Internal Revenue Bulletin 2024-15 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 2024–15
April 8, 2024
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
EXEMPT ORGANIZATIONS
Announcement 2024-15, page 876.
Revocation of IRC 501(c)(3) Organizations for failure to meet
the code section requirements. Contributions made to the
organizations by individual donors are no longer deductible
under IRC 170(b)(1)(A).
INCOME TAX
Notice 2024-31, page 869.
Notice 2024-31 provides for adjustments to the limitation
on housing expenses for purposes of section 911 of the
Internal Revenue Code for the 2024 tax year. These adjust-
ments are made on the basis of geographic differences
in housing costs relative to housing costs in the United
States. If the limitation on housing expenses is higher for
the 2024 tax year than the adjusted limitations on housing
expenses provided in Notice 2023-26, qualified taxpayers
may apply the adjusted limitations in this notice for the
2024 tax year to their 2023 tax year.
Rev. Proc. 2024-17, page 873.
Generally, U.S. citizens or resident aliens living and work-
ing abroad are taxed on their worldwide income. However,
if their tax home is in a foreign country and they meet either
the bona fide residence test or the physical presence test,
they can choose to exclude from their income a limited
amount of their foreign earned income (up to $120,000
for 2023). Both the bona fide residence test and the phys-
ical presence test contain minimum time requirements.
Revenue Procedure 2024-17 provides a waiver under
section 911(d)(4) for the time requirements for individu-
als electing to exclude their foreign earned income who
must leave a foreign country because of war, civil unrest,
or similar adverse conditions in that country. Rev. Proc.
2024-17 adds Ukraine, Belarus, Sudan, Haiti, Niger, and
Iraq to the list of waiver countries for tax year 2023 for
which the minimum time requirements are waived.
Rev. Proc. 2024-18, page 874.
This revenue procedure supplements Rev. Proc. 2023-32,
2023-41 I.R.B. 1064, by publishing amounts of unused
housing credit carryovers allocated to qualified states
under § 42(h)(3)(D) of the Internal Revenue Code for calen-
dar year 2023 in addition to those amounts published in
Rev. Proc. 2023-32.
T.D. 9988, page 794.
The final regulations describe the rules for the elective
payment of applicable credit amounts in a taxable year,
including definitions and special rules applicable to part-
nerships and S corporations. In addition, the final regu-
lations provide rules related to a required IRS pre-filing
registration process. Temporary regulations that were
previously issued to describe rules for the pre-filing reg-
istration process are removed. The pre-filing registration
process is necessary to complete before filing an effective
elective payment election for applicable credits.
T.D. 9989, page 850.
These final regulations describe the rules for the elective
payment election under section 48D(d) of the Internal Rev-
enue Code, as established by the CHIPS Act of 2022. The
final regulations describe rules related to an IRS pre-filing
registration process as a condition of, and prior to, any
amount being treated as a payment made by or to the
taxpayer. The final regulations also describe special rules
applicable to partnerships and S corporations, repayment
of excessive payments, and basis reduction and recapture.
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
April 8, 2024 Bulletin No. 2024–15

Part I
26 CFR 1.6417-1 through 1.6417-6; 26 CFR
301.6241-1(a)(6)(iii) and (b)(1); 26 CFR 301.6241-
7(j) through (k)
T.D. 9988
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
Elective Payment of
Applicable Credits
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations and removal
of temporary regulations.
SUMMARY: This document contains
final regulations concerning the elec-
tion under the Inflation Reduction Act of
2022 to treat the amount of certain tax
credits as a payment of Federal income
tax. The regulations describe rules for the
elective payment of these credit amounts
in a taxable year, including definitions
and special rules applicable to partner-
ships and S corporations and regarding
repayment of excessive payments. In
addition, the regulations describe rules
related to a required IRS pre-filing regis-
tration process. These regulations affect
tax-exempt organizations, State and local
governments, Indian tribal governments,
Alaska Native Corporations, the Tennes-
see Valley Authority, rural electric coop-
eratives, and, in the case of three of these
credits, certain taxpayers eligible to elect
the elective payment of credit amounts in
a taxable year.
DATES: Effective date: These regulations
are effective May 10, 2024.
Applicability date: For dates of appli-
cability, see §§1.6417-1(q), 1.6417-2(f),
1.6417-3(f), 1.6417-4(f), 1.6417-5(d),
1.6417-6(e), 301.6241-1(b)(1), and 301.
6241-7(k)(3).
FOR FURTHER INFORMATION
CONTACT: Concerning these final regu-
lations, Jeremy Milton at (202) 317-5665
and James Holmes at (202) 317-5114 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains final regula-
tions that amend the Income Tax Regula-
tions (26 CFR part 1) and the Procedure
and Administration Regulations (26 CFR
part 301) to implement the statutory pro-
visions of section 6417 of the Internal
Revenue Code (Code), as enacted by sec-
tion 13801(a) of Public Law 117-169, 136
Stat. 1818, 2003 (August 16, 2022), com-
monly known as the Inflation Reduction
Act of 2022 (IRA).
I. Overview of Section 6417
An applicable entity that meets all the
requirements of section 6417 is permitted
to make an election under section 6417
with respect to any applicable credit
determined with respect to the applica-
ble entity for the taxable year (elective
payment election). If an applicable entity
makes an elective payment election, the
applicable entity is treated as making a
payment against Federal income taxes
imposed by subtitle A of the Code (subti-
tle A) for the taxable year with respect to
which such credit was determined that is
equal to the amount of such credit (elec-
tive payment amount). An election under
section 6417 must be made at such time
and in such manner as provided by the
Secretary of the Treasury or her delegate
(Secretary).
Section 6417(b) defines the term
“applicable credit” to mean each of the
following 12 credits:
(1) So much of the credit for alternative
fuel vehicle refueling property allowed
under section 30C of the Code that, pur-
suant to section 30C(d)(1), is treated as a
credit listed in section 38(b) of the Code
(section 30C credit);
(2) So much of the renewable electric-
ity production credit determined under
section 45(a) of the Code as is attributable
to qualified facilities that are originally
placed in service after December 31, 2022
(section 45 credit);
(3) So much of the credit for carbon
oxide sequestration determined under sec-
tion 45Q(a) of the Code as is attributable
to carbon capture equipment that is origi-
nally placed in service after December 31,
2022 (section 45Q credit);
(4) The zero-emission nuclear power
production credit determined under sec-
tion 45U(a) of the Code (section 45U
credit);
(5) So much of the credit for produc-
tion of clean hydrogen determined under
section 45V(a) of the Code as is attribut-
able to qualified clean hydrogen produc-
tion facilities that are originally placed in
service after December 31, 2012 (section
45V credit);
(6) In the case of a “tax-exempt entity”
described in section 168(h)(2)(A)(i), (ii),
or (iv) of the Code, the credit for qualified
commercial vehicles determined under
section 45W of the Code by reason of sec-
tion 45W(d)(3)
1
(section 45W credit);
(7) The credit for advanced manufac-
turing production under section 45X(a) of
the Code (section 45X credit);
(8) The clean electricity production
credit determined under section 45Y(a) of
the Code (section 45Y credit);
(9) The clean fuel production credit
determined under section 45Z(a) of the
Code (section 45Z credit);
(10) The energy credit determined
under section 48 of the Code (section 48
credit);
(11) The qualifying advanced energy
project credit determined under section
48C of the Code (section 48C credit); and
(12) The clean electricity investment
credit determined under section 48E of the
Code (section 48E credit).
As described in part II of this Back-
ground, section 6417(d) defines an “appli-
cable entity” and provides generally
applicable rules for making elective pay-
ment elections. Section 6417(e) through
1
The reference was intended to be to section 45W(d)(2). See General Explanation of Tax Legislation Enacted in the 117th Congress, JCS-1-23 (December 21, 2023) at 282. Thus, the final
regulations refer to section 45W(d)(2).
April 8, 2024 794 Bulletin No. 2024–15

(h) provide special rules applicable under
section 6417 that are described in part II
of this Background. As described in parts
III and IV of this Background, section
6417(c), (d)(1)(B) through (D), and (d)
(3) also contain special rules allowing
a taxpayer, including for this purpose a
partnership or S corporation, that is not
an applicable entity (electing taxpayer) to
elect to be treated as an applicable entity
for the limited purpose of making an
elective payment election under section
6417, but only with respect to section 45Q
credits, section 45V credits, and section
45X credits. Part V of this Background
describes Notice 2022-50, 2022-43 I.R.B.
325, which, in part, requested feedback
from the public on potential issues with
respect to the elective payment election
provisions under section 6417. Part VI of
this Background describes proposed reg-
ulations (REG-101607-23) and temporary
regulations (TD 9975) issued under sec-
tion 6417.
II. Applicable Entities and General
Elective Payment Election Rules
Section 6417(d)(1)(A) defines the term
“applicable entity” to mean:
(1) Any organization exempt from tax
imposed by subtitle A;
(2) Any State or political subdivision
thereof;
(3) The Tennessee Valley Authority;
(4) An Indian tribal government (as
defined in section 30D(g)(9) of the Code);
(5) Any Alaska Native Corporation
(as defined in section 3 of the Alaska
Native Claims Settlement Act (43 U.S.C.
1602(m)); or
(6) Any corporation operating on a
cooperative basis that is engaged in fur-
nishing electric energy to persons in rural
areas.
Section 6417(d)(2) provides that, in
the case of any applicable entity that
makes the election described in section
6417(a), any applicable credit amount
is determined (1) without regard to sec-
tion 50(b)(3) and (4)(A)(i) of the Code
(that is, restrictions on property used by
tax-exempt organizations and govern-
mental units), and (2) by treating any
property with respect to which such
credit is determined as used in a trade or
business of the applicable entity.
Section 6417(d)(3)(A)(i) provides
rules regarding the due date for making
any elective payment election. In the case
of any government (such as a State, the
District of Columbia, an Indian tribal gov-
ernment, any U.S. territory) or any polit-
ical subdivision, agency or instrumental-
ity of the foregoing described in section
6417(d)(1) and for which no return is
required under section 6011 or 6033(a)
of the Code, any election under section
6417(a) cannot be made later than the date
as is determined appropriate by the Secre-
tary. In any other case, any election under
section 6417(a) cannot be made later than
the due date (including extensions of time)
for the tax return for the taxable year for
which the election is made, but in no event
earlier than 180 days after the date of the
enactment of section 6417 (that is, in no
event earlier than 180 days after August
16, 2022, which is February 13, 2023).
Section 6417(d)(3)(A)(ii) provides that
any election under section 6417(a), once
made, is irrevocable, and applies (except
as otherwise provided in section 6417(d)
(3)) with respect to any credit for the tax-
able year for which the election is made.
Section 6417(d)(3)(B) provides that, in
the case of section 45 credits, any election
under section 6417(a): (1) applies sepa-
rately with respect to each qualified facil-
ity; (2) must be made for the taxable year
in which such qualified facility is origi-
nally placed in service; and (3) applies to
such taxable year and to any subsequent
taxable year that is within the 10-year
credit period described in section 45(a)
(2)(A)(ii) with respect to such qualified
facility.
Section 6417(d)(3)(C) provides that, in
the case of section 45Q credits, any elec-
tion under section 6417(a): (1) applies sep-
arately with respect to the carbon capture
equipment originally placed in service by
the applicable entity during a taxable year;
and (2) applies to such taxable year and to
any subsequent taxable year that is within
the 12-year credit period described in sec-
tion 45Q(a)(3)(A) or (4)(A) with respect
to such equipment. Section 6417(d)(3)(C)
(i)(II)(aa), (d)(3)(C)(ii), and (d)(3)(C)(iii)
provides special rules for a taxpayer mak-
ing the election to be treated as an appli-
cable entity for purposes of section 6417
with respect to a section 45Q credit (see
part III of this Background).
Section 6417(d)(3)(D) provides
that, in the case of section 45V credits,
any election under section 6417(a): (1)
applies separately with respect to each
qualified clean hydrogen production
facility; (2) must be made for the taxable
year in which such facility is placed in
service (or within the 1-year period sub-
sequent to the date of enactment of sec-
tion 6417 in the case of facilities placed
in service before December 31, 2022);
and (3) applies to the taxable year and
all subsequent taxable years with respect
to such facility. Section 6417(d)(3)(D)
(i)(III)(aa), (ii), and (iii) provide special
rules for a taxpayer making the election
to be treated as an applicable entity for
purposes of section 6417 with respect to
the 45V credit (see part III of this Back-
ground).
Section 6417(d)(3)(E) provides that, in
the case of section 45Y credits, any elec-
tion under section 6417(a): (1) applies
separately with respect to each qualified
facility; (2) must be made for the taxable
year in which such facility is placed in ser-
vice; and (3) applies to such taxable year
and to any subsequent taxable year that is
within the 10-year credit period described
in section 45Y(b)(1)(B) with respect to
such facility.
Section 6417(d)(4) provides rules
regarding when the elective payment is
treated as made. Section 6417(d)(4)(A)
provides that, in the case of any govern-
ment or political subdivision described
in section 6417(d)(1), and for which no
return is required under section 6011 or
6033(a), the payment described in section
6417(a) is treated as made on the later of
the date that a return would be due under
section 6033(a) if such government or sub-
division were described in section 6033
or the date on which such government or
subdivision submits a claim for credit or
refund (at such time and in such manner as
the Secretary provides). Section 6417(d)
(4)(B) provides that, in any other case, the
payment described in section 6417(a) is
treated as made on the later of the due date
(determined without regard to extensions)
of the return of tax for the taxable year or
the date on which such return is filed with
the IRS.
Section 6417(d)(5) provides that, as
a condition of, and prior to, any amount
being treated as a payment that is made by
Bulletin No. 2024–15 795 April 8, 2024

April 8, 2024 796 Bulletin No. 2024–15
an applicable entity under section 6417(a),
the Secretary may require such informa-
tion or registration as the Secretary deems
necessary for purposes of preventing
duplication, fraud, improper payments, or
excessive payments under section 6417.
Section 6417(d)(6) provides rules
relating to excessive payments. In the case
of any amount treated as a payment that is
made by the applicable entity under sec-
tion 6417(a), or the amount of the payment
made pursuant to section 6417(c), that is
determined to constitute an excessive pay-
ment, the tax imposed on such entity by
chapter 1 of the Code (chapter 1), regard-
less of whether such entity would other-
wise be subject to chapter 1 tax, for the
taxable year in which such determination
is made is increased by an amount equal to
the sum of (1) the amount of such exces-
sive payment, plus (2) an amount equal
to 20 percent of such excessive payment.
The increase equal to 20 percent of the
excessive payment does not apply if the
applicable entity can demonstrate that the
excessive payment resulted from reason-
able cause.
An excessive payment is defined as,
with respect to a facility or property for
which an election is made under section
6417 for any taxable year, an amount
equal to the excess of (1) the amount
treated as a payment that is made by the
applicable entity under section 6417(a),
or the amount of the payment made pur-
suant to section 6417(c), with respect to
such facility or property for such taxable
year, over (2) the amount of the credit
that, without application of section 6417,
would be otherwise allowable (as deter-
mined pursuant to section 6417(d)(2)
and without regard to section 38(c)) with
respect to such facility or property for
such taxable year.
Section 6417(e) provides a denial of
double benefit rule providing that, in the
case of an applicable entity making an
election under section 6417 with respect to
an applicable credit, such credit is reduced
to zero and, for any other purpose under
the Code, is deemed to have been allowed
to such entity for such taxable year.
Section 6417(f) provides a special rule
relating to any territory
2
of the United
States with a mirror code tax system (as
defined in section 24(k) of the Code).
Under this rule, section 6417 will not be
treated as part of the income tax laws of
the United States for purposes of deter-
mining the income tax law of any such
U.S. territory unless such U.S. territory
elects to have section 6417 be so treated.
Currently, the U.S. Virgin Islands, Guam,
and the Commonwealth of the Northern
Mariana Islands have mirror code tax sys-
tems.
Section 6417(g) provides basis reduction
and recapture rules. It states that, except as
otherwise provided in section 6417(c)(2)
(A),
3
rules similar to the rules of section 50
apply for purposes of section 6417.
Section 6417(h) authorizes the Secre-
tary to issue regulations or other guidance
as may be necessary to carry out the pur-
poses of section 6417, including guidance
to ensure that the amount of the payment
or deemed payment made under section
6417 is commensurate with the amount of
the credit that would be otherwise allow-
able (determined without regard to section
38(c)).
III. Special Rules Relating to Electing
Taxpayers Making An Election Under
Section 6417(d)(1)(B), (C), or (D)
A taxpayer other than an applicable
entity under section 6417(d)(1)(A) (elect-
ing taxpayer) may make an election to
be treated as an applicable entity for the
limited purpose of making an elective
payment election with respect to a section
45V credit, a section 45Q credit, or a sec-
tion 45X credit under section 6417(d)(1)
(B), (C), or (D), respectively. An electing
taxpayer may make an elective payment
election under section 6417(d)(1)(B), (C),
or (D) at such time and in such manner
as the Secretary provides (but no election
may be made with respect to any taxable
year beginning after December 31, 2032).
The special rules for such an election are
described in parts III.A, III.B, and III.C of
this Background.
A. Electing taxpayers making an election
with respect to section 45V credits
Section 6417(d)(1)(B) allows an elect-
ing taxpayer to make an elective payment
election for any taxable year in which
such taxpayer has placed in service a
qualified clean hydrogen production facil-
ity (as defined in section 45V(c)(3)), but
only with respect to a section 45V credit
determined in such year with respect to
the electing taxpayer. Pursuant to sec-
tion 6417(d)(3)(D)(i)(III), such electing
taxpayer is treated as having made such
election for the taxable year with respect
to which the election is made and each of
the four subsequent taxable years ending
before January 1, 2033. Under section
6417(d)(3)(D)(iii), an electing taxpayer
may elect to revoke the application of
such election, but any such election to
revoke, if made, applies to the applicable
year specified in such election (but not any
prior taxable year) and each subsequent
taxable year within the 5-year period and
cannot be revoked.
Section 6417(d)(3)(D)(ii) prohibits an
electing taxpayer from making a transfer
election under section 6418(a) of the Code
with respect to a section 45V credit for
any year for which the electing taxpayer’s
election under section 6417(d)(1)(B) is in
effect.
B. Electing taxpayers making an election
with respect to section 45Q credits
Section 6417(d)(1)(C) allows an elect-
ing taxpayer to make an elective payment
election for any taxable year in which the
electing taxpayer has, after December
31, 2022, placed in service carbon cap-
ture equipment at a qualified facility (as
defined in section 45Q(d)), but only with
respect to a section 45Q credit determined
in such year with respect to such taxpayer.
Pursuant to section 6417(d)(3)(C)(i)(II)
(aa), such electing taxpayer is treated as
having made such election for the taxable
year with respect to which the election
is made and each of the four subsequent
taxable years ending before January 1,
2
Section 6417(f) uses the term “possession,” but the proposed regulations and these final regulations use the alternative term “territory.”
3
There is no section 6417(c)(2)(A) and the Treasury Department and the IRS believe Congress intended to refer instead to section 6417(d)(2)(A). See General Explanation of Tax Legislation
Enacted in the 117th Congress, JCS-1-23 (December 21, 2023) at 284. Thus, the proposed and final regulations refer to section 6417(d)(2)(A).

Bulletin No. 2024–15 797 April 8, 2024
2033. Under section 6417(d)(3)(C)(iii), an
electing taxpayer may elect to revoke the
application of such election, but any such
election to revoke, if made, applies to the
applicable year specified in such election
(but not any prior taxable year) and each
subsequent taxable year within the 5-year
period and cannot be revoked.
Section 6417(d)(3)(C)(ii) prohibits an
electing taxpayer from making a trans-
fer election under section 6418(a) with
respect to a section 45Q credit for any year
for which the electing taxpayer’s election
under section 6417(d)(1)(C) is in effect.
C. Electing taxpayers making an election
with respect to section 45X credits
Section 6417(d)(1)(D) allows an elect-
ing taxpayer to make an elective payment
election for any taxable year in which the
electing taxpayer has, after December 31,
2022, produced eligible components (as
defined in section 45X(c)(1)), but only
with respect to a section 45X credit deter-
mined in such year with respect to such
taxpayer. Pursuant to section 6417(d)
(1)(D)(ii)(I), such electing taxpayer is
treated as having made such election for
the taxable year with respect to which the
election is made and each of the four sub-
sequent taxable years ending before Janu-
ary 1, 2033. Under section 6417(d)(1)(D)
(ii)(II), an electing taxpayer may elect to
revoke the application of such election,
but any such election to revoke, if made,
applies to the applicable year specified in
such election (but not any prior taxable
year) and each subsequent taxable year
remaining within the 5-year period and
cannot be revoked.
Section 6417(d)(1)(D)(iii) prohibits an
electing taxpayer from making a trans-
fer election under section 6418(a) with
respect to a section 45X credit for any year
for which the electing taxpayer’s election
under section 6417(d)(1)(D) is in effect.
IV. Section 6417 Rules for Partnerships
and S corporations
Section 6417(c) provides special rules
for partnerships and S corporations that
hold directly (as determined for Federal
tax purposes) a facility or property for
which an applicable credit is determined.
Section 6417(c)(1) provides that, in the
case of any applicable credit determined
with respect to any facility or property held
directly by a partnership or S corporation,
any elective payment election must be
made by such partnership or S corporation
in the manner provided by the Secretary.
If a partnership or S corporation makes
an elective payment election with respect
to any applicable credit, (1) a payment is
made to such partnership or S corporation
equal to the applicable credit amount; (2)
section 6417(e) is applied with respect to
the applicable credit before determining
any partner’s distributive share, or S cor-
poration shareholder’s pro rata share, of
such applicable credit; (3) any applica-
ble credit amount with respect to which
the election in section 6417(a) is made is
treated as tax exempt income for purposes
of sections 705 and 1366 of the Code; and
(4) a partner’s distributive share of such
tax exempt income is based on such part-
ner’s distributive share of the otherwise
applicable credit for each taxable year (an
S corporation shareholder’s share of tax
exempt income is based on the sharehold-
er’s pro rata share).
Section 6417(c)(2) provides that, in
the case of any facility or property held
directly by a partnership or S corporation,
no election by any partner or shareholder
is allowed under section 6417(a) with
respect to any applicable credit deter-
mined with respect to such facility or
property.
V. Notice 2022-50
On October 24, 2022, the Department
of the Treasury (Treasury Department)
and the IRS published Notice 2022-50,
2022-43 I.R.B. 325, to, among other
things, request feedback from the public
on potential issues with respect to the elec-
tive payment election provisions under
section 6417 that may require guidance.
Stakeholders submitted more than 200
comments in response to Notice 2022-50.
Feedback in those comments informed the
development of the proposed regulations
and is described in the preamble to the
proposed regulations as appropriate.
VI. Proposed and Temporary Regulations
On June 21, 2023, the Treasury Depart-
ment and the IRS published proposed
regulations under section 6417 (REG-
101607-23) in the Federal Register (88
FR 40528) to provide guidance on elective
payment elections (proposed regulations).
Those proposed regulations included pro-
posed §1.6417-5, which contained pro-
posed rules identical to the temporary reg-
ulations at §1.6417-5T. Those temporary
regulations also were published on June
21, 2023, in the Federal Register (88 FR
40093) to provide guidance on the manda-
tory information and registration require-
ments for elective payment elections. The
provisions of the proposed regulations are
explained in greater detail in the preamble
to the proposed regulations.
Summary of Comments and
Explanation of Revisions
This Summary of Comments and
Explanation of Revisions summarizes
the proposed regulations and all the sub-
stantive comments submitted in response
to the proposed regulations. The Trea-
sury Department and the IRS received
151 written comments in response to the
proposed regulations. The comments are
available for public inspection at www.
regulations.gov or upon request. A hear-
ing was conducted in person and tele-
phonically on August 21, 2023, during
which 10 presenters provided comments.
After full consideration of the comments
received, these final regulations adopt the
proposed regulations with modifications
in response to the comments described in
this Summary of Comments and Explana-
tion of Revisions.
Comments merely summarizing the
proposed regulations, recommending stat-
utory revisions to section 6417 or other
statutes, or addressing issues that are out-
side the scope of this rulemaking, such
as the calculation of applicable credits
(including any bonus credit amounts) or
recommended changes to IRS forms, are
beyond the scope of these regulations and
are not adopted.
I. General Rules and Definitions
A. Applicable entities
Section 6417(d)(1) defines applica-
ble entity. Proposed §1.6417-1(c) clari-
fied the statutory definition of applicable

