Understanding Clean Energy Credits and Timely Filing

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

The Inflation Reduction Act and Clean Energy Tax Credits

The IRA has made it possible for qualifying entities to treat certain clean energy tax credits as payments against their federal income tax liabilities, rather than as nonrefundable credits. This applies to tax years that start after December 31, 2022. The credit amount will first be used to offset any tax liability of the entity. If there is any excess, it will be refundable.

How to Timely File Your Return

The elective payment election can only be made on an original, timely filed return, including extensions. The deadline for this is the due date (including any extensions) for the tax return for the taxable year in which the election is made. For most tax exempt and government entities, including Indian tribal governments, this is typically 4.5 months (for example, May 15 for a calendar year taxpayer) or up to 10.5 months with extensions, after the end of the entity’s tax year.

An original return also includes a superseding return filed on or before the due date, including extensions. However, no election can be made on an amended return or by filing an administrative adjustment request under section 6227 of the Code. There is also no relief available under §§ 301.9100-1 through 301.9100-3 of the Procedure and Administration Regulations (26 CFR part 301) for an elective payment election that is not timely filed.

For more information on the due dates for filing Form 990-T, you can refer to the Instructions for Form 990-T.

Automatic Extension for Filing

An automatic six-month extension from the original due date will be granted without the need to file Form 8868, Application for Extension of Time to File. (REG-101607-23, RIN 1545-BQ63 NPRM, Section 6417 Elective Payment of Applicable Credits at, page 36)

Additional Resources

For further information about clean energy credits, visit the IRS website sections on tribes and clean energy.