§6417 — Elective payment of applicable credits
1 citing cases
Statute Text — 26 U.S.C. §6417
In the case of an applicable entity making an election (at such time and in such manner as the Secretary may provide) under this section with respect to any applicable credit determined with respect to such entity, such entity shall be treated as making a payment against the tax imposed by subtitle A (for the taxable year with respect to which such credit was determined) equal to the amount of such credit.
The term “applicable credit” means each of the following:
So much of the credit for alternative fuel vehicle refueling property allowed under section 30C which, pursuant to subsection (d)(1) of such section, is treated as a credit listed in section 38(b).
So much of the renewable electricity production credit determined under section 45(a) as is attributable to qualified facilities which are originally placed in service after
December 31, 2022
.
So much of the credit for carbon oxide sequestration determined under section 45Q(a) as is attributable to carbon capture equipment which is originally placed in service after
December 31, 2022
.
The zero-emission nuclear power production credit determined under section 45U(a).
So much of the credit for production of clean hydrogen determined under section 45V(a) as is attributable to qualified clean hydrogen production facilities which are originally placed in service after
December 31, 2012
.
In the case of a tax-exempt entity described in clause (i), (ii), or (iv) of section 168(h)(2)(A), the credit for qualified commercial vehicles determined under section 45W by reason of subsection (d)(3) thereof.
The credit for advanced manufacturing production under section 45X(a).
The clean electricity production credit determined under section 45Y(a).
The clean fuel production credit determined under section 45Z(a).
The energy credit determined under section 48.
The qualifying advanced energy project credit determined under section 48C.
The clean electricity investment credit determined under section 48E.
In the case of any applicable credit determined with respect to any facility or property held directly by a partnership or S corporation, any election under subsection (a) shall be made by such partnership or S corporation. If such partnership or S corporation makes an election under such subsection (in such manner as the Secretary may provide) with respect to such credit—
the Secretary shall make a payment to such partnership or S corporation equal to the amount of such credit,
subsection (e) shall be applied with respect to such credit before determining any partner’s distributive share, or shareholder’s pro rata share, of such credit,
any amount with respect to which the election in subsection (a) is made shall be treated as tax exempt income for purposes of sections 705 and 1366, and
a partner’s distributive share of such tax exempt income shall be based on such partner’s distributive share of the otherwise applicable credit for each taxable year.
In the case of any facility or property held directly by a partnership or S corporation, no election by any partner or shareholder shall be allowed under subsection (a) with respect to any applicable credit determined with respect to such facility or property.
For purposes of section 1324 of title 31, United States Code, the payments under paragraph (1)(A) shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.
For purposes of this section—
The term “applicable entity” means—
any organization exempt from the tax imposed by subtitle A,
any State or political subdivision thereof,
the Tennessee Valley Authority,
an Indian tribal government (as defined in section 30D(g)(9)),
any Alaska Native Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act (
43 U.S.C. 1602(m)
), or
any corporation operating on a cooperative basis which is engaged in furnishing electric energy to persons in rural areas.
If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has placed in service a qualified clean hydrogen production facility (as defined in section 45V(c)(3)), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(5).
If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has, after December 31, 2022, placed in service carbon capture equipment at a qualified facility (as defined in section 45Q(d)), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(3).
If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has, after December 31, 2022, produced eligible components (as defined in section 45X(c)(1)), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(7).
Except as provided in subclause (II), if a taxpayer makes an election under this subparagraph with respect to any taxable year, such taxpayer shall be treated as having made such election for each of the 4 succeeding taxable years ending before January 1, 2033.
A taxpayer may elect to revoke the application of the election made under this subparagraph to any taxable year described in subclause (I). Any such election, if made, shall apply to the applicable year specified in such election and each subsequent taxable year within the period described in subclause (I). Any election under this subclause may not be subsequently revoked.
For any taxable year described in clause (ii)(I), no election may be made by the taxpayer under section 6418(a) for such taxable year with respect to eligible components for purposes of the credit described in subsection (b)(7).
