The Inflation Reduction Act of 2022 included significant business credits for energy investments in vehicles, manufacturing, alternative fuels, and carbon capture, effective for tax years beginning on or after January 1, 2023. As part of this legislation, Congress authorized two novel credit delivery mechanisms: direct pay of the credit under Section 6417 and transfer or sale of the credits under Section 6418. This course will focus on final regulations under these two Code sections, enabling tax practitioners to confidently advise their clients regarding claiming, transferring, and purchasing credits.
Learning Objectives
- Competently advise clients with regard to claiming, transferring, and purchasing energy credits
Major Topics
- Overview of energy credits eligible for transfer or direct pay
- Pre-registration requirement
- Which taxpayers are eligible to transfer credits?
- Which types of entities may elect direct pay?
- Special rules affecting partnerships and S corporations
- Rules for transferees, including passive activity loss rules
- Who bears the risk of credit recapture?
- Tax reporting, filing deadlines, and redesigned Form 3800