April 8, 2024 798 Bulletin No. 2024–15
entity pursuant to the Secretary’s authority
under section 6417(h) to issue regulations
necessary to carry out the purposes of sec-
tion 6417. Commenters addressed several
aspects of the proposed definitions, as
described in this Part I.A of the Summary
of Comments and Explanation of Revi-
sions.
1. Any Organization Exempt from the
Tax Imposed by Subtitle A
Section 6417(d)(1)(A)(i) defines
“applicable entity” as including any orga-
nization exempt from the tax imposed
by subtitle A. The proposed regulations
would have clarified that “any organi-
zation exempt from the tax imposed by
subtitle A” meant (1) any organization
exempt from the tax imposed by subtitle
A by reason of section 501(a) of the Code
and (2) any organization exempt from the
tax imposed by subtitle A because it is
the government of any U.S. territory or a
political subdivision thereof.
A few commenters asked that Puerto
Rico-registered nonprofits (those with
Puerto Rico 1101.01 nonprofit status) be
allowed to file for elective payment of
renewable energy tax credits without hav-
ing to acquire section 501(c)(3) status.
As the preamble to the proposed regula-
tions noted, stakeholders had previously
responded to Notice 2022-50 by asking
whether an entity classified as a nonprofit
under State law but that does not have Fed-
eral tax-exempt status would be described
in section 6417(d)(1)(A). The preamble to
the proposed regulations stated that such
an entity would not be described in section
6417(d)(1)(A) because it is not exempt
from the tax imposed by subtitle A (but
that some of these entities might meet the
requirements of another type of applica-
ble entity, such as a State instrumentality,
and might be an applicable entity on those
grounds). This same answer applies to a
Puerto Rico-registered nonprofit that does
not have section 501(c)(3) status.
Multiple commenters urged that home-
owners’ associations described in section
528 of the Code be considered applica-
ble entities under section 6417(d)(1)(A)
because they are “exempt from the tax
imposed by subtitle A” by their statu-
tory language. Two of these commenters
noted that other sections within subchap-
ter F of chapter 1 have similar statutory
language, and one of these commenters
thus requested that the final regulations
be modified to include all organizations
considered exempt from income taxes
pursuant to subchapter F of chapter 1. In
response, these final regulations adopt this
comment and define “any organization
exempt from the tax imposed by subtitle
A” to include organizations exempt from
the tax imposed by subtitle A by reason
of subchapter F of chapter 1. Thus, under
these final regulations, any organization
described in sections 501 through 530 of
the Code that meets the requirements to
be recognized as exempt from tax under
those sections is an applicable entity eligi-
ble to make an elective payment election.
No commenters opposed the inclusion
of the government of any U.S. territory or
a political subdivision thereof in this defi-
nition; thus, these final regulations adopt
this definition as proposed. However,
several commenters recommended that
the final regulations provide an exception
to the general rule in section 50(b)(1) for
territorial applicable entities making elec-
tions under section 6417 for investment
tax credits, advocating that such a rule
would provide better parity with domestic
applicable entities making such elections
and would advance the IRA’s purpose by
improving access to clean energy invest-
ment tax credits in U.S. territories.
Since before the IRA, investment tax
credits, vehicle-related credits, and energy
efficiency incentives have included
restrictions with respect to property
located or used in U.S. territories by refer-
ence to section 50(b)(1). Section 50(b)(1)
provides that “no [investment tax] credit
shall be determined . . . with respect to
any property which is used predominantly
outside the United States”
4
unless sec-
tion 168(g)(4) applies (which provides an
exception for any property that is owned
by a domestic corporation or by a United
States citizen other than a citizen entitled
to the benefits of section 931 or 933 of
the Code, and that is used predominantly
in a possession of the United States by
such a corporation or such a citizen, or
by a corporation created or organized in,
or under the law of, a possession of the
United States). The IRA did not amend
these provisions; instead, the IRA specif-
ically referenced 50(b)(1) in section 30C,
incorporated section 50(b)(1) into section
45W, and did not exclude section 48, 48C,
or 48E from the application of section
50(b)(1). Furthermore, section 6417(d)(2)
provides special rules that enable tax-ex-
empt and government entities to benefit
from section 30C, 45W, 48, 48C, and 48E
because it provides that applicable credits
are determined without regard to sections
50(b)(3) and (4)(A)(i). However, there is
no provision lifting the territory-related
restrictions of section 50(b)(1). Without
specific language in section 6417 or in the
underlying applicable credits addressing
section 50(b)(1), or other compelling evi-
dence of Congressional intent, a special
rule turning off the application of section
50(b)(1) is not supported by the Code.
Therefore, these final regulations do not
adopt this recommendation.
One commenter asked for a process
under which the Puerto Rico Department
of Treasury (or any other agency desig-
nated by the Governor of Puerto Rico)
is designated to receive, process, and/or
administer elections for elective payments
from applicable entities and instrumental-
ities of Puerto Rico, similar to the process
for disbursements of Coronavirus Relief
Funds under the Coronavirus Aid, Relief,
and Economic Security Act, Public Law
116-136, 134 Stat. 281 (March 27, 2020).
The Treasury Department and the IRS
have determined that creating the sug-
gested process is inappropriate for elective
payment elections because section 6417
involves the filing of a tax return with the
IRS. Accordingly, these final regulations
do not adopt this comment.
2. Any State or Political Subdivision
Thereof
Section 6417(d)(1)(A)(ii) defines
“applicable entity” to include any State
or political subdivision thereof. The pro-
posed regulations would have clarified
that this includes the District of Columbia.
4
Under section 7701(a)(9) of the Code, “[t]he term ‘United States’ when used in a geographical sense includes only the States and the District of Columbia.”

Bulletin No. 2024–15 799 April 8, 2024
No comments addressed this definition, so
these final regulations adopt the definition
as proposed.
3. Indian Tribal Governments
Section 6417(d)(1)(A)(iv) states that an
applicable entity includes an Indian tribal
government (as defined in section 30D(g)
(9)). To provide Indian tribal governments
parity with State governments, proposed
§1.6417-1(c)(3) would have included
subdivisions of Indian tribal governments
in this definition. Proposed §1.6417-1(k)
defined the term Indian tribal govern-
ment as the recognized governing body of
any Indian or Alaska Native tribe, band,
nation, pueblo, village, community, com-
ponent band, or component reservation,
individually identified (including par-
enthetically) in the most recent list pub-
lished by the Department of the Interior in
the Federal Register pursuant to section
104 of the Federally Recognized Indian
Tribe List Act of 1994 (25 U.S.C. 5131).
Although no comments were received
that directly addressed the definition of
an Indian tribal government provided in
proposed §1.6417-1(c)(3), these final reg-
ulations clarify the proposed definition by
specifying that the most recent list pub-
lished by the Department of the Interior in
the Federal Register is the one prior to the
date on which a relevant elective payment
election is made. (Comments regarding
Tribal entities other than Indian tribal gov-
ernments are discussed elsewhere in this
Summary of Comments and Explanation
of Revisions.)
4. Alaska Native Corporations
Section 6417(d)(1)(A)(v) provides that
any Alaska Native Corporation (as defined
in section 3 of the Alaska Native Claims
Settlement Act (43 U.S.C. 1602(m))
(ANC) is an applicable entity. The pro-
posed regulations would have adopted
this definition. The proposed regulations
requested comments regarding the defi-
nition in proposed §1.6417-1(c)(4) and
whether additional guidance is necessary
regarding consolidated groups with ANC
common parents. The Treasury Depart-
ment and the IRS did not receive com-
ments related to this definition, but these
final regulations adopt the proposed reg-
ulation and broaden it to apply to consol-
idated groups with any applicable entity
as a common parent, as described in part
I.B.5. of this Summary of Comments and
Explanation of Revisions.
5. Rural Electric Cooperatives
Section 6417(d)(1)(A)(vi) provides
that any corporation operating on a coop-
erative basis that is engaged in furnishing
electric energy to persons in rural areas is
an applicable entity. The proposed regu-
lations did not elaborate on this definition
but requested comments on whether fur-
ther clarification of the definition in pro-
posed §1.6417-1(c)(6) is necessary.
A few commenters addressed this defi-
nition. Some of these commenters stated
that “clarity would be better achieved”
if the Treasury Department and the IRS
would refer to tax-exempt electric coop-
eratives as applicable entities described
in 501(c)(12) and taxable electric cooper-
atives as applicable entities described in
section 1381(a)(2)(C) of the Code. One of
these commenters stated that an electric
cooperative may be described in section
45(e)(2)(A)(iii) as a not-for-profit electric
utility that had or has received a loan or
loan guarantee under the Rural Electrifi-
cation Act of 1936. Another commenter
asked that the final regulations also allow
a “pre-1962” rural electric cooperative
under section 1381(a)(2)(C) to be eligi-
ble to make an elective payment election.
Another commenter asked that the final
regulations clarify that rural electric coop-
eratives that file either Form 1120, U.S.
Corporation Income Tax Return, or Form
990, Return of Organization Exempt from
Income Tax, be eligible to make an elec-
tive payment election.
The Treasury Department and the IRS
have concluded that rural electric coop-
eratives as described in section 6417(d)
(1)(A)(vi) include rural electric cooper-
atives that do not meet the requirements
under section 501(c)(12), as cooperatives
that meet the requirements under section
501(c)(12) are already considered tax-ex-
empt entities in section 6417(d)(1)(A)
(i). To avoid rendering section 6417(d)
(1)(A)(vi) superfluous, it is necessary to
include taxable (nonexempt) rural electric
cooperatives in section 6417(d)(1)(A)(vi).
Taxable (nonexempt) rural electric coop-
eratives are described in section 1381(a)
(2)(C) as “any corporation operating on
a cooperative basis that is engaged in
furnishing electric energy to persons in
rural areas.” Thus, these final regulations
under §1.6417-1(c)(6) clarify that section
6417(d)(1)(A)(vi) means “any corpora-
tion operating on a cooperative basis that
is engaged in furnishing electric energy
to persons in rural areas as described in
section 1381(a)(2)(C) of the Code.” These
final regulations do not include “any elec-
tric cooperative described in section 45(e)
(2)(A)(iii)” in the definition because such
section does not exist in the Code, and
the Treasury Department and the IRS are
unsure what cooperatives the commenter
is referencing.
One commenter recommended that the
final regulations clarify that local, publicly
owned utilities (for example, water and
electric) and electric cooperatives (other
than rural) are eligible entities under sec-
tion 6417(d)(1)(A)(vi), stating that the
proposed definition aligns with Congres-
sional intent and that there are more than
2,800 public owned utilities and coop-
eratives in operation combined serving
millions of customers across the United
States. Because section 6417(d)(1)(A)(vi)
requires that a cooperative be engaged in
furnishing electric energy to persons “in
rural areas,” these final regulations do not
include these entities in the definition of
rural electric cooperative. However, it
is possible that publicly owned utilities
and non-profit co-ops could qualify as
applicable entities under other definitions
described in these rules, such as if they are
considered agencies or instrumentalities
of a State, local, territorial, or Tribal gov-
ernment.
Multiple commenters asked that the
final regulations expand rural electric
cooperatives to cover workers coopera-
tives that install solar panels. These com-
menters also requested clarification as
to how to determine an organization is
(1) operating on a cooperative basis; (2)
furnishing electricity; and (3) furnishing
electricity in a rural area. The commenters
generally suggest adopting existing rules
under subchapter T of chapter 1 of the
Code (subchapter T).
These final regulations do not adopt a
specific rule covering workers coopera-
tives that install solar panels because the

April 8, 2024 800 Bulletin No. 2024–15
revision to the definition of rural electric
cooperatives in the final regulations is
sufficient to clarify the meaning of the
term. As these final regulations include
any corporation operating on a cooper-
ative basis that is engaged in furnishing
electric energy to persons in rural areas
as described in section 1381(a)(2)(C), it is
the law that applies to those corporations
that will apply in making the determina-
tion with respect to any respective corpo-
ration.
With respect to operating on a cooper-
ative basis, a summary of the taxation of
nonexempt rural electric cooperatives may
be helpful in explaining the key principles.
The rules for tax treatment of most nonex-
empt cooperatives and their patrons were
codified with the enactment of subchapter
T as part of the Revenue Act of 1962. Pub-
lic Law No. 87-834 (H.R. 10650). How-
ever, section 1381(a)(2)(C) states that
subchapter T is not applicable to an orga-
nization engaged in furnishing electric
energy (or providing telephone service)
to persons in rural areas. According to the
Senate Finance Committee Report accom-
panying the 1962 Act, the intent of Con-
gress was that nonexempt rural electric
cooperatives would continue to be treated
as under “present law” as of 1962. While
subchapter T does not expressly control
the taxation of nonexempt rural electric
cooperatives, its foundations rest upon
pre-1962 cooperative tax law. As a result,
there are certain basic parallels between
the tax treatment of nonexempt utility
(electric and telephone) cooperatives and
treatment of other cooperative organiza-
tions under subchapter T. Therefore, to
extent that subchapter T reflects cooper-
ative taxation as it existed prior to 1962,
it is instructive in resolving certain issues
facing rural electric cooperatives. This is
because Congress stated that, in enacting
subchapter T, it was merely codifying the
long common law history of cooperative
taxation (with the exception of ensuring at
least one annual level of tax at the coop-
erative or patron level. See S. Rep. No.
1881, 87th Cong., 1st Sess. 113 (1962)).
Arguably, the case law post-enactment is
merely a continuation and refinement of
the pre-enactment common law.
Perhaps the most succinct definition of
the term “cooperative” for Federal income
tax purposes was provided by the U.S.
Tax Court in Puget Sound Plywood, Inc.
v. Commissioner, 44 T.C. 305 (1965), acq.
1966-1 C.B. 3:
Under the cooperative association form
or organization . . . , the worker-mem-
bers of the association supply their own
capital at their own risk; select their
own management and supply their own
direction for the enterprise, through
worker meetings conducted on a dem-
ocratic basis; and then themselves
receive the fruits of their cooperative
endeavors, through allocations of the
same among themselves as coworkers,
in proportion to the amounts of their
active participation in the cooperative
undertaking.
The Tax Court went on to describe
three guiding principles at the core of eco-
nomic cooperative theory as, id. at 308:
(1) Subordination of capital, both as
regards control over the cooperative
undertaking, and as regards the own-
ership of the pecuniary benefits aris-
ing therefrom; (2) democratic control
by the worker-members themselves;
and, (3) the vesting in and allocation
among the worker-members of all
fruits and increases arising from their
cooperative endeavor (i.e., the excess
of operating revenues over the costs
incurred in generating those revenues),
in proportion to the worker-members
active participation in the cooperative
endeavor.
The mechanism by which rural electric
cooperatives achieve operation at cost is
the patronage dividend (or capital credit).
The payment of patronage dividends (and
operation at cost) is critical to achieving
cooperative status as defined by Puget
Sound, so any organization must analyze
this issue to determine whether it is oper-
ating on a cooperative basis.
The comments related to the definition
of “furnishing” electricity for purposes
of section 6417(d)(1)(A)(vi) varied. For
example, some commenters suggested
using the language in §1.1381-1(b)(4) as
the standard, and some suggested the term
should not be limited to generating and
transmitting electricity. One commenter
suggested that a percentage of rural name-
plate capacity be applied for purposes of
the definition of “furnishing” electric-
ity, while another commenter stated that
a more than de minimis standard should
be used to meet furnishing requirements.
Consistent with the determination that
section 6417(d)(1)(A)(vi) will cover rural
electric cooperatives described in section
1381(a)(2)(C), the Treasury Department
and the IRS conclude that “furnishing”
electricity under section 6417(d)(1)(A)
(vi) should be interpreted in the same man-
ner as the language in §1.1381-1(b)(4),
which provides “[a]ny organization which
is engaged in generating, transmitting, or
otherwise furnishing electric energy.” The
purpose of this language in §1.1381-1(b)
(4) is to identify rural electric coopera-
tives described in section 1381(a)(2)(C).
Using a similar interpretation for purposes
of section 6417 means that a cooperative
furnishing electric energy under §1.1381-
1(b)(4) would meet this portion of the
definition. Such a cooperative would not
be subject to subchapter T as a result of
section 1381(a)(2)(C), assuming the elec-
tricity is provided to rural areas.
With respect to this conclusion, the
Treasury Department and the IRS note that
some of the commenters identified them-
selves as cooperatives subject to the pro-
visions of subchapter T. The definition of
applicable entity in section 6417(d)(1)(A)
(vi) would not include a cooperative that
is subject to subchapter T, as a cooperative
cannot be both subject to subchapter T and
excepted from subchapter T. Further, the
definition of furnishing in §1.1381-1(b)
(4), and thus for purposes of section 6417,
does not include the activity of installation
of energy equipment (such as the instal-
lation of solar panels), as that alone is
not the generation or other furnishing of
electricity. Thus, organizations evaluat-
ing whether their operations include fur-
nishing electricity for purposes of section
6417 should take this into account.
Consistent with including rural electric
cooperatives described in section 1381(a)
(2)(C) and the use of §1.1381-1(b)(4) to
determine whether a cooperative is “fur-
nishing” electricity, the Treasury Depart-
ment and the IRS reach a similar conclu-
sion with respect to defining “rural” for
purposes of section 6417 by reference
to §1.1381-1(b)(4). Section 1.1381-1(b)
(4) provides that the term rural area has

Bulletin No. 2024–15 801 April 8, 2024
the meaning assigned to [it] in section 5
of the Rural Electrification Act of 1936,
as amended (7 U.S.C. 924). Currently
7 U.S.C. 924(b) provides that the term
‘rural area’ is deemed to mean any area
of the United States not included within
the boundaries of any incorporated or
unincorporated city, village, or borough
having a population in excess of 5,000
inhabitants.
6. Tennessee Valley Authority
Section 6417(d)(1)(A)(iii) states that
the Tennessee Valley Authority is an
applicable entity. The proposed regula-
tions would have adopted this definition.
No commenters addressed this definition,
so these final regulations adopt the defini-
tion as proposed.
7. An Agency or Instrumentality of
Certain Applicable Entities
Proposed §1.6417-1(c)(7) would have
clarified that an agency or instrumental-
ity of (1) any U.S. territory or a political
subdivision thereof; (2) any State, the Dis-
trict of Columbia, or political subdivision
thereof; or (3) an Indian tribal government
or a subdivision thereof is also an applica-
ble entity eligible to make an elective pay-
ment election. The proposed regulations
requested comments on this approach
to defining applicable entities and on
whether further guidance is necessary.
Commenters addressed both the scope
of the definition and whether it should be
expanded to include Federal agencies and
instrumentalities.
i. Scope of the definition of “agency” and
“instrumentality”
Several commenters asked for addi-
tional clarity on the definition of agencies
and instrumentalities, such as whether
joint powers authorities, housing author-
ities, transit authorities, air authorities,
publicly owned utilities, or tax-exempt
entities in the water sector are included
(and one commenter requested a similar
clarification pertaining to political subdi-
visions). Various commenters mentioned
application of Rev. Rul. 57-128, 1957-1
C.B. 311, while two of these commenters
asked how the facts and circumstances
analysis in the revenue ruling would apply
to their specific facts. One commenter
requested a rule stating that whether an
entity is an agency or an instrumentality
is determined based on (or at least influ-
enced by) State or local law. Finally, one
commenter asked that the final regula-
tions allow tribes to determine what is
an agency or instrumentality of an Indian
tribal government.
The determination of whether an entity
is an agency, instrumentality, or a polit-
ical subdivision (or subdivision in the
case of an Indian tribal government) is
governed by Federal tax law that is out-
side the scope of these final regulations.
Federal tax determinations of whether an
entity is an agency or instrumentality of
any government typically are analyzed on
a facts and circumstances basis. In deter-
mining whether an entity is an agency or
instrumentality for Federal tax purposes,
Federal courts have applied a test similar
to the six-factor test in Rev. Rul. 57-128,
which generally provides guidance on
whether an entity is an instrumentality for
purposes of the exemption from employ-
ment taxes under sections 3121(b)(7) and
3306(c)(7). See, e.g., Bernini v. Federal
Reserve Bank of St. Louis, Eighth District,
420 F. Supp. 2d 1021 (E.D. Mo. 2005)
and Rose v. Long Island Railroad Pension
Plan, 828 F.2d 910, 918 (2d Cir. 1987),
cert. denied, 485 U.S. 936 (1988).
Rev. Rul. 57-128 looks to the following
six factors:
(1) Whether the organization is used for a
governmental purpose and performs a
governmental function;
(2) Whether performance of the organi-
zation’s function is on behalf of one
or more States or political subdivi-
sions;
(3) Whether there are any private inter-
ests involved, or whether the States or
political subdivisions involved have
the powers and interests of an owner;
(4) Whether control and supervision of
the organization is vested in public
authority or authorities;
(5) If express or implied statutory or
other authority is necessary for the
creation and/or use of such an instru-
mentality, and whether such authority
exists; and
(6) The degree of financial autonomy and
the source of its operating expenses.
The Treasury Department and the IRS
are unaware of any different Federal tax
authority or standard that applies to deter-
mine whether an entity qualifies as an
instrumentality of an Indian tribal gov-
ernment for Federal tax purposes. The
application of the facts-and-circumstances
analysis in Rev. Rul. 57-128 to any par-
ticular entity is outside the scope of this
rulemaking.
With respect to political subdivisions,
Rev. Rul. 78-276, 1978-2 C.B. 256, states
that the term “political subdivision” has
been defined consistently for all Federal tax
purposes as denoting either (1) a division of
a State or local government that is a munic-
ipal corporation, or (2) a division of such
State or local government that has been
delegated the right to exercise sovereign
power by the State or local government.
The three generally acknowledged sover-
eign powers are the power to tax, the power
of eminent domain, and the police power.
See Commissioner v. Estate of Shamberg,
3 T.C. 131 (1944), acq., 1945 C.B. 6, aff ’d
144 F.2d 998 (2d Cir. 1944), cert. denied,
323 U.S. 792 (1945). It is not necessary
that all three sovereign powers enumerated
in Shamberg be delegated. See Rev. Rul.
77-164, 1977-1 C.B. 20. However, posses-
sion of only an insubstantial amount of any
or all sovereign powers is not sufficient.
In determining whether an entity is a
division of a State or local governmen-
tal unit, important considerations are the
extent that the entity is (1) controlled by
the State or local government unit, and
(2) motivated by a wholly public purpose.
See., e.g., Rev. Rul. 78-276, 1978-2 C.B.
256 and Rev. Rul. 83-131, 1983-2 C.B.
184.
Determination of agency, instrumental-
ity, or political subdivision (or subdivision
in the case of an Indian tribal government)
status is based on all the facts and cir-
cumstances, and additional guidance on
this subject is beyond the scope of these
final regulations. Generally, however, tax-
payers may request a private letter ruling
from the IRS Office of Chief Counsel to
apply applicable law to the organization’s
specific set of facts. See Rev. Proc. 2024-
1, I.R.B. 2024-1 (containing procedures
for letter rulings) and Rev. Proc. 2024-3,
I.R.B. 2024-1 (containing a list of areas of
the Code relating to matters on which the
IRS will not issue letter rulings).