An election made under subparagraph (B), (C), or (D) shall be made at such time and in such manner as the Secretary may provide.
No election may be made under subparagraph (B), (C), or (D) with respect to any taxable year beginning after December 31, 2032.
In the case of any applicable entity which makes the election described in subsection (a), any applicable credit shall be determined—
without regard to paragraphs (3) and (4)(A)(i) of section 50(b), and
by treating any property with respect to which such credit is determined as used in a trade or business of the applicable entity.
Any election under subsection (a) shall be made not later than—
in the case of any government, or political subdivision, described in paragraph (1) and for which no return is required under section 6011 or 6033(a), such date as is determined appropriate by the Secretary, or
in any other case, the due date (including extensions of time) for the return of tax for the taxable year for which the election is made, but in no event earlier than 180 days after the date of the enactment of this section.
Any election under subsection (a), once made, shall be irrevocable and shall apply (except as otherwise provided in this paragraph) with respect to any credit for the taxable year for which the election is made.
In the case of the credit described in subsection (b)(2), any election under subsection (a) shall—
apply separately with respect to each qualified facility,
be made for the taxable year in which such qualified facility is originally placed in service, and
shall apply to such taxable year and to any subsequent taxable year which is within the period described in subsection (a)(2)(A)(ii) of section 45 with respect to such qualified facility.
In the case of the credit described in subsection (b)(3), any election under subsection (a) shall—
apply separately with respect to the carbon capture equipment originally placed in service by the applicable entity during a taxable year, and
in the case of a taxpayer who makes an election described in paragraph (1)(C), apply to the taxable year in which such equipment is placed in service and the 4 subsequent taxable years with respect to such equipment which end before
January 1, 2033
, and
in any other case, apply to such taxable year and to any subsequent taxable year which is within the period described in section 45Q(a)(3)(A) with respect to such equipment.
For any taxable year described in clause (i)(II)(aa) with respect to carbon capture equipment, no election may be made by the taxpayer under section 6418(a) for such taxable year with respect to such equipment for purposes of the credit described in subsection (b)(3).
In the case of a taxpayer who makes an election described in paragraph (1)(C) with respect to carbon capture equipment, such taxpayer may, at any time during the period described in clause (i)(II)(aa), revoke the application of such election with respect to such equipment for any subsequent taxable years during such period. Any such election, if made, shall apply to the applicable year specified in such election and each subsequent taxable year within the period described in clause (i)(II)(aa). Any election under this subclause may not be subsequently revoked.
In the case of the credit described in subsection (b)(5), any election under subsection (a) shall—
apply separately with respect to each qualified clean hydrogen production facility,
be made for the taxable year in which such facility is placed in service (or within the 1-year period subsequent to the date of enactment of this section in the case of facilities placed in service before
December 31, 2022
), and
in the case of a taxpayer who makes an election described in paragraph (1)(B), apply to such taxable year and the 4 subsequent taxable years with respect to such facility which end before
January 1, 2033
, and
in any other case, apply to such taxable year and all subsequent taxable years with respect to such facility.
For any taxable year described in clause (i)(III)(aa) with respect to a qualified clean hydrogen production facility, no election may be made by the taxpayer under section 6418(a) for such taxable year with respect to such facility for purposes of the credit described in subsection (b)(5).
In the case of a taxpayer who makes an election described in paragraph (1)(B) with respect to a qualified clean hydrogen production facility, such taxpayer may, at any time during the period described in clause (i)(III)(aa), revoke the application of such election with respect to such facility for any subsequent taxable years during such period. Any such election, if made, shall apply to the applicable year specified in such election and each subsequent taxable year within the period described in clause (i)(II)(aa). Any election under this subclause may not be subsequently revoked.
In the case of the credit described in subsection (b)(8), any election under subsection (a) shall—
apply separately with respect to each qualified facility,
be made for the taxable year in which such facility is placed in service, and
shall apply to such taxable year and to any subsequent taxable year which is within the period described in subsection (b)(1)(B) of section 45Y with respect to such facility.
