IRS releases pre-registration portal for IRA elective pay and transferable credits

On Dec. 22, 2023, the IRS opened the pre-filing registration portal for credits to be claimed under the Inflation Reduction Act of 2022 (IRA) and the CHIPS Act of 2022 as required by Treas. Reg. § 1.6417-5T. Registration through the portal is required to obtain a registration number to be included on the income tax return filings needed to claim the tax credits.

A taxpayer can submit only one pre-filing registration for the applicable tax period. Thus, a taxpayer must apply for registration numbers for every credit it will claim within one filing.

A pre-filing registration can be amended or updated under section 1.6417-5T(c)(4), but only after the review of the initial submission has been completed by the IRS. Further, any amendment or update must be made before the registration number is used under section 1.6417-5 T(c)(4).

Pre-filing registration should be done after placing the investment property or facility in service but cannot be done any earlier than the beginning on the tax period in which the tax credit is earned. A pre-filing registration should be submitted at least 120 days prior to the due date (including extensions) for the return where the credits will be reported.

The IRS may prioritize the review of pre-filing registrations based on the tax year end date of the taxpayer.

As of Dec. 27, 2023, the IRS has not updated the FAQs regarding elective pay or clean energy tax credit transferability to reflect the opening of the portal.

Note: A registration number is only valid for the taxable year for which it was obtained under section 1.6417-5T(c)(2). However, registration numbers may be renewed each year as necessary.

In order to complete the pre-filing registration, taxpayers will need to complete two sections. The first section collects general information regarding the taxpayer. The second section, based on the taxpayer’s inputs in the general section, will allow the taxpayer to input all relevant information for specific credits. Below is an overview of the information and documents required to complete each section. The general information provides for the taxpayer to input the information required by section 1.6417-5T(b)(5). The credit-specific information provides for the taxpayer to input the information required by section 1.6417-5T(b)(5)(vii).

General information

Information required to complete the general registration portion:

• Tax period of the election
• EIN (see below for EIN-specific information)
• Information about subsidiaries included in a consolidated group of corporations
• Name (as it appears on tax returns)
• Address (must be the address used on last income or employment tax return)
• Type of entity
• Bank account information
• Types of returns filed

The EIN entered for the registration must be the EIN of the taxpayer making the elective payment or transfer election on its tax return.

If a parent of a consolidated group of corporations is the registrant, the EIN and name must be that of the parent. Information regarding the subsidiaries is captured during the credit-specific information input. The parent of a consolidated group of corporations will register on behalf of itself and will act as an agent for subsidiaries included in the group. See regulations section 1.1502-77. When entering credit-specific information, the parent corporation will provide the subsidiary name and EIN for each facility or property being registered that is owned by the subsidiary.

If the entity that earns the credit is disregarded for federal income tax purposes, the information entered for the registrant will depend on the ownership structure. Below is an overview of the input of disregarded entities.

Credit-specific information

After the general registrant information is complete, based on the responses the credit-specific information portion of the application will be generated.

Note: The section 45Y, Clean Energy Production Credit, section 45Z, Clean Fuel Production Credit and section 48E, Clean Energy Investment Credit will not be included for pre-filing registration until after Dec. 31, 2024.

In order to capture the information needed for the registration, the portal offers two ways to upload the information, manual entry and bulk upload. Currently, only credits under sections 30C, 45, 45W, and 48 are available for bulk upload.

When using manual entry, all information regarding a facility or property must be manually entered into the portal. If using the bulk upload, a spreadsheet may be used to upload the information in a single step.

For the majority of credits, the following information will be needed:

• Choice of election (either elective pay or transfer)
• Subsidiary in a consolidated group of corporations
• Date construction began
• Date placed in service
• Facility/property location
• Joint ownership
• Source of funds

Aside from the information listed above, each credit type will request supporting documentation to be uploaded. An overview of each credit and supporting documentation can be found below.

Note: If detailed project plans or contractual agreements are the best support that the taxpayer is engaging in activities or making tax credit investments that qualify the registrant to claim a credit, the registrant should submit an extract of the document showing the name of the taxpayer, date of purchase and identifying information such as serial numbers, rather than the entire document.

