Inflation Reduction Act: Monetizing clean energy tax credits

The Inflation Reduction Act of 2022 (IRA) created new tax credit monetization options that dramatically expand opportunities for all taxpayers. By providing more expedient paths to cash benefits, these options will likely drive greater investment into clean energy technologies.

These options include:

• The direct pay rules pursuant to Section 6417, which allows tax-exempt organizations, governments, and others to receive tax refunds even in the absence of a tax liability.
• A second option allows taxable organizations to sell certain tax credits in exchange for cash through the rules of Section 6418. Creating a market for these tax credits also allows purchasers to participate in this economy by acquiring and utilizing tax credits.
• A third option allows taxpayers investing in clean energy equipment to use these tax credits themselves or take on new investors to fund such activities.

During this view on-demand webinar, our tax professionals will break down how organizations (including tax-exempt) and investors can monetize these tax credits. They’ll also clarify the risks and benefits of the monetization options to help you determine whether monetizing a credit via direct pay or transferability makes sense for your organization. The session will help taxpayers untangle the legislative complexities of the IRA and bring focus to relevant tax structuring opportunities.

Learning objectives:

• Learn how to monetize the clean energy tax credits that were expanded by the IRA.
• Define the advantages and disadvantages of credit transfers, direct pay, or tax equity investment for your organization and/or investment.
• Identify the tax risks associated with tax credit transactions and mitigation strategies.