The payment described in subsection (a) shall be treated as made on—
in the case of any government, or political subdivision, described in paragraph (1) and for which no return is required under section 6011 or 6033(a), the later of the date that a return would be due under section 6033(a) if such government or subdivision were described in that section or the date on which such government or subdivision submits a claim for credit or refund (at such time and in such manner as the Secretary shall provide), and
in any other case, the later of the due date (determined without regard to extensions) of the return of tax for the taxable year or the date on which such return is filed.
As a condition of, and prior to, any amount being treated as a payment which is made by an applicable entity under subsection (a), the Secretary may require such information or registration as the Secretary deems necessary for purposes of preventing duplication, fraud, improper payments, or excessive payments under this section.
In the case of any amount treated as a payment which is made by the applicable entity under subsection (a), or the amount of the payment made pursuant to subsection (c), which the Secretary determines constitutes an excessive payment, the tax imposed on such entity by chapter 1 (regardless of whether such entity would otherwise be subject to tax under such chapter) for the taxable year in which such determination is made shall be increased by an amount equal to the sum of—
the amount of such excessive payment, plus
an amount equal to 20 percent of such excessive payment.
Subparagraph (A)(ii) shall not apply if the applicable entity demonstrates to the satisfaction of the Secretary that the excessive payment resulted from reasonable cause.
For purposes of this paragraph, the term “excessive payment” means, with respect to a facility or property for which an election is made under this section for any taxable year, an amount equal to the excess of—
the amount treated as a payment which is made by the applicable entity under subsection (a), or the amount of the payment made pursuant to subsection (c), with respect to such facility or property for such taxable year, over
the amount of the credit which, without application of this section, would be otherwise allowable (as determined pursuant to paragraph (2) and without regard to section 38(c)) under this title with respect to such facility or property for such taxable year.
In the case of an applicable entity which made an election under subsection (a) with respect to an applicable credit for which there is a disallowance described in section 6662(m)(2), subparagraph (A) shall apply with respect to any excessive payment resulting from such disallowance.
In the case of an applicable entity making an election under this section with respect to an applicable credit, such credit shall be reduced to zero and shall, for any other purposes under this title, be deemed to have been allowed to such entity for such taxable year.
In the case of any possession of the United States with a mirror code tax system (as defined in section 24(k)), this section shall not be treated as part of the income tax laws of the United States for purposes of determining the income tax law of such possession unless such possession elects to have this section be so treated.
Except as otherwise provided in subsection (c)(2)(A), rules similar to the rules of section 50 shall apply for purposes of this section.
The Secretary shall issue such regulations or other guidance as may be necessary to carry out the purposes of this section, including guidance to ensure that the amount of the payment or deemed payment made under this section is commensurate with the amount of the credit that would be otherwise allowable (determined without regard to section 38(c)).
Treasury Regulations
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Treas. Reg. §1.6417-0Table of Contents
This section lists the table of contents for §§ 1.6417-1 through 1.6417-6.
(a) In general.
(b) Annual tax return.
(c) Applicable entity.
(d) Applicable credit.
(e) Applicable credit property.
(f) Disregarded entity.
(g) Electing taxpayer.
(h) Elective payment amount.
(i) Elective payment election.
(j) Guidance.
(k) Indian tribal government.
(l) Partnership.
(m) S corporation.
(n) Section 6417 regulations.
(o) Statutory references.
(p) U.S. territory.
(q) Applicability date.
(a) Elective payment elections.
(b) Manner of making election.
(c) Determination of applicable credit.
(d) Timing of payment.
(e) Denial of double benefit.
(f) Applicability date.
(a) In general.
(b) Elections with respect to the credit for production of clean hydrogen.
(c) Election with respect to the credit for carbon oxide sequestration.
(d) Election with respect to the advanced manufacturing production credit.