April 8, 2024 802 Bulletin No. 2024–15
One commenter asked that an instru-
mentality be eligible to make an elective
payment election with respect to its assets
that are operated and maintained by a pri-
vate partner under a public-private part-
nership. While it is not clear what kind
of entity the commenter means by “pub-
lic-private partnership,” if the arrange-
ment is treated as a partnership for Federal
tax purposes, then the partnership would
not be an applicable entity listed in sec-
tion 6417(d)(1)(A). See part I.B.4 of this
Summary of Comments and Explanation
of Revisions.
ii. Federal agencies and instrumentalities
Several commenters asked that the
final regulations include Federal agencies
and instrumentalities within the definition
of applicable entity. Commenters specifi-
cally mentioned the United States Postal
Service, Federal hydropower agencies,
Federal Power Marketing Administrations
(PMAs), the Army Corps of Engineers,
and the Bureau of Reclamation.
One commenter stated that the proposed
regulations did not provide a justification
for why Federal agencies or instrumental-
ities were not included. This commenter
did, however, note that, absent statutory
authorization to the contrary, agency-col-
lected user fees and charges already must
be deposited in the Treasury General
Fund. Several commenters suggested that
the cross-reference in section 6417(b)
(6) – the provision setting out the list of
applicable credits – to section 168(h)(2)
(A)(i) should be read to provide Federal
agencies and instrumentalities with the
ability to make an elective payment elec-
tion for at least section 45W credits. Simi-
larly, one commenter asked that PMAs be
able to apply, file, and receive all elective
payments under section 6417 on behalf of
the power generating agencies of regional
Federal power programs. This commenter
stated that PMAs serve as the Federal enti-
ties responsible for facilitating the funding
of and ensuring repayment for the regional
power program, both expensed annual
maintenance and capital improvements,
and that it would be beneficial to elimi-
nate unnecessary overlap, confusion, and
administrative burdens to efficiently use
elective payments for applicable projects.
Section 6417(a)(1), however, authorizes
an election of an applicable credit only by
an applicable entity under section 6417(d)
(1)(A). Although the Treasury Depart-
ment and the IRS solicited comments on
the issue, no commenter addressed how
appropriations issues raised by including
Federal agencies and instrumentalities
(beyond the Tennessee Valley Authority,
which is specifically listed in the statute)
or PMAs within the definition of applica-
ble entities could or should be resolved.
The Treasury Department and the IRS
have thus retained the proposed approach
and have not extended the definition of
applicable entities to those additional enti-
ties in these final regulations.
8. Electing Taxpayers
Certain taxpayers that are not listed
in section 6417(d)(1)(A) or described
in the preceding paragraphs may nev-
ertheless make an election to be treated
as an applicable entity with respect to
applicable credit property giving rise to
a section 45Q credit, section 45V credit,
or section 45X credit, as described more
fully in part III of this Summary of Com-
ments and Explanation of Revisions. Pro-
posed §1.6417-1(g) would have defined
an “electing taxpayer” as any taxpayer
that is not an applicable entity, but makes
an election in accordance with proposed
§§1.6417-2(b), 1.6417-3, and, if applica-
ble, 1.6417-4, to be treated as an applica-
ble entity for a taxable year with respect to
applicable credits determined with respect
to an applicable credit property described
in proposed §1.6417-1(e)(3), (5), or (7).
No commenters addressed this definition;
thus, these final regulations adopt the defi-
nition as proposed.
B. Entities related to an applicable entity
or an electing taxpayer
Proposed §1.6417-2(a) would have
provided rules for elective payment elec-
tions made by entities related to applicable
entities or electing taxpayers. Comment-
ers addressed several of these proposed
rules.
1. Disregarded Entities
Proposed §1.6417-1(f) defined “dis-
regarded entity” as an entity that is dis-
regarded as an entity separate from its
owner for Federal income tax purposes.
Proposed §1.6417-2(a)(1)(ii) would have
provided that, if an applicable entity or
electing taxpayer is the owner (directly
or indirectly) of a disregarded entity that
directly holds an applicable credit prop-
erty, the applicable entity may make an
elective payment election for applicable
credits determined with respect to the
applicable credit property held directly by
the disregarded entity.
Several commenters asked that the
final regulations clarify whether Tribal
corporations formed under section 17 of
the Indian Reorganization Act of 1934
are considered applicable entities. In
response, these final regulations clarify
the definition of disregarded entity under
§1.6417-1(f), consistent with the current
rule in §301.7701-1(a)(3), to expressly
state that the term includes a Tribal cor-
poration incorporated under section 17 of
the Indian Reorganization Act of 1934,
as amended (25 U.S.C. 5124), or under
section 3 of the Oklahoma Indian Welfare
Act, as amended (25 U.S.C. 5203), that is
not recognized as an entity separate from
the tribe for Federal tax purposes, and
therefore is disregarded as an entity sepa-
rate from its owner for purposes of section
6417.
One commenter asked that the final
regulations treat an applicable entity that is
the sole shareholder of an S corporation as
eligible to make an elective payment elec-
tion for all applicable credits determined
with respect to applicable property held
by the S corporation, in the same manner
as an applicable entity that is the owner of
a disregarded entity would be eligible to
make an elective payment election for all
applicable credits determined with respect
to applicable credit property held by the
disregarded entity. Another commenter
asked that any entity wholly owned by an
applicable entity be treated as an appli-
cable entity. This commenter anticipated
that many applicable entities will want to
create special purpose entities to own their
tax credit eligible projects, but that the
classification of such entities as an appli-
cable entity can be uncertain. As an exam-
ple, the commenter suggested that a city
that would normally issue bonds through
an industrial development authority that is
treated as an agency or instrumentality of

Bulletin No. 2024–15 803 April 8, 2024
the city may want the industrial develop-
ment authority to create a wholly-owned
corporation or limited liability company
to be the owner of the project. The com-
menter stated that it may be difficult to
determine whether such wholly-owned
entity of an industrial development author-
ity would also be treated as an agency or
instrumentality since it is based on a facts
and circumstances analysis. Moreover,
under §301.7701-2(b)(6), the commenter
pointed out that a limited liability com-
pany that is wholly owned by an agency
or instrumentality of a State or local gov-
ernmental unit may be treated as a sepa-
rate corporation and, therefore, may not
be treated as a disregarded entity. In sum,
the commenter stated that it saw no policy
reason why an entity wholly owned by an
applicable entity should not be treated as
an applicable entity.
The Treasury Department and the IRS
have determined that special rules disre-
garding an entity’s Federal tax status for
purposes of section 6417(d)(1)(A) are
not appropriate. Section 6417(d)(1)(A) is
specific as to the types of entities afforded
applicable entity status. Any regarded
entity that has a Federal tax status sepa-
rate from its owner(s) and is not separately
listed in section 6417(d)(1)(A) cannot be
treated as an applicable entity. This is
consistent with the rule for taxable C cor-
porations discussed in part I.B.2 of this
Summary of Comments and Explanation
of Revisions.
2. Taxable C Corporations
The proposed regulations would have
provided that, because a taxable C corpora-
tion is an entity separate from its owner, pro-
posed §1.6417-1(c)(1) would not include a
C corporation that is not itself an applica-
ble entity described in proposed §1.6417-
1(c)(1) as an applicable entity, even if its
owner is an applicable entity described in
proposed §1.6417-1(c)(1). However, an
electing taxpayer may include a taxable C
corporation (including a member of a con-
solidated group). These final regulations
adopt §1.6417-1(c)(1) as proposed.
3. Undivided Ownership Interests
Proposed §1.6417-2(a)(1)(iii) would
have provided that, if an applicable entity
is a co-owner in an applicable credit prop-
erty through an arrangement properly
treated as a tenancy-in-common (TIC) for
Federal income tax purposes, or through
an organization that has made a valid elec-
tion under section 761(a) of the Code to be
excluded from the application of subchap-
ter K of chapter 1 (subchapter K), then the
applicable entity’s undivided ownership
share of the applicable credit property will
be treated as a separate applicable credit
property owned by such applicable entity,
and the applicable entity may make an
elective payment election for the applica-
ble credits determined with respect to such
applicable credit property. Commenters
addressed TICs, valid section 761(a) elec-
tions, and joint ownership under section
48E.
i. Tenancies in common and organizations
that have made a valid election under
section 761(a)
Several commenters asked for addi-
tional guidance and examples illustrating
how an applicable entity’s undivided own-
ership share of applicable credit property
is determined in the context of renew-
able energy projects such as wind and
solar projects, clean hydrogen projects,
and electric vehicle infrastructure. These
comments are beyond the scope of these
final regulations. The ownership share of
a party to a transaction will be determined
based upon the agreement of the par-
ties and other relevant facts and circum-
stances.
Several commenters stated that the
mechanisms for co-ownership allowed
under the proposed regulations are in com-
mon practice today and would allow appli-
cable entities to join with other entities in
developing applicable credit properties
without precluding elective payment elec-
tion choices by project participants. How-
ever, other commenters stated that TICs
and joint operating agreements (JOAs)
that have validly elected out of subchapter
K are not commonly used in the renew-
able energy marketplace (even by private
entities) and can deprive participants of
limited liability. These commenters stated
that these arrangements may be less famil-
iar to applicable entities as compared to
traditional partnership structures used
between public and private entities for
the development of clean energy projects.
Commenters also opined that applicable
entities may not be sufficiently resourced
to navigate these newer commercial law
relationships and would be disadvantaged
compared to non-applicable entities, who
can avail themselves of partnership struc-
tures in the form of limited partnerships
or limited liability companies, which pro-
vide most members with limited liability
for State law purposes.
Commenters asked for clear guidance
and clarifications as to how a renewable
energy project could meet the require-
ments for electing out of subchapter K.
For example, one commenter asked how
§1.761-2(a) could be applicable in the
context of a jointly operated renewable
energy project. Section 1.761-2(a) pro-
vides, in relevant part, that an unincorpo-
rated organization the members of which
are able to compute their income without
the necessity of computing partnership
taxable income, and that is not an orga-
nization classifiable as an association,
may be excluded from the application of
subchapter K if the organization is availed
of (1) for investment purposes only and
not for the active conduct of a business,
or (2) for the joint production, extraction,
or use of property, but not for the purpose
of selling services or property produced
or extracted. Specifically, the commenter
stated that it is unclear how parties jointly
operating a renewable energy project can
do so without conducting a business sell-
ing services or property produced (that is,
selling electricity).
5
Another commenter asked for clarity
on what a delegation of authority under
§1.761-2(a)(3)(iii) would cover for a JOA
of applicable credit property that produces
electricity. Section 1.761-2(a)(3)(iii) pro-
5
The commenter also raised Rev. Proc. 2002-22, 2002-1 CB 733 (specifying the conditions under which the IRS will consider a request for a private letter ruling that an undivided fractional
interest in rental real property is not an interest in a business entity), and noted that: “if the parties to a joint venture combine capital or services with the intent of conducting a business or
enterprise and of sharing the profits and losses from the venture, a partnership (or other business entity) is created.”

April 8, 2024 804 Bulletin No. 2024–15
vides, in relevant part, that a participant
to a JOA may delegate authority to sell
its share of any property produced or
extracted, but not for a period in excess
of the minimum needs of the industry, and
in no event for more than one year. This
commenter also asked for examples of
compliant JOAs that would allow electric-
ity generated through the joint ownership
of applicable credit property to be sold
pursuant to a power purchase agreement.
Commenters also requested guidance
permitting a single entity or taxpayer
to handle the administrative affairs and
day-to-day management activities of
operating an applicable credit property
on behalf of the other joint owners with-
out impacting the owners’ ability to be
properly excluded from the application of
subchapter K. One commenter stated that
it would be useful to illustrate a range of
JOAs likely to result in exclusion from the
application of subchapter K and suggested
that key elements of such fact patterns
might include: an agreement to share rev-
enues in proportion with the co-owners’
respective ownership interests; an agree-
ment to share revenues out of proportion
with the co-owners’ respective ownership
interests; an agreement in which rights to
dispose of property or take other signifi-
cant actions are reserved to a subset of the
co-owners; and/or an agreement to receive
debt financing based on the anticipation of
funds expected to result from an elective
payment election in a case in which the
lender is not a co-owner.
A commenter stated that it would also
be helpful to clarify the application of
§1.761-2(a)(3)(iii) to co-ownership ven-
tures in cases in which co-owners gener-
ate and sell power as a collective rather
than on their separate accounts, or alter-
natively if the collective entity sells power
to each of the participating co-owners
and then those co-owners sell power to
third parties on their own accounts but the
collective may sell some other services
or property incidental to the activity for
which the credit is determined. This com-
menter highlighted that, in California and
some other States, local government agen-
cies often pool resources under a Joint
Powers Authority (JPA). The commenter
asked that guidance clarify the conditions
under which a JPA could be treated as an
organization that has made a valid elec-
tion under section 761(a) of the Code to
be excluded from the application of sub-
chapter K, including if the JPA is a sepa-
rate legal entity and sells power under its
own account.
One commenter stated that exist-
ing guidance allowing for clean energy
arrangements to validly elect out of sub-
chapter K, including through the use of
TIC structures, is limited and should be
updated. This commenter stated that a
partnership is defined in the Code and in
the Treasury Regulations under sections
761 and 7701, but the distinction between
an arrangement treated as a partnership for
Federal tax purposes and one that has val-
idly elected out of subchapter K, includ-
ing a valid TIC, is not well defined in the
energy generation context. The commenter
pointed out that pre-IRA partnership guid-
ance, including guidance allowing for the
use of tax-equity partnership structures,
is widely used as a basis for structuring
projects within the renewable industry
and is well understood. However, existing
guidance for arrangements in the energy
generation context that will not be treated
as a partnership for Federal tax purposes
is limited and outdated. The commenter
urged the Treasury Department and the
IRS to provide clear, updated, and timely
guidance on clean energy arrangements
that would not be treated as partnerships
for Federal tax purposes.
The Treasury Department and the IRS
agree that additional guidance is needed on
joint ownership arrangements of applica-
ble credit property that produce electricity
that can be excluded from the application
of subchapter K. As a result, the Treasury
Department and the IRS have proposed
regulations in the Proposed Rules section
of this edition of the Federal Register
that would add certain exceptions to the
requirements contained in the regulations
under section 761(a) and provide an exam-
ple. These exceptions generally would
allow any applicable entity described in
section 6417(d)(1)(A) and §1.6417-1(c)
that jointly owns applicable credit prop-
erty that produces electricity to (1) own
its interests through an entity (other than
an entity required to be treated as a cor-
poration under the Code) and (2) delegate
its authority to an agent to sell its share of
the electricity produced from such appli-
cable credit property for a period of more
than 1 year, provided that the delegation
authority to the agent is not for more than
1 year. See Election to Exclude Certain
Unincorporated Organizations Owned by
Applicable Entities from the Application
of Subchapter K, REG-101552-24, in the
Proposed Rules section of this edition of
the Federal Register.
ii. Applying the undivided ownership
interests rule to qualified property
One commenter requested some clar-
ifying edits to address how proposed
§1.6417-2(a)(1)(iii), the rule for undivided
ownership interests, would operate with
respect to a section 48E credit. This com-
menter noted that proposed §1.6417-1(e)
(12) defines “applicable credit property”
for purposes of section 48E as “a quali-
fied facility described in section 48E(b)
(3);” however, section 48E(b) allows a
section 48E credit to be claimed only with
respect to a qualified investment in a qual-
ified facility. The commenter asked for
clarification on what part of the qualified
investment is owned by such joint tenant,
and suggested adding language to the final
regulations to clarify that an applicable
entity should be able to claim applica-
ble credits with respect to the applicable
credit property in proportion to its share of
qualified property.
The Treasury Department and the IRS
agree with the commenter that a section
48E credit is determined, in part, based on
an applicable entity’s qualified investment
with respect to a qualified facility, but do
not believe that further language is needed
because this concept is already covered in
the language under proposed §1.6417-2(a)
(1)(iii), which provides that an applicable
entity will be treated as owning a sepa-
rate applicable credit property equal to
its undivided ownership share. An appli-
cable entity’s undivided ownership share
is determined under Federal income tax
ownership principles and is outside the
scope of these final regulations. Thus,
these final regulations do not adopt the
commenter’s suggestion.
4. Partnerships
The proposed regulations would have
provided that partnerships and S corpora-
tions are not applicable entities described

Bulletin No. 2024–15 805 April 8, 2024
in section 6417(d)(1)(A), but requested
comments on whether any entity described
in section 6417(d)(1)(A)(i) through (vi)
or proposed §1.6417-1(c) could include
an entity organized as a partnership or S
corporation for Federal tax purposes. No
commenter stated that an entity described
in section 6417(d)(1)(A)(i) through (vi) or
proposed §1.6417-1(c) could include an
entity organized as a partnership or S cor-
poration for Federal tax purposes. There-
fore, these final regulations adopt the rule
as proposed.
Under the proposed regulations and
these final regulations, a partnership or an
S corporation is eligible to make the elec-
tive payment election only with respect to
a section 45V credit, section 45Q credit,
and section 45X credit (assuming all the
other requirements to make the election
with respect to these credits are met). This
rule applies no matter how many of the
partners or shareholders are applicable
entities described in section 6417(d)(1)
(A) and §1.6417-1(c), including if all of
the partners or shareholders are applica-
ble entities described in section 6417(d)
(1)(A) and §1.6417-1(c). However, as the
proposed regulations noted, because sec-
tion 6418(f)(2) defines “eligible taxpayer”
for purposes of transfer eligibility as “any
taxpayer which is not described in section
6417(d)(1)(A)” (and thus not in proposed
§1.6417-1(c)), such a partnership or S
corporation would be an eligible taxpayer
described in section 6418(f)(2) and may
be eligible to transfer eligible credits.
6
A number of commenters requested
that the final regulations allow applicable
entities to make elective payment elec-
tions through an entity treated as a part-
nership for Federal tax purposes, either
if all the partners in the partnership are
applicable entities described in section
6417(d)(1)(A) or if at least one partner
in the partnership is an applicable entity
described in section 6417(d)(1)(A). Com-
menters advocating for including part-
nerships composed entirely of applicable
entities as an applicable entity stated that
such a rule would help cover capital needs,
diversify risk, and fill gaps in expertise
between applicable entities. Commenters
advocating for mixed partnerships (that is,
partnerships consisting of both applicable
entities and entities that are not applica-
ble entities) said that not allowing appli-
cable entities to make elective payment
elections for applicable credit property
held through mixed partnerships would
reduce economic incentives to invest in
clean energy, undermining the objectives
of the IRA. Several commenters stated
that applicable entities lack the required
resources to engage in green energy proj-
ects themselves and asked that the final
regulations permit a partnership to make
an elective payment election with respect
to the portion of the underlying credits
allocable to an applicable entity. A few
commenters stated that structures eligible
to elect out of subchapter K have numer-
ous requirements and complexities that
limit their usefulness. One commenter
recommended that the final regulations
either (1) allow a partnership to make an
elective payment election on one hundred
percent of the credits so long as the part-
nership is majority owned by an applica-
ble entity, or (2) allow a partnership with
majority applicable entity ownership to
make an elective payment election on the
portion of credits allocable to such appli-
cable entities.
Based on the language in section
6417(c)(1) that treats a partnership as
the owner of any applicable credit prop-
erty held directly by the partnership and
requires a partnership to make any elec-
tive payment election with respect to such
property, these final regulations retain
the proposed regulations’ entity view of
partnerships under section 6417(c)(1).
Because an entity described in section
6417(d)(1)(A)(i) through (vi) or proposed
§1.6417-1(c) does not include an entity
treated as a partnership for Federal tax
purposes (or as an S corporation), these
final regulations do not adopt comment-
ers’ suggestions and do not allow entities
treated as partnerships for Federal tax pur-
poses (or S corporations) to make elective
payment elections, except with respect
to a section 45V credit, section 45Q
credit, and section 45X credit. However,
these restrictions do not apply to entities,
whether comprised of only applicable
entities or comprised of a mix of applica-
ble and non-applicable entities, that have
made a valid election out of subchapter K
under section 761(a), including through
the exception for certain joint ownership
arrangements of applicable credit prop-
erty identified in the proposed regulations
under section 761 described in part I.B.3.i
of this Summary of Comments and Expla-
nation of Revisions.
A few commenters asked that taxable
entities be permitted to serve as an admin-
istrative member or manager of a State law
entity to which an applicable entity owns
all of the other interests without creating
a partnership for Federal tax purposes,
provided that such taxable entities do not
receive distributive shares of partnership
items or partnership distributions. These
final regulations do not attempt to estab-
lish any additional criteria by which a tax-
payer can provide administrative or man-
agerial services for an applicable entity
without creating a partnership between the
taxpayers for Federal tax purposes. How-
ever, as previously described, the Treasury
Department and the IRS are simultane-
ously issuing proposed regulations under
section 761 in the Proposed Rules section
of this edition of the Federal Register that
provide additional guidance for certain
renewable energy arrangements that can
validly elect out of subchapter K.
Multiple commenters asked that the
final regulations provide further clarity
on Tribal entities and allow co-ownership
of projects. A few commenters asked that
the final regulations allow Tribal Energy
Development Organizations (TEDOs), or
other wholly owned Tribal enterprises,
to be applicable entities regardless of
how they are chartered. Some comment-
ers asked that the final regulations allow
tribes to form special purpose vehicles
under an LLC structure to jointly own
renewable energy projects and employ
the distributive share rules for allocat-
ing the “applicable credit” to each LLC
member, regardless of the tax status of
that member. Commenters also asked that
inter-governmental partnerships, whether
formed under State law such as JPAs, or
6
The Treasury Department and the IRS acknowledge that section 6418 does not contain a provision parallel to section 6417(d)(2) providing that section 50(b)(3) and (4)(A)(i) do not apply
to limit the determination of a credit in section 6417. Thus, section 50(b)(3) and (4)(A)(i) may limit eligible investment tax credits determined with respect to a partnership or S corporation
with applicable entity partners or shareholders for purposes of section 6418.

