Form 3468, Investment Credit, is the IRS form businesses use to claim credits for investing in qualifying property: energy property, clean electricity facilities, advanced manufacturing, advanced energy projects, coal and gasification projects, and the rehabilitation of certified historic buildings. You now file a separate Form 3468 for each facility or property, and the credit then flows to Form 3800 as part of the general business credit.
It's one of the longest sets of IRS instructions there is, but most filers only touch one part of it. Everything below comes from the IRS instructions for Form 3468 for 2025, current as of October 2026.
The parts of Form 3468
| Part | Credit |
|---|---|
| Part I | Information on the qualified property or facility, required for every form |
| Part II | Qualifying advanced coal project and qualifying gasification project credits |
| Part III | Qualifying advanced energy project credit (section 48C) |
| Part IV | Advanced manufacturing investment credit (section 48D) |
| Part V | Clean electricity investment credit (section 48E) |
| Part VI | Energy credit (section 48) |
| Part VII | Rehabilitation credit (section 47) |
What changed for 2025
- Advanced manufacturing: the credit is 35% of the qualified investment, unless the property was placed in service before 2026, when the rate stays at 25%.
- Clean electricity: the law known as the One Big Beautiful Bill Act added restrictions on prohibited foreign entities and ends the credit for wind or solar facilities placed in service after 2027 where construction begins after July 4, 2026.
- Energy credit: the same law restricted the applicable percentage for certain geothermal and solar energy property.
- New Form 7220: if you claim the increased credit for meeting the prevailing wage and apprenticeship requirements, you file it for each facility or property.
- Rehabilitation: the transition rule in Part VII was removed.
The wind and solar change is the date to watch. A project that hasn't begun construction by July 4, 2026, now has to be placed in service by the end of 2027 to keep the credit.
Property that doesn't qualify
Investment credit property is depreciable or amortizable property that qualifies for one of the credits above. You can't claim a credit for property that is:
- Used mainly outside the US, with limited exceptions.
- Used by a governmental unit or a foreign person or entity, apart from some leases.
- Used for lodging or in furnishing lodging, with exceptions.
- Business property you've already expensed under section 179, to that extent.
Selling or getting paid for the credit
Two options change who benefits. Eligible taxpayers, partnerships and S corporations can elect to transfer all or part of certain investment credits to an unrelated buyer for cash. And tax-exempt and governmental entities can elect to treat certain credits as a payment of tax, which is the only way most of them can use the credit at all.
Both routes need the IRS pre-filing registration first. You get an IRS-issued registration number for the facility or property and enter it in Part I; you can't make the election without completing it.
Historic buildings: the rehabilitation credit
Part VII is the one smaller property owners meet. The building must be a certified historic structure, listed in the National Register of Historic Places or certified as significant to a registered historic district, and you request certification through your State Historic Preservation Officer, ideally before physical work starts.
It must also be substantially rehabilitated: your qualified spending in a 24-month period you choose, ending in your tax year, has to be more than the greater of $5,000 or your adjusted basis in the building. For phased work under a written plan drawn up before you start, the window is 60 months. You reduce the building's basis by the credit.
Qualified progress expenditures
For property that takes a long time to build, you can elect to claim credit on qualified progress expenditures before the property is placed in service. It applies to property being built by or for you that has a normal construction period of 2 years or more, where it's reasonable to expect it to be new investment credit property when finished. For property someone else builds, the expenditure is generally the lesser of what you paid in the year or the share of the overall cost matching the work completed in the year.
At-risk limits
The cost or basis that the credit is figured on may be cut if you borrowed against the property and are protected against loss, or borrowed from a related person or someone with an interest in the activity. If that nonqualified nonrecourse financing changes in a later year, the credit base changes too, which can increase the credit or trigger recapture.
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The 5-year recapture
Claiming the credit isn't the end of it. You may have to pay back all or part of it if, before 5 full years after the property is placed in service, you dispose of it, it stops being investment credit property, your share in a partnership or S corporation that passed the credit to you drops by more than a third, or you return leased property early. Recapture is figured on Form 4255.
How to file it
- Complete a separate Form 3468 for each facility or property, with Part I filled in.
- Complete the one part that matches the credit.
- Attach Form 7220 if you claim the increased amount for prevailing wage and apprenticeship.
- Carry the credit to Form 3800, General Business Credit.
- If you're an individual who e-files and attachments are needed, send paper Form 8453 as well.
Homeowners claiming credits for solar panels or other energy improvements on their own home use Form 5695, not Form 3468.
The verdict
Form 3468 rewards planning more than paperwork. Register early if you'll transfer or take payment for the credit, check the July 4, 2026, construction date on any wind or solar project, and keep the property for at least 5 full years. For a historic building, get the certification request in before the builders start.
Frequently asked questions
What is Form 3468 used for?
It's used to claim the investment credit, including the energy, clean electricity, advanced manufacturing, advanced energy project and rehabilitation credits.
Do I need a separate Form 3468 for each property?
Yes. You complete a separate Form 3468 to claim an investment credit for each facility or property.
What is the advanced manufacturing investment credit rate?
It's 35% of the qualified investment, unless the property was placed in service before 2026, in which case the rate remains 25%.
Can the investment credit be recaptured?
Yes. You may have to recapture it if you dispose of the property before the end of 5 full years after it was placed in service, among other events.
Can I sell an investment tax credit?
Eligible taxpayers, partnerships and S corporations can elect to transfer all or part of certain credits to an unrelated third party for cash, after pre-filing registration.