(e) Election for electing taxpayers.
(f) Applicability date.
(a) In general.
(b) Elections.
(c) Effect of election.
(d) Determination of amount of the credit.
(e) Partnerships subject to subchapter C of chapter 63.
(f) Applicability date.
(a) Pre-filing registration and election.
(b) Pre-filing registration requirements.
(c) Registration number.
(d) Applicability date.
(a) Excessive payment.
(b) Basis reduction and recapture.
(c) Mirror code territories.
(d) Partnerships subject to subchapter C of chapter 63 of the Code.
(e) Applicability date.
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Treas. Reg. §1.6417-0(a)Excessive payment.
Excessive payment.
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Treas. Reg. §1.6417-0(b)Basis reduction and recapture.
Basis reduction and recapture.
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Treas. Reg. §1.6417-0(c)Mirror code territories.
Mirror code territories.
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Treas. Reg. §1.6417-0(d)Partnerships subject to subchapter C of chapter 63 of the Code.
Partnerships subject to subchapter C of chapter 63 of the Code.
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Treas. Reg. §1.6417-0(e)Applicability date.
Applicability date.
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Treas. Reg. §1.6417-0(f)Applicability date.
Applicability date.
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Treas. Reg. §1.6417-0(g)Electing taxpayer.
Electing taxpayer.
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Treas. Reg. §1.6417-0(h)Elective payment amount.
Elective payment amount.
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Treas. Reg. §1.6417-0(i)Elective payment election.
Elective payment election.
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Treas. Reg. §1.6417-0(j)Guidance.
Guidance.
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Treas. Reg. §1.6417-0(k)Indian tribal government.
Indian tribal government.
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Treas. Reg. §1.6417-0(l)Partnership.
Partnership.
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Treas. Reg. §1.6417-0(m)S corporation.
S corporation.
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Treas. Reg. §1.6417-0(n)Section 6417 regulations.
Section 6417 regulations.
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Treas. Reg. §1.6417-0(o)Statutory references.
Statutory references.
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Treas. Reg. §1.6417-0(p)U.
U.S. territory.
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Treas. Reg. §1.6417-0(q)Applicability date.
Applicability date.
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Treas. Reg. §1.6417-1Elective payment election of applicable credits
(a) In general. An applicable entity may make an elective payment election with respect to any applicable credit determined with respect to such applicable entity in accordance with section 6417 of the Code and the section 6417 regulations. Paragraphs (b) through (p) of this section provide definitions applicable to the section 6417 regulations. See § 1.6417-2 for rules and procedures under which all elective payment elections must be made, rules for determining the amount and the timing of payments, and statutory rules denying double benefits. See § 1.6417-3 for special rules pertaining to electing taxpayers. See § 1.6417-4 for special rules pertaining to electing taxpayers that are partnerships or S corporations. See § 1.6417-5 for pre-filing registration requirements and other information required to make any elective payment election effective. See § 1.6417-6 for special rules related to excessive payments, basis reduction and recapture, any U.S. territory with a mirror code tax system, and payments made to partnerships subject to subchapter C of chapter 63 of the Code.
(b) Annual tax return. The term annual tax return means the following returns (and for each, any successor return)—
(1) For any taxpayer normally required to file a tax return with the IRS on an annual basis, such return (including the Form 1040 for individuals; the Form 1120 for corporations, certain rural electric cooperatives, and certain agencies and instrumentalities; the Form 1120-S for S corporations; the Form 1065 for partnerships; and the Form 990-T for organizations subject to tax imposed by section 511 of the Code or a proxy tax under section 6033(e) or that are required to file a Form 990 pursuant to section 6033(a));
(2) For any taxpayer that is not normally required to file a tax return with the IRS on an annual basis (such as taxpayers located in the U.S. territories), the return they would be required to file if they were located in the United States, or, if no such return is required (such as for governmental entities), the Form 990-T; and
(3) For taxpayers filing a return for a taxable year of less than 12 months (short year), the short year tax return.
