IRS strongly urges pre-filing registration now for 2023 elective payment or transfer claims
IRS recommends submitting the pre-filing registration at least 120 days before the planned filing date
August 14, 2024
The IRS today issued a release strongly urging qualifying businesses, tax-exempt organizations, and state, local, and Indian tribal governments to quickly complete the pre-filing registration process for projects placed in service in 2023 if they plan to make an elective payment or transfer election. The “Inflation Reduction Act” (IRA) and the “CHIPS Act of 2022” allow taxpayers to take advantage of certain manufacturing investment, clean energy investment and production tax credits through elective payment (also known as “direct pay”) or transfer.
According to today’s IRS release—IR-2024-210:
- Taxpayers must complete the pre-filing registration to receive a registration number, which is necessary for making a valid elective payment or transfer election on their original annual tax return. The IRS recommends submitting the pre-filing registration at least 120 days before the planned filing date.
- After completing the pre-filing registration, taxpayers must make the elective payment or transfer election on their timely filed (including extensions) annual return. Electronic filing is strongly encouraged, even if not required.
- The registration number obtained through the pre-filing process must be included on the taxpayer’s annual return making the elective payment or transfer election. The IRS will communicate the status of the registration exclusively through the IRA/CHIPS Pre-Filing Registration tool.
- Elective payment and transfer elections offer alternative ways for applicable entities and eligible taxpayers, respectively, to get the benefit of certain IRA clean energy credits or the CHIPS credit they have earned, even if the taxpayer cannot use the credit to offset their tax liability.
- The IRS is hosting office hour sessions to assist organizations with the pre-filing registration process and the use of the IRA/CHIPS Pre-Filing Registration tool. Subject matter experts from Large Business & International and Tax Exempt/Government Entities will be available to answer questions.