Nationwide Tax Relief: 844-638-0800

Clean energy credits: what you need to know about pre-filing registration

Understanding Clean Energy Credits and Pre-Filing Registration

The Inflation Reduction Act of 2022 (IRA) has introduced new opportunities for tax-exempt and governmental entities to benefit from clean energy tax credits. This includes Indian tribal governments and Alaskan Native Corporations, who are now able to leverage these credits through elective pay.

Elective Payment Elections and Clean Energy Tax Credits

Starting from the tax years that begin after December 31, 2022, any entity that qualifies for a clean energy tax credit can make an elective payment election. This essentially means that certain credits will be treated as a payment against their federal income tax liabilities, rather than as a nonrefundable credit. The credit amount will first be used to offset any tax liability of the entity, with any excess being refundable.

Pre-Filing Registration Process

Before an entity can make an elective payment election on an annual tax return, a pre-filing registration process must be completed. This involves receiving a registration number. Entities will need their own Employer Identification Number (EIN) or Tax Identification Number (TIN) to complete this process, and cannot use or borrow the EIN of a related entity.

The online pre-filing registration process is set to launch in late 2023. Once it’s live, entities can complete pre-filing registration as soon as they have all the required information. More details will be provided closer to the launch date.

Completing Pre-Filing Registration

To complete pre-filing registration, entities must provide certain information about themselves, the applicable credits they intend to earn, each eligible project or property that will contribute to the applicable credit, and certain additional information. The IRS will review this information and issue a separate registration number for each credit property for which the entity or electing taxpayer provided sufficient verifiable information. Registration is not considered complete until a registration number is received.

For more information about clean energy tax credits, visit the IRS pages on tribes and clean energy.

Facebook
Twitter
LinkedIn
Tax-exempt and governmental entities can benefit from clean energy tax credits using new options enabled by the Inflation Reduction Act of 2022 (IRA). This newsletter is part of a series from the IRS to provide information to Indian tribal governments about clean energy tax credits and how to make elective payment elections. The IRA allows Indian tribal governments and Alaskan Native Corporations to benefit from certain clean energy tax credits through elective pay. For tax years beginning after December 31, 2022, an applicable entity that qualifies for a clean energy tax credit can make an elective payment election. This election will treat certain credits as a payment against their federal income tax liabilities rather than as a nonrefundable credit. The amount of the credit will first offset any tax liability of the entity and any excess will be refundable. A pre-filing registration process must be completed, and a registration number received, prior to making an elective payment election on an annual tax return. Applicable entities will need their own Employer Identification Number (EIN) or Tax Identification Number (TIN) to complete the pre-filing registration process. Applicable entities cannot use or borrow the EIN of a related entity. The online pre-filing registration process is expected to launch in late 2023. After the launch, you may complete pre-filing registration as soon as you have all the information required. More detail will be available as the launch approaches. To complete pre-filing registration, you must provide certain information about yourself, the applicable credits you intend to earn, each eligible project or property that will contribute to the applicable credit, and certain additional information. The IRS will review the information provided and will issue a separate registration number for each applicable credit property for which the applicable entity or electing taxpayer provided sufficient verifiable information. Registration is not complete until a registration number is received. Additional information about clean energy tax credits can be found at irs.gov/tribes and irs.gov/cleanenergy.

Table of Contents