(c) Applicable entity. The term applicable entity means any entity described in paragraphs (c)(1) through (7) of this section.
(1) Any organization exempt from the tax imposed by subtitle A of the Code—
(i) By reason of subchapter F of chapter 1 of subtitle A; or
(ii) Because it is the government of any U.S. territory or a political subdivision thereof.
(2) Any State, the District of Columbia, or political subdivision thereof.
(3) An Indian Tribal government or a subdivision thereof.
(4) Any Alaska Native Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act, 43 U.S.C. 1602(m)).
(5) The Tennessee Valley Authority.
(6) Any corporation operating on a cooperative basis that is engaged in furnishing electric energy to persons in rural areas as described in section 1381(a)(2)(C) of the Code.
(7) An agency or instrumentality of any applicable entity described in paragraph (c)(1)(ii) or (c)(2) or (3) of this section. For purposes of making an elective payment election under section 6417 (including determining eligibility for and the consequences of such election), an entity described in § 301.7701-1(a)(4)(i) of this chapter is treated as an instrumentality of the Indian Tribal government(s) or subdivision(s) thereof that own(s) it.
(d) Applicable credit. The term applicable credit means each of the following:
(1) So much of the credit for alternative fuel vehicle refueling property determined under section 30C of the Code that, pursuant to section 30C(d)(1), is treated as a credit listed in section 38(b) of the Code (section 30C credit).
(2) So much of the renewable electricity production credit determined under section 45(a) of the Code as is attributable to qualified facilities that are originally placed in service after December 31, 2022 (section 45 credit).
(3) So much of the credit for carbon oxide sequestration determined under section 45Q(a) of the Code as is attributable to carbon capture equipment that is originally placed in service after December 31, 2022 (section 45Q credit).
(4) The zero-emission nuclear power production credit determined under section 45U(a) of the Code (section 45U credit).
(5) So much of the credit for production of clean hydrogen determined under section 45V(a) of the Code as is attributable to qualified clean hydrogen production facilities that are originally placed in service after December 31, 2012 (section 45V credit).
(6) In the case of a tax-exempt entity described in section 168(h)(2)(A)(i), (ii), or (iv) of the Code, the credit for qualified commercial vehicles determined under section 45W of the Code by reason of section 45W(d)(2) (section 45W credit).
(7) The credit for advanced manufacturing production determined under section 45X(a) of the Code (section 45X credit).
(8) The clean electricity production credit determined under section 45Y(a) of the Code (section 45Y credit).
(9) The clean fuel production credit determined under section 45Z(a) of the Code (section 45Z credit).
(10) The energy credit determined under section 48 of the Code (section 48 credit).
(11) The qualifying advanced energy project credit determined under section 48C of the Code (section 48C credit).
(12) The clean electricity investment credit determined under section 48E of the Code (section 48E credit).
(e) Applicable credit property. The term applicable credit property means each of the following units of property with respect to which the amount of an applicable credit is determined:
(1) In the case of a section 30C credit, a qualified alternative fuel vehicle refueling property described in section 30C(c).
(2) In the case of a section 45 credit, a qualified facility described in section 45(d).
(3) In the case of a section 45Q credit, a component of carbon capture equipment within a single process train described in § 1.45Q-2(c)(3).
(4) In the case of a section 45U credit, a qualified nuclear power facility described in section 45U(b)(1).
(5) In the case of a section 45V credit, a qualified clean hydrogen production facility described in section 45V(c)(3).
(6) In the case of a section 45W credit, a qualified commercial clean vehicle described in section 45W(c).
(7) In the case of a section 45X credit, a facility that produces eligible components, as described in guidance under sections 48C and 45X.
(8) In the case of a section 45Y credit, a qualified facility described in section 45Y(b)(1).
(9) In the case of a section 45Z credit, a qualified facility described in section 45Z(d)(4).
