US IRS, US Treasury issued final regulations on elective payments of certain clean energy credits under Inflation reduction act (IRA) for tax years after Dec. 31, 2022.
Follows US IRS, Treasury Jun. 2023 proposed regulations on elective payments and temporary regulations on mandatory IRS pre-filing registration process, see #176395.
US IRS also updated frequently asked questions (FAQs) based on the final regulations.
Clean Energy Credits
Applicable entities can make elective payment election, will treat certain clean energy credits as payment against federal income tax liabilities rather than nonrefundable.
Payment will offset income tax liability; any excess is refunded to the applicable entity.
Tax-exempt organizations, state and local governments, Indian tribal governments, Alaska native corporations, Tennessee valley authority and rural electric cooperatives.
Electing taxpayers, may elect to be treated as an applicable entity for some credits.
Provide certainty for applicable entities to understand law’s scope and requirements for eligibility; final rules lay out process and timeline to claim, receive elective payment.
Pre-filing registration process and registration number received, before payment.
Effectiveness
Final regulations are effective 60 days after publication in the federal register.
Clean energy credits are effective for tax years beginning after Dec. 31, 2022.
On the same day, US Treasury issued proposal on elective payments, see #203622.
Regulators
US IRS; US Treasury
Entity Types
CNSM; Corp
Reference
PR IR-2024-61, FAQ, 3/5/2024; RIN 1545-BQ63; IRA; ESG;