April 8, 2024 806 Bulletin No. 2024–15
formed under Tribal law as inter-tribal
consortiums, should be eligible to make
an elective payment election.
While it is possible that in certain cases
a Tribal law entity (including a TEDO)
and/or inter-governmental partnership
could be an applicable entity, such a deter-
mination is outside the scope of these
final regulations. However, the Treasury
Department and the IRS are actively work-
ing on guidance regarding the Federal tax
status of Tribal law entities organized and
controlled by tribes. The Treasury Depart-
ment and the IRS will not release final
guidance in advance of additional Tribal
consultation.
Commenters also stated that, if the
Treasury Department and the IRS allow
for section 6417 elections to be made on
behalf of applicable entity partners, the
final regulations should make conforming
clarifications, including clarifying that the
“applicable credit” that is reduced to zero
under section 6417(e) is only the portion
of the credit for which a section 6417 elec-
tion has been made and clarifying the dis-
tributive share rules. Because these final
regulations do not allow section 6417
elections to be made on behalf of applica-
ble entity partners, these final regulations
do not adopt the suggested conforming
changes.
5. Consolidated Groups
Proposed §1.6417-2(a)(1)(v) would
have provided that, for members of a con-
solidated group (as defined in §1.1502-1)
the common parent of which is an Alaska
Native Corporation, any member that is
an electing taxpayer may make an elective
payment election with respect to appli-
cable credits determined with respect to
the member. Proposed §1.6417-2(a)(2)
(vi) would have provided the same rule
with respect to electing taxpayers. See
§1.1502-77 (providing rules regarding the
status of the common parent as agent for
its members). The proposed regulations
would also have provided that a mem-
ber of a consolidated group is required to
complete pre-filing registration as a con-
dition of, and prior to, making an elective
payment election.
The preamble to the proposed reg-
ulations stated that an ANC may be the
common parent of a consolidated group
of corporations (ANC-parented group)
and noted that some stakeholders had
inquired whether non-ANC members of
an ANC-parented group may separately
make an elective payment election with
respect to a section 45V credit, section
45Q credit, or section 45X credit deter-
mined with respect to such member. In
response, the preamble to the proposed
regulations stated that a non-ANC mem-
ber of an ANC-parented group may qual-
ify as an electing taxpayer eligible to
make elections under section 6417(d)(1)
(B), (C), or (D), based on its own cor-
porate status. See §1.1502-80(a). As
with any other electing taxpayer, a non-
ANC member of an ANC-parented group
would be required to complete pre-filing
registration (as would be required under
proposed §1.6417-5) and must make its
elective payment election under section
6417(d)(1)(B), (C), or (D) with respect to
an applicable section 45V credit, section
45Q credit, or section 45X credit deter-
mined with respect to the member. See
§1.1502-77 (providing rules regarding
the status of the common parent as agent
for its members).
The preamble to the proposed regula-
tions requested comments (1) regarding
the definition in proposed §1.6417-1(c)
(4) and whether additional guidance is
necessary regarding consolidated groups
with ANC common parents; (2) whether
additional guidance is necessary to
address any uncertainty that may exist
regarding the application of section 6417
in the context of a consolidated group
with members that are cooperatives sub-
ject to the rules of subchapter T of chap-
ter 1; and (3) regarding the application
of section 6417 to consolidated groups
with electing taxpayers (for example,
whether special rules are necessary for
consolidated groups to apply the “denial
of double benefit” rule under proposed
§1.6417-2(e)(2)).
No commenter addressed these issues
relating to ANCs. However, the Treasury
Department and the IRS have determined
that the text of proposed §1.6417-2(a)
(1)(v), which referred to consolidated
groups “of which an Alaska Native Cor-
poration is the common parent,” was too
limiting and should apply to any consol-
idated group with an applicable entity
parent. Therefore, these final regula-
tions expand the definition by removing
the specific reference to Alaska Native
Corporations in §1.6417-2(a)(1)(v) and
broaden the rule to apply to any consoli-
dated group of which an applicable entity
is the common parent.
A few commenters requested confir-
mation that the “entity-specific” rules of
section 6417 apply to an elective payment
election made by a partnership that has as
its only partners two or more members of
the same consolidated group and suggested
an example confirming the treatment. The
commenters wanted confirmation that the
election would be made by the partner-
ship, as required by section 6417(c)(1)
and proposed §1.6417-4(a), rather than by
the partnership’s members, as provided in
proposed §1.6417-2(a)(2)(vi). The Trea-
sury Department and the IRS agree that
any entity treated as a partnership for Fed-
eral tax purposes, and not any of its part-
ners (regardless of the identity or Federal
tax status of the partners), would make an
elective payment election with respect to
section 45Q credits, section 45V credits,
or section 45X credits pursuant to section
6417(c)(1) and §1.6417-4(a), but disagree
that an example illustrating this point is
needed.
6. Pooled Investment Vehicles
The proposed regulations did not pro-
vide a special rule for employee plans that
are subject to the Employee Retirement
Income Security Act of 1974 (ERISA)
if they choose to invest through pooled
investment vehicles, whether the vehicles
are organized as partnerships or other-
wise. One commenter stated that ERISA
plans typically make investments through
pooled investment vehicles, which often
are organized as limited partnerships or
LLCs, and take minority interests in them
in order to avoid subjecting the vehicles to
fiduciary, prohibited transaction, and other
rules under ERISA’s “plan asset’’ rules.
The commenter believed that, if pooled
investment vehicles are not considered
to be applicable entities, then employee
plans generally cannot benefit from elec-
tive payment elections under section 6417
with respect to some or all of the applica-
ble credits listed in section 6417(b). The
commenter suggested that ERISA plan
fiduciaries might choose not to invest in

Bulletin No. 2024–15 807 April 8, 2024
applicable credit activities at all. The com-
menter requested that the final regulations
provide a mechanism by which ERISA
plan investors indirectly investing through
pooled investment vehicles can make an
elective payment election.
The Treasury Department and the IRS
understand the commenter’s concern that
ERISA plans may be discouraged from
investing in certain entities engaged in
applicable credit activities under the
proposed regulations. Other applicable
entities have similar concerns that invest-
ments in certain entities engaged in appli-
cable credit activities under the proposed
regulations will not be investments in
applicable entities. While there are rules
outside of these final regulations that may
impact how ERISA plans make invest-
ments, there is no indication in section
6417 that ERISA plans can or should be
subject to rules different than those that
apply to other applicable entities. Thus,
these final regulations do not provide a
special rule for ERISA plans investing
in pooled investment vehicles that would
allow ERISA plans to be eligible to make
an elective payment election if investing
through a partnership structure.
II. Rules for Making Elective Payment
Elections
A. In general
Proposed §1.6417-2 would have pro-
vided general rules for an applicable entity
or electing taxpayer to make an elective
payment election under section 6417 with
respect to any applicable credit deter-
mined with respect to such entity. Com-
menters addressed many aspects of these
proposed rules, which are discussed in this
part II of the Summary of Comments and
Explanation of Revisions. These final reg-
ulations adopt the rules as proposed, with
the modifications described in this part II.
B. Manner of making the election
Section 6417(a) provides that the elec-
tive payment election is made “at such
time and in such manner as the Secretary
may provide,” and proposed §1.6417-
2(b) would have provided the particu-
lar requirements for properly and timely
making the election.
1. Return Requirements
Proposed §1.6417-2(b)(1)(i) would
have provided that an applicable entity
makes an elective payment election on the
applicable entity’s or electing taxpayer’s
annual tax return, as defined in proposed
§1.6417-1(b), in the manner prescribed
by the IRS in guidance, along with any
required completed source credit form(s)
with respect to the applicable credit prop-
erty, a completed Form 3800, General
Business Credit (or its successor), and any
additional information, including support-
ing calculations, required in instructions
to the relevant forms.
To avoid any confusion about how
the elective payment election should
be made, proposed §1.6417-1(b) would
have defined “annual tax return,” for
purposes of the section 6417 regula-
tions, as follows: (1) for any taxpayer
normally required to file an annual tax
return with the IRS, such annual return
(including the Form 1065, U.S. Return of
Partnership Income, for partnerships and
the Form 990-T, Exempt Organization
Business Income Tax Return (and proxy
tax under section 6033(e)), for organiza-
tions with unrelated business income tax
or a proxy tax under section 6033(e));
(2) for any taxpayer that is not normally
required to file an annual tax return with
the IRS (such as taxpayers located in the
U.S. territories), the return they would
be required to file if they were located
in the United States, or, if no such return
is required (such as for a State; the Dis-
trict of Columbia; or local or Indian tribal
governments), the Form 990-T; and (3)
for taxpayers filing a return for a taxable
year of less than 12 months (short year),
the short year tax return. These final regu-
lations make minor, nonsubstantive edits
to the definition in the proposed regula-
tions to avoid using the phrase annual tax
return in defining the term.
Several commenters requested that the
IRS use a new or different form than Form
990-T or revise certain forms (including
Forms 990, 990-T, 1120, 3468, 3800,
8038-CP, and 8911). Several commenters
also requested a detailed list of the doc-
uments required to complete the filing
process, information on how to complete
required forms, or reduced information
requirements for filers who had previously
not been required to file any returns with
the IRS.
The Treasury Department and the IRS
recognize that some taxpayers may not
have experience or a historical filing obli-
gation and will consider providing simpli-
fied instructions or the need for a new form
in future years. The Treasury Department
and IRS are committed to developing edu-
cational and outreach tools to assist tribes,
government entities, their instrumental-
ities, and exempt organizations to com-
plete the forms required solely to make
an elective payment election. It is outside
of the scope of these final regulations to
address comments related to individual
forms or the kind of documentation that
may be required to complete those forms.
Thus, these final regulations adopt the
rules as proposed.
Several commenters requested confir-
mation that, for those taxpayers that nor-
mally file the Form 1120 with the IRS,
the Form 1120 can be used to make the
elective payment election. The Treasury
Department and the IRS confirm that this
is the intent of the language in §1.6417-
1(b)(1), which states “[f]or any taxpayer
normally required to file an annual tax
return with the IRS, such annual return,”
and have added the Form 1120, as well as
other examples of annual tax forms, to the
parenthetical.
Other commenters requested that the
elective payment election could be made
on the Form 1120-W. As the Form 1120-W
is not an annual income tax return, these
final regulations do not adopt that sugges-
tion.
2. Original Return Requirements
Proposed §1.6417-2(b)(1)(ii) would
have provided that an elective payment
election must be made on an original
return (including any revisions on a super-
seding return) filed not later than the due
date (including extensions of time) for
the original return for the taxable year
for which the applicable credit is deter-
mined. The proposed regulations stated
that no elective payment election may be
made “or revised” on an amended return
or by filing an administrative adjustment
request (AAR) under section 6227 of the
Code. The proposed regulations also did
not provide for relief under §301.9100-1

April 8, 2024 808 Bulletin No. 2024–15
through 301.9100-3 (9100 relief) for
an elective payment election that is not
timely filed.
Multiple commenters asked that an
elective payment election be permitted on
an amended return or AAR and/or that a
taxpayer be permitted an extension of time
under the 9100 relief procedures to make
a late election. Commenters stated that not
allowing a late election is an unreasonable
result for new market entrants and cre-
ates significant barriers for entities with
limited resources. Some commenters rec-
ommended that applicable entities should
be allowed to make the elective payment
election on late returns and also be able to
claim a six-month automatic extension of
time to file the election under §301.9100-
2(b). Commenters requested that the final
regulations provide some form of relief for
taxpayers that acted in good faith and made
a reasonable effort in complying, particu-
larly for new filers who may not have had a
prior filing obligation. Commenters further
suggested that providing additional time to
make an election would increase market
participation and promote equity.
In response to these comments, these
final regulations remove the words “or
revised” in §1.6417-2(b)(1)(ii) and pro-
vide “[n]o elective payment election may
be made for the first time on an amended
return, withdrawn on an amended return,
or made or withdrawn by filing an admin-
istrative adjustment request under section
6227, although a numerical error with
respect to a properly claimed elective
payment election may be corrected on an
amended return or by filing an adminis-
trative adjustment request under section
6227 if necessary.” This clarification is
intended to address situations in which
a taxpayer intended to make an elective
payment election but made a reporting
error with respect to an element of a valid
election (for example, miscalculating the
amount of the credit on the original return
or making a typographical error in the pro-
cess of inputting a registration number),
and to allow the taxpayer to correct any
errors that would result in a disallowance
of the election or to correct an excessive
payment before an excessive payment
determination is made by the IRS. Con-
sistently, it is appropriate to allow tax-
payers to correct errors that would result
in a larger payment than indicated on
the original return as long as such larger
amount is accurate. This provision can-
not be used to revoke an election or to
make an election for the first time on an
amended return. In addition, the taxpay-
er’s original return, which must be signed
under penalties of perjury, must contain
all of the information, including a regis-
tration number, required by these final
regulations. To properly correct an error
on an amended return or AAR, a taxpayer
must have made an error in the informa-
tion included on the original return such
that there is a substantive item to correct; a
taxpayer cannot correct a blank item or an
item that is described as being “available
upon request.”
These final regulations also modify the
proposed regulations to permit an exten-
sion of time under §301.9100-2(b) to
allow for an automatic six-month exten-
sion of time from the due date of the
return (excluding extensions) to make the
election prescribed in section 6417(d)(3),
which provides relief for applicable enti-
ties or electing taxpayers who have a filing
obligation and file by the due date of the
return. The elective payment election is a
statutory election because its due date is
prescribed by statute. As such, the section
9100 relief procedures apply only insofar
as the late election is being filed pursuant
to §301.9100-2(b), which requires that
the taxpayer timely filed its return for the
year the election should have been made.
Relief under this provision applies only to
taxpayers that have not received an exten-
sion of time to file a return after the orig-
inal due date. Taxpayers eligible for this
relief must take corrective action under
§301.9100-2(c) within the six-month
extension period and follow the proce-
dural requirements of §301.9100-2(d).
A few commenters requested clar-
ification on superseding returns. One
commenter stated that the proposed reg-
ulations appeared ambiguous regarding
whether a return filed after the original
due date, but within the automatic exten-
sion period, is considered a superseding
return. This commenter recommended
clarifying that this would be considered a
superseding return.
Neither the Code nor regulations define
a superseding return, but administrative
IRS guidance provides that a supersed-
ing return is a return filed subsequent to
the originally-filed return but before the
due date for filing the return (including
extensions). For example, if an applica-
ble entity subject to an automatic 6-month
extension files an original return on the
due date (excluding extensions) and then
files a subsequent return within the auto-
matic extension period, the subsequent
return would generally be considered a
superseding return. Unlike a superseding
return, an amended return is a return filed
after the taxpayer filed an original return
and after the due date for filing the return
(including extensions).
One commenter stated that the refer-
ence to a superseding return seems to be
an acknowledgment that some taxpayers
will use a provisional tax return filed on
the due date (before extensions) to has-
ten the election process. This commenter
asked whether, if a taxpayer files a pro-
visional return on March 15, 2024, and
files a superseding return on September
15, 2024, the taxpayer would be treated
as making payment against tax under sec-
tion 6417(d)(4) on March 15, 2024. The
Treasury Department and the IRS note
that the designation “provisional” return
has no basis in the Code or regulations
and accordingly, such returns are not
treated differently by the IRS upon filing.
Taxpayers are reminded that a tax return
is signed under penalties of perjury that
the return is true, correct, and complete.
If an original return is filed on March 15,
2024, and contains a valid elective pay-
ment election, the taxpayer is treated as
making a payment against tax on that day.
A superseding return could increase or
reduce the amount of the net elective pay-
ment election. If the amount is increased,
the additional elective payment is treated
as paid on the date the superseding return
was filed. Taxpayers should be aware that
filing a superseding return could result in
a delay in processing the additional elec-
tive payment amount. If the net elective
payment amount is reduced because of the
superseding return, the taxpayer could be
subject to interest and, if the taxpayer fails
to pay the difference with the superseding
return, penalties.
3. Pre-filing Registration Requirements
Proposed §1.6417-2(b)(2) would have
specified that pre-filing registration (as is

Bulletin No. 2024–15 809 April 8, 2024
required under §1.6417-5T and would be
required under proposed §1.6417-5) is a
condition of any amount being treated as
a payment that is made by an applicable
entity under section 6417(a). The pro-
posed regulations stated that an elective
payment election will not be effective
with respect to applicable credits deter-
mined with respect to an applicable credit
property unless the applicable entity or
electing taxpayer receives a valid registra-
tion number for the applicable credit prop-
erty and provides the registration number
for each applicable credit property on its
Form 3800 (or its successor) attached to
the tax return, in accordance with guid-
ance. These final regulations clarify in
§1.6417-2(b)(2) that a valid registration
number must also be included on any
required completed source credit form(s)
with respect to the applicable credit prop-
erty. Additional information about the
pre-filing registration process is described
in part V of this Summary of Comments
and Explanation of Revisions.
4. Due Date Requirements
Section 6417(d)(3)(A)(i) provides that
any election under section 6417(a) must
be made not later than (1) in the case of
any government, or political subdivision,
described in section 6417(d)(1) and for
which no return is required under section
6011 or 6033(a), such date as is deter-
mined appropriate by the Secretary, or (2)
in any other case, the due date (including
extensions of time) for the return of tax for
the taxable year for which the election is
made, but in no event earlier than 180 days
after the date of the enactment of section
6417 (February 13, 2023). Section 6417 is
applicable to taxable years beginning after
December 31, 2022.
Proposed §1.6417-2(b)(3) would have
implemented this provision as follows.
In the case of any taxpayer for which no
income tax return is required under sec-
tion 6011 or 6033(a) of the Code (such as
a governmental entity), the elective pay-
ment election must be made no later than
the due date (including an extension of
time) for the original return that would be
due under section 6033(a) if such appli-
cable entity were described in that sec-
tion. Under section 6072(e) of the Code,
that date is the 15th day of the fifth month
after the taxable year determined by sec-
tion 441 of the Code. Subject to the issu-
ance of guidance that specifies the manner
in which an entity for which no Federal
income tax return is required under section
6011 or 6033(a) of the Code could request
an extension of time to file, the proposed
regulations would have provided that an
automatic paperless six-month extension
from the original due date is deemed to be
allowed.
In the case of any taxpayer that is not
normally required to file an annual tax
return with the IRS (such as those located
in the U.S. territories), the proposed reg-
ulations would have provided that the
elective payment election must be made
no later than the due date (including
extensions of time) that would apply if the
taxpayer was located in the United States
(such as the 15th day of the fourth month
after the end of the year for individuals fil-
ing Form 1040 or for corporations filing
Form 1120). For example, an individual in
a U.S. territory would be required to make
the elective payment election on or before
the 15th day of April following the close
of the calendar year, or, if the individual
filed an extension, on or before the 15th
day of October following the close of the
calendar year.
The proposed regulations would have
provided that, in any other case, the elec-
tive payment election must be made no
later than the due date (including exten-
sions of time) for the original return for
the taxable year for which the election is
made, but in no event earlier than Febru-
ary 13, 2023.
Commenters did not address the sec-
ond or third provisions, and they are
adopted without change. However, with
respect to the first provision, these final
regulations simplify the provision in pro-
posed §1.6417-2(b)(3), which stated that
an elective payment elective must be
made no later than, “[i]n the case of any
taxpayer for which no Federal income
tax return is required under section 6011
or 6033(a) of the Code, the due date
(including an extension of time) for the
original return that would be due under
section 6033(a) if such applicable entity
were described in that section. Under
section 6072(e), that date is the 15th day
of the fifth month after the taxable year
determined by section 441 of the Code,”
to simply provide that an elective pay-
ment election must be made no later than,
“[i]n the case of any taxpayer for which
no Federal income tax return is required
under sections 6011 or no Federal return
is required under 6033(a) of the Code . . . ,
the 15th day of the fifth month after the
taxable year.”
Commenters asked that the final reg-
ulations clarify the determination of tax-
able year for an entity that does not have
a filing requirement under section 6011 or
6033(a), stating that the reference to “the
taxable year determined by section 441 of
the Code” is confusing and that the Code
provides latitude to taxpayers in determin-
ing their applicable taxable year (includ-
ing calendar year, fiscal year, and short
years as applicable). Commenters gave
the example of an applicable entity that
is filing Form 990-T for the sole reason
of making an elective payment election
for an applicable credit. If the applicable
entity uses a fiscal year beginning July 1
and ending June 30, placed in service a
project for which an applicable credit was
determined during the first six months
of 2023, and used its fiscal year for pur-
poses of establishing a taxable year, then
the applicable entity would be ineligible
to make an elective payment election for
such project because the fiscal year during
which the project was placed in service
began on July 1, 2022, which is a fiscal
year beginning before December 31,
2022. Commenters noted that similarly
situated taxpayers who file their returns on
a calendar year basis would be eligible to
make an elective payment election. Com-
menters requested that they be allowed
to choose a calendar taxable year for
purposes of making an elective payment
election, or, alternatively, that they be per-
mitted to file using a short year beginning
January 1, 2023, and ending on the date of
their next fiscal year.
These final regulations delete the ref-
erence to section 441 and clarify that, for
purposes of section 6417, an applicable
entity that is not required to file a Fed-
eral income tax return pursuant to section
6011 or Federal return pursuant to section
6033(a) (such as a State; the District of
Columbia; an Indian tribal government;
any U.S. territory; a political subdivi-
sion of a State, the District of Columbia,
or a U.S. territory, or a subdivision of an

April 8, 2024 810 Bulletin No. 2024–15
Indian tribal government; certain agencies
or instrumentalities of a State, the District
of Columbia, an Indian tribal government,
or a U.S. territory; or a taxpayer excluded
from filing pursuant to section 6033(a)
(3)), but is filing solely to make an elective
payment election, may choose whether to
file its first Form 990-T (and thus adopt
a taxable year for purposes of section
6417) based upon a calendar or fiscal
year, provided that such entity maintains
adequate books and records, including a
reconciliation of any difference between
its regular books of account and its cho-
sen taxable year, to support making an
elective payment election on the basis of
its chosen taxable year. This should allow
an applicable entity that is not required to
file a Federal income tax return pursuant
to section 6011 or Federal return pursuant
to section 6033, but has placed in service
an applicable credit property in 2023, to
file Form 990-T based on a calendar year
and make an elective payment election
with respect to the applicable credit prop-
erty regardless of when the property was
placed in service during 2023.
These final regulations continue to
provide, consistent with the proposed reg-
ulations, that, subject to issuance of guid-
ance that specifies the manner in which
an entity for which no Federal income
tax return is required under section 6011
or no Federal return is required under
section 6033(a) could request an exten-
sion of time to file and make the elective
payment election, an automatic paperless
six-month extension from the 15th day
of the fifth month after the taxable year is
deemed to be allowed.
The Treasury Department and the IRS
note that a taxpayer that has filed a Federal
income tax return under section 6011 or a
Federal return under section 6033(a) with
the IRS must continue to use that taxable
year unless the taxpayer requests a change
of annual accounting period pursuant to
section 442 of the Code.
5. Irrevocability Requirement
Proposed §1.6417-2(b)(4) would have
provided that any election under section
6417(a), once made, is irrevocable and
applies with respect to any applicable
credit for the taxable year for which the
election is made.
Under section 6417, the election period
applies for a period of years with respect
to certain applicable credits. Specifically,
for a section 45 credit or section 45Y
credit, the election applies to the 10-year
period beginning on the date the facility
was originally placed in service. For a sec-
tion 45Q credit, the election applies to the
12-year period beginning on the date the
equipment was originally placed in ser-
vice. For a section 45V credit, the election
applies to all subsequent taxable years
with respect to the facility.
Electing taxpayers make the election
for one five-year period per applicable
credit property, but are allowed one revo-
cation per applicable credit property, as
provided in section 6417(d)(1)(D), (d)
(3)(C), and (d)(3)(D), and would have
been provided in proposed §1.6417-3 (as
described in part III of this Explanation of
Provisions).
No commenters addressed the irrevo-
cability rule, and these final regulations
adopt the rule without change.
6. No Partial Elections
Proposed §1.6417-2(b)(5) would have
provided that an elective payment election
applies to the entire amount of applicable
credit(s) determined with respect to each
applicable credit property that was prop-
erly registered for the taxable year, result-
ing in an elective payment amount that is
the entire amount of applicable credit(s)
determined with respect to the applicable
entity or electing taxpayer for a taxable
year. As a result, the proposed regulations
would require that an applicable entity
make an elective payment election for the
entire amount of the credit determined
with respect to each applicable credit
property.
A few commenters advocated for
allowing partial elections, stating that this
flexibility would be helpful. The Treasury
Department and the IRS note that the stat-
ute and the proposed regulations already
provide considerable flexibility because
taxpayers can register none, some, or
all of their applicable credit properties.
Further, as opposed to section 6418(a),
which allows an eligible taxpayer to elect
to transfer all (or any portion specified in
the election) of an eligible credit, section
6417(a) provides that an applicable entity
making an election is treated as making
a payment against the income tax “equal
to the amount of” the applicable credit,
which does not provide the flexibility to
make an election equal to a portion of the
applicable credit. Thus, these final regula-
tions adopt the proposed regulations with-
out change.
C. Determination of applicable credit
Proposed §1.6417-2(c) would have
provided three rules relating to the deter-
mination of any applicable credit: (1) spe-
cial rules for tax-exempt organizations
and government entities; (2) a special
rule for investment-related credit prop-
erty acquired with income that is exempt
from taxation under subtitle A; and (3) a
rule that credits must be determined with
respect to the applicable entity or electing
taxpayer.
1. Special Rules for Tax-exempt
Organizations and Government Entities
In accordance with section 6417(d)
(2), proposed §1.6417-2(c)(1) would have
provided that, in the case of any applicable
entity that makes the election described
in section 6417(a), any applicable credit
is determined (1) without regard to the
restrictions regarding use of property by
tax-exempt organizations and government
entities found in sections 50(b)(3) and (4)
(A)(i); and (2) by treating any property
with respect to which such credit is deter-
mined as used in a trade or business of the
applicable entity.
Proposed §1.6417-2(c)(2) would have
elaborated on the effect of the “trade or
business” rule in section 6417(d)(2) and
proposed §1.6417-2(c)(1)(ii). Proposed
§1.6417-2(c)(2)(i) would have allowed
tax-exempt and government entities to
take advantage of applicable credits even
outside of the unrelated business taxable
income context (provided other require-
ments are met) by allowing the entity
to treat an item of property as if it is of
a character subject to an allowance of
depreciation (such as under sections 30C
and 45W); to produce items “in the ordi-
nary course of a trade or business of the
taxpayer” (such as in sections 45V and
45X); and to state that an item of property
is one for which depreciation (or amorti-

