Treasury Finalizes Direct-Pay Rules for Energy Tax Credits (1)

The Treasury and the IRS issued final rules Tuesday for tax-exempt and government organizations that want to get a cash payment in lieu of the clean energy tax credits in the Biden administration’s tax-and-climate law.

Tax-exempt entities, states, and political subdivisions are among those that will be able to receive “direct pay” under Section 6417, following the passage of the Inflation Reduction Act in August 2022.

The final rules (RIN 1545-BQ63) define the organizations eligible to get a refund. The proposed rules had clarified that an instrumentality of the state such as some school districts, hospitals, ...