Clean Energy Tax Provisions in the Inflation Reduction Act
The 2022 Inflation Reduction Act includes some two dozen tax provisions that will save families money on their energy bills and accelerate the deployment of clean energy, clean vehicles, clean buildings, and clean manufacturing. These tax provisions reflect President Biden’s strong belief in building the economy from the bottom up and middle out.
Many of the clean energy tax provisions offer bonus credits to projects that are located in low-income communities or energy communities, pay prevailing wages and use registered apprentices, or meet certain domestic content requirements— all with the goal of strengthening America’s energy security, creating good-paying, high-quality jobs, and spurring shared economic growth that will last well beyond the Biden-Harris Administration.
For a comprehensive, up-to-date compilation of the latest IRA tax guidance from Treasury, click here.
The table below provides the key information about these tax provisions and links to the latest announcements related to their implementation.
| Tax Provision | Description | Eligible Recipients | Base Credit Amount | Bonus Credit Amount | U.S. Code | IRA Section | Funding Mechanism | New or Modified Tax Provision? | Period of Availability | Direct Pay? | Transferable? | Stackable? | Tribal eligibility? | Link to More Information |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Investment Tax Credit for Energy Property | Provides a tax credit for investment in renewable energy projects. | Fuel cell, solar, geothermal, small wind, energy storage, biogas, microgrid controllers, and combined heat and power properties. For solar, includes (1) equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat, and (2) equipment that uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight or electrochromic glass that uses electricity to change its light transmittance properties in order to heat or cool a structure. | 6% of qualified investment (basis of energy property) | Credit is increased by 5 times for projects meeting prevailing wage and registered apprenticeship requirements. Credit is increased by up to 10 percentage points for projects meeting certain domestic content requirements for steel, iron, and manufactured products. Credit is increased by up to 10 percentage points if located in an energy community. | 26 U.S. Code 48 | 13102 | Investment tax credit | Modified and extended to include standalone energy storage with capacity of at least 5 kWh, biogas, microgrid controllers (20MW or less), and interconnection property for small projects (5MW or less). Value of the credit tied to prevailing wage and apprenticeship requirements. | Facilities beginning construction before 1/1/25. For geothermal heat property, the base investment tax credit is 6% for the first 10 years, scaling down to 5.2% in 2033 and 4.4% in 2034. | Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops. | Yes | Credit reduced for tax-exempt bonds with similar rules as section 45(b)(3). | Yes | https://www.federalregister.gov/documents/2024/12/12/2024-28190/definition-of-energy-property-and-rules-applicable-to-the-energy-credi |
| Low-Income Communities Bonus Credit | Provides an additional investment tax credit for small-scale solar and wind facilities on Indian land and in low-income communities. | Solar and wind facilities with a maximum net output of less than 5 MW, including associated energy storage technology. | 6% of qualified investment (basis of energy property) | Credit is increased by 10 percentage points for projects located in low-income communities or on Tribal land. Credit is increased by 20 percentage points for projects that are part of certain federally subsidized housing programs or that offer at least 50 percent of the financial benefits of the electricity produced to low-income households. This bonus amount will require an application by the taxpayer, with a cumulative total of 1.8 GW of direct current capacity per year available for allocation. | 26 U.S. Code 48(e); 26 U.S. Code 48E(h) | 13103, 13702(h) | Allocated investment credit, capped at 1.8 GW per year. Unused capacity carries over to following year. | New | 48(e) begins in 2023 andends when the 48E(h) Clean Electricity Investment Tax Credit becomes available in 2025 through2032. | Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops. | Yes | No rules | Yes, facilities on Indian land qualify for the 10 percentage point bonus credit. | https://www.irs.gov/credits-deductions/low-income-communities-bonus-credit |
