Clean Energy Tax Credits For Tribal Governments, Alaska Native Corporations, and Tax-Exempt Organizations; Inflation Reduction Act

Click for Elective Pay Guide for Tribal Governments

Click for Elective Pay Guide for Alaska Native Corporations

Click for Elective Pay Guide for Tax-Exempt Organizations

The Inflation Reduction Act of 2022 (IRA) has multiple clean energy tax credits available to Tribal governments, Alaska Native Corporations, businesses; tax-exempt organizations; state, local, and governments; other entities; and individuals.

The IRA also enables entities to take advantage of certain clean energy tax credits through its elective pay provision (also known as direct pay). Elective pay allows several types of entities, such as tax-exempts and governments, to treat the amount of certain credits as a payment against tax on their tax returns and as a result receive direct payments for certain clean energy tax credits.

Additional Resource links:

• Updates on Inflation Reduction Act of 2022

• Inflation Reduction Act (IRA) and CHIPS Act of 2022 (CHIPS): Pre-Filing Registration Tool User Guide and Instructions

• Clean Energy Tax Incentives for Businesses

• Low-Income Communities Bonus Credit

• IRA-Related Tax Guidance

• List of Posters, Guides and Toolkits for the Inflation Reduction Act credits

• Clean Energy Tax Incentives for Individuals

What to do to receive an elective pay payment:

1. Identify and pursue the qualifying project or activity: You will need to know what applicable credit you intend to earn and use elective pay for.

2. Determine your tax year, if not already known: Your tax year will determine the due date for your tax return.

3. Placed in service: The applicable credit property must be placed in service BEFORE a registration number will be issued.

4. Complete pre-filing registration with the IRS: This will include providing information about yourself, which applicable credits you intend to earn, and each eligible project/property that will contribute to the applicable credit and other information required. Upon completing this process, the IRS will provide you with a registration number for each applicable credit property. You will need to provide that registration number on your tax return as part of making the elective pay election.

   • Complete pre-filing registration in sufficient time to have a valid registration number at the time you file your tax return.

5. Satisfy all eligibility requirements for the tax credit and any applicable bonus credits, if applicable, for a given tax year:

   • You will need the documentation necessary to properly substantiate any underlying tax credit, including if bonus amounts increased the credit.

6. File Form 990-T by the due date (or extended due date) and make a valid elective payment election