Elective Payment Election

Elective pay under section 6417 allows applicable entities (as defined), including tax-exempt and governmental entities (such as a local government) that would otherwise be unable to claim these credits because they do not owe federal income tax, to benefit from some clean energy tax credits by treating the amount of the credit as a payment of tax.

The Advanced Manufacturing Investment Credit under section 48D incentivizes the manufacture of semiconductors and semiconductor manufacturing equipment within the United States. This credit is available to taxpayers that meet certain eligibility requirements. Eligible taxpayers can choose to receive the credit as an elective payment under section 48D(d). Like elective pay under section 6417, an eligible taxpayer that earns the advanced manufacturing credit must notify the IRS of its intent to claim the credit and file an annual tax return to claim elective pay for the full value of the credit.

A taxpayer that wants to make an elective payment election for one or more clean energy or advanced manufacturing credits under section 6417 or 48D(d) must register the intention to make an elective payment election and receive a registration number. The registration number must be entered in the appropriate field on the Form 3800 and the appropriate field on the source credit form on which the underlying credit is computed filed with the taxpayer’s original filed return.

A taxpayer making the elective payment election is treated as having made a payment against tax imposed by Subtitle A of the Internal Revenue Code at the later of the due date of the tax return (without extension), or

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