MN HF3878

Allows taxpayers a credit equal to 50 percent of the total installed cost of an eligible combined heat and power system, capped at their tax liability for the year.

Defines eligible systems as those meeting Internal Revenue Code section 48(c)(3)(A)(i) and (ii) requirements, with nameplate output between 1 and 26 megawatts, located in Minnesota, and installed between January 1, 2016 and December 31, 2023.

Requires taxpayers to certify to the commissioner the installation date, total installed cost, and nameplate output of the system.

Allows unused credits to carry forward for up to ten succeeding taxable years, with taxpayers required to certify ongoing system operation to claim carryover credits.

Passes through credits from partnerships, LLCs, S corporations, and multiple-owner properties to partners, members, shareholders, or owners pro rata based on their ownership share or as specially allocated in organizational documents.