Taxpayers planning to claim Section 1603 cash grants in lieu of the Section 45 production credit or Section 48 investment credit for certain alternative energy property must file an application no later than Sept. 30, 2012, whether or not the property has been placed in service. No extension or other relief for late filing is expected to be available.
Section 1603 of the American Recovery and Reinvestment Act of 2009 (ARRA), as amended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, allows production investment tax credits for placing specified alternative energy property in service to be claimed as a cash grant, rather than as nonrefundable general business credits. This provides an incentive to place such property in service without regard to the profitability of the entity placing the property in service or the level of participation by the investor.
To qualify for the cash grant, the property must have been placed in service in 2009, 2010 or 2011, or construction must have begun on the property during those years and the property placed in service by the "credit termination date."
In either case, an application for the grant must be submitted BEFORE Oct. 1, 2012, using the Treasury's dedicated online system at https://treas1603.nrel.gov. Applications may not be submitted by mail or delivery. The Treasury has announced that the online system will close for new applications at midnight (Hawaii time), Sept. 30, 2012.
A separate application must be submitted for each property. The application should be submitted by the owner (or by an appointee of the owner) of the property. An LLC can be considered the owner of property even if the LLC is otherwise disregarded for federal income tax purposes.
Various application forms are all accessed through the online system. After the applicant indicates it wishes to start an application, it will be asked when the property was (or is expected to be) placed in service. The system will then take the applicant to the appropriate form based on the (expected) placed in service date. Necessary documentation should be available in electronic form when the application process is begun, because the application cannot be saved once the process has begun.
The Treasury has published the "1603 Online System Guide," which should be consulted in connection with the filing of any application. It can be accessed through https://treas1603.nrel.gov and the application itself is available at http://www.treasury.gov/initiatives/recovery/Pages/1603.aspx.
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