Notice 2009-41

PHASE-OUT CALCULATION
Because the 2009 reference price for
electricity produced from wind does not
exceed 8 cents multiplied by the inflation adjustment factor, the phaseout of
the credit provided in § 45(b)(1) does
not apply to such electricity sold during
calendar year 2009. Because the 2009 reference price of fuel used as feedstock for
refined coal does not exceed the $31.90
reference price of such fuel in 2002 multiplied by the inflation adjustment factor
and 1.7, the phaseout of credit provided
in § 45(e)(8)(B) does not apply to refined coal sold during calendar year 2009.
Further, for electricity produced from
closed-loop biomass, open-loop biomass,
geothermal energy, solar energy, small
irrigation power, municipal solid waste,
qualified hydropower production, marine
and hydrokinetic energy, the phaseout of
credit provided in § 45(b)(1) does not apply to such electricity sold during calendar
year 2009.
CREDIT AMOUNT BY QUALIFIED
ENERGY RESOURCE AND FACILITY,
REFINED COAL, AND INDIAN COAL
As required by § 45(b)(2), the 1.5
cent amount in § 45(a)(1), the 8 cent
amount in § 45(b)(1), the $4.375 amount
in § 45(e)(8)(A) and the $2.00 amount in
§ 45(e)(8)(D) are each adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which
the sale occurs. If any amount as increased
under the preceding sentence is not a multiple of 0.1 cent, such amount is rounded
to the nearest multiple of 0.1 cent. In the
case of electricity produced in open-loop
biomass facilities, small irrigation power
facilities, landfill gas facilities, trash combustion facilities, qualified hydropower
facilities, marine and hydrokinetic renewable energy, § 45(b)(4)(A) requires the
amount in effect under § 45(a)(1) (before
rounding to the nearest 0.1 cent) to be
reduced by one-half. Under the calculation required by § 45(b)(2), the credit for
renewable electricity production for calendar year 2009 under § 45(a) is 2.1 cents per
kilowatt hour on the sale of electricity produced from the qualified energy resources
of wind, closed-loop biomass, geothermal
energy, and solar energy, and 1.1 cent per
kilowatt hour on the sale of electricity

May 11, 2009

produced in open-loop biomass facilities,
small irrigation power facilities, landfill
gas facilities, trash combustion facilities,
qualified hydropower facilities, marine
and hydrokinetic energy facilities. Under
the calculation required by § 45(b)(2),
the credit for refined coal production for
calendar year 2009 under § 45(e)(8)(A)
is $6.20 per ton on the sale of qualified
refined coal. The credit for steel industry
fuel is $2.00 per barrel-of-oil equivalent
of steel industry fuel sold. The credit for
Indian coal production for calendar year
2009 under § 45(e)(10)(B) is $1.625 per
ton on the sale of Indian coal.
DRAFTING AND CONTACT
INFORMATION
The principal author of this notice is
Philip Tiegerman of the Office of Associate Chief Counsel (Passthroughs and
Special Industries). For further information regarding this notice, contact
Mr. Tiegerman at (202) 622–3110 (not a
toll-free call).

Credit for Residential Energy
Efficient Property
Notice 2009–41
SECTION 1. PURPOSE
This notice sets forth interim guidance,
pending the issuance of regulations, relating to the credit for residential energy efficient property under § 25D of the Internal
Revenue Code for taxable years beginning
after December 31, 2008. Specifically, this
notice provides procedures that manufacturers may follow to certify that property
satisfies certain conditions of § 25D, as
well as guidance regarding the conditions
under which taxpayers seeking to claim
the § 25D credit may rely on a manufacturer’s certification. The Internal Revenue
Service (Service) and the Treasury Department expect that the regulations will incorporate the rules set forth in this notice.
SECTION 2. BACKGROUND
.01 Section 25D provides a tax credit to
individuals for residential energy efficient
property. Section 1122 of Division B of
the American Recovery and Reinvestment
Act of 2009, Pub. L. No. 111–5, amended

