Instructions for Filling Out Form 3468

This article offers a concise overview of Form 3468, which is used to claim various investment credits, including those related to energy, rehabilitation of historic buildings, and advanced manufacturing. The form has been updated for 2023 to reflect changes made by recent legislation.

In this article, we'll provide information on Form 3468 and a step-by-step guide on how to fill it out.

What is Form 3468?

Form 3468, titled "Investment Credit," is a tax form used by taxpayers to claim various investment credits, such as those related to rehabilitation, energy, and advanced manufacturing investments. The form is divided into several parts, each dedicated to a specific type of credit, including the Rehabilitation Credit, Energy Credit, and Advanced Manufacturing Investment Credit. The primary purpose of Form 3468 is to allow taxpayers to calculate and claim credits for certain investments in rehabilitation, energy properties, and advanced manufacturing facilities, incentivizing the preservation of historic buildings, the production of renewable energy, and investments in advanced manufacturing processes.

Who Must File Form 3468?

Taxpayers who need to file Form 3468 are those claiming various investment credits for qualified property. This includes individuals and businesses involved in advanced manufacturing, energy production (such as solar, wind, geothermal, and fuel cell technology), rehabilitation of historic buildings, and other specified activities. Detailed information on the specific requirements for each type of credit can be found in the instructions for each part of the form.

Form 3468 Tax Filing Deadlines and Due Dates

• Due dates for Form 3468 are not explicitly mentioned in the instructions.
• Form 3468 is typically filed with the taxpayer's income tax return.
• The due date depends on the type of taxpayer (individual, corporation, etc.) and their specific tax return due date.

Form 3468 Late Payment Penalty

Although the instructions for Form 3468 do not explicitly mention a specific late payment penalty for the form itself, it's important to note that late payment penalties are generally associated with the tax return to which the form is attached. As a result, taxpayers should consult IRS guidelines or a tax professional for information on penalties related to late payments of taxes due, which may be affected by credits claimed on Form 3468.

Step-by-Step Instructions for Form 3468

Step 1: Determine if you need to file Form 3468 by checking if you're claiming investment credits for qualified property, such as energy production, rehabilitation of historic buildings, or advanced manufacturing.

Step 2: Read the general instructions provided by the IRS to understand the purpose of Form 3468, definitions of investment credit property, and details on qualified progress expenditures, at-risk limits, and recapture of credit.

Step 3: Identify the specific type of investment credit you're claiming and refer to the corresponding part of Form 3468. The form is divided into several parts, each dedicated to a specific type of credit, such as the Rehabilitation Credit, Energy Credit, and Advanced Manufacturing Investment Credit.

Step 4: Follow the specific instructions provided by the IRS for the part of the form related to the credit you're claiming. These instructions will guide you on how to determine if your property qualifies, how to calculate the basis of the property, and how to apply the credit percentage to the qualified expenditures.

Step 5: For energy credits, identify the type of energy property, calculate the basis of the property, determine the applicable energy percentage, and understand any applicable phaseouts or special rules.

Step 6: For the rehabilitation credit, determine if your building qualifies, calculate qualified rehabilitation expenditures, and apply the credit percentage to those expenditures.

Step 7: Complete any additional sections of Form 3468 that apply to your specific situation, such as instructions for S Corporations, Partnerships, Estates, and Trusts, applicable entities, elective payment under Section 48D(d), credit transfers, and pre-filing registration requirements.

Step 8: Review your completed Form 3468 to ensure all information is accurate and complete before attaching it to your income tax return.

How to Submit Form 3468

To submit Form 3468, complete all applicable sections of the form, including facility information, specific credits, and any required statements or certifications. Once the form is filled out and the credit amount is calculated, attach Form 3468 to your tax return and submit it to the IRS by the tax return's due date.

Need Help with other Finance or Startup Questions?

Choose Pilot for expert bookkeeping, CFO, and tax services, catering to thousands of startups and expanding businesses. We pride ourselves on processing over 10 million transactions and possessing exceptional expertise in promoting business growth. As a premier accounting firm focused on startups in the U.S., our goal is to help you thrive. Get in touch with our sales team or check out our demo for more information!

‍