(10) Section 48 credit property—(i) In general. In the case of a section 48 credit and except as provided in paragraph (d)(10)(ii) of this section, an energy property described in section 48.
(ii) Pre-filing registration and elections. At the option of an applicable entity or electing taxpayer, and to the extent consistently applied for purposes of the pre-filing registration requirements of § 1.6417-5 and the elective payment election requirements of §§ 1.6417-2 through 1.6417-4, an energy project as described in section 48(a)(9)(A)(ii) and defined in guidance.
(11) In the case of a section 48C credit, an eligible property described in section 48C(c)(2).
(12) In the case of a section 48E credit, a qualified facility described in section 48E(b)(3) or, in the case of a section 48E credit relating to a qualified investment with respect to energy storage technology, an energy storage technology described in section 48E(c)(2).
(f) Disregarded entity. The term disregarded entity means an entity that is disregarded as, or not recognized as, an entity separate from its owner for Federal income tax purposes under § 301.7701-1(a)(3) or §§ 301.7701-2 and 301.7701-3 of this chapter. See paragraph (c)(7) of this section regarding entities described in § 301.7701-1(a)(4)(i) of this chapter.
(g) Electing taxpayer. The term electing taxpayer means any taxpayer that is not an applicable entity described in paragraph (c) of this section but makes an election in accordance with §§ 1.6417-2(b), 1.6417-3, and, if applicable, 1.6417-4, to be treated as an applicable entity for a taxable year with respect to applicable credits determined with respect to an applicable credit property described in paragraph (e)(3), (5), or (7) of this section.
(h) Elective payment amount—(1) In general. The term elective payment amount means, with respect to an applicable entity or an electing taxpayer that is not a partnership or an S corporation, the applicable credit(s) for which an applicable entity or electing taxpayer makes an elective payment election to be treated as making a payment against the tax imposed by subtitle A for the taxable year, which is equal to the sum of—
(i) The amount (if any) of the current year applicable credit(s) allowed as a general business credit under section 38 for the taxable year, as provided in § 1.6417-2(e)(2)(iii), and
(ii) The amount (if any) of unused current year applicable credits that would otherwise be carried back or carried forward from the unused credit year under section 39 and that are treated as a payment against tax, as provided in § 1.6417-2(e)(2)(iv).
(2) Elective payment amount with respect to partnerships and S corporations. With respect to an electing taxpayer that is a partnership or an S corporation, the term elective payment amount means the sum of the applicable credit(s) for which the partnership or S corporation makes an elective payment election and that results in a payment to such partnership or S corporation equal to the amount of such credit(s) (unless the partnership owes a Federal tax liability, in which case the payment may be reduced by such tax liability).
(i) Elective payment election. The term elective payment election means an election made in accordance with § 1.6417-2(b) for applicable credit(s) determined with respect to an applicable entity or electing taxpayer.
(j) Guidance. The term guidance means guidance published in the Federal Register or Internal Revenue Bulletin, as well as administrative guidance such as forms, instructions, publications, or other guidance on the IRS.gov website. See §§ 601.601 and 601.602 of this chapter.
(k) Indian Tribal government. The term Indian Tribal government means the recognized governing body of any Indian or Alaska Native Tribe, band, nation, pueblo, village, community, component band, or component reservation, individually identified (including parenthetically) in the most recent list published by the Department of the Interior in the Federal Register pursuant to section 104 of the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 5131) prior to the date on which a relevant elective payment election is made.
(l) Partnership. The term partnership has the meaning provided in section 761 of the Code.
(m) S corporation. The term S corporation has the meaning provided in section 1361(a)(1) of the Code.
(n) Section 6417 regulations. The term section 6417 regulations means §§ 1.6417-1 through 1.6417-6.
(o) Statutory references—(1) Chapter 1. The term chapter 1 means chapter 1 of the Code.
(2) Code. The term Code means the Internal Revenue Code.
(3) Subchapter K. The term subchapter K means subchapter K of chapter 1.