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section 25D for taxable years beginning
after December 31, 2008. The amount of a
taxpayer’s section 25D credit for a taxable
year beginning after December 31, 2008,
is equal to the sum of the following:
(1) 30 percent of the qualified solar
electric property expenditures made by the
taxpayer during the taxable year;
(2) 30 percent of the qualified solar water heating property expenditures made by
the taxpayer during the taxable year;
(3) The lesser of—
(i) 30 percent of the qualified fuel cell
property expenditures made by the taxpayer during the taxable year; or
(ii) $500 for each half kilowatt of capacity of the qualified fuel cell property to
which the expenditures relate;
(4) 30 percent of the qualified small
wind energy property expenditures made
by the taxpayer during the taxable year;
and
(5) 30 percent of the qualified geothermal heat pump property expenditures
made by the taxpayer during the taxable
year.
.02 Section 25D(g) provides that the
credit applies to residential energy efficient property placed in service before January 1, 2017.
SECTION 3. RESIDENTIAL ENERGY
EFFICIENT PROPERTY
.01 Meaning of Terms.
(1) Qualified Expenditures. The expenditures for which the credit for residential
energy efficient property is allowed (qualified expenditures) are defined as follows:
(a) Qualified solar electric property expenditures are expenditures for property
which uses solar energy to generate electricity for use in a qualifying dwelling unit.
(b) Qualified solar water heating property expenditures are expenditures for
property which heats water for use in a
qualifying dwelling unit if at least half
of the energy used by the property for
such purpose is derived from the sun, and
which is certified for performance by the
non-profit Solar Rating Certification Corporation or a comparable entity endorsed
by the government of the State in which
such property is installed.
(c) Qualified fuel cell property expenditures are expenditures for a fuel cell power
plant which has a nameplate capacity of
at least 0.5 kilowatt of electricity using an

2009–19 I.R.B.

electrochemical process, has an electricity-only generation efficiency greater than
30 percent, and is installed on or in connection with a qualifying dwelling unit.
(d) Qualified small wind energy property expenditures are expenditures for
property which uses a wind turbine to generate electricity for use in connection with
a qualifying dwelling unit.
(e) Qualified geothermal heat pump
property expenditures are expenditures
for equipment which uses the ground or
ground water as a thermal energy source to
heat the dwelling unit or as a thermal energy sink to cool the dwelling unit, meets
the requirements of the Energy Star program which are in effect at the time that
the expenditure for such equipment is actually made (even if under § 25D(e)(8) the
expenditure is deemed made at a later time
for purposes of determining the taxable
year for which a taxpayer may claim the
credit), and is installed on or in connection
with a qualifying dwelling unit.
(2) Qualifying Dwelling Unit.
(a) Except as provided in section
3.01(2)(b) of this notice, a qualifying
dwelling unit is a dwelling unit that is
located in the United States and is used as
a residence by the taxpayer.
(b) For purposes of section 3.01(1)(c)
of this notice (relating to qualified fuel
cell property expenditures), a qualifying
dwelling unit is a dwelling unit that is located in the United States and is used as a
principal residence (within the meaning of
section 121) by the taxpayer.
.02 Manufacturer’s Certification
(1) In General. The manufacturer of
property may certify to a taxpayer that the
property meets certain requirements that
must be satisfied to claim the credit under § 25D by providing the taxpayer with a
certification statement that satisfies the requirements of section 3.02(3), (4) and (5)
of this notice. The manufacturer may provide the certification statement by including a written copy of the statement with
the packaging of the property, in printable
form on the manufacturer’s website, or in
any other manner that will permit the taxpayer to retain the certification statement
for tax recordkeeping purposes.
(2) Taxpayer Reliance. Except as provided in section 3.02(7) of this notice, a
taxpayer may rely on a manufacturer’s
certification in determining whether property is eligible for the credit under § 25D.

2009–19 I.R.B.

