0424 Publ 5817-A (PDF)

Official source: IRS Forms, Instructions & Publications (https://www.irs.gov/pub/irs-pdf/p5817a.pdf), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

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Elective pay allows applicable entities, including tax-exempt and governmental entities that would otherwise be unable to claim certain credits because they do not owe federal income tax, to benefit from some clean energy tax credits. By choosing this election, the amount of the credit is treated as a payment of tax and any overpayment will result in a refund.

For example, because of the Inflation Reduction Act, a local government that makes a clean energy investment that qualifies for the investment tax credit can file an annual tax return with the IRS to claim elective pay for the full value of the investment tax credit, if it meets all of the requirements including a pre-filing registration requirement. As the local government would not owe other federal income tax, the IRS would then make a refund payment in the amount of the credit to the local government.

Yes. Any corporation operating on a cooperative basis that is engaged in furnishing electric energy to persons in rural areas is eligible. A rural electric cooperative’s use of elective pay does not affect the 85% income test of a tax-exempt electric cooperative.

Tax exempt rural electric cooperatives are eligible to use elective pay for all 12 credits listed in the link below. Those that are not tax exempt may use elective pay for each of the credits listed except for the Commercial Clean Vehicles credit (45W).

Eligible entities would claim and receive an elective payment by making an elective payment election on their annual tax return along with any form required to claim the relevant tax credit.

However, there are steps leading up to this, such as a required pre-filing registration process. An EIN or TIN is required to complete the pre-filing registration process.

Electronic return filing is strongly encouraged.

1. Identify and pursue the qualifying project or activity: You will need to know what applicable credit you intend to earn and use elective pay for.

2. Determine your tax year, if not already known: Your tax year will determine the due date for your tax return.

3. Placed in service: The applicable credit property must be placed in service BEFORE a registration number will be issued.

4. Complete pre-filing registration with the IRS: This will include providing information about yourself, which applicable credits you intend to earn, and each eligible project/property that will contribute to the applicable credit and other information required. Upon completing this process, the IRS will provide you with a registration number for each applicable credit property. You will need to provide that registration number on your tax return as part of making the elective pay election.

• Complete pre-filing registration in sufficient time to have a valid registration number at the time you file your tax return.

5. Satisfy all eligibility requirements for the tax credit and any applicable bonus credits, if applicable, for a given tax year:

• You will need the documentation necessary to properly substantiate any underlying tax credit, including if bonus amounts increased the credit.

6. File the required annual tax return by the due date (or extended due date) and make a valid elective payment election.

See Publication 5817g for a list of tax credits that can be used for elective pay.

❯ Elective Pay and Transferability

❯ irs.gov/cleanenergy

❯ Publication 5884, IRA and CHIPS Pre-Filing

Registration Tool User Guide

❯ Publication 5902, Clean Energy Authorization

Permission Management User Guide

Publication 5817-A (Rev. 4 -2024) Catalog Number 94129S Department of the Treasury Internal Revenue Service www.irs.gov