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Energy Credits & Not-for-Profits: What You Need To Know

Sikich

Sep 7 2023

2 min read

The Inflation Reduction Act (IRA) of 2022 created and expanded many useful energy-related credits and even included a few ways for not-for-profit organizations to take advantage of them. The Department of Treasury issued additional guidance on the credits in a press release on June 14, 2023. On February 26, 2024, the IRS made office hours available to help with the pre-registration requirements. The 2023 Form 990-T instructions have been updated to provide guidance for how to claim the credits by filing that Form as well.

The IRA created two new credit delivery mechanisms to allow not-for-profits to take advantage of clean energy tax credits: elective (or direct) pay or transferability. The direct pay option allows qualifying organizations to be paid directly for clean energy credits. Organizations who choose the transferability option can receive tax-free funds from a third party in exchange for use of the credits.

Organizations that are interested in claiming one of these credits must complete a pre-filing registration process. Temporary regulations are in place for registration, and additional guidance on the pre-registration process is expected to be released later this year.

Elective pay and transferability can be used for the following tax credits:

Commercial Clean Vehicle Credit (45W), (Form 8936, Part V)
Credit for Alternative Fuel Vehicle Refueling / Recharging Property (30C), (Part 8911, Part II)
Energy Credit (48), (Form 3468, Part VI)
Clean Electricity Investment Credit (48E), (Form 3468, Part V)
Qualifying Advanced Energy Project Credit (48C), (Form 3468, Part III) 
Renewable Electricity Production Credit (45), (Form 8835, Part II)
Clean Electricity Production Credit (45Y)
Zero-emission Nuclear Power Production Credit (45U), (Form 7213, Part II)
Advanced Manufacturing Production Credit (45X), (Form 7207)
Clean Hydrogen Production Credit (45V), (Form 7210)
Clean Fuel Production Credit (45Z)
Carbon Oxide Sequestration Credit (45Q), (Form 8933)

We encourage you to visit the IRS website to learn more about these credits and find out whether your organization qualifies. Be sure to reach out to your Sikich tax advisor if you’re unsure which credits may be advantageous or if you have any questions about the process.

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This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

About the Author

Sikich

Sikich is a global company specializing in technology-enabled professional services. With more than 1,900 employees, Sikich draws on a diverse portfolio of technology solutions to deliver transformative digital strategies and is comprised of one of the largest CPA firms in the United States. From corporations and not-for-profits to state and local governments and federal agencies, Sikich clients utilize a broad spectrum of services* and products to help them improve performance and achieve long-term, strategic goals. *Securities offered through Sikich Corporate Finance LLC, member FINRA/SIPC. Investment advisory services offered through Sikich Financial, an SEC Registered Investment Advisor. 