Policy Alert: IRS Releases Guidance on Direct Pay


Today, the Internal Revenue Service (IRS) released guidance on elective payments (better known as “Direct Pay”) and “transfers of certain credits under the Inflation Reduction Act (IRA).”

At this afternoon’s Treasury Tribal Advisory Committee (TTAC) public meeting, Treasurer of the United States, Chief Marilynn Malerba, announced that the White House and Department of the Treasury will hold two stakeholder briefings on this new guidance:

Elective Pay Stakeholder Briefing
Thursday, June 15th at 12:00 PM Eastern Time:
Thursday, June 29th at 3:00 PM Eastern Time

From: U.S. Department of the Treasury, Office of Public Affairs, as of 6/14/23:

As part of the Biden-Harris Administration’s Investing in America agenda, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) today released guidance on key provisions in the Inflation Reduction Act to expand the reach of the clean energy tax credits and help build projects more quickly and affordably, which will create good-paying jobs, lower energy costs for families, and advance American innovation.
The Inflation Reduction Act created two new credit delivery mechanisms—elective pay (otherwise known as “direct pay”) and transferability—that enable state, local, and Tribal governments; non-profit organizations, U.S. territories; and other entities to take advantage of clean energy tax credits. Until the Inflation Reduction Act introduced these new credit delivery mechanisms, governments, many types of tax-exempt organizations, and even many businesses could not fully benefit from tax credits like those that incentivize clean energy construction.

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Elective Pay and Transferability Frequently Asked Questions
Federal Register Notices of Guidance
Pre-Filing Registration Requirements for Certain Tax Credit Elections Federal Register Notice
Section 6417 Elective Payment of Applicable Credits Federal Register Notice
Section 6418 Transfer of Certain Credits Federal Register Notice
Elective Payment of Advanced Manufacturing Investment Credit


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