| Zero-Emission Nuclear Power Production Credit | Provides tax credit for electricity from qualified nuclear power facilities and sold after 2023. | Existing nuclear power plants at time of enactment that are not eligible for the 45J credit. | 0.3 cents/kWh, inflation adjusted after 2024. Credit amount phases down depending on the amount of energy produced and the gross receipts of the nuclear power facility. | 5 times the base credit if prevailing wage requirement is met for workers doing alteration or repair at the facility. | 26 U.S. Code 45U | 13105 | Production tax credit | New | Available for electricity produced and sold after 12/31/23, in tax years beginning after that date. Not available for tax years beginning after 12/31/32. | Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops. | Yes | Facilities eligible for the 45J advanced nuclear production tax credit are not eligible for the 45U credit. Payments from federal, state, or local zero-emission nuclear subsidies reduce the credit amount. | Yes | https://www.irs.gov/credits-deductions/zero-emission-nuclear-power-production-credit |
| Clean Electricity Production Tax Credit | Provides a technology-neutral tax credit for production of clean electricity. Replaces the production tax credit for electricity generated from renewable sources (§45) for facilities placed in service in 2025 and later. | Facilities generating electricity for which the greenhouse gas emissions rate is not greater than zero. | 0.3 cents/kW [inflation adjusted] | Credit is increased by 5 times for projects meeting prevailing wage and apprenticeship requirements. Credit is increased by 10% for projects meeting cetain domestic content requirements for steel, iron, and manufactured products. Credit is increased by 10% if located in an energy community. | 26 U.S. Code 45Y | 13701 | Production tax credit | New | Facilities placed in service after 12/31/24. Phase-out starts the later of (a) 2032 or (b) when U.S. greenhouse gas emissions from electricity are 25% of 2022 emissions or lower. | Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops. Applies separately with regard to each facility. | Yes | Credit reduced for tax-exempt bonds with similar rules as section 45(b)(3). | Yes | https://www.irs.gov/credits-deductions/clean-electricity-production-credit |
| Clean Electricity Investment Tax Credit | Provides a technology-neutral tax credit for investment in facilities that generate clean electricity. Replaces the investment tax credit for energy property (§48) for property placed in service in 2025 and later. | Facilities that generate electricity with a greenhouse gas emissions rate that is not greater than zero and qualified energy storage technologies. | 6% of qualified investment (basis) | Credit is increased by 5 times for facilities meeting prevailing wage and apprenticeship requirements. Credit is increased by up to 10 percentage points for facilities meeting certain domestic content requirements for steel, iron, and manufactured products. Credit is increased by up to 10 percentage points if located in an energy community. | 26 U.S. Code 48E | 13702 | Investment tax credit | New | Facilities placed in service after 12/31/24. Phase-out starts the later of (a) 2032 or (b) when U.S. greenhouse gas emissions from electricity are 25% of 2022 emissions or lower. | Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops. | Yes | Credit reduced for tax-exempt bonds with similar rules as section 45(b)(3). | Yes | https://www.irs.gov/credits-deductions/clean-electricity-investment-credit |
| Advanced Energy Project Credit | Provides a tax credit for investments in advanced energy projects, as defined in 26 USC § 48C(c)(1). | A project that (1) re-equips, expands, or establishes an industrial or manufacturing facility for the production or recycling of a range of clean energy equipment and vehicles; (2) re-equips an industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20 percent; or (3) re-equips, expands, or establishes an industrial facility for the processing, refining, or recycling of critical materials. | 6% of taxpayer's qualifying investment | Businesses can claim a 30% credit for projects meeting prevailing wage and apprenticeship requirements. | 26 U.S. Code 48C | 13501 | Allocated investment credit. 48C provides $10 billion of allocations, at least $4 billion of which must be allocated in energy communities. | Modified and extended. 48C had been enacted in 2009 but was fully allocated after the 2nd allocation round in 2013. The Inflation Reduction Act provides $10 billion of allocations, directs a minimum share to energy communities, and expands eligibility to new types of projects. | The credit is available when the application and certification process begins and ends when credits are fully allocated. | Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops. | Yes | Cannot claim 45X credit for property produced at facilities that received the 48C credit. | Yes | https://www.irs.gov/credits-deductions/businesses/advanced-energy-project-credit |
