SECTION 7. TRANSFER OF

CREDIT BY QUALIFIED PUBLIC ENTITIES

.01 In general. Section 45J(e) permits a qualified public entity (as defined in

§ 45J(e)(2)(A)) to elect to transfer all or a portion of its § 45J credit to an eligible project partner (as defined in § 45J(e) (2)(B)) (§ 45J(e) Election). If a facility is owned by a partnership, a qualified public entity may elect to transfer its distributive share under § 1.704-1(b)(4)(ii) of the credit to an eligible project partner. In addition, if a facility is owned by a partnership, an eligible project partner includes any partner of the partnership. A § 45J(e) Election may be made by a qualified public entity for a taxable year only if a § 45J credit is determined for the qualified public entity for such taxable year. If a qualified public entity is not required to file an income tax return for the taxable year that the § 45J credit is determined, the qualified public entity is still considered a taxpayer for purposes of making the § 45J(e) Election and its taxable year is treated as the calendar year for purposes of determining the § 45J credit and making such election.

.02 Election Procedures . (1) A qualified public entity may make a § 45J(e) Election by furnishing an eligible project partner with a statement titled “SECTION 45J(e) ELECTION STATEMENT” (§ 45J(e) Election Statement) transferring all or a portion of the qualified public entity’s § 45J credit. The statement must be signed under penalties of perjury by an individual with authority to legally bind the qualified public entity. The election statement must also include the written consent of an individual with authority to legally bind the eligible project partner. A qualified public entity must furnish a separate statement to each eligible project partner to whom it transfers any portion of its § 45J credit.

(2) The § 45J(e) Election Statement must include the following information:

(a) The name, address, and taxpayer identification number (if available) of the qualified public entity;

(b) The name and location of the facility;

(c) The nameplate capacity of the facility;

(d) The date on which the facility was placed in service;

(e) The full amount of the unutilized NMCL allocated to the qualified public entity with respect to the facility and a copy of the letter issued by the IRS stating

the amount of the unutilized NMCL allocated to the qualified public entity;

(f) The taxable year of the qualified public entity for which the § 45J credit is determined and the election is made;

(g) The name, address and taxpayer identification number of all known eligible project partners receiving any portion of the qualified public entity’s transferred § 45J credit;

(h) The total kilowatt-hours of electricity produced by the facility and sold to an unrelated taxpayer during the taxable year of the qualified public entity for which the election is made;

(i) The total amount of the § 45J credit determined with respect to the qualified public entity for the taxable year for which the election is made and the amount of that § 45J credit that the qualified public entity is electing to transfer to the eligible project partner;

(j) A statement providing how the § 45J credit claimant qualifies as an eligible project partner; and

(k) A declaration, applicable to the § 45J(e) Election Statement signed by a person currently authorized to bind the qualified public entity in these matters, in the following form:

“Under penalties of perjury I declare that I have examined the information contained in this § 45J(e) Election Statement and the documents that substantiate this § 45J(e) Election Statement, and to the best of my knowledge and belief, it is true, correct, and complete.”

(l) The following additional statement:

“I further declare that I have authority to sign this § 45J(e) Election Statement on behalf of the qualified public entity.”

(3) A § 45J(e) Election is an annual election that must be made for each taxable year for which a qualified public entity will transfer the credit to an eligible project partner. A separate election must be made for each eligible project partner for which a qualified public entity will transfer a portion of the § 45J credit.

.03 Due Date for Making Election . The § 45J(e) Election Statement must be furnished to the eligible project partner on or

Bulletin No. 2023–13 575 March 27, 2023

before the due date (including extensions of time) of the eligible project partner’s Federal income tax return on which it claims the transferred § 45J credit for the taxable year ending with, or after, the qualified public entity’s taxable year with respect to which the credit was determined.

.04 Election Irrevocable . An election by a qualified public entity to transfer any portion of the § 45J credit is irrevocable once the § 45J(e) Election Statement referred to in section 7.02 of this notice is furnished to the eligible project partner.

.05 Requirement for an Eligible Project Partner to Claim the Credit . An eligible project partner claims the § 45J credit by filing the applicable IRS form for claiming the credit (and including all requested information) and attaching the § 45J(e) Election Statement furnished by the qualified public entity as provided in section 7.02 of this notice. .06 Carryforwards and Carrybacks of Credits . In the case of any credit or portion thereof with respect to which a § 45J(e) Election is made, the credit must be taken into account under § 38 by the eligible project partner in the first taxable year of the eligible project partner ending with or after the qualified public entity’s taxable year with respect to which the credit was determined. The carryback and carryforward rule provided in § 39 regarding unused business credits applies to the eligible project partner.