The Biden administration’s new tax credit rules, set to take effect on Jan. 19, 2025, aim to expedite the shift to a more sustainable economy. The Internal Revenue Service (IRS) and the U.S. Treasury Department have introduced regulations to expand access to tax credits for specific co-owned projects in order to hasten the development of clean energy initiatives.
The updated guidelines permit entities such as state and local governments, tribal organizations, and non-profits to access clean energy tax credits through elective pay, also known as direct pay. This initiative allows eligible entities to convert certain clean energy tax credits into refundable payments, providing a boost to clean energy projects’ financing.
Deputy Secretary of the Treasury Wally Adeyemo emphasized the benefits of direct pay in facilitating the construction of clean energy projects efficiently and economically. The new rules enable co-owned clean energy projects to qualify for direct pay, allowing project co-owners to individually claim their portion of the tax credits.
By enhancing access to direct pay for co-owned energy ventures, the Biden administration aims to incentivize clean energy projects and expedite the transition to a more sustainable economy. These measures align with the administration’s commitment to promoting renewable energy investments and reducing carbon emissions.
Source link