| Advanced Manufacturing Production Credit | Provides a production tax credit for domestic manufacturing of components for solar and wind energy, inverters, battery components, and critical minerals. | Domestic manufacturers | Varies by technology | None | 26 U.S. Code 45X | 13502 | Production tax credit | New | Credit for critical minerals is permanent starting in 2023. For other items, the full credit is available between 2023-2029 and phases down over 2030-2032. | Yes, for tax-exempt organizations, states, political subdivisions, the Tennessee Valley Authority, Indian Tribal governments, Alaska Native Corporations, and rural electricity co-ops (applicable entities). Entities other than applicable entities are eligible for up to 5 years of direct pay (which expires at the end of 2032) for tax years after December 31, 2022 if they make an election. | Yes | Cannot claim 45X credit for property produced at facilities that received the 48C credit. | Yes | https://www.federalregister.gov/documents/2024/10/28/2024-24840/advanced-manufacturing-production-credit |
| Clean Vehicle Credit | Provides a tax credit for purchasers of clean vehicles. | The tax credit is not available for consumers who have adjusted gross incomes for the current or preceding year above $300,000 (couples), $225,000 (heads of household), $150,000 (singles). Not inflation adjusted. | $0 | $3,750 credit for vehicles meeting critical minerals requirement. The vehicle must contain a threshold percentage of critical minerals extracted or processed in the United States or in a country with which the United States has a free trade agreement, or recycled in North America. Additional $3,750 credit for vehicles meeting the requirement that a threshold percentage of battery components be manufactured or assembled in North America. Vehicles must meet other requirements, including final assembly in North America and MSRP limits (generally $55,000; for vans, SUVs, and pickups $80,000). Starting in 2024, qualifying vehicles cannot have battery components manufactured or assembled by a foreign entity of concern. Starting in 2025, qualifying vehicles’ batteries cannot contain critical minerals extracted, processed, or recycled by a foreign entity of concern. | 26 U.S. Code 30D | 13401 | Tax credit for consumers | Modified and extended. Credit extended with new rules pertaining to final assembly in the United States, critical minerals/battery components, and foreign entities of concern. Per manufacturer limit is lifted. | Generally, vehicles placed in service in 2023-2032. Some of the 30D rules have differing timeframes. | No | Yes. Starting in 2024, transferable only to the dealer at point of sale under section 30D(g) but not under section 6418. | Cannot claim both 30D credit and 45W credit. | Yes, point of sale transfer to registered dealers (definition of dealer includes persons licensed by Indian Tribal governments to engage in the sale of vehicles) | https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after |
| Credit for Previously-Owned Clean Vehicles | To provide a tax credit for purchasers of pre-owned clean vehicles | Tax credit is not available for consumers who have adjusted gross incomes for the current or preceding year above $150,000 (couples), $112,500 (heads of household), $75,000 (singles). Individuals can claim only once per three years. Vehicles must be sold by a dealer; the sale price must be $25,000 or less; and it can only be claimed once per vehicle. | The lesser of $4,000 or 30% of sale price | None | 26 U.S. Code 25E | 13402 | Tax credit for consumers | New | Generally, vehicles placed in service in 2023-2032. | No | Yes. Starting in 2024, transferable only to the dealer at point of sale under section 25E(f) but not under section 6418. | No rules | Yes, point of sale transfer to registered dealers (definition of dealer includes persons licensed by Indian Tribal governments to engage in the sale of vehicles) | https://www.irs.gov/credits-deductions/used-clean-vehicle-credit |
| Credit for Qualified Commercial Clean Vehicles | Provides a tax credit for purchasers of qualified commercial clean vehicles | Businesses that acquire motor vehicles or mobile machinery for use or lease; applicable entities, including Indian Tribal governments and Alaska Native Corporations, that acquire them for use. | The amount of the credit is the lesser of (a) 15% of the vehicle's basis (i.e. its cost to the purchaser) or 30% for vehicles without internal combustion engines, or (b) the amount the purchase price exceeds the price of a comparable internal combustion vehicle. The credit is capped at $7,500 for vehicles < 14,000 lbs and $40,000 for all other clean vehicles. | None | 26 U.S. Code 45W | 13403 | Tax credit for commercial use or lease | New | Vehicles placed in service after 1/1/23 and acquired before 1/1/33. | Yes, for states, political subdivisions, tax-exempt organizations (other than co-ops described in section 521), and Indian Tribal governments. | No | Cannot claim both the 30D credit and 45W credit. | Yes | https://www.irs.gov/credits-deductions/commercial-clean-vehicle-credit |
