Some states may not conform to the rules allowing taxpayers to monetize green energy tax credits, potentially creating surprising state income tax liabilities.
Pub. L. No. 117-169 (commonly called the “Inflation Reduction Act of 2022” (IRA)) extended, expanded, and/or established a slate of federal income tax credits in renewable or “green” energy. The IRA also allowed eligible taxpayers to monetize applicable green energy tax credits by directly selling them to third parties. However, some states may not conform to those rules, potentially creating surprising state income tax liabilities for taxpayers investing in this new and growing market.
Read an October 2024 report* prepared by KPMG LLP tax professionals: Federal Credit Sales May Create Unexpected State Tax Headaches
* Reproduced with permission from Tax Management Memorandum, 65 TMM, 10/02/2024. Copyright ® 2024 by Bloomberg Industry Group, Inc. (800-372-1033) http://www.bloombergindustry.com