Instructions for Form

Instructions for Form

1097-BTC

(Rev. April 2025)

Bond Tax Credit

Section references are to the Internal Revenue Code unless

otherwise noted.

Future Developments

For the latest information about developments related to

Form 1097-BTC and its instructions, such as legislation

enacted after they were published, go to IRS.gov/

Form1097BTC.

You can get the General Instructions for Certain

Information Returns at IRS.gov/1099GeneralInstructions.

Reminders

In addition to these specific instructions, you should also use

the current General Instructions for Certain Information

Returns. Those general instructions include information

about the following topics.

• Who must file.

• When and where to file.

• Electronic reporting.

• Corrected and voided returns.

• Statements to recipients.

• Taxpayer identification numbers (TINs).

• Backup withholding.

• Penalties.

• Other general topics.

Continuous use revision. Use these instructions for tax

year 2025 and subsequent years until a superseding revision

is issued.

Online fillable forms. You may fill out the form, found online

at IRS.gov/Form1097BTC, and send Copy B to the recipient.

For filing with the IRS, follow the applicable procedures if you

are required to file electronically, or, for this form only, if you

are qualified to file on paper, send in the black-and-white

copy A with Form 1096 that you print from the IRS website.

Specific Instructions

Issuers of certain tax credit bonds (or their agents) and

recipients of Form 1097-BTC from the bond issuer or agent,

such as mutual funds or partnerships, who are further

distributing the credit must file Form 1097-BTC for each tax

credit distributed from the following tax credit bonds.

• New clean renewable energy bonds.

• Qualified energy conservation bonds.

• Qualified zone academy bonds.

• Qualified school construction bonds.

• Clean renewable energy bonds.

• Build America bonds (Tax Credit).

Filings of Form 1097-BTC with respect to a bond, by the

issuer or the issuer's agent, must be made on a separate

Form 1097-BTC for each bond.

For tax credit bonds issued with two or more maturities,

each maturity must be reported separately on the Form

1097-BTC issued by the bond issuer or its agent.

Nov 25, 2024

Recipients of Form 1097-BTC from the bond issuer or

agent, such as brokers, nominees, mutual funds, or

partnerships, who are further distributing the credit must file

only one Form 1097-BTC per recipient or account,

aggregating credit from all applicable bonds.

Note. Issuers that elected to issue build America bonds

(Direct Pay) under section 54AA(g) or specified tax credit

bonds under section 6431(f) to receive a refundable credit

under section 6431(a) in lieu of tax credits under section 54A

should not file Form 1097-BTC.

Definitions

Tax credit bond. Generally, a tax credit bond is an

obligation issued under sections 54, 54A, 54AA, 1397E, or

1400N(l) that entitles the taxpayer holding such bond on one

or more credit allowance dates occurring during any tax year

to a credit against the federal income tax imposed for that tax

year.

Public Law Number 115-97, 131 Stat. 2054 (2017),

repealed sections 54, 54A-F, and 54AA effective for

CAUTION bonds issued after December 31, 2017.

!

Qualified tax credit bond. Qualified tax credit bonds under

section 54A include new clean renewable energy bonds

under section 54C, qualified energy conservation bonds

under section 54D, qualified zone academy bonds under

section 54E, and qualified school construction bonds under

section 54F.

New clean renewable energy bond. An obligation issued

before January 1, 2018, that is part of an issue, 100% of the

available project proceeds of which are to be used for capital

expenditures incurred by governmental bodies, public power

providers, or cooperative electric companies for one or more

qualified renewable energy facilities, as defined in section

54C. The annual credit allowed is 70% of the annual credit

amount determined by applying section 54A(b).

Qualified energy conservation bond. An obligation issued

before January 1, 2018, that is part of an issue, 100% of the

available project proceeds of which are to be used for one or

more qualified energy conservation purposes, as defined in

section 54D. The annual credit allowed is 70% of the annual

credit amount determined by applying section 54A(b).