(4) Subtitle A. The term subtitle A means subtitle A of the Code.
(p) U.S. territory. The term U.S. territory means the Commonwealth of Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands.
(q) Applicability dates—(1) In general. Except as provided in paragraph (q)(2) of this section, this section applies to taxable years ending on or after March 11, 2024. For taxable years ending before March 11, 2024, taxpayers may choose to apply the rules of this section and §§ 1.6417-2 through 1.6417-4 and 1.6417-6, provided the taxpayers apply the rules in their entirety and in a consistent manner.
(2) Paragraphs (c)(7) and (f) of this section. Paragraphs (c)(7) and (f) of this section apply to taxable years beginning on or after January 1, 2026. For taxable years beginning before January 1, 2026, an entity described in § 301.7701-1(a)(4)(i) of this chapter may choose to apply paragraphs (c)(7) and (f) of this section, but only if the Indian Tribal government(s) that own the entity also apply paragraphs (c)(7) and (f) of this section consistently with such entity for all such taxable years. For the rules that apply to entities that do not choose to apply paragraphs (c)(7) and (f) of this section in accordance with the preceding sentence for taxable years beginning before January 1, 2026, see § 1.6417-1 as contained in 26 CFR part 1, revised April 1, 2025.
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Treas. Reg. §1.6417-1(a)In general.
In general. An applicable entity may make an elective payment election with respect to any applicable credit determined with respect to such applicable entity in accordance with section 6417 of the Code and the section 6417 regulations. Paragraphs (b) through (p) of this section provide definitions applicable to the section 6417 regulations. See § 1.6417-2 for rules and procedures under which all elective payment elections must be made, rules for determining the amount and the timing of payments, and statutory rules denying double benefits. See § 1.6417-3 for special rules pertaining to electing taxpayers. See § 1.6417-4 for special rules pertaining to electing taxpayers that are partnerships or S corporations. See § 1.6417-5 for pre-filing registration requirements and other information required to make any elective payment election effective. See § 1.6417-6 for special rules related to excessive payments, basis reduction and recapture, any U.S. territory with a mirror code tax system, and payments made to partnerships subject to subchapter C of chapter 63 of the Code.
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Treas. Reg. §1.6417-1(b)Annual tax return.
Annual tax return. The term annual tax return means the following returns (and for each, any successor return)—
(1) For any taxpayer normally required to file a tax return with the IRS on an annual basis, such return (including the Form 1040 for individuals; the Form 1120 for corporations, certain rural electric cooperatives, and certain agencies and instrumentalities; the Form 1120-S for S corporations; the Form 1065 for partnerships; and the Form 990-T for organizations subject to tax imposed by section 511 of the Code or a proxy tax under section 6033(e) or that are required to file a Form 990 pursuant to section 6033(a));
(2) For any taxpayer that is not normally required to file a tax return with the IRS on an annual basis (such as taxpayers located in the U.S. territories), the return they would be required to file if they were located in the United States, or, if no such return is required (such as for governmental entities), the Form 990-T; and
(3) For taxpayers filing a return for a taxable year of less than 12 months (short year), the short year tax return.
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Treas. Reg. §1.6417-1(c)Applicable entity.
Applicable entity. The term applicable entity means any entity described in paragraphs (c)(1) through (7) of this section.
(1) Any organization exempt from the tax imposed by subtitle A of the Code—
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Treas. Reg. §1.6417-1(d)Applicable credit.
Applicable credit. The term applicable credit means each of the following:
(1) So much of the credit for alternative fuel vehicle refueling property determined under section 30C of the Code that, pursuant to section 30C(d)(1), is treated as a credit listed in section 38(b) of the Code (section 30C credit).
(2) So much of the renewable electricity production credit determined under section 45(a) of the Code as is attributable to qualified facilities that are originally placed in service after December 31, 2022 (section 45 credit).
(3) So much of the credit for carbon oxide sequestration determined under section 45Q(a) of the Code as is attributable to carbon capture equipment that is originally placed in service after December 31, 2022 (section 45Q credit).
