Page 16 - Inflation-Reduction-Act-Guidebook

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Each of the tax credits in the above table, except for 168(e)(3)(B), is eligible for direct pay
and transferability. Section 13801 of the Inflation Reduction Act, which adds Section 6417 of
the Internal Revenue Code, extends many of the law’s tax incentives to entities that generally do
not benefit from income tax credits, such as state, local, and Tribal governments and other tax-
exempt entities. Specifically, these entities can elect to receive some of the Inflation Reduction
Act’s tax credits in the form of direct payments. Section 13801 also adds Section 6418 of the
Internal Revenue Code and makes certain tax credits transferable. In these cases, taxpayers that
are generally ineligible for direct payment of credits may transfer all or a portion of certain
credits to an unrelated party in exchange for cash.

B U IL D IN G A C L E A N E N E R G Y E C O N O MY 11
G U ID E B O O K | J AN UARY 20 2 3 | VE RS I O N 2