Qualified zone academy bond. An obligation issued

before January 1, 2018, that is part of an issue, 100% of the

available project proceeds of which are to be used for a

qualified purpose with respect to a qualified zone academy

established by an eligible local education agency, as

provided in section 54E; or an obligation that is part of an

issue, 95% or more of the proceeds of which are to be so

used and issued before October 4, 2008, as provided in

section 1397E.

Instructions for Form 1097BTC (Rev. 4-2025) Catalog Number 54657F

Department of the Treasury Internal Revenue Service www.irs.gov

Qualified school construction bond. An obligation issued

before January 1, 2018, that is part of an issue, 100% of the

available project proceeds of which are to be used for the

construction, rehabilitation, or repair of a public school facility

or for the acquisition of land on which such a facility is to be

constructed with the proceeds, as provided in section 54F.

Clean renewable energy bond. An obligation issued after

December 31, 2005, and before January 1, 2010, that is part

of an issue, 95% or more of the proceeds of which are used

for capital expenditures incurred by qualified borrowers for

one or more qualified projects, as defined in section 54.

Build America bond (Tax Credit). An obligation issued

after February 17, 2009, and before January 1, 2011, issued

by a state or local government (excluding private activity

bonds under section 141) as defined in section 54AA(d).

Who Must Receive Form 1097-BTC

Each person who is allowed a tax credit as a holder, directly

or indirectly, of a tax credit bond or a stripped credit coupon

on one or more credit allowance dates during the calendar

year in an amount of at least $10 must be issued Form

1097-BTC.

Credit Allowance Dates

The tax credit from tax credit bonds or stripped credit

coupons is allowed on each credit allowance date for which

the bond was outstanding or to which the stripped credit

coupon corresponds. For qualified tax credit bonds and clean

renewable energy bonds, the credit allowance dates are

March 15, June 15, September 15, December 15, and the

last day on which the bond is outstanding. For bonds issued

during the 3-month period ending on a credit allowance date,

the amount of the credit is determined ratably based on the

portion of the 3-month period during which the bond is

outstanding. The same ratable determination of credit applies

when a bond is redeemed or matures. For build America

bonds (Tax Credit), the credit allowance dates are the interest

payment dates. For qualified zone academy bonds issued

before October 4, 2008, the credit allowance date is the last

day of the 1-year period beginning on the issue date of the

bond and each anniversary of such day thereafter.

Statement to Recipient

If required to file Form 1097-BTC, you must furnish a

statement to the recipient quarterly for each credit amount

indicated on or before the 15th day of the 2nd calendar

month after the close of the calendar quarter in which the

credit was allowed.

Quarterly Furnishing Dates

Reporting period:

To recipient (on or before):

1 Quarter: January–March

May 15*

2nd Quarter: April–June

August 15*

3 Quarter: July–September

November 15*

Annual/4 Quarter: October–

December

February 15*

st

rd

th

*Dates may change due to weekends or holidays.

For the first 3 quarters, report to the recipient only the

amounts for the months of the applicable quarter. Box 1

should not be completed and box 6 is optional.

You are not required to furnish a separate report solely for

the 4th quarter because the 4th quarter amounts are reported

with the annual filing. For the annual filing, report the credits

for each month in boxes 5a–5l; report the total of those

amounts in box 1; and complete the rest of the form as

applicable. Furnish the annual filing to the recipient by

February 15, of the subsequent year.

If any amounts previously furnished for the first 3 quarters

need to be corrected, report the correct amounts for the

annual reporting and explain the correction to the recipient;

no explanation is required for the IRS filing.

For the report furnished to the recipient (quarterly or

annual), you may use Copy B or your own substitute

statement reporting all the same applicable information (the

reporting for the first 3 quarters may be furnished

electronically). See Pub. 1179 for specific rules about

providing substitute statements to recipients.