| Alternative Fuel Vehicle Refueling Property Credit | Provides a tax credit for alternative fuel vehicle refueling and charging property in low-income and rural areas. Alternative fuels include electricity, ethanol, natural gas, hydrogen, biodiesel, and others. | The qualified alternative fuel vehicle refueling property must be for clean-burning fuels, as defined in the statute, and must be located in low-income or rural areas. | 6% of the cost for businesses, limited to a $100,000 credit per item of property for businesses. 30% for individuals, limited to $1,000. | Businesses can claim a 30% credit for projects meeting prevailing wage and apprenticeship requirements. | 26 U.S. Code 30C | 13404 | Tax credit for consumers and businesses. | Extended and modified to include prevailing wage and registered apprenticeship requirements for businesses claiming the credit. Adds bidirectional charging equipment, charging equipment for 2- and 3-wheel electric vehicles. Limited to low-income and non-urban areas. | January 1, 2023-December 31, 2032 | Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops. | Yes, for property used in a trade or business. | No rules | Yes | https://www.irs.gov/credits-deductions/alternative-fuel-vehicle-refueling-property-credit |
| Clean Fuel Production Credit | Provides a tax credit for domestic production of clean transportation fuels, including sustainable aviation fuels, beginning in 2025. | Registered producers in the United States. Fuels with less than 50 kilograms of carbon dioxide equivalent per million British thermal units (CO2e per mmBTU) qualify as clean fuels eligible for credits. | The base amount is $0.20/gallon for non-aviation fuel and $0.35/gallon for aviation fuel, multiplied by the carbon dioxide "emissions factor" of the fuel. Inflation adjusted after 2024. | Credit is 5 times the base amount ($1/gallon for non-aviation fuel, $1.75 gallon for aviation fuel, multiplied by the emissions factor) for facilities meeting prevailing wage and apprenticeship requirements. Inflation adjusted after 2024. | 26 U.S. Code 45Z | 13704 | Production tax credit | New | Fuel produced after 12/31/24 and used or sold before 12/31/27. | Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops. | Yes | No rules | Yes | https://www.irs.gov/credits-deductions/clean-fuel-production-credit |
| Sustainable Aviation Fuel Credit | Provides a tax credit for the sale or use of sustainable aviation fuel (SAF) that achieves a lifecycle greenhouse gas emissions reduction of at least 50% as compared with petroleum-based jet fuel | Producers and blenders of SAF-kerosene fuel mixtures for aviation. Qualified SAF mixture must be made in the United States, and fueling of the aircraft must occur in the United States. | $1.25/gallon of SAF. | Up to $0.50/gallon depending on lifecycle greenhouse gas emissions of SAF relative to petroleum-based jet fuel. | 26 U.S. Code 40B | 13203 | Tax credit | New | January 1, 2023-December 31, 2024 | No | No | Credit can be claimed against income tax or fuel excise tax. Credit included in gross income (similar to alcohol and biodiesel fuels credits). | No | https://www.irs.gov/credits-deductions/businesses/sustainable-aviation-fuel-credit |
| Credit for Carbon Oxide Sequestration | Provides a credit for carbon dioxide sequestration coupled with permitted end uses within the United States. | U.S. facilities within minimum volumes: 1,000 metric tons of CO2 per year for DAC facilities; 18,750 metric tons for electricity generating facilities (with carbon capture capacity of 75% of baseline CO2 production); 12,500 metric tons for any other facility. | $17/metric ton of carbon dioxide captured and sequestered; $12/metric ton for carbon dioxide that is injected for enhanced oil recovery or utilized. Those amounts are $36 and $26, respectively, for direct air capture facilities. | 5 times the base amounts if the facility meets prevailing wage and apprenticeship requirements. | 26 U.S. Code 45Q | 13104 | Production tax credit based on carbon capture and sequestration, injection for enhanced oil recovery (EOR), or utilization | Extended and modified, tying the credit amounts to meeting prevailing wage and apprenticeship requirements, providing an enhanced credit for direct air capture (DAC), and lowering the carbon capture threshold requirements at facilities. | Credit can be claimed