A taxpayer is not required to attach the
certification statement to the return on
which the credit is claimed. However,
§ 1.6001–1(a) of the Income Tax Regulations requires that taxpayers maintain
such books and records as are sufficient to
establish the entitlement to, and amount
of, any credit claimed by the taxpayer.
Accordingly, a taxpayer claiming a credit
for residential energy efficient property
should retain the certification statement as
part of the taxpayer’s records for purposes
of § 1.6001–1(a).
(3) Content of Manufacturer’s Certification; Required Information. A manufacturer’s certification statement must contain
the following:
(a) The name and address of the manufacturer.
(b) Identification of the property as a
solar electric property, solar water heating property, fuel cell property, small wind
energy property, or geothermal heat pump
property.
(c) The make, model number, and any
other appropriate identifiers of the property.
(4) Content of Manufacturer’s Certification; Optional Information. A manufacturer’s certification statement may contain
any of the following statements that are applicable:
(a) A statement that the property is
made by the manufacturer.
(b) In the case of a solar water heating
property, a statement describing the circumstances in which at least half the energy used by the property to heat water for
use in a dwelling unit is derived from the
sun.
(c) In the case of a solar water heating
property, a statement that the property is
certified for performance by the non-profit
Solar Rating Certification Corporation or a
comparable entity endorsed by the government of the State in which such property is
installed.
(d) In the case of a fuel cell property,
a statement that the property is a fuel cell
power plant that has a nameplate capacity
of at least 0.5 kilowatt of electricity using
an electrochemical process.
(e) In the case of a fuel cell property,
a statement that the property is a fuel cell
power plant that has an electricity-only
generation efficiency greater than 30 percent.

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(f) In the case of a fuel cell property,
a statement specifying the capacity of the
property in half kilowatts.
(g) In the case of a small wind energy
property, a statement specifying the capacity of the wind turbine in half kilowatts.
(h) In the case of a geothermal heat
pump property, a statement that the property meets the requirements of the Energy
Star program that are in effect at the time
that the expenditure for such equipment is
actually made.
(5) Content of Manufacturer’s Certification; Required Declaration. A manufacturer’s certification statement must contain a declaration, signed by a person currently authorized to bind the manufacturer
in these matters, in the following form:
“Under penalties of perjury, I declare
that I have examined this certification
statement, and to the best of my knowledge and belief, the facts presented are
true, correct, and complete.”
(6) Manufacturer’s Records. A manufacturer that certifies to a taxpayer that a
property meets a requirement that must be
satisfied to claim the credit under § 25D
must retain in its records documentation
establishing that the property meets the requirement. The manufacturer must, upon
request, make such documentation available for inspection by the Service.
(7) Effect of Erroneous Certification
or Failure to Satisfy Documentation Requirements. The Service may, upon examination (and after any appropriate consultation with the Department of Energy
or the Environmental Protection Agency),
determine that a manufacturer’s certification that property meets a requirement that
must be satisfied to claim the credit under
§ 25D is erroneous. In that event, or if the
property’s manufacturer fails to satisfy the
requirements relating to documentation in
section 3.02(6) of this notice, the manufacturer’s right to provide a certification
on which future purchasers of the property
can rely will be withdrawn, and taxpayers
purchasing the property after the date on
which the Service publishes an announcement of the withdrawal may not rely on the
manufacturer’s certification. Taxpayers
may continue to rely on the certification
for properties purchased on or before
the date on which the announcement of
the withdrawal is published (including
in cases in which the property is not installed or the credit is not claimed before