The tax credit allowed to holders of any tax credit bonds or

stripped credit coupons is treated as interest which is

included in gross income and must be reported as interest

income on a Form 1099-INT or Form 1099-OID, as

applicable. For more information on reporting the tax credit

treated as interest income paid from tax credit bonds, see the

Instructions for Forms 1099-INT and 1099-OID.

The IRS encourages Form 1097-BTC issuers to provide

the credit information to the recipient monthly if applicable,

and as soon after the end of the month in which a credit

arises as possible.

When To File

Bond issuer. If issuing the Form 1097-BTC as an issuer of

the bond or its agent, box 2a of the form will always reflect

code “C” and box 2b must reflect the CUSIP number for the

bond or stripped coupon, unless a CUSIP number was not

issued for the bond. See the instructions for boxes 2a and 2b.

For filing due dates, refer to the current General Instructions

for Certain Information Returns. See Statement to Recipient,

later, for furnishing statements to recipients.

Penalties for Failure To File or Furnish

There are penalties for failure to file correct information

returns by the due date and for failure to furnish correct payee

statements. See part O in the current General Instructions for

Certain Information Returns for details. Failure to file Forms

1097-BTC also includes failure to file electronically, when

required. For more information on penalties for failure to file

electronically, see part F in the current General Instructions

for Certain Information Returns.

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For more information about the requirement to furnish a

statement to the recipient, see part M in the current General

Instructions for Certain Information Returns.

Form 1097-BTC Issuer's Name, Address, and

Telephone Number

Enter the name, street address, city or town, state or

province, country, ZIP or foreign postal code, and telephone

number of the entity issuing the Form 1097-BTC.

Enter the entity's true name (as set forth in the legal

documents creating it). Enter the address of the entity's

principal office or place of business. Include the suite, room,

or other unit number after the street address. If the post office

Instructions for Form 1097-BTC (Rev. 4-2025)

does not deliver mail to the street address and the entity has

a P.O. box, show the box number instead.

Note. Do not use the address of the registered agent for the

state in which the entity is incorporated. For example, if a

business is incorporated in Delaware or Nevada and the

corporation's principal office is located in Little Rock, AR, the

corporation should enter the Little Rock address.

If the entity receives its mail in care of a third party (such

as an accountant or an attorney), enter for the street address

“C/O” followed by the third party's name and street address

or P.O. box.

Form 1097-BTC Issuer's TIN

Enter the Form 1097-BTC issuer's TIN, such as an employer

identification number (EIN). Do not truncate the Form

1097-BTC issuer's TIN. An issuer that does not have an EIN

should apply for one. See Form SS-4, Application for

Employer Identification Number, and its separate

instructions, available at IRS.gov. Applications can be

submitted online, by phone, fax, or mail.

Truncating Recipient's TIN on Recipient

Statements

Pursuant to Regulations section 301.6109-4, all filers of this

form may truncate a recipient's TIN (social security number

(SSN), employer identification number (EIN), individual

taxpayer identification number (ITIN), or adoption taxpayer

identification number (ATIN)) on recipient statements.

Truncation is not allowed on any documents the filer files with

the IRS. A filer's TIN may not be truncated on any form. See

part J in the current General Instructions for Certain

Information Returns.

Recipient's TIN

Enter the TIN of the recipient of the distributed (or stripped)

credit from the tax credit bond. Do not truncate the recipient's

TIN on the form filed with the IRS. Truncation of the

recipient's TIN is allowed on the statement to the recipient.

See the current General Instructions for Certain Information

Returns.

Recipient's Name

Enter the name of the recipient of the distributed (or stripped)

credit from the tax credit bond. If not an individual, enter the

entity's true name (as set forth in the legal documents

creating it).

Recipient's Street Address (Including Apt. No.)

