Join Our Free Virtual Event on Clean Energy Credits

Interested in clean energy credits? We’re hosting a complimentary live virtual event to guide you through the ins and outs of this topic. Our 1-hour workshop will be conducted via Microsoft Teams and is proudly organized by the Office of Indian Tribal Governments. Mark your calendars for Tuesday, December 12, 2023, at 12 p.m. EST. We’ll be covering topics such as the types of clean energy credits available, tribal eligibility, and the usage of elective pay. Stay tuned for a Microsoft Teams invitation in your inbox.

Understanding Clean Energy Credits and Taxable Year Determination

Clean energy credits are a boon for tax-exempt and governmental entities. Thanks to the Inflation Reduction Act of 2022 (IRA), these entities can now take advantage of clean energy tax credits through new elective pay options. This blog post is part of a series by the IRS, aiming to educate Indian tribal governments on clean energy tax credits and the process of making elective payment elections.

The IRA has opened doors for Indian tribal governments and Alaskan Native Corporations to reap the benefits of certain clean energy tax credits via elective pay. Starting from the tax years that begin after December 31, 2022, any applicable entity that qualifies for a clean energy tax credit can make an elective payment election. This means that certain credits will be treated as a payment against their federal income tax liabilities, not as a nonrefundable credit. The credit amount will first be used to offset any tax liability of the entity, and any remaining amount will be refundable.

How to Determine the Taxable Year

Determining the taxable year is simple. All you need to do is refer to the instructions for the annual tax return you’re filing. For instance, tax-exempt entities filing Form 990-T must file the return using the organization’s established annual accounting period. If the organization doesn’t have an established accounting period, the return should be filed based on the calendar-year basis.

For more details on clean energy credits, visit irs.gov/tribes and IRS.gov/cleanenergy.