(4) The zero-emission nuclear power production credit determined under section 45U(a) of the Code (section 45U credit).
(5) So much of the credit for production of clean hydrogen determined under section 45V(a) of the Code as is attributable to qualified clean hydrogen production facilities that are originally placed in service after December 31, 2012 (section 45V credit).
(6) In the case of a tax-exempt entity described in section 168(h)(2)(A)(i), (ii), or (iv) of the Code, the credit for qualified commercial vehicles determined under section 45W of the Code by reason of section 45W(d)(2) (section 45W credit).
(7) The credit for advanced manufacturing production determined under section 45X(a) of the Code (section 45X credit).
(8) The clean electricity production credit determined under section 45Y(a) of the Code (section 45Y credit).
(9) The clean fuel production credit determined under section 45Z(a) of the Code (section 45Z credit).
(10) The energy credit determined under section 48 of the Code (section 48 credit).
(11) The qualifying advanced energy project credit determined under section 48C of the Code (section 48C credit).
(12) The clean electricity investment credit determined under section 48E of the Code (section 48E credit).
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Treas. Reg. §1.6417-1(e)Applicable credit property.
Applicable credit property. The term applicable credit property means each of the following units of property with respect to which the amount of an applicable credit is determined:
(1) In the case of a section 30C credit, a qualified alternative fuel vehicle refueling property described in section 30C(c).
(2) In the case of a section 45 credit, a qualified facility described in section 45(d).
(3) In the case of a section 45Q credit, a component of carbon capture equipment within a single process train described in § 1.45Q-2(c)(3).
(4) In the case of a section 45U credit, a qualified nuclear power facility described in section 45U(b)(1).
(5) In the case of a section 45V credit, a qualified clean hydrogen production facility described in section 45V(c)(3).
(6) In the case of a section 45W credit, a qualified commercial clean vehicle described in section 45W(c).
(7) In the case of a section 45X credit, a facility that produces eligible components, as described in guidance under sections 48C and 45X.
(8) In the case of a section 45Y credit, a qualified facility described in section 45Y(b)(1).
(9) In the case of a section 45Z credit, a qualified facility described in section 45Z(d)(4).
(10) Section 48 credit property—(i) In general. In the case of a section 48 credit and except as provided in paragraph (d)(10)(ii) of this section, an energy property described in section 48.
(ii) Pre-filing registration and elections. At the option of an applicable entity or electing taxpayer, and to the extent consistently applied for purposes of the pre-filing registration requirements of § 1.6417-5 and the elective payment election requirements of §§ 1.6417-2 through 1.6417-4, an energy project as described in section 48(a)(9)(A)(ii) and defined in guidance.
(11) In the case of a section 48C credit, an eligible property described in section 48C(c)(2).
(12) In the case of a section 48E credit, a qualified facility described in section 48E(b)(3) or, in the case of a section 48E credit relating to a qualified investment with respect to energy storage technology, an energy storage technology described in section 48E(c)(2).
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Treas. Reg. §1.6417-1(f)Disregarded entity.
Disregarded entity. The term disregarded entity means an entity that is disregarded as, or not recognized as, an entity separate from its owner for Federal income tax purposes under § 301.7701-1(a)(3) or §§ 301.7701-2 and 301.7701-3 of this chapter. See paragraph (c)(7) of this section regarding entities described in § 301.7701-1(a)(4)(i) of this chapter.
1 Citing Cases
nd applied to the total income tax liability determined. Where Congress has intended for specific general business credits to be treated as deemed payments, it has done so expressly. See, e.g., 2022 IRA § 13801(a), 136 Stat. at 2003– 09 (codified at § 6417). 11 blender.19 The “credit” in section 4081(b)(2) reduces the blender’s excise tax amount under section 4081(b)(1) and is not, as petitioner would have it, a payment of that amount.20 Thus, the Court concludes that the words “allowed as a cre