for 12 years after a facility is placed in service. Facilities must be placed in service before 1/1/33. | Yes, for tax-exempt organizations, states, political subdivisions, the Tennessee Valley Authority, Indian Tribal governments, Alaska Native Corporations, and rural electricity co-ops (applicable entities). Entities other than applicable entities are eligible for up to 5 years of direct pay (which is less than the full credit period and expires at the end of 2032) if they make an election. Applies to carbon capture equipment (CCE) that is originally placed in service after December 31, 2022. Applies separately with respect to CCE placed in service during a taxable year. | Yes | Credit reduced for tax-exempt bonds with similar rules as section 45(b)(3). | Yes | https://www.irs.gov/credits-deductions/credit-for-carbon-oxide-sequestration |
| Clean Hydrogen Production Tax Credit | Provides a tax credit for the production of clean hydrogen at a qualified clean hydrogen production facility. | Producers of hydrogen in the United States. | $0.60/kg multiplied by the applicable percentage. The applicable percentage ranges from 20% to 100% depending on lifecycle greenhouse gas emissions. The $0.60/kg is adjusted for inflation. | 5 times the base credit if the facility meets prevailing wage and apprenticeship requirements. | 26 U.S. Code 45V | 13204 | Production tax credit | New. The existing excise tax credit for liquified hydrogen terminates after 12/31/22. | Credit is for hydrogen produced after 12/31/22. Credit is available for facilities placed in service before 1/1/33 for their first 10 years in service. | Yes, for tax-exempt organizations, states, political subdivisions, the Tennessee Valley Authority, Indian Tribal governments, Alaska Native Corporations, and rural electricity co-ops (applicable entities). Applies to facilities placed in service after December 31, 2012. Applies separately with regard to each facility. Entities other than applicable entities are eligible for up to 5 years of direct pay, which is less than the full credit period and expires at the end of 2032, if they make an election. | Yes | Taxpayers can make an irrevocable election to choose the ITC in lieu of the 45V credit as long as they have not claimed the 45Q credit for carbon sequestration. Credit reduced for tax-exempt bonds with similar rules as section 45. | Yes | https://www.irs.gov/credits-deductions/clean-hydrogen-production-credit |
| Energy Efficiency Home Improvement Credit | Provides a tax credit for energy-efficiency improvements of residential homes. | Homeowners; renters for certain improvements | 30% of cost, with limits for each type of improvement and total per year. Credit capped at $600 for "energy property," e.g. efficient heating and cooling equipment; $600 for windows; $250 per door, $500 total for doors; $2,000 for heat pumps; $1,200 for qualified energy efficiency improvements to the building envelope, including insulation and air sealing. Total annual credit capped at $1,200, with a separate annual $2,000 limit for heat pumps. $150 credit for home energy audits. | None | 26 U.S. Code 25C | 13301 | Consumer tax credit | Modified and extended. Credit rate increased from 10% to 30%. Eligibility and standards are modified. $500/per taxpayer lifetime limit eliminated and replaced with increased annual limits. | 2022-2032 | No | No | No rules | Yes | https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit |
| Residential Clean Energy Credit | Provides a tax credit for the purchase of residential clean energy equipment, including battery storage with capacity of at least 3 kWh. | Homeowners (including renters) | 30% of cost of equipment through 2032; 26% in 2033; 22% in 2034. | None | 26 U.S. Code 25D | 13302 | Consumer tax credit | Modified and extended. Credit extended at 30% through 2032, with phasedown through 2034. Battery storage newly eligible in 2023; biomass fuel property credit eliminated. | 2022-2032, with phasedown over 2033-2034. | No | No | No rules | Yes | https://www.irs.gov/credits-deductions/residential-clean-energy-credit |
| New Energy Efficient Homes Credit | Provides a tax credit for construction of new energy efficient homes. | Homebuilders | $2,500 for new homes meeting Energy Star standards; $5,000 for certified zero-energy ready homes. For multifamily, base amounts are $500 per unit for Energy Star and $1000 per unit for zero-energy ready. | For multifamily homes, 5 times the base amount if prevailing wage requirements are met. | 26 U.S. Code 45L | 13304 | Tax credit for homebuilders | Existing, but the credit had previously expired at end of 2021. Retroactively extended with new rules effective for homes acquired after 2022. | 2023-2032 | No | No | Yes. Taxpayers claiming the Low-Income Housing Tax Credit do not have to reduce basis for 45L credits claimed. | Yes | https://www.irs.gov/credits-deductions/credit-for-builders-of-energy-efficient-homes |
