The IRS offers a registration process for entities such as businesses, tax-exempt organizations, and governmental bodies to elect payment or transfer of certain business tax credits, even if they do not have taxable income to apply these credits towards. This is particularly relevant for credits under the Inflation Reduction Act and CHIPS Act of 2022. Authorized representatives can use the Energy Credits Online (ECO) account to register, obtain registration numbers for each applicable credit property, and must include these numbers on their tax returns. Detailed instructions and FAQs are available on the IRS website for entities looking to monetize eligible credits.
For more detailed information, you can visit the IRS page directly: IRS Elective Payment or Transfer of Credits.
Nonprofit Credits
Here’s a breakdown of some relevant credits that nonprofits might be eligible for:
- Energy Credit (Section 48, Form 3468, Part VI): This credit can apply to nonprofits that invest in solar, wind, and other renewable energy property. Nonprofits might use this to reduce the cost of installing solar panels on their facilities.
- Clean Electricity Investment Credit (Section 48E, Form 3468, Part V): Similar to the Energy Credit, this is aimed at investments in clean electricity properties, including solar photovoltaic systems and wind turbines.
- Commercial Clean Vehicle Credit (Section 45W, Form 8936, Part V): Nonprofits that purchase new commercial clean vehicles, such as electric or hydrogen fuel cell vehicles, can benefit from this credit.
- Credit for Alternative Fuel Vehicle Refueling/Recharging Property (Section 30C, Form 8911, Part II): If a nonprofit installs alternative fuel vehicle refueling or recharging stations, this credit can help offset the costs.
Political Campaigns and Charities
The IRS offers comprehensive guidance on the restrictions involving political campaign activities by tax-exempt organizations. Charities, churches, and other nonprofits with tax-exempt status must avoid any political campaign involvement to maintain their exemption. This includes not endorsing or donating to political campaigns, among other restrictions. Detailed information and further guidance on maintaining compliance with these rules are available through the IRS’s Stay Exempt resources.
For more detailed information, you can visit the specific page on the IRS website: Political Campaigns and Charities – Stay Exempt.
More in This Series:
Part I: Accounting and Auditing Update | Fall 2024
Part III: Compliance and Legislation | Fall 2024
Part IV: Expert Insights | Fall 2024