Bulletin No. 2024–15 811 April 8, 2024
zation in lieu of depreciation) is allowable
(such as in sections 48, 48C, and 48E). No
commenter addressed this rule, but these
final regulations made nonsubstantive
edits to this proposed version.
Proposed §1.6417-2(c)(2)(ii) would
have allowed the entity to apply the capital-
ization and accelerated depreciation rules
(such as sections 167, 168, 263 and 263A
of the Code) that apply to determining the
basis and the depreciation allowance for
property used in a trade or business. One
commenter asked whether applicable enti-
ties can use section 266 of the Code to cap-
italize carrying charges. In response, these
final regulations add section 266 to the list
of capitalization and accelerated deprecia-
tion rules that applicable entities can use in
§1.6417-2(c)(2)(ii).
Proposed §1.6417-2(c)(2)(iii) would
have made limitations on the use of credits
generally applicable to persons engaged in
the conduct of a trade or business applica-
ble to the making of an elective payment
election under section 6417, such as the
at-risk rules of section 49 of the Code in
the context of investment credits deter-
mined under sections 48, 48C, and 48E,
and the passive activity rules under sec-
tion 469 of the Code that apply to all appli-
cable credits. For section 49 to apply to
investment tax credits for which an elec-
tive payment election is made, the prop-
erty must be placed in service by an appli-
cable entity or electing taxpayer described
in section 465(a)(1) of the Code (for
example, an individual or a C corporation
with respect to which the stock ownership
requirements of section 542(a)(2) of the
Code are met). For section 469 to apply
to applicable credits for which an elective
payment election is made, the applicable
entity or electing taxpayer would need to
be described in section 469(a)(2) (that is,
an individual, estate or trust, a closely held
C corporation, or a personal service cor-
poration). Thus, for any applicable entity
or electing taxpayer for which section 49
or 469 generally applies, those limitations
apply with respect to the determination of
applicable credits for purposes under sec-
tion 6417.
The proposed regulations requested
comments on whether any additional clar-
ification is needed regarding the applica-
tion of sections 49 and 469 to applicable
entities or electing taxpayers determining
the amount of an applicable credit. Two
commenters asked that the final regula-
tions clarify that section 49 does not apply
to limit credits available to tribes or Tribal
entities that use direct loan or Federal
loan guarantee programs. The Treasury
Department and the IRS note that section
49 generally applies only to individu-
als and C corporations meeting the stock
ownership requirements of section 542(a)
(2), and that section 49 reduces the credit
base only by the amount of nonqualified
nonrecourse financing, as defined in sec-
tion 49(a)(1)(D)(ii). Both of these deter-
minations are dependent on the facts and
circumstances and are outside of the scope
of these final regulations.
Proposed §1.6417-2(c)(2)(iv) would
have stated that the trade or business rule
does not create any presumption that the
trade or business is related (or unrelated)
to a tax-exempt entity’s exempt purpose.
One commenter asked whether nonprofits
will owe tax on Solar Renewable Energy
Credits (SREC) sales and how selling the
SRECs upfront versus selling them over
time might change the result. This com-
ment is outside the scope of these final
regulations. Another commenter asked that
the final regulations provide that income
from applicable credit property does not
give rise to unrelated business income tax
(UBIT). Whether income from applica-
ble credit property gives rise to UBIT is a
fact-intensive inquiry under sections 511
through 514 of the Code and it is outside
the scope of these final regulations. As
these comments do not require revisions
to the proposed rule, these final regulations
adopt the §1.6417-2(c)(2)(iv) as proposed.
In addition, these final regulations clar-
ify that the trade or business rule subjects
the applicable entity to the credit limita-
tion that applies when there is an excess
benefit, as described in part II.C.2 of this
Summary of Comments and Explanation
of Revisions. See §1.6417-2(c)(2)(v) and
(c)(3)(ii).
2. Special Rule for Investment-related
Credit Property Acquired with Amounts,
Including Income from Certain Grants
and Forgivable Loans, that are Exempt
from Taxation Under Subtitle A
Proposed §1.6417-2(c)(3) would have
provided a special rule for investment
credit property acquired with amounts,
including income from certain grants and
forgivable loans, that are exempt from
taxation under subtitle A (tax exempt
amounts) and would have expanded the
rule to “investment-related tax credits”
(that is, to other credits that are determined
as a percentage of a property’s basis).
The special rule stated that, for purposes
of section 6417, any tax exempt amounts
used to purchase, construct, reconstruct,
erect, or otherwise acquire an applicable
credit property described in sections 30C,
45W, 48, 48C, or 48E (investment-related
credit property) are included in basis for
purposes of computing the applicable
credit amount determined with respect
to the investment-related credit property,
regardless of whether basis is required to
be reduced (in whole or in part) by such
amounts under general tax principles.
Without this rule, applicable entities that
use tax exempt amounts to purchase, con-
struct, reconstruct, erect, or otherwise
acquire investment-related credit property
may not be able to take full advantage of
investment-related tax credits with respect
to such property because general tax prin-
ciples may require applicable entities
to reduce the basis in such property, for
general business credit purposes, by the
amount paid for with tax exempt amounts.
This special rule, by not reducing basis
for tax exempt amounts for purposes of
computing the applicable credit amount,
conferred excess tax benefits under gen-
eral tax principles applicable to taxable
entities. The proposed regulations con-
tained a “no excess benefit” rule in pro-
posed §1.6417-2(c)(3) to give effect to the
requirement in section 6417(d)(2)(B) that
the investment-related credit property be
treated as used in a trade or business of
an applicable entity (and thus subject to
general tax principles that apply to taxable
entities). The proposed no excess benefit
rule would have reduced the applicable
credit amount with respect to “restricted
tax exempt amounts,” which taxable enti-
ties are generally not entitled to include in
the basis of corresponding investment-re-
lated credit property under general tax
principles, if the sum of such restricted tax
exempt amounts plus the applicable credit
exceeded the cost of the applicable credit
property. Specifically, proposed §1.6417-
2(c)(3) would have provided that, if an

April 8, 2024 812 Bulletin No. 2024–15
applicable entity receives tax exempt
amounts for the specific purpose of pur-
chasing, constructing, reconstructing,
erecting, or otherwise acquiring an invest-
ment-related credit property (restricted
tax exempt amount), and any restricted
tax exempt amounts plus the applicable
credit otherwise determined with respect
to that investment-related credit property
exceeds the cost of the investment-re-
lated credit property, then the amount of
the applicable credit is reduced so that
the total amount of applicable credit plus
the amount of any restricted tax exempt
amounts equals the cost of investment-re-
lated credit property. This no excess ben-
efit rule was a subset of the special rule
for investment credit property acquired
with tax exempt amounts in that it applied
only to restricted tax exempt amounts; in
other words, it only applied to tax exempt
amounts that are conditioned on being
used for the specific purpose of purchas-
ing, constructing, reconstructing, erect-
ing, or otherwise acquiring an investment
credit property and did not apply to other
tax exempt amounts. Proposed §1.6417-
2(c)(5) contained three examples illustrat-
ing these rules.
One commenter strongly supported the
special rule for investment-related credit
property acquired with income that is
exempt from taxation as reasonable and
necessary, stating that it (1) places appli-
cable entities on similar footing as tax-
able entities with respect to impacts on
basis, (2) makes funding count equally for
investment tax credits (that are determined
as a percentage of basis) and production
tax credits (which are not tied to basis),
and (3) is consistent with the purposes in
section 6417. Several other commenters
expressed appreciation for this “stackabil-
ity” feature of the proposed regulations.
However, some commenters did not
support the no excess benefit part of the
rule, stating that section 6417 does not
contain any limitation on determining
the amount of an elective payment for an
applicable credit if the applicable entity
has received grants or forgivable loans not
subject to Federal income tax. These com-
menters opined that not only does section
6417 not authorize promulgation of such
a rule, but the proposed rule is inconsis-
tent with the intent of section 6417, which,
in the commenters’ view, is generally to
permit applicable entities to receive an
elective payment of an applicable credit in
an amount otherwise allowable under the
Code.
These final regulations generally adopt
the proposed special rule for invest-
ment-related credit property acquired with
amounts, including income from certain
grants and forgivable loans, that are exempt
from taxation, with modifications dis-
cussed in this Part II.C.2 of the Summary
of Comments and Explanation of Provi-
sions section. First, these final regulations
seek to clarify that the no excess benefit
rule is a subset of the general rule by sepa-
rating the special rule into two parts: (1) an
“amounts included in basis” rule (allowing
tax exempt amounts to count toward basis)
and (2) a “no excess benefit from restricted
tax exempt amounts” rule (not allowing
restricted tax exempt amounts plus the
amount of the credit to exceed the cost of
the investment-related credit property).
With respect to the second part of the
rule, the Treasury Department and the
IRS conclude that section 6417(d)(2)(B)
effectively places a limitation on deter-
mining the amount of an applicable credit
by treating the property as being used in a
trade or business of an applicable entity,
which otherwise subjects the invest-
ment-related credit property and the appli-
cable credit to general tax principles that
apply to taxable entities. Taxable entities
that receive restricted tax exempt amounts
are generally required to reduce their basis
in the corresponding investment-related
credit property under general tax prin-
ciples, which would limit the amount of
the applicable credit. While the no excess
benefit rule does not go so far as to require
basis in investment-related credit property
to be reduced by the restricted tax exempt
amount, it limits the applicable credit so
that an applicable entity that receives a
restricted tax exempt amount does not
receive more than the cost of the invest-
ment-related credit property financed
without those non-taxable funds. The
alternative to the no excess benefit rule
would be to disallow restricted tax exempt
amounts from counting toward the basis
in investment-related credit property (a
more severe limitation), which would still
give effect to section 6417(d)(2)(B) but
not accomplish the goals of the IRA as
well as the no excess benefit rule does.
However, these final regulations clar-
ify the no excess benefit rule in several
ways. These final regulations provide that
the determination of whether a tax exempt
grant is made for the specific purpose of
purchasing, constructing, reconstructing,
erecting, or otherwise acquiring an invest-
ment-related credit property is made at the
time the grant is awarded to the applicable
entity. (If only a portion of a tax exempt
amount is restricted and another portion
is unrestricted, then only the restricted tax
exempt amount is considered for purposes
of this rule.)
Similarly, these final regulations clar-
ify how to treat a grant that is awarded
after investment-related credit property
is purchased, constructed, reconstructed,
erected, or otherwise acquired. One com-
menter requested clarification of whether
the excessive payment addition to tax
may apply if an applicable entity received
a Federal grant after the elective pay-
ment election submission. Although the
comment was unclear, it appears that the
commenter was asking whether a grant
received after the acquisition of invest-
ment-related credit property might be con-
sidered a “restricted tax exempt amount”
that could affect the amount of the appli-
cable credit claimed on the annual return.
Similarly, two commenters asked that
applicable entities be allowed to self-iden-
tify during the pre-filing registration
process or the elective payment election
process, or both, if they are preparing
to apply for a Federal grant that could
potentially impact their elective payment
amount. These commenters stated that an
entity could then amend its return based
on whether the grant was received to bet-
ter determine if the entity should receive
the full elective payment amount or be
required to recalculate the elective pay-
ment amount so as not to incur an addition
to tax due to a possible excessive payment
in subsequent taxable years.
A grant awarded after acquisition of
the property is generally not a restricted
tax exempt amount because a restricted
tax exempt amount is one made for the
specific purpose of purchasing, construct-
ing, reconstructing, erecting, or otherwise
acquiring an investment-related credit
property and, in the commenters’ exam-
ples, the applicable entity would already
have acquired the investment-related

Bulletin No. 2024–15 813 April 8, 2024
credit property before receiving the grant
funds. However, to avoid allowing tax-
payers to circumvent the no excess benefit
rule by acquiring applicable credit prop-
erty in cases in which the receipt of the
grant is assured if an application is made
and the applicable entity only needs to
finance the purchase until the money is
received, these final regulations provide
that a grant awarded after acquisition of
the property is a restricted tax exempt
amount if approval of the grant was per-
functory and the amount of the grant was
virtually assured at the time of application.
Commenters asked whether the credit
reduction applies to a loan that is not a
forgivable loan or to a taxable loan. The
Treasury Department and the IRS clarify
that loans that need to be repaid are not
tax exempt amounts and, thus, will not
be restricted tax exempt amounts for pur-
poses of this rule. Commenters also asked
about the timing of the credit reduction
and whether there is any potential tax
credit recapture if a loan for a project that
was not intended to be forgivable is later
forgiven by the lender. In response, these
final regulations add a sentence clarifying
that the determination of whether a loan is
made for the specific purpose of purchas-
ing, constructing, reconstructing, erecting,
or otherwise acquiring an investment-re-
lated credit property, and whether forgive-
ness of that loan is contingent upon the
specific purpose being satisfied, is made at
the time the loan is approved.
Several commenters did not appear to
understand that the no excess benefit rule
is a subset of the special rule for invest-
ment-related credit property because
it applies only to restricted tax-exempt
amounts. For example, one commenter
opined that, if an applicable entity’s gen-
eral revenue (from charitable donations) is
not taxable and does not reduce the credit
amount, then the concern of an excessive
benefit for specific grants is unfounded.
Multiple commenters expressed confu-
sion by the definitions in the rule, asking
for further definition (or a safe harbor)
of “restricted tax exempt amount” or
for a definition of “unrestricted funds.”
Restricted gifts are distinguishable from
unrestricted gifts because of the restric-
tions donors place on the use of the funds.
In response to these comments, however,
these final regulations add a sentence to
the end of §1.6417-2(c)(3)(ii) stating that
the no excess benefit rule does not apply
if the tax exempt amount is not received
for the specific purpose of purchasing,
constructing, reconstructing, erecting,
or otherwise acquiring a property eligi-
ble for an investment-related credit. This
sentence includes two examples of a tax
exempt amount that is not considered to
be a restricted tax exempt amount: (1) a
tax exempt amount from the organiza-
tion’s general funds and (2) a tax exempt
amount the use of which is not restricted
to the purpose of purchasing, construct-
ing, reconstructing, erecting, or otherwise
acquiring an investment-related credit
property (such as purchasing an electric
vehicle) and could be used for any of sev-
eral different applicable credit properties
(such as purchasing an electric vehicle
or purchasing solar panels) or can be put
to other purposes (such as purchasing an
electric vehicle or making a building more
energy efficient). In addition, these final
regulations add an example with unre-
stricted funds to clarify that unrestricted
funds do not implicate the no excess ben-
efit rule.
One commenter thought that the no
excess benefit rule is administratively
impractical and will lead certain applica-
ble entities and their donors to structure
donations as unrestricted grants (with an
unenforceable expectation that the grant
will still be used to fund the energy prop-
erty). The commenter stated that this lack
of a legally enforceable obligation by
donors will lead to more opportunities for
the misuse of funds and further frustrate
Congressional intent to encourage appli-
cable entities to actually build and operate
energy property. The Treasury Depart-
ment and the IRS recognize that unre-
stricted funds are not impacted by the no
excess benefit rule; thus, taxpayers could
structure around the no excess benefit rule
by requesting unrestricted funds rather
than restricted ones. However, these final
regulations maintain the decision that,
when a restricted tax exempt amount plus
a general business credit exceeds the cost
of the applicable credit property that was
purchased with the restricted tax exempt
amount, then the no excess benefit rule is
reasonable and necessary, gives effect to
section 6417(d)(2)(B), and is consistent
with general tax principles.
In response to the commenters ask-
ing that applicable entities be allowed to
self-identify if they are preparing to apply
for a Federal grant that could potentially
impact their elective payment amount,
as provided in part V of this Summary of
Comments and Explanation of Revisions,
§1.6417-5(b)(5)(vii)(E) provides that an
applicable entity must provide informa-
tion on the source of funds the taxpayer
used to acquire the property as part of the
pre-filing registration process if the appli-
cable credit property is an investment-re-
lated credit property. However, the report-
ing of an actual credit amount is done on
the annual tax return. In addition, if an
applicable entity makes a valid elective
payment election but later determines the
amount was calculated incorrectly, these
final regulations provide the opportunity
to file an amended return or AAR to make
the appropriate adjustments to the elective
payment amount. See part II.B.2 of this
Summary of Comments and Explanation
of Revisions. As described in part VI of
this Summary of Comments and Explana-
tion of Revisions, these final regulations
clarify that, if an applicable entity or elect-
ing taxpayer amends its tax return or files
an AAR to properly adjust an excessive
elective payment amount before the IRS
opens an examination, then the excessive
payment provisions of section 6417(d)(6)
and §1.6417-6(a) would not apply.
A commenter recommended that the
final regulations limit or eliminate the pro-
posed rule that tax-exempt funds raised
to pay for the cost of a system must be
subtracted from the installed system cost
before calculating the value of the invest-
ment tax credit. The commenter’s sum-
mary of the proposed rule is not accurate.
The excess benefit determination is made
after the investment tax credit is calculated
and reduces the amount of the calculated
credit only to the extent that an excess
benefit was created by any restricted tax
exempt amounts used to fund the pur-
chase.
One commenter asked how the credit
reduction relates to tax-exempt bond
financing (which, for certain credits,
results in a reduction of the credit amount).
The Treasury Department and the IRS
confirm that the no excess benefit rule
applies after application of any rule, such
as sections 45(b)(3), 45Q(f)(8), 45V(d)

April 8, 2024 814 Bulletin No. 2024–15
(3), 45Y(g)(8), 48(a)(4), and 48E(d)(2),
that relates to the determination of the
underlying applicable credit.
A few commenters said that only
Federal grants should be considered in
applying the no excess benefit rule. The
Treasury Department and the IRS have
concluded that all restricted tax exempt
amounts should be treated the same way,
as any could lead to an excess benefit.
Two commenters stated that an applica-
ble credit property financed with “recov-
erable grants” should not result in the
reduction of the applicable credit, stating
that recoverable grants are similar to loans
although some nonprofits and schools
cannot enter into loan agreements. These
final regulations do not adopt this com-
ment because, without knowing the con-
ditions upon which the grant proceeds are
returned to the grantor, it is not possible to
conclude whether such amounts would be
considered restricted tax exempt amounts.
For example, if a grantor requires return
of the grant proceeds to the extent of
an excess benefit created, the proceeds
required to be repaid would likely not be
considered a restricted tax exempt amount
for purposes of §1.6417-2(c)(3), as those
amounts are more similar to debt repay-
ment.
One commenter asked that the final
regulations provide more specific infor-
mation about “other amounts generally
exempt from taxation under subtitle A,”
stating that all revenues earned by section
501(c) entities that are not subject to the
unrelated business income provisions of
sections 511 through 514 are generally
exempt from tax. The commenter noted
that Examples 2 and 3 in the proposed
regulations contained an exempt organi-
zation’s own unrestricted funds, which the
commenter presumed was from income
exempt from taxation under subtitle A. The
Treasury Department and the IRS agree
that the types of income mentioned by the
commenter are examples of income “that
is exempt from taxation under subtitle A”
that are intended to be included in basis
for purposes of computing the applicable
credit amount determined with respect to
the applicable credit property, regardless
of whether basis is required to be reduced
(in whole or in part) by such amounts
under general tax principles. However,
the Treasury Department and the IRS
have identified that certain governmental
entities, including Indian tribal govern-
ments, may have income that is excluded
from Federal income taxation rather than
exempt from taxation under subtitle A.
The intent of the special rule was to have
all of this income count towards the basis
of investment-related credit property.
Thus, these final regulations add “or oth-
erwise excluded from taxation” to the text
of §1.6417-2(c)(3).
A commenter asked how the special
rule works if grant or loan proceeds are
paid directly to the contractor building the
property, providing an example in which
(1) another entity helped cover the cost of
the applicable credit property for the appli-
cable entity by paying a vendor directly,
and (2) the remaining funds were pro-
vided by a lender to the applicable entity,
with the lender providing the proceeds of
the loan directly to the vendor. The com-
menter asked whether these arrangements
would affect the cost basis for determin-
ing the credit amount, which could then
impact the applicable entity’s ability to
make an elective payment election. These
final regulations do not address this ques-
tion since it requires analysis of the details
surrounding the contractual arrangements
(for example, the terms of the gift and the
terms of the loan), as the results depend on
the underlying facts.
One commenter asked whether there are
any restrictions on the use of elective pay-
ment amounts once they are received by the
applicable entity; for example, whether they
can be used to repay grant match require-
ments or to pay off debt used specifically
to purchase applicable credit property. Sec-
tion 6417 imposes no restriction on the use
an applicable entity makes of the elective
payment amount after it has been paid to
the entity (although the entity bears the risk
that any excessive payments are subject to
repayment plus a 20-percent tax).
3. Credits Must be Determined with
Respect to the Applicable Entity or
Electing Taxpayer
Proposed §1.6417-2(c)(4) would have
stated that any credit for which an elec-
tion is made under section 6417(a) must
have been “determined with respect to”
the applicable entity or electing taxpayer,
meaning that the applicable entity or elect-
ing taxpayer must own the underlying
eligible credit property or, in the case of
section 45X, conduct the activities giving
rise to the underlying eligible credit.
7
This
proposed rule, which is consistent with the
proposed regulations under section 6418,
would prohibit an applicable entity or
electing taxpayer from making an election
under section 6417(a) for credits trans-
ferred pursuant to section 6418, transferred
pursuant to section 45Q(f)(3), acquired by
a lessee from a lessor by means of an elec-
tion to pass through the credit to a lessee
under former section 48(d) (pursuant to
section 50(d)(5)), owned by a third party,
or otherwise not determined directly with
respect to the applicable entity or electing
taxpayer, which the proposed regulations
labeled “chaining.”
The preamble to the proposed regula-
tions noted several potential obstacles to
permitting chaining, but requested com-
ments on any limited situations in which
exceptions to this proposed rule may be
appropriate because they are consistent
with the text, design, and intent of the
IRA, while also ensuring that such excep-
tions are not subject to fraud or abuse.
i. Credits transferred pursuant to section
6418
One commenter agreed with the pro-
posed rule, stating that chaining will
likely create practical and administrative
challenges and make the applicable cred-
its more vulnerable to fraud and abuse.
However, multiple commenters stated that
chaining is consistent with the text, design,
and intent of the IRA and requested that it
be allowed. Some commenters advocated
for enacting a limited exception tailored
to certain situations or limited to certain
types of taxpayers, such as (1) a taxpayer
whose receipt of credits is directly tied to
the taxpayer’s involvement in the manu-
facturing process and its contractual agree-
ments with third-party producers under
section 45X, if not considered a producer
under section 45X; (2) public-private
partnership arrangements under which a
7
The section 45X credit requires that the taxpayer produce eligible components. Thus, an applicable entity or electing taxpayer must produce eligible components to claim the credit.