| Energy Efficient Commercial Buildings Deduction | Provides a tax deduction for energy efficiency improvements to commercial buildings, such as improvements to interior lighting; heating, cooling, and ventilation, hot water; and building envelope. | Owners and long-term lessees of commercial buildings. Designers of energy efficient building property (architects, engineers). Tax-exempt owners of commercial properties, pending Treasury guidance on deduction allocation. | $0.50-$1 per square foot, depending on increase in efficiency, with deduction over four year periods capped at $1 per square foot. Inflation adjusted. Alternatively, taxpayers can deduct adjusted basis in "qualified retrofit plans" that reduce a building's energy use intensity by at least 25%. | 5 times the base amount if the project meets prevailing wage and apprenticeship requirements. | 26 U.S. Code 179D | 13303 | Business tax deduction | Modified and extended. Efficiency requirements updated. | Permanent; new rules generally begin in 2023. | No | No | No rules | Yes | https://www.irs.gov/credits-deductions/energy-efficient-commercial-buildings-deduction |
| Cost Recovery for Qualified Facilities, Qualified Property, and Energy Storage Technology | Section 13703 offers an additional tax deduction for facilities or property qualifying for this tax credit. These facilities or property will be treated as a 5-year property for purposes of cost recovery; meaning, they will be able to deduct from their taxable income the depreciating value of their business assets, such as equipment, faster than the value actually declines. In practical terms, qualifying facilities or property will be able to take bigger deductions—leaving them with lower taxable income—in the earlier years of a clean energy investment. | Any qualified facility (as defined in section 45Y(b)(1)(A)), any qualified property (as defined in subsection (b)(2) of section 48E) that is a qualified investment (as defined in subsection (b)(1) of such section), or any energy storage technology (as defined in subsection (c)(2) of such section). | 168(e)(3)(B) | 13703 | Cost Recovery | Modified | Applies to facilities and property placed in service afterDecember 31, 2024. | No rules | https://www.irs.gov/credits-deductions/cost-recovery-for-qualified-clean-energy-facilities-property-and-technology | |||||
| Elective Pay | Elective pay makes certain clean energy tax credits effectively refundable. With elective pay, an eligible entity (such as a local government) that qualifies for a clean-energy investment tax credit can notify the IRS of their intent to claim the credit and file an annual tax return to claim elective pay for the full value of the credit. The IRS would then pay the local government the value of the credit. | Applicable entities can use elective pay. Applicable entities include tax-exempt organizations, States, and political subdivisions such as local governments, Indian tribal governments, Alaska Native Corporations, the Tennessee Valley Authority, rural electric co-operatives, U.S. territories and their political subdivisions, and agencies and instrumentalities of state, local, tribal, and U.S. territorial governments. See for more: https://www.irs.gov/credits-deductions/elective-pay-and-transferability-frequently-asked-questions-elective-pay | 26 U.S. Code 6417 | 13801 | See https://www.irs.gov/credits-deductions/elective-pay-and-transferability. | https://www.irs.gov/credits-deductions/elective-pay-and-transferability | ||||||||
| Transferability | Transferability allows entities that qualify for a tax credit but are not eligible to use elective pay to transfer all or a portion of the credit to a third-party buyer in exchange for cash. The buyer and seller would negotiate and agree to the terms and pricing. | A taxpayer eligible to transfer credits is one that is NOT an applicable entity. See Q1-Q8 on "Elective Pay Eligibility" for information about applicable entities. Generally, an applicable entity would include a tax-exempt organization, a State or political subdivision, a local government, an Indian tribal government, an Alaska Native Corporation, the Tennessee Valley Authority, a rural electric co-op, a U.S. territory, or an agency or instrumentality of a state, local, tribal, or territorial government. See for more: https://www.irs.gov/credits-deductions/elective-pay-and-transferability-frequently-asked-questions-transferability | 26 U.S. Code 6418 | 13801 | See https://www.irs.gov/credits-deductions/elective-pay-and-transferability. | https://www.irs.gov/credits-deductions/elective-pay-and-transferability |