ends before December 31, 2023, you must file that 2023 return using the 2022 tax return form and make all necessary modifications, taking into account all tax law changes effective for tax years beginning after 2022. These supplemental instructions explain how to elect and report payment or transfer for any advanced manufacturing production credit under sections 6417 and 6418. Section 6417 Elective Payment for Advanced Manufacturing Production Credit Reported on Form 7207, Line 9 If properly elected by completing and attaching additional information to a Part III of Form 3800, notated as "IRA22DPE," an "applicable entity," as described in section 6417(d)(1)(A) (generally, a tax-exempt entity) and section 6417(d)(1)(D), with a short tax year beginning after December 31, 2022 and ending before December 31, 2023, may treat the advanced manufacturing production credit reported in Form 7207, lines 1-7 as an elective or deemed payment of taxes under section 6417. The credit for production and sale of eligible components after 2022 is allowed to the applicable entity for the short tax year. See the supplemental instructions for Form 7207, line 9, below, and the latest instructions for Form 3800, Part III, posted at IRS.gov/form3800. An applicable entity as described in section 6417(d)(1)(A) includes the following. Any organization exempt from the tax imposed by subtitle A; Any State or political subdivision thereof; The Tennessee Valley Authority; An Indian tribal government (as defined in section 30D(g)(9)); Any Alaska Native Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 20 1602(m)); or Any corporation operating on a cooperative basis which is engaged in furnishing electric energy to persons in rural areas. Any taxpayer not described in section 6417(d)(1)(A) may elect to be treated as an applicable entity for elective payment, but only for the section 45X advanced manufacturing production credit under section 6417(d)(1)(D). If you are a section 6417(d)(1)(A) applicable entity engaged in business of manufacturing eligible components, you must file a Form 990-T, Exempt Organization Business Income Tax Return, and attach completed Form 7207 and Form 3800 to elect payment for advanced manufacturing production credit. If you are an applicable entity with taxable income or unrelated business taxable income (as defined in section 512) related to the production of eligible components at a facility, your elective payment amount is the lesser of the amount of credit or any unused credit amount. The term "unused credit amount" is any amount not allowed as a business credit against the tax imposed on your taxable income for the taxable year. If elected, your credit is reduced to zero and deemed allowed to you for the tax year. See the Credit Ordering Rules in the Instructions for Form 3800. If you are a partnership or S corporation, you may also elect to treat any credit for advanced manufacturing production as an elective payment under section 6417(c). You must file your appropriate return and attach a completed Form 7207 and a Part III of Form 3800, notated "IRA22DPE" to properly elect any advanced manufacturing production credit as a payment for your short tax year. If you make the election for payment under section 6417(d)(1)(D) or section 6417(c), you may not make the election for credit transfer under section 6418(a) for the same credit. Your election for payment with respect to the production of eligible components at a facility applies for the short tax year and the 4 subsequent tax years (unless you revoke your election). You must still satisfy all requirements under section 45X to otherwise earn the credit in each of the succeeding years. For the latest information about developments related to Form 7207 and its instructions, such as regulations, go to IRS.gov/form7207. Section 6418 Transfer of Advanced Manufacturing Production Credit Reported on Form 7207, Line 9 If properly elected by completing and attaching additional information to a Part III of Form 3800, notated as "IRA22TRE," an "eligible taxpayer," defined as any entity not described in section 6417(d)(1)(A), including partnerships and S corporations, may elect under section 6418 to transfer or sell all (or any portion) of its advanced manufacturing production credit to an unrelated "transferee taxpayer" for cash in a 2023 short tax year. The cash payment received by the eligible taxpayer is not treated as taxable income, and the cash paid by the transferee taxpayer cannot be deducted against taxable income. If elected, your current general business credits are reduced by the amount of the transferred amount. The transferee taxpayer is treated as a taxpayer with respect to such credit (or such portion thereof). Once a credit is transferred to an unrelated party, the unrelated party can't transfer it again. See the latest Instructions for Form 7207, line 9, below, and latest instructions for Form 3800, Part III. If you are a transferee taxpayer which acquired the advanced manufacturing production credit with respect to a single item (or any portion of) from an eligible taxpayer, see the latest instructions for Form 3800 to take into account your acquired credit. You are not required to complete the source credit form. For the latest information about developments related to Form 3800 and its instructions, go to IRS.gov/form3800. Additional Line 9 Instructions for Certain Filers With 2023 Short Tax Years to Elect Payment or Transfer of Advanced Manufacturing Production Credit If you do not or cannot elect payment or transfer of any advanced manufacturing production credit (or portion, in case of transfer), follow reporting instructions on Form 7207, Lines 9a, b and c. If you are an applicable entity as defined under section 6417(d)(1)(A) or 6417(d)(1)(D) and elect to treat any advanced manufacturing production credit amount on Form 7207, line 9 as an elective payment for your short tax year, you must report the lesser of the credit amount with respect to a facility or property or any unused credit amount in line 1b of a Part III of Form 3800, notated as "IRA22DPE." You must also attach additional information to Form 3800, Part III, line 1b. For the latest Instructions for Form 3800, go to IRS.gov/form3800. If you are partnership or S corporation and you elect payment for any advanced manufacturing production credit under section 6417(c), you must report the amount with respect to a facility or property in line 1b of a Part III of Form 3800, notated "IRA22DPE," even if you are not otherwise required to file Form 3800. You must not include any elective payment reported on Form 3800, Part III, on Schedules K and K-1. If you are an eligible taxpayer, including a partnership or S corporation, and elect to transfer any advanced manufacturing production credit (or portion of) on Form 7207, line 9, you must report the transfer amount of advanced manufacturing production credit for the production and sale of eligible components at a facility in line 1b of a Part III of Form 3800, line 1b, notated as "IRA22TRE." You must also attach additional information to Form 3800, Part III, line 1b. See the latest instructions for Form 3800 at IRS.gov/Form3800. If you are a partnership or S corporation and elected to transfer any advanced manufacturing production credit under section 6418, the amount reported on Schedules K and K-1 should not include any transferred amounts reported in line 1b of a Part III of Form 3800, notated as "IRA22TRE."
