New Filing Form for Your Federal Subsidy of Tax Credit Bonds

This notice is for any school administrative units that file IRS Form 8038-CP to receive the federal subsidy for interest payments due on “direct pay” tax credit bonds. Tax credit bonds include Qualified School Construction Bonds (QSCBs), Qualified Zone Academy Bonds (QZABs), Qualified Energy Credit Bonds (QECBs), and Build America Bonds (BABs). Note, however, that not all tax credit bonds are structured as “direct pay.”

The IRS has announced that will revise Form 8038-CP as of January of 2022 (last revised in January 2020). The draft Form and Instructions are attached. The final Form 8038-CP and instructions are not available as of December 22. Please check the IRS website for the final form and instructions.

The IRS has advised:

  • that the revised Form 8038-CP (Jan. 2022) should be submitted for filings that will be received by the IRS on or after January 1, 2022; and
  • that using the old version of Form 8038-CP may cause a delay in a request for credit payment.

What’s new on the revised form?

  • You will be required to assign a report number for each tax credit bond. This reported number will be used for subsequent filing for each bond.
  • Interest payments will be reported on a separate Schedule A.
  • The IRS expects to enable e-filing of the new Form 8038-CP, but this will not be available until later in 2022.

Also, if you are a new, or newly transferred, superintendent or business manager, we strongly recommend that you review all outstanding bonds, determine if any of them are “direct pay” tax credit bonds and that you have not inadvertently discontinued filing Form 8038-CP.  If you fail to file, you will be losing important federal subsidy payments to subsidize your interest payments on these bonds.

If you have questions about whether you should be filing Form 8038-CP or questions about your existing tax credit bonds, please contact one of our public finance attorneys.


Draft Instructions Form 8038-CP
Draft Form 8038-CP
Draft Form 8038-CP Schedule A


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