As we enter into the first tax season for non-taxable entities to make an election for direct pay, the following guide can help organizations as they work through necessary steps with the Internal Revenue Service (IRS).
Under the Inflation Reduction Act, qualifying businesses and tax-exempt entities can take advantage of certain tax credits even if they don’t have taxable income through new elective or direct payment options. To monetize applicable credits for clean energy projects, an authorized representative of the entity must use the IRS online tool to make an election. The steps below can be used as a guide for first-time users:
Complete this process during the tax year you intend to receive applicable credits. Visit the IRS Portal to begin.
New users will need photo identification. NOTE: Personal information is used to verify identity, not the entity’s information.
As an authorized representative, you will need to sign in and provide the following information about the entity to create its clean energy account: - Employer ID Number (EIN) - Name and address
Follow the prompts to provide details and documentation for credits the entity will report on its tax return. The information required will vary according to credits the entity will earn.
The authorized representative should expect to receive a special registration number for each project location.
990-T www.irs.gov/pub/irs-pdf/f990t.pdf
3800-T www.irs.gov/pub/irs-pdf/f3800.pdf
3468 ITC www.irs.gov/pub/irs-pdf/f3468.pdf
At Centrica Business Solutions, we help organizations design and build clean energy projects that maximize available tax incentives while simplifying the procedure to claim applicable credits.
