Date: 04/25/2024
Type: Implementation of IRA
On April 25, Treasury released final rules on the transferability of clean energy tax credits, enabling state and local governments, Native American tribes, and non-profits to take advantage of tax credits even though they do not themselves have tax liability. IRA section 13801 created a transferability mechanism that allows entities to transfer all or a portion of any of 11 clean energy tax credits if they lack tax liability to utilize the credits themselves. The final rules provide the process for transferring credits in a taxable year, including rules for partnerships and S corporations, as well the pre-filing process through the IRS electronic portal.
Opportunities for Participation and Additional Resources:
- Treasury Press release: https://home.treasury.gov/news/press-releases/jy2296
- IRS Press Release: https://www.irs.gov/newsroom/irs-releases-final-guidance-on-transfers-of-certain-credits-under-the-inflation-reduction-act
- Instructions on using IRS pre-filing tool: https://www.irs.gov/pub/irs-pdf/p5884.pdf
- FAQs: https://www.irs.gov/credits-deductions/elective-pay-and-transferability-frequently-asked-questions
- Final rule: https://www.federalregister.gov/documents/2024/04/30/2024-08926/transfer-of-certain-credits