Summer 2023 Solar Industry Update
Direct Payment of Tax Credits Guidance
Treasury and the IRS have issued FAQs, proposed, and temporary regulations on direct pay (also called "elective pay") of
the ITC, PTC, 48C, and Manufacturing Production Tax Credit (MPTC). Comments were due to the IRS by August 14th.
•
3
2
pre-filing registration
registration #
5
tax forms
+ registration # + $ taxes
Tax burden < full credit
still receives full value
$$ full value of tax credit
6
IR
SE
Step 1 - Pursue a qualifying project
Step ②Determine the tax year
Step 3 - Complete pre-filing
registration with the IRS and get #
Step ④Meet all requirements of
qualifying project
Step ⑤- File annual taxes using #
Step 6 - Get refund
Indian tribal governments
The ITC, PTC, and 48C are eligible for direct pay only by:
Tax-exempt organizations
States and Territories (or political subdivisions thereof,⚫
including cities, counties, and instrumentalities like
school districts)
Alaska Native Corporations
.
The Tennessee Valley Authority
Rural electric cooperatives.
The MPTC is eligible for direct pay for five consecutive years (which may be postponed).
Not all steps need be
sequential, but ③ must
precede 5 and ⑥.View entire presentation