Bulletin No. 2024–15 815 April 8, 2024
governmental entity or nonprofit entity
can be treated as the owner of the proj-
ect while receiving private capital from
the private, for-profit partner to finance
the project; (3) governmental entities and
unrelated section 501(c)(3) entities on
whose premises the project is located; (4)
green banks and other public financing
entities; (5) governmental agencies; (6)
public power systems that entered into a
long-term power purchase agreement with
respect to the electricity to be produced at
a qualifying facility; (7) entities conduct-
ing the activity that do not own the appli-
cable credit property; (8) a transferor and
transferee that are joint tenants or partners
in a partnership completing a single return,
or cross-referencing returns, in which the
transfer and elective payment elections
are made concurrently on the due date of
the return (or later filing date under a valid
extension); or (9) in cases in which an
ERISA plan, entity holding plan assets, or
an entity in which an ERISA plan or entity
holding plan assets is the primary equity
holder, the transferee would not own more
than 50 percent of the seller, the transferee
does the same due diligence required of all
transferees, the transferee pays a minimum
of 90 percent of the face value of the credit
in cash, and, if the purchasing ERISA plan
has an indirect interest in the proceeds of
the sale, it is not permitted to buy more
than the commensurate share of the pro-
ceeds it would have received if the seller
had elected to sell the tax credit to another
person or entity with no relationship to the
seller. One commenter asked that any rule
prohibiting chaining be limited to poten-
tially abusive situations in which a princi-
pal purpose of the structure is to avoid the
transfer election rules or otherwise allow
taxpayers that are not applicable entities
to make elective payment elections.
After considering comments, the
Treasury Department and the IRS have
determined that sections 6417 and 6418,
read together, are most straightforwardly
understood as creating two separate,
mutually exclusive regimes regarding
credit monetization. While the Treasury
Department and the IRS acknowledge
that no specific language in section 6417
or 6418 directly prohibits chaining, not
permitting chaining allows for more
straightforward application of the stat-
ute as a whole. This interpretation reads
“determined with respect to” in both sec-
tions 6417 and 6418 to require the entity
to own the underlying applicable credit
property with respect to which the appli-
cable credit is determined and conduct
the activities giving rise to the applica-
ble credit or, in the case of section 45X,
for which ownership of applicable credit
property is not required, to be considered
(under the section 45X regulations) the
taxpayer with respect to which the sec-
tion 45X credit is determined.
The Treasury Department and the IRS
also remain concerned about the admin-
istrability of chaining and the scope for
fraud and abuse. The Treasury Depart-
ment and the IRS considered comment-
ers’ suggestions on how chaining might
be limited to certain types of taxpayers
or certain situations. While there may be
ways in which limiting chaining to cer-
tain types of entities or those performing
certain activities could potentially reduce
risks of fraud and abuse, the Treasury
Department and the IRS have concluded,
based on the comments, statutory text, and
available information, that the IRS would
face substantial challenges in attempting
to distinguish those types of taxpayers or
situations from other applicable entities or
other situations. For example, the existing
pre-filing registration process and portal,
a key anti-fraud and anti-abuse feature
specifically authorized by sections 6417
and 6418, are not capable of administer-
ing such distinctions as, for example, the
proposed requisite relationships between
the parties, many of which would require
assessments of particular circumstances or
other fact-dependent inquiries. The Trea-
sury Department and the IRS have not
determined how the proposed distinctions
or criteria could be sufficiently verified
in an administratively reasonable manner
during the pre-filing registration process.
Thus, based on available information, the
Treasury Department and the IRS could
not conclude that any chaining rule could
be limited in the manner taxpayers pro-
posed.
Furthermore, any chaining rule would
need ancillary rules to address opera-
tional differences between the two stat-
utory provisions and complications that
would necessarily arise from chaining.
For example, absent ancillary rules to
address differences between the two stat-
utes, there would be inconsistencies in
the requirements for elective payment
elections made by applicable entities for
applicable credits that are determined with
respect to the applicable entity and elec-
tive payment elections made by applica-
ble entities for transferred credits (even if
a taxpayer was making both elections for
the same type of credit). Transfer elections
under section 6418 with respect to cred-
its determined under sections 45, 45Q,
45X, 45V, and 45Y are made on an annual
basis, whereas elective payment elections
under section 6417 with respect to these
credits are made for a multi-year period
and are irrevocable. Additionally, transfer
elections under section 6418 are permitted
to be made for a portion of eligible cred-
its determined with respect to an eligible
credit property, whereas section 6417 does
not on its face permit partial elections. A
partnership making the election under
section 6417 must hold the applicable
credit property “directly,” language that is
not a clear fit for transferred credits. If a
chaining rule were permitted, the rules in
section 6418 would need to accommodate
the election requirements in section 6417,
but the Treasury Department and the IRS
could not determine, based on comments
received and available information, how
the differences between elective payment
elections and transfer elections could be
addressed in an administratively reason-
able manner.
Similarly, an applicable entity that is
both a transferee under section 6418 and
an applicable entity under section 6417
could be subject to both the excessive
credit transfer addition to tax under sec-
tion 6418(g)(2) and the excessive pay-
ment addition to tax under section 6417(d)
(6). None of the comments addressed how
the excessive credit transfer or excessive
payment additions to tax should apply
in the case of a chaining rule, including
whether there would be authority to avoid
application of both additions to tax by the
same applicable entity.
Additionally, none of the comments
addressed how the basis reduction and
recapture rules under sections 6418(g)(3)
and 6417(g) would work in the case of a
chaining rule, given that transferred cred-
its presumably would need to be treated as
“determined with respect to” the applica-
ble entity for purposes of section 6417(g).

April 8, 2024 816 Bulletin No. 2024–15
A chaining rule would also create
administrative challenges with regard to
the pre-filing registration process that are
separate from the challenge of potentially
distinguishing types of entities or situ-
ations, and which were not addressed in
comments. A facility or property intended
to produce credits that would be chained
would appear to need to be registered
twice – first, under section 6418 as an eli-
gible credit property and second, under
section 6417 as an applicable credit prop-
erty – which would result in two different
registration numbers with respect to the
same facility or property. Both of these
registrations would presumably need to
occur after the eligible/applicable credit
property was placed in service, but before
either taxpayer filed their annual tax
return.
Finally, the Treasury Department and
the IRS remain concerned that a rule
allowing for chaining could increase risks
of fraudulent elective payment elections
as well as fraudulent transfers of credits
(such as transferring credits that have not
been earned by the transferor and there-
fore do not exist), given a range of factors
including the limited time before filing
season that the IRS would have to verify
information as part of the pre-filing regis-
tration process, the transferor’s incentives
to shift risk to the transferee, and the diffi-
culties of recovering monies once already
paid out to applicable entities. Comments
received by the Treasury Department and
the IRS have not provided information
that addresses these concerns.
Thus, these final regulations adopt the
rule as proposed. However, the Treasury
Department and the IRS will continue
to consider potential chaining rules that
would address these concerns and be con-
sistent with the statutory framework, as
well as the legislative purpose, of sections
6417 and 6418. In particular, the Treasury
Department and the IRS will be monitor-
ing uptake and efficiency of the market for
transferred credits and whether additional
or different approaches may be useful to
improve the functioning of the market to
ensure that the provisions are functioning
consistent with Congress’s intent in enact-
ing the IRA. The Treasury Department and
the IRS will also be monitoring uptake of
the elective payment election, including
whether additional or different regulatory
approaches may be useful to ensure broad
access to the clean energy tax credits con-
sistent with Congress’s intent in enacting
the IRA. At the same time, the Treasury
Department and the IRS will be monitor-
ing the risk of improper payments with
respect to sections 6417 and 6418 and will
consider additional regulatory or admin-
istrative action to reduce such risk as
experience is gained with respect to these
novel provisions.
ii. Credits allowed pursuant to section
45Q(f)(3)
As described in part II.C.3 of this
Summary of Comments and Explanation
of Revisions, proposed §1.6417-2(c)(4)
would have provided that no election may
be made under section 6417(a) for credits
transferred pursuant to section 45Q(f)(3).
Multiple commenters opined that sec-
tion 45Q credits transferred pursuant to
section 45Q(f)(3)(B) should be considered
“determined with respect to” the trans-
feree. Commenters posited that this is the
correct result because those transferees
conduct carbon capture activities neces-
sary to give rise to a section 45Q credit,
citing the language in proposed §1.6417-
2(c)(4) that “[a]n applicable credit is
determined with respect to an applicable
entity or electing taxpayer in cases where
the applicable entity or electing taxpayer
owns the underlying eligible credit prop-
erty or, if ownership is not required, other-
wise conducts the activities giving rise to
the underlying eligible credit.” Comment-
ers further stated that performing those
carbon capture activities makes them dis-
tinguishable from taxpayers that are trans-
ferred a credit under section 6418 or an
election under section 50(d)(5).
The Treasury Department and the IRS
have concluded that a taxpayer that is
transferred a section 45Q credit as a result
of an election under section 45Q(f)(3) is
not the taxpayer with respect to which the
section 45Q credit is determined. Under
section 45Q(f)(3)(A)(ii), a section 45Q
credit is attributable to the person that
owns the carbon capture equipment and
physically or contractually ensures the
capture and disposal, utilization, or use
as a tertiary injectant of such qualified
carbon oxide (emphasis added). Further,
under §1.45Q-1(h)(3), it is the taxpayer
described in §1.45Q-1(h)(1) to whom the
section 45Q credit is attributable (elect-
ing taxpayer), that may elect to allow the
person that enters into a contract with the
electing taxpayer to dispose of the qual-
ified carbon oxide (disposer), utilize the
qualified carbon oxide (utilizer), or use
the qualified carbon oxide as a tertiary
injectant (injector) to claim the credit
(credit claimant) (section 45Q(f)(3)(B)
election). Contrary to commenters’ asser-
tions, it is not sufficient for a party to only
conduct carbon capture activities to be
eligible for a section 45Q credit. Further,
the requirement of ownership in the sec-
tion 45Q statute and regulations means the
commenters’ argument that the language
in §1.6417-2(c)(4) allows a section 45Q
credit to be determined with respect to an
applicable entity or electing taxpayer when
the party “otherwise conducts the activi-
ties giving rise to the underlying applica-
ble credit” is misplaced. That language in
§1.6417-2(c)(4) applies only in the case
of an applicable credit for which owner-
ship of property is not required, which is
not the case with respect to a section 45Q
credit. Thus, these final regulations clarify
in §1.6417-2(c)(4) that the only applicable
credit for which ownership is not required
is the section 45X credit. While the activ-
ities of a contractor may be necessary for
a section 45Q credit to be determined,
ultimately, the credit is attributable to and
determined by the person that both owns
the equipment and physically or contrac-
tually ensures the capture and disposal,
injection, or utilization of such qualified
carbon oxide. Thus, these final regulations
adopt the proposed regulations without
change on this issue.
Other commenters implied that a sec-
tion 45Q(f)(3) election is not a transfer,
just the attribution of the credit to the
claimant. The Treasury Department and
the IRS note that the relevant standard
under section 6417 for making an elec-
tive payment election is that a section 45Q
credit must be determined with respect to
the applicable entity or electing taxpayer.
Thus, while the proposed regulations used
the term “transfer,” the result would have
remained unchanged if the proposed regu-
lations used the term ‘attributed’ in refer-
ring to a party that receives the credit as a
result of a section 45Q(f)(3)(B) election.
To maintain consistency with §1.45Q-1(h)

Bulletin No. 2024–15 817 April 8, 2024
(3), these final regulations use the word
“allowed,” but the result is unchanged
from the proposed regulations.
One commenter asked that, in the case
of a taxpayer that is registering a single
process train for purposes of a section 45Q
credit and will make a section 45Q(f)(3)
(B) election to allow all or a portion of that
credit to disposers/utilizers, the final reg-
ulations require information about such
election, as well as an acknowledgment by
the owner of the single process train that
the disposer(s)/utilizer(s) may make a sec-
tion 6417 election for its portion of section
45Q credit allowed, using the registration
number obtained by the owner of the sin-
gle process train. As described previously,
a section 45Q credit that is received as the
result of a section 45Q(f)(3)(B) election is
not determined with respect to the recipi-
ent, and therefore the recipient is ineligi-
ble to make a section 6417 election and
has no need to complete pre-filing regis-
tration.
Commenters stated, citing Rev. Rul.
2021-13, 2021-30 IRB 152, that a tax-
payer does not need to own every com-
ponent of a single process train to claim
a section 45Q credit. The Treasury
Department and the IRS agree that guid-
ance under section 45Q does not require
a taxpayer to own every component of a
single process train and have revised the
language under §1.6417-1(e)(3) (defining
applicable credit property with respect to
the section 45Q credit) accordingly.
iii. Credits acquired by a lessee from a
lessor by means of an election to pass
through the credit to a lessee under
former section 48(d) (pursuant to section
50(d)(5))
Several commenters stated that tribes
cannot monetize their elective payment
amounts by making transfer elections
under section 6418.
8
These commenters
stated that tribes should thus be able to
structure projects through sale-leasebacks
or inverted leases, which would allow
tribes to retain ownership of the project
while a third party receives tax benefits
in exchange for contributing capital to the
project.
The proposed regulations did not spe-
cifically address sale-leaseback trans-
actions under section 50(d)(4), and the
Treasury Department and the IRS have
determined that adopting an explicit rule
with respect to sale-leaseback transac-
tions in these final regulations is not
necessary. Such a rule is unnecessary
because a sale-leaseback transaction
under section 50(d)(4) is one in which
a purchaser/lessor of investment credit
property owns the underlying property
with respect to which an applicable credit
is determined. In that case, provided all
of the applicable rules are met, because
the applicable credit is determined with
respect to applicable credit property
owned and treated as originally placed in
service by the purchaser/lessor, the pur-
chaser/lessor can make an elective pay-
ment election with respect to the property
under section 6417.
With respect to inverted leases, the
Treasury Department and the IRS under-
stand the commenters to be referring to
an election to pass through the applicable
credit to a lessee under former section
48(d) (pursuant to section 50(d)(5)). The
commenters pointed out that a rule allow-
ing the lessee to make a section 6417 elec-
tion with respect to a credit would allow
tribes to retain ownership of the project
while a third-party receives tax benefits
in exchange for contributing capital to
the project. There is a distinction between
sale-leaseback transactions under section
50(d)(4) and lease-passthrough elections
under former section 48 (pursuant to
section 50(d)(5)). In the latter case, it is
the lessor that is the party with respect to
which the credit is determined, and not the
lessee that is allowed to claim the credit as
a result of the election. Therefore, the les-
see does not meet the requirement of sec-
tion 6417(a), which requires the applica-
ble credit to be determined with respect to
the applicable entity making the elective
payment election. The Treasury Depart-
ment and the IRS have concluded that the
rationale underlying the proposed rule is
correct. Thus, these final regulations adopt
the proposed rule without change.
iv. Ownership
Proposed §1.6417-2(c)(4) would have
provided that applicable credits must be
determined with respect to the applica-
ble entity or electing taxpayer, and fur-
ther explained that an applicable credit
is determined with respect to an appli-
cable entity or electing taxpayer in cases
in which the applicable entity or electing
taxpayer owns the underlying applicable
credit property or, if ownership is not
required, otherwise conducts the activi-
ties giving rise to the underlying appli-
cable credit. Commenters addressed the
ownership aspect of this proposed rule. A
commenter asked for clarity on the types
of activities that would be required to give
rise to the underlying applicable credit
and whether, if the electing taxpayer
owns the property for which the appli-
cable credit is determined, they are also
required to conduct activities giving rise
to the underlying applicable credit. This
commenter stated that property owners
often contract with a third-party for oper-
ations and maintenance. This commenter
also asked for clarification on whether
property ownership is sufficient to satisfy
any other requirements. Lastly, the com-
menter requested additional information
on the types of documentation needed to
establish ownership of the property.
It is generally outside of the scope
of these final regulations to address the
types of activities required to determine
the underlying applicable credits. How-
ever, to help clarify, these final regula-
tions specify that the applicable entity
or electing taxpayer must both own the
underlying applicable credit property and
conduct the activities giving rise to the
applicable credit or, in the case of a sec-
tion 45X credit for which ownership of
applicable credit property is not required,
to be considered (under the section 45X
regulations) the taxpayer with respect
to which the section 45X credit is deter-
mined. That is, with respect to all of the
8
While it is true that section 6418(f)(2) defines “eligible taxpayer” for purposes of transfer election eligibility as “any taxpayer which is not described in section 6417(d)(1)(A)” (and thus an
Indian tribal government (including agencies and instrumentalities) described in section 6417(d)(1)(A)(iv) and §6417-1(c)(3) and -1(k) would not be eligible to make a transfer election), a
Tribal entity that is not described in section 6417(d)(1)(A) would be eligible to make a transfer election under section 6418.

April 8, 2024 818 Bulletin No. 2024–15
applicable credits, with the exception of
the section 45X credit, ownership of qual-
ified property is required. It is also true
that, in order to be eligible for an applica-
ble credit, it is necessary to first complete
activities required by the Code section(s)
relevant to the determination of the appli-
cable credit. To the extent that an appli-
cable entity or electing taxpayer contracts
with a third party for operation or mainte-
nance of the property, the applicable entity
or electing taxpayer must meet the appli-
cable credit requirements for the credit
to be determined with respect to such
entity or taxpayer. Lastly, with respect to
additional information on documentation
necessary for establishing ownership, the
determination will be made based on the
regulations for the particular applicable
credit or bonus credit amount as well as
Federal income tax principles. Ultimately,
the principle incorporated into these final
regulations, which is based on language
in section 6417(a), is that the applicable
credit must have been determined with
respect to the applicable entity or elect-
ing taxpayer making the elective payment
election.
One commenter asked that the final
regulations contain a safe harbor for
determining the Federal tax owner of
the tax credit eligible project and rec-
ommended the safe harbor under section
142(b) of the Code as a model. Section
142(b) requires certain facilities financed
with tax-exempt bonds to be owned by a
governmental unit. The safe harbor under
section 142(b) treats property that is sub-
ject to a lease, a management contract, or
other similar operating agreement to be
treated as owned by the governmental unit
under specified conditions. Specifically,
the lessee (or manager or operator) must
make an irrevocable election not to claim
depreciation or an investment credit with
respect to the property; the term of the
agreement must not exceed 80 percent of
the reasonably expected economic life of
the property; and the lessee (or manager
or operator) must have no option to pur-
chase the property other than at fair mar-
ket value as of the time the option is exer-
cised. The commenter proposed language
for a safe harbor for purposes of section
6417 that included language nearly iden-
tical to that under section 142(b) but that
also included a requirement that the appli-
cable entity own the property under State
or local law. These final regulations do not
adopt the commenter’s proposal because
ownership is determined based on gen-
eral Federal tax principles, including any
requirements applicable to the relevant
applicable credit.
D. Denial of double benefit
Section 6417(a) allows an applica-
ble entity or electing taxpayer other
than a partnership or S corporation to be
treated as making a payment against the
tax imposed by subtitle A for the taxable
year with respect to which such credit
was determined equal to the amount of
such credit. Section 6417(c)(1)(A) pro-
vides that, for an electing taxpayer that
is a partnership or S corporation, the
Secretary will make a payment to such
partnership or S corporation with respect
to a credit determined with respect to
applicable credit property held directly
by the partnership or S corporation equal
to the amount of such credit. Sections
6417(e) and (c)(1)(B) each provide that
such credit is reduced to zero and, for any
other purposes of the Code, is deemed
to have been allowed to such entity for
such taxable year. Section 6417(h) pro-
vides that the Secretary must issue guid-
ance necessary to carry out the purposes
of section 6417, including guidance to
ensure that the amount of the payment (in
the case of an electing taxpayer that is a
partnership or S corporation) or deemed
payment (in the case of all other electing
taxpayers and applicable entities) made
under section 6417 is commensurate with
the amount of the credit that would be
otherwise allowable (determined without
regard to section 38(c)).
Proposed §1.6417-2(e)(2) and (3)
would have addressed the methodology
for determining the elective payment elec-
tion amount and reducing the applicable
credit to zero while treating the applicable
credit as allowed for the taxable year for
all other purposes of the Code with respect
to applicable entities and electing taxpay-
ers other than partnerships or S corpora-
tions as provided in section 6417(e). The
methodology with respect to a payment
made to a partnership or S corporation is
described in part IV of this Summary of
Contents and Explanation of Revisions.
Under the proposed regulations, an
applicable entity or electing taxpayer
(other than an electing taxpayer that is a
partnership or S corporation) making an
elective payment election would have
applied section 6417(e) by taking the fol-
lowing steps. First, the taxpayer would
have computed the amount of the Federal
income tax liability (if any) for the tax-
able year, without regard to the GBC, that
is payable on the due date of the return
(without regard to extensions), and the
amount of the Federal income tax liabil-
ity that may be offset by GBCs pursuant
to the limitation based on the amount of
tax under section 38. Second, the taxpayer
would have computed the allowed amount
of GBC carryforwards carried to the tax-
able year plus the amount of current year
GBCs (including current applicable cred-
its) allowed for the taxable year under sec-
tion 38 (that is, in accordance with all the
rules in section 38, including the ordering
rules provided in section 38(d)). Since
the election would have been required to
be made on an original return, any busi-
ness credit carrybacks would not have
been considered in determining the elec-
tive payment amount for the taxable year.
Third, the taxpayer would have applied
the GBCs allowed for the taxable year
as computed in step 2, including those
attributable to applicable credits as GBCs,
against the tax liability computed in step
1. Fourth, the taxpayer would have iden-
tified the amount of any excess or unused
current year business credit, as defined
under section 39 of the Code, attributable
to current year applicable credit(s) for
which the applicable entity is making an
elective payment election. The amount
of such unused applicable credits would
have been treated as a payment against the
tax imposed by subtitle A for the taxable
year with respect to which such credits
are determined (rather than having them
available for carryback or carryover) (net
elective payment amount). Fifth, the tax-
payer would have reduced the applicable
credits for which an elective payment
election is made by the amount (if any)
allowed as a GBC under section 38 for the
taxable year, as provided in step 3, and by
the net elective payment amount (if any)
that is treated as a payment against tax,
as provided in step 4, which results in the
applicable credits being reduced to zero.

Bulletin No. 2024–15 819 April 8, 2024
Proposed §1.6417-2(e)(3) would have
provided, consistent with section 6417(e),
that the full amount of the applicable cred-
its for which an elective payment election
is made is deemed to have been allowed
for all other purposes of the Code, includ-
ing, but not limited to, the basis reduction
and recapture rules imposed by section
50 and calculation of any underpayment
of estimated tax under sections 6654 and
6655 of the Code. The proposed regula-
tions gave several examples illustrating
these rules.
The proposed regulations requested
comments on whether future guidance
should expand or clarify the methodology
that an applicable entity follows to com-
pute its elective payment amount. The
proposed regulations also requested com-
ments on additional Code sections under
which it may be necessary to consider the
applicable credit to have been deemed to
have been allowed for the taxable year
in which an elective payment election is
made.
Multiple commenters asked that the
final regulations revise or not include the
section 38 ordering rule in §1.6417-2(e)
(2). Commenters stated that, under the
proposed ordering rules, if a taxpayer
reaches the section 38(c) limitation using
prior year credit carryforwards and cur-
rent year applicable credits, which may
be considered used ahead of some other
non-applicable credits based on the sec-
tion 38(d) ordering rule, then the taxpayer
would lose the benefit of treating the appli-
cable credit as a payment because it could
have used the non-applicable credits to
reach the section 38(c) limitation. Instead
of receiving the benefits of treating the
applicable credit as a payment, the tax-
payer could be required to carry otherwise
usable non-applicable credit GBCs back
or forward to other taxable years. These
commenters suggested that the elective
payment amount should not be reduced
if a taxpayer has non-applicable credits
that can be used to reduce tax liability to
the section 38(c) limitation. A commenter
thought specifically that the language in
section 6417(e) should not be read as a
reference to the GBC ordering rules. The
commenter thought that the proposed
rule’s application of the GBC ordering
rules goes beyond merely addressing a
double benefit issue and effectively limits
the availability of direct payments, con-
trary to the statutory language in section
6417. The commenter thought that the
proper application of section 6417(e) is
demonstrated in proposed §1.6417-2(e)
(3) – for example, deeming the applica-
ble credit as allowed for purposes of basis
reduction, recapture rules, and estimated
tax calculations.
The Treasury Department and the IRS
note that the fact pattern raised by com-
menters will have no relevance, and appli-
cation of the rules in §1.6417-2(e) should
be straightforward, for any applicable
entities without taxable income to offset
or with only applicable credits. How-
ever, the Treasury Department and the
IRS agree with commenters that the GBC
ordering rules can result in a lowered elec-
tive payment amount for other applicable
entities and/or electing taxpayers; thus,
these final regulations include changes to
address that result.
Section 6417(a) provides that the
applicable entity will be treated as making
a payment against tax equal to the amount
of the credit, and section 6417(d)(4) ref-
erences such payment, as noted by com-
menters. It is section 6417(e) that creates
a bifurcated treatment for purposes of the
Code by reducing the credit to zero, but
for any other purposes under the Code,
deeming the applicable credit to have
been allowed to such entity for such tax-
able year.
In reviewing these provisions, the
Treasury Department and the IRS have
determined that section 38 is the section of
the Code with respect to which applicable
credits should be reduced to zero as pro-
vided under section 6417(e), other than as
explained in this paragraph. As section 38
is the operative provision under which all
of the applicable credits would be taken
into account and allowed to reduce tax lia-
bility, it is reasonable to read the no double
benefit rule in section 6417(e) to reduce
the applicable credits to zero for purposes
of section 38. This prevents a direct dou-
ble benefit that could be achieved from
claiming the credits. However, prevent-
ing such a double benefit does not require
reducing the applicable credit to zero for
purposes of section 38 to the extent an
applicable credit is needed to reduce tax
liability up to the section 38(c) limitation.
In addition, reducing an applicable credit
to zero in such situations would unneces-
sarily disadvantage an applicable entity
or electing taxpayer filing on extension
by preventing them from claiming the
applicable credit as a current year GBC.
This is because, to the extent applied as a
credit, the applicable credit will reduce tax
liability as of the due date of the return,
while the elective payment amount is not
treated as being made until the later of the
due date of the return or the date of filing.
See section 6417(d)(4). Treating the entire
applicable credit as zero in the case of an
applicable entity or electing taxpayer fil-
ing on extension could result in more tax
due on the due date of the return and, if not
paid, would result in the applicable entity
or electing taxpayer owing interest and
could result in penalties assessed against
the taxpayer.
The proposed rules accounted for this
situation, and as noted by a commenter,
helped mitigate any potential estimated
tax penalties if amounts owed were not
paid by the due date. No commenters
objected to this aspect of the proposed
rule. Thus, the Treasury Department and
the IRS conclude that these final regula-
tions should treat the applicable credit as
a credit for section 38 in the limited situ-
ation that the applicable credit is needed
to reduce tax liability up to the section
38(c) limitation. It is also noted that, for
an applicable entity or electing taxpayer
that is filing and making an election by the
due date of their return, there should be no
difference in outcome between treating an
applicable credit resulting in an elective
payment as reduced to $0 for section 38,
or as a credit that reduces tax liability up
to the section 38(c) limitation and a pay-
ment beyond the section 38(c) limitation.
Based on these conclusions, the Trea-
sury Department and the IRS have revised
the rules and examples in proposed
§1.6417-2(e) and have added a new exam-
ple. Under these final regulations, there
is still a description of steps for an appli-
cable entity or electing taxpayer to com-
plete, but there is a change in the order-
ing of the steps and in the calculation of
the net elective payment amount. The net
elective payment amount, consistent with
the proposed regulations, is the amount
of an applicable credit that is treated as a
payment against the tax imposed by sub-
title A. In these final regulations, the net