Section 30C, Alternative Fuel Refueling Property

• 11-digit population census tract identification number
• Fuel type

In addition, the following is a non-exhaustive list of documents that may support the registration of a facility/property for the section 30C credit:

• A construction permit that clearly ties the facility/property to its physical location
• Equipment purchase documentation that shows the taxpayer as the buyer identifies the seller and specifically identifies the purchased property
• A permit issued by a government authority with jurisdiction over the operation of alternative fuel refueling properties in the community where the facility/property is located

Section 45, Renewable Electricity Production Credit

• Attestation is required the taxpayer has not claimed a section 48 credit for the facility for any prior tax period
• Type of facility (such as geothermal, solar, trash, etc.)

Supporting documents:

• Permits to operate from a utility (only if connected to the grid)
• If not connected to the grid electrical permits to operate from an authority having jurisdiction
• A brief description of the facility/property signed by an executive-level representative of the taxpayer
• Executive summary of an independent engineer or commissioning report
• An executive summary, of the interconnection agreement with the applicable utility, signed by an executive-level representative of the taxpayer
• A document, signed by an authorized representative of the supplier of materials used for the manufacture of components with regard to domestic content of such materials

Section 45Q, Carbon Oxide Sequestration

• The type of sequestration activity must be selected.
• Information regarding the ownership of the sequestration point must also be input. If the taxpayer is not the owner of the sequestration point, the operator's name and address must be input

Supporting documents:

• Approved lifecycle analysis (LCA), or summary, if the LCA is greater than five pages
• Substantiation that the taxpayer will have use of the land where the sequestration facility is located, such as proof of land ownership or long term lease
• Substantiation of EPA permit application
• Proof of approval for geologic sequestration wells
• State and local government approvals or permits, including environmental approvals

Section 45U, Zero Emission Nuclear Power Production Credit

The credit under 45U applies to electricity produced and sold after Dec. 31, 2023. Due to the applicable tax years for the credit, the registration tool should not be used for a facility with an annual accounting period beginning in 2023 even if the electricity was produced in 2023.

Supporting documents:

• Copy of the license or permit issued to the taxpayer by an appropriate government agency authorizing the registrant’s operation of the Zero Emission Nuclear Power facility

Section 45V, Production of Clean Hydrogen Credit

The type of facility/ property will need to be input as a brief description of the production facility.

Supporting documents:

• Operating permit
• Commissioning report

Section 45W, Commercial Clean Vehicles Credit

Each vehicle requires its own registration number and VIN assigned by the qualified manufacturer. There is a bulk upload option available.

Supporting documents:

• Certificate of title showing ownership of the vehicle/machinery (including a certificate of title indicating a lien held by a financial institution or other lender)
• Time of sale documents, including a bill of sale or similar purchase agreement
• If registered for on-road use, a copy of a registration document issued by an appropriate government authority

Section 45X, Advanced Manufacturing Production Credit

The pre-filing registration for a section 45X credit requires an attestation that a section 48C, Qualifying Advanced Energy Project Credit will not be claimed for this property/facility for the current or any prior taxable period.

You may select as many eligible components listed under the Facility/Property Information as applicable. Election under section 45X(a)(3)(B) must be selected as “yes” or “no” during the registration process.

Supporting documents:

• Proof of ownership of the premises
• Permits to operate the manufacturing facility or to produce certain eligible components

If the production tax credit relates to an offshore wind vessel, additional supporting documents are required.

Section 48, Energy Credit

Supporting documents:

• Proof of ownership of the facility/property with respect to which the credit is computed
• Construction permit showing commencement of construction
• Permits to operate from the utility (only if connected to the grid, or if not connected to the grid electrical permits to operate from an authority having jurisdiction)

Section 48C, Qualifying Advanced Energy Project Credit

The control number issued by the Department of Energy is required to support the pre-filing registration for a credit under section 48C.

Section 48D, Advanced Manufacturing Investment Credit (CHIPS Act)

An attestation is required that the taxpayer is an “eligible taxpayer.” The attestation must include (1) the taxpayer is not a foreign entity of concern (as defined in section 9901(6) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, as amended by section 103 of the CHIPS Act), and (2) has not made an applicable transaction (as defined in section 50(a)) during the taxable year.

Placed in service date must be input.

Supporting documents:

• Permits to operate from authority having jurisdiction
• EPA permit to operate (for a semiconductor manufacturer only)
• Evidence of ownership that contractually ties the qualifying property to the land and that geographic location. List relevant contracts and clauses

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.