Enter the street address, city or town, state or province,

country, and ZIP or foreign postal code of the recipient's

principal residence, office, or place of business. Include the

apartment, suite, room, or other unit number after the street

address. If the post office does not deliver mail to the street

address and the entity has a P.O. box, show the box number

instead.

Note. Do not use the address of the registered agent for the

state in which the recipient is incorporated.

If the recipient receives its mail in care of a third party

(such as an accountant or an attorney), enter for the street

address “C/O” followed by the third party's name and street

address or P.O. box.

Check, as applicable, whether you are the issuer of the

bond (or its agent) filing the Form 1097-BTC for the bond, or

Instructions for Form 1097-BTC (Rev. 4-2025)

are an entity or a person that received or should have

received a Form 1097-BTC for credit(s) that was or should

have been reported and that is distributing part or all of that

credit to others.

Box 1. Total

Enter the total amount of credits distributed to the recipient

with respect to the amounts reported in boxes 5a–5l for the

calendar year.

This box should be only filled out when filing Copy A and

when the annual statement (Copy B of the form) is sent to the

recipient. See Statement to Recipient, earlier.

Box 2a. Code

Enter the unique identification number code. Enter “C” for

CUSIP number, “A” for account number, and “O” if the unique

identification number is not an account number or a CUSIP

number, such as a self-provided identification number. If you

checked the first box under Form 1097-BTC issuer, and a

CUSIP number is assigned to the bond(s), enter “C.” If no

CUSIP number is assigned to the bond(s), and you checked

the first box under Form 1097-BTC issuer, use the account

number as the unique identifier and enter “A” or “O” if you are

using any other unique identifying number. See Box 2b.

Unique Identifier next.

Box 2b. Unique Identifier

The unique identification number is assigned by the Form

1097-BTC issuer and is limited to 39 alphanumeric

characters. It can be the CUSIP number, account number, or

any other unique identification number by which you track the

bond transactions.

For a bond issuer (or its agent) filing Form 1097-BTC for a

bond, the unique identification number must start with the

CUSIP number(s), if available, and may be expanded by the

account number or any other self-provided number(s). If a

CUSIP number was not issued for the bond, the bond issuer

may use or devise its own unique identifier, preferably the

account number or other reference number by which you

track and account for the bond transaction. A recipient of a

Form 1097-BTC that issues its own Form 1097-BTC to further

distribute the credit may use or devise its own unique

identifier using whatever means it deems best.

Box 3. Bond Type

Enter code “101” for clean renewable energy bonds issued

under section 54. Enter code “199” for all other bonds.

Multiple bond types can be entered on one Form

TIP 1097-BTC, other than clean renewable energy

bonds. Credits from clean renewable energy bonds

must be reported on a separate Form 1097-BTC.

Box 4

Reserved.

Boxes 5a–5l

Enter the amount of credit allowed for each month during the

calendar year, calculated by using STEPS 1 and 2, following.

STEP 1. For each recipient, multiply the outstanding face

amount of the qualified tax credit bond, clean renewable

energy bond, or qualified zone academy bond issued before

October 4, 2008, by the applicable credit rate. The

outstanding face amount of the bond is the face amount of

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the bond minus any principal that has been paid. The credit

rate for the qualified tax credit bond, clean renewable energy

bond, or qualified zone academy bond issued before October

4, 2008, is the rate published on the Treasury Direct website

under “IRS Tax Credit Bond Rates” at TreasuryDirect.gov/

govt/rates/rates_irstcb.htm for the first day on which there is a

binding contract, in writing, for the sale or exchange of the

bond.

The credit rate for qualified zone academy bonds issued

before July 1, 1999, is 110% (1.10) of the long-term

applicable federal rate (AFR), compounded annually, for the

month and year the bond is issued. The IRS announces the

long-term AFR monthly in a series of revenue rulings

published in the Internal Revenue Bulletin.

