Greetings to all solar energy enthusiasts and those considering making a switch to this renewable source of power, today I bring you exciting news concerning credits under the Inflation Reduction Act of 2022 (IRA). Being a solar expert, I want to breakdown this crucial update for you.
As most of you may know, solar energy has gained significant traction over the years as we shift towards sustainable energy solutions. To further stimulate this move, the IRS opened the pre-filing registration portal for credits on 22nd December 2023. This registration will fundamentally impact those intending to claim the tax credits, so if you’re among those selecting solar panels for your home, this is for you.
Previously, solar and other clean energy tax credits were at the edge of expiration but the implementation of the IRA has injected new life into these initiatives. One of the features of this act is the opportunity for non-profit entities to pursue elective pay credits, an option that numerous solar companies are eagerly exploring.
Now let’s dive into the registration process that is likely to profoundly affect numerous homeowners and solar companies, all aimed at enhancing the use of solar arrays for homes.
The IRS has provided a comprehensive 73-page registration guidebook to aid in the registration process. The registration will take place via the newly launched IRA pre-registration filing portal. It’s worth noting that each organization and taxpayer will only get one pre-filing registration for the applicable tax period.
Pre-filing registration should ideally occur after a project is “placed in service” and at the commencement of the tax period in which the tax credit is earned. To be on the safe side, advocate for submission at least 120 days before the due date of the tax return in which the credit will be reported.
The registration process requires taxpayers to fill out two sections. The first section pertains to general information about the taxpayer, and the subsequent one is for the specific credits to be claimed.
Upon completion of the General Registration Section, you then provide detailed project information. This includes a variety of details such as the choice of election (elective pay or transfer), commencement date of the construction, the date the project was placed in service, and the sources of funding.
Contrary to what one might think, you’re not yet done! Beside the general and detailed sections, each credit type will necessitate supporting documents, including proof of ownership of the facility or property, commencement of construction permit, and permits to operate.
As promising and stimulating as this all sounds, it is a learning process that requires careful consideration. While the elective pay or transferable credit registration may seem like a simple step, a complete and correct registration is more likely to be approved and can potentially save you from lengthy delays.
In conclusion, it’s an exciting time to be part of the solar industry, either as a solar company or as a homeowner planning to install solar panels. The IRA adds another incentive to shift towards the use of solar arrays for homes. Remember, the earlier the registration, the better, given the inevitable heavy traffic anticipated within the pre-filing registration portal. So, it’s now time to take action to reap the benefits of this remarkable opportunity!
Original Article: https://pv-magazine-usa.com/2024/02/05/irs-pre-registration-portal-open-for-ira-elective-pay-and-transferable-credits/
