On December 22, 2023, the IRS announced a new online registration tool for eligible taxpayers who want to monetize their energy credits. (IR-2023-249) Registration is required before any qualifying business, tax-exempt organization, or government or tribal entity can monetize their energy credits under the Inflation Reduction Act and the Creating Helpful Incentives to Produce Semiconductors Act.
Once an entity registers through the IRS’s registration tool, which can be found at the link below, the taxpayer must receive a registration number from the IRS before monetizing their energy credits. The IRS recommends registering at least 120 days prior to filing the entity’s income tax returns for the year it intends to elect to monetize its credits so that the IRS has plenty of time to review the registration process on its end.
Monetizing energy credits involves either selling the credits or electing to treat the credits as tax payments (the latter is generally limited to nonprofits and governmental agencies). Additionally, credit monetization is only available for taxable years beginning after December 31, 2022.
The registration website is at:
The IRS news release is available at:
Sign up for Spidell’s 2023/24 Federal and California Tax Update for details regarding monetizing energy credits and for registration tips from tax professionals who have already gone through the registration process. Click here to register.
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