IMPORTANT NOTICE: FEDERAL GOVERNMENT MAKES TAX CREDITS AVAILABLE FOR LOCAL GOVERNMENTS and Not-for-Profits THROUGH ELECTIVE PAY
On June 14, 2023, the inflation Reduction Act was modified to allow local governments and not for profits to receive tax credit refunds even though they are not required to pay income taxes. Under the new elective pay rules a government may qualify for a refund for one of the following activities:
- Clean Vehicle Credits. If your government purchased a plug-in electric vehicle that draws significant propulsion from an electric motor, you may be eligible for a maximum credit of $7,500 for qualified vehicles with gross vehicle weight of under 14,000 pounds and $40,000 for all other vehicles. This includes passenger vehicles, buses, and ambulances.
- Charging infrastructure. If your government expended funds for charging infrastructure on your property, you may qualify for a refundable tax credit.
- Solar, geothermal or wind generation projects that have been completed in 2023 or are going to be completed by year end. This can include solar panels on government owned buildings.
These credits are likely available regardless of whether Federal or State Grants were utilized for their purchase or construction. The IRS has just finished accepting input on the proposed preliminary rules and final regulations are not anticipated to be completed until later this year. HOWEVER, in order to retain the ability to claim credits you will need to:
- Complete a pre-filing registration with the IRS. It is anticipated that the portal for registration will be available later this year.
- File form 990-T or related extension by May 15th, 2024. This will entitle you to receive the credit which can be wired directly to your account.
The rules, documentation and filings can be complex; however, your government will be entitled to a refund if they meet the required criteria. If you believe you may qualify for a credit based upon the items noted above, or anticipate completing projects in 2024 that may qualify, please contact us directly. Additional information can be found here: http://www.irs.gov/pub/irs-pdf/p5817e.pdf and here: https://www.irs.gov/credits-deductions/elective-pay-and-transferability-frequently-asked-questions-elective-pay as well as attached.
NEW Federal Green Tax Refundable Credits now available for Local Governments and Not-for-Profits: Eligible Tax Credits