Frequently Asked Questions
Common questions about tax credit transfers and IRS requirements
Key IRS Resources
The primary IRS resources include the Final Regulations (T.D. 9993) issued on April 25, 2024, which offer comprehensive guidance on the election to transfer eligible credits. IRS Publication 5884 provides specific information on CHIPS Elective Payment and Transfer Resources, including filing guidance. The IRS Pre-filing Registration Tool is essential for sellers to register credits and obtain a unique registration number. Sellers also need to use IRS Form 3800 (General Business Credit) and relevant source credit forms, attaching a schedule of transferred credits.
Eligible Tax Credits
The most common types of clean energy tax credits eligible for transfer include:
- Section 45 Production Tax Credit (PTC) for renewable energy
- Section 48 Investment Tax Credit (ITC)
- Section 45Q Credit for Carbon Capture, Utilization, and Storage
- Section 45X Advanced Manufacturing Production Credit
Transfer Process Overview
The process involves several key steps:
- Identify the specific eligible credits
- Register the credit property with the IRS using the pre-filing registration tool
- Negotiate and enter into a transfer agreement with the buyer
- Complete the necessary tax forms
- Make the election to transfer the credits with the tax return
- Be prepared to notify the buyer of any subsequent recapture events
Required Documentation
Essential documentation categories include:
- Ownership and Entity Documentation
- Technical Documentation
- Compliance Documentation
- Financial Documentation
- Placed-in-service Documentation
Tax Form Requirements and Deadlines
Both sellers and buyers must file:
- IRS Form 3800 (General Business Credit)
- Transfer Election Statement
- Schedule showing transferred credit amounts
- Relevant source credit forms (sellers only)
The transfer election must be made on an original tax return filed before the due date (including extensions) for both parties.