For build America bonds (Tax Credit), multiply by 35%

(0.35) the amount of interest payable with respect to the

interest payment date for which you are filing Form 1097-BTC

or sending a statement to the credit recipient. Enter the credit

amount so determined in boxes 5a–5l for the month in which

the interest payment date occurred. Thus, if the interest

payment dates for a build America bond are June 30 and

December 31, enter the credit amounts in boxes 5f and 5l.

For qualified zone academy bonds issued before October

4, 2008, enter the amount so determined in the box 5 that

corresponds to the credit allowance date. When filing the

annual Form 1097-BTC with the IRS, enter the same amount

in box 1.

STEP 2. For qualified tax credit bonds or clean renewable

energy bonds only, multiply the credit amount so determined

in STEP 1 by 25% (0.25) for each credit allowance date you

hold a qualified tax credit bond or clean renewable energy

bond during your tax year. Enter the credit amount

determined in STEP 2 in the box for the month in which the

credit allowance date occurred.

Example 1. You issued a qualified energy conservation

bond on March 15, 2017. For the Form 1097-BTC statement

for the March 15, 2025, credit allowance date, due to the

recipient by May 15, 2025, you would enter 25% (0.25) of the

amount computed in STEP 1 in box 5c. For the Form

1097-BTC statement for the June 15, 2025, credit allowance

date, due to the recipient by August 15, 2025, you would

enter 25% (0.25) of the amount computed in STEP 1 in

box 5f. For the Form 1097-BTC statement for the September

15, 2025, credit allowance date, due to the recipient by

November 17, 2025, you would enter 25% (0.25) of the

amount computed in STEP 1 in box 5i. For the annual Form

1097-BTC and December 15, 2025, credit allowance date,

due to the recipient by February 16, 2026, and to the IRS by

March 2, 2026 (March 31, 2026, if filed electronically), enter

25% (0.25) of the credit amount determined in STEP 1 in

box 5l and 100% (1.0) of the credit amount determined in

STEP 1 in box 1.

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However, the 25% will be prorated for any credit allowance

date if a clean renewable energy bond or qualified tax credit

bond is issued, redeemed, or matures during the 3-month

period ending on a credit allowance date with respect to

which you are reporting the credit. The percentage of credit

allowed for that credit allowance date is prorated for the

number of days the bond was outstanding during the 3-month

period.

See Caution regarding the repeal of sections 54, 54A, and

54AA, earlier.

Example 2. A qualified zone academy bond that you

issued matures on March 23, 2025. Since the bond was not

outstanding for the entire 3-month period on June 15, 2025,

the prorated portion of the 25% is figured by dividing (a) the

number of days the bond was outstanding beginning on the

day after the prior (March 15) credit allowance date and

ending on March 23, 2025, by (b) the number of days

included in the 3-month period beginning on the day after the

prior (March 15) credit allowance date and ending on the next

(June 15) credit allowance date. See Proration Calculation

below.

Proration Calculation

8 days (number of days from March

16 through March 23)

92 days (number of days from

March 16 through June 15)

= 0.087 x 0.25 = 2% (0.02)

Thus, for the credit allowance date with respect to the

3-month period in which the bond matures, you would

multiply the credit amount determined in STEP 1 by the

prorated percentage. In Example 2, for the 2nd quarter

reporting period for 2025, due to the recipient by August 17,

2026, you would enter the amount determined by multiplying

2% (0.02) with the credit amount determined in STEP 1 in

box 5f. You would carry the same percentage to the Total

annual credit reported in box 1 for the annual/4th quarter

reporting period filed with the IRS and sent to the recipient.

Thus, in Example 2, you would enter in box 1 “27%” (0.27) of

the amount determined in STEP 1.

Note. For new clean renewable energy bonds issued under

section 54C and qualified energy conservation bonds issued

under section 54D, report the credit amount after the 70%

limit has been applied.

Box 6. Comments

Enter any additional information.

Instructions for Form 1097-BTC (Rev. 4-2025)