May 11, 2009

the announcement of the withdrawal is
published). Manufacturers are reminded
that an erroneous certification may result
in the imposition of penalties—
(a) Under § 7206 for fraud and making
false statements; and
(b) Under § 6701 for aiding and abetting an understatement of tax liability (in
the amount of $1,000 per return on which
a credit is claimed in reliance on the certification).
(8) Availability of Certification Information. The Service encourages manufacturers to provide a listing of applicable certification information with respect to their
products on their websites to assist taxpayers in determining whether their purchases
qualify for the credit for residential energy
efficient property.
.03 Additional Requirements. A taxpayer claiming a credit with respect to an
expenditure is responsible for determining
whether the expenditure appropriately relates to a qualifying dwelling unit (within
the meaning of section 3.01(2) of this notice) and cannot rely on a manufacturer’s
certification for that purpose.
.04 Labor Costs. Section 25D allows
the credit for expenditures for labor costs
properly allocable to the onsite preparation, assembly, or original installation of
residential energy efficient property described in section 3.01 of this notice and
for piping or wiring to interconnect such
property to the dwelling unit.
SECTION 4. SPECIAL RULES FOR
JOINT OCCUPANCY
.01 If a dwelling unit is jointly occupied and used during any calendar year as a
residence by two or more individuals, then
the maximum amount of qualified fuel cell
expenditures which may be taken into account for purposes of § 25D(a) by all individuals with respect to the dwelling unit
during the calendar year is $1,667 for each
half kilowatt of capacity of the fuel cell
power plant to which such expenditures relate.
.02 The amount of expenditures taken
into account under section 4.01 of this notice by any individual for a taxable year is
equal to the lesser of—
(1) The amount of expenditures made
by the individual with respect to the
dwelling during the calendar year, or

May 11, 2009

(2) The maximum amount of expenditures that may be taken into account by all
individuals under section 4.01 of this notice multiplied by a fraction—
(a) The numerator of which is the
amount of expenditures made by the individual with respect to the dwelling during
the calendar year, and
(b) The denominator of which is the total expenditures made by all individuals
with respect to the dwelling during the calendar year.
SECTION 5. PAPERWORK
REDUCTION ACT
The collection of information contained
in this notice has been reviewed and approved by the Office of Management and
Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. 3507) under
control number 1545–2134.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collection of information in this notice is in section 3. This information is required to be collected and retained in order
to ensure that property meets the requirements for the residential energy efficient
property credit under § 25D. This information will be used to determine whether the
property for which manufacturers provide
certifications is property that qualifies for
the credit. The collection of information is
required to obtain a benefit from manufacturers’ certification statements that property meets certain requirements that must
be satisfied to qualify for the credit. The
likely respondents are corporations, partnerships, and individuals.
The estimated total annual reporting
burden is 350 hours.
The estimated annual burden per respondent varies from 2 hours to 3 hours,
depending on individual circumstances,
with an estimated average burden of 2.5
hours to complete the requests for certification required under this notice. The
estimated number of respondents is 140.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue

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law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
SECTION 6. DRAFTING
INFORMATION
The principal author of this notice
is Martha S. McRee of the Office of
Associate Chief Counsel (Passthroughs
& Special Industries). For further information regarding this notice, contact
Martha S. McRee at (202) 622–3110 (not
a toll-free call).
26 CFR 601.105: Examination of returns and claims
for refund, credit or abatement; determination of correct tax liability.
(Also Part I, §§ 172, 6411.)

Rev. Proc. 2009–26
SECTION 1. PURPOSE
.01 In February 2009, the American Recovery and Reinvestment Tax Act of 2009,
Div. B of Pub. L. No. 111–5, 123 Stat.
115 (the Act) was signed into law. Section
1211 of the Act allows an eligible small
business (ESB) to elect to carry back a
2008 net operating loss (NOL) for a period
of 3, 4, or 5 years to offset taxable income
in those preceding taxable years. Prior to
the Act, taxpayers generally could carry
back an NOL only two taxable years. On
March 16, 2009, the Internal Revenue Service and Treasury Department issued Rev.
Proc. 2009–19, 2009–14 I.R.B. 747, advising taxpayers how to elect the 3-, 4-, or
5-year carryback.
.02 The Service has received many
claims from taxpayers that seek a 3-, 4-,
or 5-year carryback but that inadvertently
have not made a valid election in accordance with Rev. Proc. 2009–19. These
inadvertent failures may be due to the fact
that the enactment of § 1211 and issuance
of Rev. Proc. 2009–19 occurred midway
through the current tax return filing season.
.03 To provide certainty to taxpayers
and to implement the intent of Congress
in providing an extended carryback period, this revenue procedure modifies Rev.
Proc. 2009–19 to provide that an ESB
may elect a 3-, 4-, or 5-year carryback period simply by filing a Form 1045, Form
1139, or amended return that carries back

2009–19 I.R.B.