April 8, 2024 820 Bulletin No. 2024–15
elective payment amount is equal to the
lesser of (1) the aggregate of all applica-
ble credits or (2) the total GBC (includ-
ing applicable credits) over the total GBC
allowed against tax liability (determined
with regard to section 38(c)). Under these
final regulations, an applicable entity or
electing taxpayer will calculate the net
elective payment amount prior to apply-
ing the ordering rules of section 38(d).
These revisions allow an applicable entity
or electing taxpayer that has other non-ap-
plicable credit GBCs to lower tax liabil-
ity to the section 38(c) limitation using
the non-applicable credit GBCs without
impact from applicable credits. But the
revisions also require a taxpayer to use an
applicable credit as a current year GBC to
the extent that it is necessary to reduce tax
liability up to the limitation under section
38(c). In all other situations, the applica-
ble credit will be zero for purposes of sec-
tion 38 and the applicable credit will be
considered a payment of tax on the later
of the due date of the return or filing (as
prescribed by section 6417(d)(4)).
In sum, these revisions to proposed
§1.6417-2(e) and the examples ensure two
outcomes. First, consistent with comment-
ers’ recommendations, these final regula-
tions ensure that taxpayers making an
elective payment election will not have to
delay using non-applicable GBCs because
of an applicable credit. Second, consistent
with the proposed rule, these final regu-
lations allow a taxpayer to benefit from
a reduction in tax liability as of the due
date of the return by treating an applicable
credit as a credit for purposes of section
38, up to the section 38(c) limitation.
One commenter urged that the final
regulations revise proposed §1.6417-2(e)
(3) to treat the entire elective payment
amount as a payment against tax for pur-
poses of the calculations under section
59A of the Code, relating to the tax on
base erosion of taxpayers with substan-
tial gross receipts (also known as the base
erosion anti-abuse tax or BEAT), so that
the amount (regardless of any portion
included in the GBC calculation) of a
section 45X credit for which an elective
payment election is made is treated as
zero for purposes of section 59A. In con-
trast with the analysis earlier for section
38, the Treasury Department and the IRS
conclude that treatment of an applicable
credit for purposes of BEAT falls within
the portion of section 6417(e) that pro-
vides, “for any other purposes under this
title [26],” the applicable credit is deemed
to have been allowed to such entity for
such taxable year. In contrast to section
38, BEAT is not a provision pursuant to
which the applicable credits would be
directly claimed, and treatment of the
elective payment amount as suggested
by the commenter would conflict with
the language in section 6417(e). Further,
since section 6417(e) provides that appli-
cable credits are treated as credits for any
other purposes of the Code, the applicable
credits are not analogous to other credits
that are considered pre-payments of tax
and for which the BEAT regulations have
an exception. See §1.59A-5(b)(3)(i)(C)
(providing that regular tax liability is not
reduced for “[a]ny credits allowed under
sections 33, 37, and 53” of the Code. Sec-
tion 33 credits are related to withholding
of tax at the source with respect to pay-
ments to foreign corporations and nonres-
ident aliens. Section 37 is a credit for the
overpayment of taxes. Section 53 relates
to a credit for alternative minimum tax
paid in a prior year). Thus, these final reg-
ulations adopt the rule in §1.6417-2(e)(3)
as proposed.
Another commenter requested clari-
fication on apparent ambiguities in pro-
posed §1.6417-2(e)(2)(ii) and (iii). As
the revisions in these final regulations
removed the text that the commenter
thought was unclear, it is not necessary
to address these comments in these final
regulations.
Although no commenters specifically
raised the application of potential penal-
ties under section 6651 in the context of
the proposed denial of double benefit rule,
these final regulations modify §1.6417-
2(e)(3) to clarify that a taxpayer may
also be subject to a penalty under section
6651(a)(2) of the Code relating to the tax-
payer’s failure to timely pay tax if a return
is filed after the original due date.
E. Timing of payment
Section 6417(d)(4) provides that the
payment described in section 6417(a)
is treated as made on (1) in the case of
any government, or political subdivision,
described in section 6417(d)(1) and for
which no return is required under sec-
tion 6011 or 6033(a), the later of the date
that a return would be due under section
6033(a) if such government or subdivision
were described in that section or the date
on which such government or subdivi-
sion submits a claim for credit or refund
(at such time and in such manner as the
Secretary provides), and (2) in any other
case, the later of the due date (determined
without regard to extensions) of the return
of tax for the taxable year or the date
on which such return is filed. Proposed
§1.6417-2(d) generally follows the stat-
utory provision. Commenters addressed
many aspects of this rule.
1. Processing the Elective Payment
Several commenters asked that the final
regulations specify a timeframe within
which an applicable entity will receive
an elective payment amount. These com-
menters stated that having certainty on
the time it will take to receive payments
is important for purposes of securing
needed financing or other funding while
they are waiting to receive their elective
payment amounts. One commenter stated
that, if the IRS takes several months to
process the payments, an organization
may default on its loan payment(s). A few
commenters speculated that an elective
payment amount could be delayed for
many months after filing, given slow pro-
cessing times by the IRS. One commenter
asked that the IRS impose a process sim-
ilar to Form 4466, Corporation Applica-
tion for Quick Refund of Overpayment of
Estimated Tax, which requires the IRS to
process a tax refund within 45 days from
the date it is filed, for elective payment
amounts. Another commenter suggested
that the final regulations require written
notice to applicable entities if the IRS will
not meet the timeline, with an explana-
tion and a date payment can be expected.
Several commenters requested that the
time between when the payments can be
claimed and the time of payment be as
short as possible, as delays can increase
an organization’s costs.
The Treasury Department and the IRS
decline to specify a particular time within
which an elective payment election will
be processed. Several factors, including
the volume of returns on which elective

Bulletin No. 2024–15 821 April 8, 2024
payment elections are made and whether
any particular return contains complete
and accurate information, will affect pro-
cessing time. However, as the preamble
to the proposed and temporary regula-
tions stated, the pre-filing registration is
intended to allow the IRS to verify certain
information about a taxpayer in a timely
manner while mitigating the risk of fraud
or improper payments and then process
the annual tax return with minimal delays.
2. Number of Payments
One commenter asked whether the
elective payment amount would be pro-
vided in one lump sum or in multiple
payments. The statute and these final
regulations contemplate one return con-
taining the elective payment election, and
one payment to the taxpayer, per taxable
year. The only exception to this rule is
if a taxpayer’s superseding or amended
return increases the applicable credit
amount reflected on the original return, as
described in part II.B.2 of this Summary
of Comments and Explanation of Revi-
sions.
3. Accelerated Payments
Several commenters asked that pay-
ments be provided to applicable enti-
ties before the time the statute provides;
for example, that applicable entities be
allowed to submit elective payment elec-
tions as soon as qualified energy proper-
ties are placed into service; that the IRS
provide a pre-payment of the tax credit of
some percentage (for example 20 to 50
percent) based on the “pre-filing record”
(and that pre-filing occur at the beginning
of construction); or that “third-party attes-
tations” or Treasury verification of initial
pre-filing information could support the
distribution of cash refunds at that time
(which does not preclude the possibility of
later audits). Because section 6417(d)(4)
provides the date the payment described
in section 6417(a) is treated as made on,
which must occur prior to the IRS provid-
ing the payment, the Treasury Department
and the IRS have determined it is not pos-
sible to provide for accelerated payments,
including in the scenarios advocated by
commenters. Thus, these final regulations
do not adopt these comments.
4. Payments Against Estimated Tax
In response to several stakeholder
responses to Notice 2022-50 asking
whether an applicable entity could treat an
applicable credit arising during a quarter
as a payment against quarterly estimated
tax (assuming such an amount was due),
the proposed regulations stated that no
special rule was needed because taxpay-
ers can determine, based on their pro-
jected tax liability, the correct amount of
estimated tax to pay in order to avoid a
section 6654 or section 6655 estimated tax
penalty at the end of the year.
In response to the proposed regula-
tions, multiple commenters continued to
advocate that applicable credits be able to
be used against estimated tax payments or
stated that the Treasury Department and
the IRS should allow for quarterly elec-
tions and payments even though the elec-
tive payment is not deemed to occur until
the later of the due date or filing date of
the applicable tax return. Some comment-
ers stated that allowing properly deter-
mined credits to be used against quarterly
estimated tax payments could more effi-
ciently provide taxpayers with the funds
to make and sustain investments, that a
delay in realizing the value of the credits
would increase pressure on cash flows and
working capital, and that the inability to
offset quarterly estimated tax liability with
an applicable credit is inconsistent with
the purpose of section 6417. Comment-
ers opined that the Treasury Department
and the IRS could allow eligible taxpayers
to make and receive quarterly elections
and payments, align quarterly elections
with quarterly returns, and replicate the
quarterly excise tax reporting mechanism
similar to rules under sections 6426 and
6427 of the Code, allowing eligible enti-
ties to claim payments every quarter. One
commenter recommended that applicable
entities be permitted to include applicable
credits within the calculation of estimated
tax for Form 4466. Another commenter
suggested the Treasury Department and
the IRS could exercise its authority under
section 6655(j) to promulgate regulations
impacting estimated tax penalties.
The distinction between estimated tax
installments (which are the obligation of
the taxpayer to calculate) versus an end
of year estimated tax penalty (that may
result if the taxpayer’s calculations are not
correct and/or if the taxpayer’s annual tax
liability is not paid on the due date for the
return, including a “payment” that is made
through an elective payment election)
appeared to confuse several commenters.
For example, one commenter stated that
proposed §1.6417-2(e)(3) could be inter-
preted to permit a taxpayer to calculate
their estimated tax installments and any
underpayment by considering properly
determined refundable credits in making
quarterly estimated tax payments, even
though the elective payment amount is not
deemed to be made until the later of the
due date or filing date of the applicable tax
return.
Some commenters asked for clarifica-
tions to proposed §1.6417-2(e)(4), Exam-
ple 5, which describes a situation in which
an electing taxpayer filed its tax return on
a timely filed extension after the due date
of the return (without extensions). Exam-
ple 5 in the proposed regulations would
have provided:
“[e]ven though W did not owe tax
after applying the net elective payment
amount against its net tax liability, W
may be subject to the section 6655 pen-
alty for failure to pay estimated income
tax. The net elective payment is not an
estimated tax installment, rather, it is
treated as a payment made at the filing
of the return.”
Commenters asked that the applica-
ble credits be considered to have been
estimated tax payments, resulting in no
tax liability at the end of the year or, at
a minimum, that final regulations waive
estimated tax penalties related to an elec-
tive payment election. In other words,
commenters requested that the elective
payment election amount may be applied
both as a reduction to any quarterly esti-
mated tax payments (without penalty) and
to offset any taxes that are reported on the
taxpayer’s income tax return for any tax-
able year in which those elections are in
effect.
These final regulations do not adopt
these suggestions. Section 6417(d)(4)
generally requires a single payment and
clearly states the timing of when the pay-
ment is treated as made, which is, at the
earliest, the return due date (determined

April 8, 2024 822 Bulletin No. 2024–15
without regard to extensions). In that
sense, payments made under section 6417
are no different than other kinds of pay-
ments a taxpayer may make as part of fil-
ing a timely return (excluding extensions)
or making a payment with a timely filed
application for extension. Taxpayers can
adequately determine whether their quar-
terly estimated payments are sufficient to
avoid estimated income tax penalties based
on their projected income and by consid-
ering any expected, properly determined
applicable credit. For the same reasons,
applicable credits may not be included
to calculate estimated tax for Form 4466,
which, under section 6425(a)(1) of the
Code must be filed after the close of a cor-
poration’s taxable year, on or before the
15th day of the fourth month following
the close of such taxable year, and prior
to the filing of the corporation’s return for
such taxable year. Comments requesting
the promulgation of regulations under sec-
tion 6655 are outside the scope of these
final regulations. For the sake of clarity,
however, these final regulations modify
Example 5 under §1.6417-2(e)(4) to bet-
ter reflect the conclusion that a taxpayer
that files its return after the due date for
filing (excluding extensions) may also be
subject to a penalty under section 6651(a)
(2) for the failure to timely pay tax, even
if it did not owe tax after applying the net
elective payment amount against its net
tax liability.
Some commenters requested clarifi-
cation on whether the elective payment
amount under section 6417(a) is subject to
the same treatment as estimated payments
against income taxes under §301.6402-4;
as a refund other than estimated taxes; as
a refundable tax credit; or as some other
form of special payment. Commenters
also stated that, if the elective payment
amount is treated as a refund, the final
regulations should clarify what specific
refund procedures under the Code apply.
These final regulations do not adopt a
specific rule related to these comments.
As previously described, section 6417(d)
(4) expressly states the timing of when
the payment is treated as made. There-
fore, the payment under section 6417 is
distinguishable from both an estimated
payment made during the taxable year and
a refundable credit. A refundable credit
reduces tax liability as of the original due
date of a return, while a payment of tax
relates to a tax liability after application of
credits and is treated as occurring on the
date the payment is made.
One commenter requested clarification
that, under proposed §1.6417-2(e)(2), an
elective payment election does not over-
ride accounting for section 45X credits
within the normal GBC limitation under
section 38, even if an elective payment
election is made. The commenter asked
that the “net elective payment amount”
should only be the excess over the amount
allowable in the section 38 calculation.
The commenter stated that this net elec-
tive payment is then treated as a payment
against tax for the year but that, given the
examples provided in the proposed regu-
lations, their interpretation was that any
amount utilized as part of the section 38
limitation is allowed to offset estimated
taxes during the taxable year; whereas
the net elective payment amount is not
allowed as a reduction to estimated taxes
as it is deemed paid on the date the return is
filed. The revisions to proposed §1.6417-
2(e)(2) in these final regulations, includ-
ing the definition of net elective payment
amount and the examples in §1.6417-2(e)
(4), are intended to clarify that any amount
utilized as part of the section 38 limitation
is allowed to reduce tax liability for pur-
poses of determining any underpayment
of estimated tax; whereas the net elective
payment amount is not treated as reduc-
ing tax liability as it is deemed paid on the
later of the due date of filing the return or
the date the return is filed.
The proposed regulations addressed
the interaction between the timing rule
in section 6417(d)(4) and the denial of
double benefit rule in section 6417(e). In
considering the comments in relation to
timing of the payment, it is clear from
section 6417(d)(4) that the payment is
considered made at the later of the due
date of filing the tax return or the actual
filing. Further, rather than as suggested
by most commenters, it is this timing rule
and not the rules in proposed §1.6417-
2(e)(2) and (3) (regarding ordering and
use of the applicable credit) that creates
the commenters’ issue related to penalties
for underpayment of estimated taxes. For
example, if a taxpayer with a tax liability
was solely relying on the elective payment
amount to cover the tax liability, such tax-
payer could receive a payment related to
the applicable credit but could still incur
an estimated tax penalty because section
6417(d)(4) explicitly states that the pay-
ment of tax occurs on the date on which
such return is filed. These final regulations
do revise proposed §1.6417-2(e)(2), but
the revisions continue to allow taxpayers
the beneficial approach of the proposed
regulations in this respect. Under the
revisions, if any of the applicable credits
for which the election is being made are
needed to reach the limitation under sec-
tion 38(c), then those credits are treated as
reducing tax liability as of the due date of
the return (excluding extensions). As one
commenter stated, while the proposed rule
does not eliminate the potential for an esti-
mated tax penalty, the approach can miti-
gate the potential penalty by minimizing
the amount of tax due on the return. The
same result is achieved in these final regu-
lations. While commenters are suggesting
it is possible to allow a payment as having
been made at various times of the year,
these comments contradict the timing of
payment language in section 6417(d)(4).
Thus, these final regulations do not adopt
comments that suggested revisions to the
rules in proposed §1.6417-2(e), but make
clarifications in the examples that illus-
trate the application of those rules.
5. Partnership Elections
Proposed §1.6417-4(c) would provide
rules for a partnership or S corporation that
makes an election under section 6417(a)
and proposed §1.6417-2(b) in accordance
with the special rules for partnerships and
S corporation under section 6417(c)(1)(A)
through (D). One commenter opined that
the proposed regulations seem to allow a
corporation making an elective payment
election for section 45X credits deter-
mined during the year to reduce quarterly
estimated taxes by including credits in its
general business credit computation up to
the section 38(c) limitation. However, the
commenter thought this was not the case
for section 45X credits earned through a
partnership, as the election and payment
are made at the partnership level. The
commenter thought that, in the absence of
quarterly elections and payments, the final
regulations should provide a mechanism
for corporate partners to reduce quar-

Bulletin No. 2024–15 823 April 8, 2024
terly estimated taxes for applicable cred-
its determined with respect to applicable
credit property held through partnerships
that will make elective payment elec-
tions; otherwise, the commenter thought it
would be penalizing taxpayers that oper-
ate their businesses through partnerships,
for example, as joint ventures.
The Treasury Department and the IRS
note that the treatment of partners of a
partnership (or shareholders of an S cor-
poration) is different from the treatment of
an applicable entity or electing taxpayer
directly making the elective payment elec-
tion. This is a result of the special rules
for partnerships in section 6417(c)(1) that
require an elective payment election for
applicable credits determined with respect
to any applicable credit property held
directly by a partnership to be made by the
partnership. An elective payment election
made by a partnership is not reduced by
the Federal tax liabilities of its partners.
Instead, it is only reduced by any partner-
ship level Federal tax liability. If partners
were allowed to reduce their quarterly esti-
mated taxes for applicable credits deter-
mined with respect to applicable credit
property held by a partnership for which
the partnership makes an elective payment
election, then the amount of the elective
payment made to the partnership should
be reduced by the partners’ corresponding
quarterly estimated tax liabilities. Other-
wise, the partners would receive a wind-
fall because the same applicable credits
would be used to both reduce the partners’
estimated tax payments and generate an
elective payment to the partnership. Sec-
tion 6417(c)(1) does not allow for such a
mechanism. Instead, section 6417(c)(1)
(C) provides that, if a partnership makes
an elective payment election, any elective
payment amount is treated as tax exempt
income for purposes of section 705 and
a partner’s distributive share of such tax
exempt income is equal to such part-
ner’s distributive share of the otherwise
applicable credit for each taxable year as
determined under §1.704-1(b)(4)(ii). As
the elective payment election results in
an applicable credit being treated as tax
exempt income rather than as a credit, it
is inappropriate to adopt a rule allowing
the partners to treat the same amount as
a credit for estimated tax purposes. Thus,
these final regulations do not adopt the
commenter’s recommendation of a rule
allowing corporate (or any other) partners
to reduce quarterly estimated taxes for
applicable credits determined with respect
to applicable credit property held through
partnerships that make elective payment
elections.
6. Appeal and Litigation Rights
Several commenters asked whether the
procedural guidelines outlined in subti-
tle F of the Code are applicable to elective
payment elections in scenarios involving
an audit or rejection by the IRS. These
commenters opined that, because section
6417 treats an elective payment election
as akin to an income tax payment, the
procedures outlined in subtitle F of the
Code should apply, and further, that the
overpayment interest provisions of sec-
tions 6611 and 6621 should apply based
on the payment dates described in section
6417(d)(4)(B) and in the proposed regu-
lations. The Treasury Department and the
IRS note that section 6417 is located in
chapter 65 of the Code, which relates to
Abatements, Credits, and Refunds, which
is in turn located under subtitle F of the
Code. Accordingly, subtitle F of the Code,
which include provisions relating to over-
payment interest, applies to elective pay-
ment elections under section 6417.
Commenters requested that the final
regulations confirm an applicable entity
or electing taxpayer’s right to appeal an
adverse determination by the IRS with
respect to a determination regarding an
elective payment election, and that defi-
ciency procedures (including the right to
petition the U.S. Tax Court) are applicable.
An applicable entity or electing taxpayer
may challenge an adverse determination
by the IRS with respect to an elective pay-
ment election if the denial of such elec-
tion creates a tax deficiency, for which
deficiency procedures apply, including the
right to petition the U.S. Tax Court. For
example, if an applicable entity or elect-
ing taxpayer claimed an elective payment
amount for applicable credits that were
subsequently disallowed by the IRS, then
the applicable entity or electing taxpayer
could protest the disallowance before
the IRS Independent Office of Appeals
(Appeals) and ultimately petition the U.S.
Tax Court, if desired or appropriate.
Another commenter suggested that
the IRS should be required to share with
the taxpayer the reasons why the IRS has
denied a credit. The Treasury Department
and the IRS intend for disallowances of
an applicable credit under section 6417 to
function the same as disallowances by the
IRS for other credits or deductions. In such
situations, a taxpayer will be provided the
basis for the disallowance. Accordingly,
this comment is not adopted.
One commenter stated that the pro-
posed regulations designated the elective
payment election as a “special enforce-
ment matter” for purposes of the central-
ized partnership audit regime
9
pursuant
to section 6241(11) of the Code but pro-
vided no information about what audit
rules apply in lieu of those partnership
audit rules or why special enforcement
is required to make an elective payment
election. Under section 6241(11), in the
case of partnership-related items involv-
ing special enforcement matters, the Sec-
retary may prescribe regulations provid-
ing that the centralized partnership audit
regime (or any portion thereof) does not
apply to such items and that such items
are subject to special rules as the Secre-
tary determines to be necessary for the
effective and efficient enforcement of the
Code. The Treasury Department and the
IRS have determined that applying the
special enforcement rules to the elective
pay election is appropriate in order to
prevent payments for invalid credits and
avoid the need for audits at that stage. The
IRS uses the special enforcement rule to
make an adjustment upon the determi-
nation of an ineffective election instead
of following the audit procedures of the
centralized partnership audit regime. This
special enforcement rule only applies to
adjustments to the elective payment elec-
tion and payment; any other adjustments
that may be required later in time remain
subject to the centralized partnership audit
regime.
9
Subchapter C of chapter 63 of the Code as amended by the Bipartisan Budget Act of 2015 (BBA).

April 8, 2024 824 Bulletin No. 2024–15
Another commenter stated that it would
be helpful to specify what, if any, audit
process would apply to tax-exempt or gov-
ernmental entities that do not normally file
tax returns or pay taxes. This commenter
stated that the pre-registration certification
process will go a long way toward prevent-
ing fraud associated with these projects
and thus recommended that the Treasury
Department and the IRS identify a category
of smaller projects that could be excluded
from, or subjected to, a simplified audit
process. The Treasury Department and the
IRS expect that tax-exempt or governmen-
tal entities that do not ordinarily file tax
returns or pay tax would be subject to the
same examination process and procedures
as other entities that have historically had
a filing obligation. Any changes to such
procedures, including a simplified audit
process, are outside the scope of these
final regulations, but may be considered in
future guidance.
III. Elective Payment Election by Electing
Taxpayers
Section 6417(d)(1)(B) through (D)
provides that an electing taxpayer (that is,
a person other than an applicable entity
described in section 6417(d)(1)(A)) that,
with respect to any taxable year, places
in service applicable credit property that
qualifies for a section 45V credit or a sec-
tion 45Q credit, or, with respect to any
taxable year in which such taxpayer has,
after December 31, 2022, produced eli-
gible components (as defined in section
45X(c)(1)), respectively, may elect to be
treated as an applicable entity for pur-
poses of section 6417 for such taxable
year, but only with respect to the afore-
mentioned applicable credit property and
only with respect to a section 45V credit,
section 45Q credit, or section 45X credit,
respectively.
The special rules for electing taxpay-
ers are found in section 6417(d)(1) and
(3). Proposed §1.6417-3 would have com-
bined these rules for clarity, and these final
regulations adopt proposed §1.6417-3
with minor changes noted in this part III
of the Summary of Comments and Expla-
nation of Revisions.
Proposed §1.6417-3(b), (c), and (d)
would have provided the specific rules
regarding the election under section 6417(d)
(1)(B) through (D). Proposed §1.6417-3(e)
would have provided the rules relating
to the election for electing taxpayers. As
described in part IV of this Summary of
Comments and Explanation of Revisions,
proposed §1.6417-4 would have provided
additional rules for electing taxpayers that
are partnerships or S corporations.
A. Qualified clean hydrogen production
facility (section 45V)
Proposed §1.6417-3(b) would have
provided that an electing taxpayer that
has placed in service a qualified clean
hydrogen production facility, as defined
in section 45V(c)(3), during the taxable
year may make an elective payment elec-
tion for such taxable year (or by August
16, 2023, in the case of facilities placed
in service before December 31, 2022), but
only with respect to the qualified clean
hydrogen production facility, only with
respect to a section 45V credit, and only if
the pre-filing registration process required
by §1.6417-5T was properly completed.
An electing taxpayer that elects to treat
qualified property that is part of a speci-
fied clean hydrogen production facility as
energy property under section 48(a)(15)
would not be able to make an elective pay-
ment election with respect to such facility.
No commenter addressed this provision,
and these final regulations adopt it with-
out change.
B. Carbon oxide sequestration (section
45Q)
Proposed §1.6417-3(c) would have
provided that an electing taxpayer that
has, after December 31, 2022, placed in
service a single process train described in
§1.45Q-2(c)(3) at a qualified facility (as
defined in section 45Q(d)) during the tax-
able year may make an elective payment
election for such taxable year, but only
with respect to the single process train,
only with respect to a section 45Q credit,
and only if the pre-filing registration pro-
cess required by §1.6417-5T was properly
completed.
One commenter asked about register-
ing multiple process trains that are part of
a single facility under section 45Q. The
IRS will consider ways outside of these
final regulations to make the pre-filing
registration process more streamlined
for entities doing multiple registrations.
Therefore, these final regulations adopt
this provision without change.
C. Advanced manufacturing credit
(section 45X)
Section 6417(d)(1)(D) provides that
an electing taxpayer can make an elec-
tion with respect to any taxable year in
which such taxpayer has, after December
31, 2022, produced eligible components
(as defined in section 45X(c)(1)), and
section 6417(d)(1)(D)(ii)(I) provides that
the elective payment election applies to
each of the four succeeding taxable years
ending before January 1, 2033. Proposed
§1.6417-2(a)(3)(v) and -3(d) would have
clarified that an electing taxpayer that
produces, after December 31, 2022, eli-
gible components (as defined in section
45X(c)(1)) at an applicable credit prop-
erty described in §1.6417-1(e)(7) (in other
words, a facility that produces eligible
components, as described in guidance
under sections 48C and 45X) during the
taxable year (whether the facility existed
on or before, or after, December 31, 2022)
may make an elective payment elec-
tion for such taxable year, but only with
respect to the facility at which the eligible
components are produced by the electing
taxpayer in that year, only with respect
to a section 45X credit, and only if the
pre-filing registration process required by
§1.6417-5T was properly completed.
Commenters asked for clarifications
regarding section 45X facilities (such as
how to designate different parts as differ-
ent facilities). These comments are out-
side the scope of these final regulations;
thus, these final regulations adopt this pro-
vision without change.
D. Electing taxpayer making an elective
payment election
Proposed §1.6417-3(e) would have
provided rules on how the electing tax-
payer makes the elective payment elec-
tion, as further described in this section.
1. In General
Proposed §1.6417-3(e)(1) would have
provided that, if an electing taxpayer

Bulletin No. 2024–15 825 April 8, 2024
makes an elective payment election under
proposed §1.6417-2(b) with respect to
any taxable year in which the electing tax-
payer places in service a qualified clean
hydrogen production facility for which a
section 45V credit is determined, places in
service a single process train at a qualified
facility for which a section 45Q credit is
determined, or produces, after December
31, 2022, eligible components (as defined
in section 45X(c)(1)) at a facility, respec-
tively, the electing taxpayer will be treated
as an applicable entity for purposes of
making an elective payment election for
such taxable year and during the election
period described in proposed §1.6417-3(e)
(3), but only with respect to the applica-
ble credit property described in proposed
§1.6417-1(e)(3), (5), or (7), respectively,
that is the subject of the election. The
taxpayer would be required to otherwise
meet all requirements to earn the credit in
the electing year and in each succeeding
year during the election period described
in proposed §1.6417-3(e)(3).
No commenter addressed this rule, and
these final regulations adopt this provision
without change.
2. Election is Per Applicable Credit
Property
Proposed §1.6417-3(e)(2) would have
provided that the election must be made
separately for each applicable credit prop-
erty, which is, respectively, a qualified
clean hydrogen production facility placed
in service for which a section 45V credit is
determined, a single process train placed
in service at a qualified facility for which
a section 45Q credit is determined, or a
facility in which eligible components are
produced for which a section 45X credit
is determined. An electing taxpayer may
only make one election with respect to any
specific applicable credit property.
A few commenters requested that the
final regulations clarify whether it is pos-
sible to make a second 5-year elective
payment election for the same applicable
credit property, opining that section 6417
does not preclude a second 5-year elec-
tion and that the language in proposed
§1.6417-2(b)(4)(iii) is ambiguous. The
Treasury Department and the IRS have
determined that it is more consistent with
the statute to allow only one election per
specific applicable credit property; thus,
these final regulations continue to unam-
biguously provide that it is not possible to
make an elective payment election for the
same applicable credit property for a sec-
ond 5-year period and §1.6417-2(b)(4)(iii)
is adopted without change.
One commenter asked whether a
change in ownership during the 5-year
period would continue the 5-year period.
Although the comment was unclear, pre-
sumably, the commenter preferred the
5-year period to continue rather than begin-
ning a new 5-year period or ending the old
5-year period. The Treasury Department
and the IRS note that proposed §1.6417-
5(c)(4) would have provided that, if a
facility previously registered for an elec-
tive payment election undergoes a change
of ownership (incident to a corporate reor-
ganization or an asset sale) such that the
new owner has a different employer iden-
tification number (EIN) than the owner
who obtained the original registration,
the original owner would be required to
amend the original registration to disasso-
ciate its EIN from the credit property and
the new owner would be required to sub-
mit an original registration (or if the new
owner previously registered other credit
properties, must amend its original regis-
tration) to associate the new owner’s EIN
with the previously registered credit prop-
erty. This provision was intended to pro-
vide that the previous 5-year period would
continue despite the change in ownership.
This is because it would be inappropriate
to start a new 5-year period with respect to
the same applicable credit property, while
at the same time undesirable to cut short
a 5-year period that had not yet ended.
These final regulations add a sentence to
clarify this point.
3. Election Period
i. In general
Pursuant to section 6417(d)(1)(D)(ii)
(I), (d)(3)(C)(i)(II)(aa), and (d)(3)(D)
(i)(III)(aa), proposed §1.6417-3(e)(3)
(i) would have provided that the elective
payment election generally would apply
for an election period consisting of the
taxable year in which the election is made
and each of the four succeeding taxable
years that end before January 1, 2033.
Proposed §1.6417-3(e)(3)(i) also would
have provided that the election period
cannot be less than a taxable year but may
be made for a taxable period of less than
12 months within the meaning of section
443 of the Code.
Several commenters thought the
five-year period should start on the date
equipment is placed in service and run
for 60 months; for example, using an
“annualization principle.” Commenters
stated that, unless the qualified facility
or carbon capture equipment is placed
in service on the first day of an elect-
ing taxpayer’s taxable year, the elective
payment amount would not be commen-
surate with the credit that would be oth-
erwise allowable under section 45Q(a)
(3) and (4). Commenters stated that this
could incentivize taxpayers to delay
placing projects in service until the first
day of the following taxable year so as
to make an elective payment election for
the amount of applicable credit allowed
for a full year, but that incentivizing such
a delay is counterintuitive and seems
misaligned with the original intent for
permitting elective payment elections.
The Treasury Department and the IRS
agree that such a result may seem coun-
terintuitive but note that any other rule
would be inconsistent with the statute. For
section 45V credits, the elective payment
election is made for the taxable year the
equipment or facility is placed in service
(or by August 16, 2023, in the case of
facilities placed in service before Decem-
ber 31, 2022) and the four succeeding
taxable years with respect to such facility
which end before January 1, 2033.
10
For
section 45Q credits, the elective payment
election is made for the taxable year in
which such taxpayer has, after December
31, 2022, placed in service carbon cap-
ture equipment at a qualified facility (as
defined in section 45Q(d)), and the four
subsequent taxable years with respect to
such equipment which end before January
10
See section 6417(d)(1)(B), 6417(d)(3)(D)(i)(II), and 6417(d)(3)(D)(i)(III)(aa).

April 8, 2024 826 Bulletin No. 2024–15
1, 2033.
11
Because the statute is unambig-
uous with respect to which taxable years
qualify for the election after an applicable
credit property is placed in service, these
final regulations adopt proposed §1.6417-
3(e)(3)(i) without change.
One commenter suggested that a tax-
payer should be able to file a short year tax
return ending on the 60th month so that
the taxpayer can make a transfer election
under section 6418 for the remainder of
the taxpayer’s taxable year following the
60th month. The Treasury Department
and the IRS note that the rules for short
year tax returns are found in section 443
and the regulations thereunder. Among
other things, adopting a short year if the
taxpayer is still in existence would require
approval by the IRS. Because the rules for
short year returns are outside the scope
of these final regulations, these final reg-
ulations do not adopt a special rule in
response to the comment.
ii. Revocation
Proposed §1.6417-3(e)(3)(ii) would
have provided that an electing taxpayer
may, during a subsequent year of the
election period, revoke the elective pay-
ment election with respect to an applica-
ble credit property described in proposed
§1.6417-1(e)(3), (5), or (7) in accordance
with forms and instructions. Any such
revocation, if made, applies to the tax-
able year in which the revocation is made
(which cannot be less than a taxable year
but may be made for a taxable period of
less than 12 months within the meaning
of section 443 of the Code) and each sub-
sequent taxable year within the election
period. Any such revocation may not be
subsequently revoked.
One commenter requested clarification
that an elective payment election remains
in effect even if an electing taxpayer does
not make an election in a particular year,
as long as the taxpayer does not affirma-
tively revoke the election. As a clarifica-
tion, unless otherwise provided in forms
and instructions, the act of not making an
elective payment election during the elec-
tion period is not itself a revocation of the
election. Thus, for example, if an electing
taxpayer makes an elective payment elec-
tion in years 1 and 2 but fails to make the
election in year 3, then the electing tax-
payer is still eligible to make the election
in years 4 and 5 if the electing taxpayer
so desires. However, the Treasury Depart-
ment and the IRS note that, as described in
part III.4 of this Summary of Comments
and Explanation of Revisions, the electing
taxpayer is ineligible to make a transfer
election under section 6418 while the sec-
tion 6417 election period is still in effect.
4. No Transfer Election Under Section
6418(a) Permitted While an Elective
Payment Election is in Effect
Pursuant to section 6417(d)(1)(D)(iii)
(section 45X credit), (d)(3)(C)(ii) (sec-
tion 45Q credit), and (d)(3)(D)(ii) (sec-
tion 45V credit), proposed §1.6417-3(e)
(4) would have provided that an electing
taxpayer could not make a transfer elec-
tion under section 6418(a) with respect
to any applicable credit under proposed
§1.6417-1(d)(3), (5), or (7) determined
with respect to applicable credit property
described in proposed §1.6417-1(e)(3),
(5), or (7) during the election period for
that applicable credit property. However,
if the election period is no longer in effect
with respect to an applicable credit prop-
erty, any credit determined with respect to
such applicable credit property could be
transferred pursuant to a transfer election
under section 6418(a), as long as the tax-
payer meets the requirements of section
6418 and the section 6418 regulations.
One commenter requested that the final
regulations clarify that electing taxpay-
ers described in section 6417(d)(1)(B)
may make a section 6417 elective pay-
ment election for up to five years and then
make a section 6418 transfer election for
the remainder of the 12-year credit period
provided for under section 45Q. The Trea-
sury Department and the IRS agree that
this is permitted as long as the electing
taxpayer complies with the requirements
of sections 45Q, 6417, and 6418, and the
respective regulations thereunder, but
concluded that no clarification in these
final regulations is necessary.
This commenter also requested clarifi-
cation that electing taxpayers may forgo
the elective payment election under sec-
tion 6417 altogether and elect to transfer
credits under section 6418 for the entire
12-year credit period provided for under
section 45Q. The Treasury Department
and the IRS agree that an electing tax-
payer that does not elect to be treated as an
applicable entity with respect to applica-
ble credit property described in proposed
§1.6417-1(e)(3), (5), or (7), respectively,
is not subject to the rules of section 6417,
and may make a section 6418 election
for a credit determined with respect to
the electing taxpayer under section 45Q,
45V, or 45X as long as the taxpayer meets
the requirements of those sections and the
respective regulations thereunder.
IV. Elective Payment Election for
Partnerships and S Corporations
Section 6417(c)(1) provides that, in the
case of any applicable credit determined
with respect to any applicable credit
property held directly by a partnership
or S corporation, any election under sec-
tion 6417(a) is made by such partnership
or S corporation. Section 6417(c)(1)(A)
through (D) describes the treatment of an
elective payment election made by a part-
nership or S corporation, and proposed
§1.6417-4 would have provided addi-
tional rules for electing taxpayers that are
partnerships or S corporations.
Proposed §1.6417-4(a) would have
provided that, if an applicable credit is
determined with respect to applicable
credit property owned by a partnership
or S corporation, the elective payment
election must be made by the partnership
or S corporation. Proposed §1.6417-4(b)
would have provided that, if an elective
payment election is made with respect to
applicable credit property pursuant to sec-
tion 45Q, 45V, or 45X, such partnership
or S corporation would be treated as an
applicable entity for purposes of making
such elective payment election. Proposed
§1.6417-4(c)(1) would have provided
that, if such partnership or S corporation
makes an elective payment election: (1)
the IRS will make a payment to such part-
nership or S corporation in the amount of
the credit determined; (2) before deter-
mining a partner’s distributive share
or shareholder’s pro rata share of any
11
See section 6417(d)(1)(C) and 6417(d)(3)(C)(i)(II)(aa).

Bulletin No. 2024–15 827 April 8, 2024
applicable credit, the applicable credit is
reduced to zero; (3) any amount received
with respect to such elective payment
election is treated as tax exempt income;
(4) a partner’s distributive share of such
tax exempt income is equal to such part-
ner’s distributive share of the otherwise
applicable credit; and (5) such tax exempt
income is treated as received or accrued,
including for purposes of sections 705 and
1366, as of the date the applicable credit
is determined. Proposed §1.6417-4(c)(2)
would have provided that if a partnership
(upper-tier partnership) receives from a
lower tier partnership an allocation of tax
exempt income pursuant to section 6417,
the upper-tier partnership must determine
its partners’ distributive shares of such tax
exempt income in proportion to the part-
ners’ distributive shares of the otherwise
applicable credit. Proposed §1.6417-4(c)
(3) would have provided that such tax
exempt income is treated as arising from
an investment activity rather than the con-
duct of a trade or business and is therefore
not treated as income from a passive activ-
ity under section 469. Proposed §1.6417-
4(d) would have provided that a partner-
ship or S corporation must compute the
amount of the applicable credit allowable
as if an elective payment election were not
made and without regard to the limitations
in sections 38(b) and (c) and 469 because
those provisions apply at the partner or S
corporation shareholder level. Addition-
ally, because the only applicable credits
with respect to which a partnership or S
corporation may make an elective pay-
ment election are not investment credits
under section 46, proposed §1.6417-4(d)
would have provided that sections 49 and
50 do not apply to limit the amount of the
applicable credits. Because there were
no comments related to the provisions
described in this paragraph, the proposed
regulations are adopted without change in
these final regulations.
In connection with the implementa-
tion of section 6417, the proposed regu-
lations would have added a sentence to
§301.6241-1(a)(6)(iii) (regarding items or
amounts with respect to a BBA Partner-
ship) to provide that any chapter 1 tax that
is the liability of the BBA Partnership is an
item with respect to the BBA Partnership,
regardless of whether that chapter 1 tax is
required to be reflected or shown on the
partnership return or required to be main-
tained in the BBA Partnership’s books and
records. The Treasury Department and the
IRS did not receive any comments related
to this change under §301.6241-1; conse-
quently, the proposed rule is adopted with-
out change in these final regulations.
V. Pre-filing Registration Requirements
Section 6417(d)(5) provides that as
a condition of, and prior to, any amount
being treated as a payment that is made
by the taxpayer under section 6417(a) or
any payment being made pursuant to sec-
tion 6417(c), the Secretary may require
such information or registration as the
Secretary deems necessary or appropriate
for purposes of preventing duplication,
fraud, improper payments, or excessive
payments. Proposed §1.6417-5 would
have addressed these requirements by
adding a pre-filing registration process,
and §1.6417-5T (TD 9975), issued con-
temporaneously, put those rules into effect
for taxable years ending on or after June
21, 2023. Because these final regulations
obsolete the temporary regulations, this
part V discusses the proposed regulations
rather than the temporary regulations,
which are identical in content.
Proposed §1.6417-5(a)-(d) would have
provided the mandatory pre-filing regis-
tration process that, except as provided in
guidance, an applicable entity or electing
taxpayer would be required to complete as
a condition of, and prior to (1) any amount
being treated as a payment against the
tax imposed by subtitle A that is made by
an applicable entity or electing taxpayer
(other than a partnership or S corporation)
under proposed §1.6417-2(a)(1)(i) or (a)
(2)(i); or (2) any amount being paid to a
partnership or S corporation pursuant to
proposed §1.6417-2(a)(2)(ii).
Proposed §1.6417-5(a) would have
provided an overview of the pre-filing reg-
istration process. Proposed §1.6417-5(b)
would have included the pre-filing regis-
tration requirements, including: (1) man-
ner of pre-filing registration; (2) pre-filing
registration and election for members of a
consolidated group; (3) timing of pre-fil-
ing registration; (4) that each applicable
credit property must have its own registra-
tion number; and (5) information required
to complete the pre-filing registration pro-
cess. Proposed §1.6417-5(c) would have
provided rules related to the registration
number, including: (1) general rules; (2)
that the registration number is valid for
only one taxable year; (3) renewing reg-
istration numbers; (4) amendment of pre-
viously submitted registration information
if a change occurs before the registration
number is used; and (5) that the registra-
tion number is required to be reported on
the return for the taxable year of the elec-
tive payment election. Proposed §1.6417-
5(d) would have provided that the section
applies to taxable years ending on or after
date of publication of the final rule.
Some commenters stated the proposed
rules related to pre-filing registration were
too cumbersome. For example, comment-
ers noted that local governments have sig-
nificantly limited resources and may, in
some cases, require robust technical assis-
tance or otherwise abandon these projects
altogether. One suggestion was to create a
streamlined pre-filing registration process
for projects that are less complex. Another
was that the IRS establish a minimum
credit threshold to relieve some applicants
who are planning to claim lower credit
amounts from the pre-filing registration
requirements.
The Treasury Department and the IRS
understand commenters’ concerns about
the need for resources to complete the
pre-filing registration process; however,
pre-filing registration is necessary to help
meet the government’s compelling inter-
est to prevent fraud and duplication while
also allowing for a more efficient process-
ing and payment upon filing of the return.
The information requested is also infor-
mation that an applicable entity should
have available after having engaged in an
activity for which an applicable credit is
determined. Further, for entities engag-
ing in fewer projects, the pre-filing regis-
tration process will be less complex. For
example, an applicable entity with one
applicable credit property for which an
applicable credit is determined during the
taxable year will have a more streamlined
registration process than will an applica-
ble entity with multiple applicable credit
properties for which multiple applicable
credits are determined during the tax-
able year. Finally, the IRS is committed
to ongoing efforts to provide guidance to
help applicable entities understand how

April 8, 2024 828 Bulletin No. 2024–15
to qualify for the underlying credits, the
pre-filing registration requirements, and
the elective payment election process,
and these efforts should address the com-
menters’ concerns. Thus, the Treasury
Department and the IRS have concluded
that these final regulations should adopt
the pre-filing registration process as pro-
posed.
Multiple commenters asked how
long the pre-filing registration process
is expected to take and what a taxpayer
should do if the IRS does not timely issue
a registration number. Because the time-
frame and procedures of the pre-filing
registration process may be modified over
time as both the IRS and taxpayers gain
experience with it, these final regulations
do not contain any such timeframe or pro-
cedure. Instead, the Treasury Department
and the IRS recommend that taxpayers
with these sorts of questions consult the
current version of Publication 5884, Infla-
tion Reduction Act (IRA) and CHIPS Act
of 2022 (CHIPS) Pre-Filing Registration
Tool User Guide and Instructions, for the
latest guidance on the pre-filing registra-
tion process. As of February 2024, Publi-
cation 5884 states:
Even though registration is not possible
prior to the beginning of the tax year in
which the credit will be earned, the IRS
recommends that taxpayers register as
soon as reasonably practicable during
the tax year. The current recommen-
dation is to submit the pre-filing regis-
tration at least 120 days prior to when
the organization or entity plans to file
its tax return. This should allow time
for IRS review, and for the taxpayer to
respond, if the IRS requires additional
information before issuing the registra-
tion numbers.
One commenter recommended a safe
harbor if the pre-filing registration was
completed by the registrant within a cer-
tain time period prior to filing. These final
regulations do not adopt this suggestion
because the timing of the submission is
only one factor; the quality and accuracy
of information of the provided informa-
tion is also a factor. Further, as the IRS
and taxpayers gain experience with the
pre-filing registration portal, the timing
of processing submissions may change,
making any proposed safe harbor period
obsolete.
One commenter recommended that the
final regulations provide that an election
could be made prior to receiving a regis-
tration number if the applicable entity or
electing taxpayer completed the pre-fil-
ing registration process but had not yet
received a registration number, suggest-
ing that an amended return could be filed
upon receipt of the registration number.
These final regulations continue to pro-
vide that an applicable entity or electing
taxpayer that does not obtain a registration
number or report the registration number
on its annual tax return with respect to
an otherwise applicable credit property
is ineligible to receive any elective pay-
ment amount with respect to the amount
of any credit determined with respect to
that applicable credit property. Publica-
tion 5884 states that the IRS will work
to issue a registration number even if the
registration submission is made close in
time before the registrant’s filing dead-
line. However, in such cases, the regis-
trant should anticipate that the tax return
on which the elective payment or transfer
election is made may undergo heightened
scrutiny to mitigate the risk of fraud and
duplication that pre-filing registration is
intended to address before a payment is
issued.
The Treasury Department and the IRS
also note that an elective payment elec-
tion can be made on any return filed on or
before the due date for filing the tax return
(including extensions), that §1.6417-2(b)
(3)(i) contains a special rule providing an
automatic paperless six-month extension
for entities that are not otherwise able to
request an automatic six-month extension,
and that these final regulations provide
late election relief for certain taxpayers,
assuming the taxpayer has not received an
extension of time to file a return, the tax-
payer’s original return is timely filed, and
the 9100 relief requirements are met. See
parts II.B.2 and II.B.4 of this Summary of
Comments and Explanation of Revisions.
A few commenters asked about the
scope of prefiling registration review and
whether taxpayers can appeal any denials
of registration numbers. Section 7803(e)
(3) of the Code provides that it is the
function of Appeals to resolve Federal tax
controversies without litigation. Decisions
made by the IRS relating to the denial,
suspension, or revocation of a registration
number are not Federal tax controversies
within the meaning of section 7803(e)(3)
because registration is too attenuated and
separate from any tax liability of the appli-
cable entity or electing taxpayer. Publica-
tion 5884 describes the IRS review, and
opportunity for taxpayers to respond with
additional information, of pre-filing reg-
istration submissions. In cases in which
a pre-filing registration submission is
incomplete, the IRS will attempt to con-
tact the registrant using the information
provided to indicate deficiencies with the
registration prior to making a determina-
tion. However, once the IRS determines
that a registration number should not be
given, the registrant may not appeal the
denial unless the IRS and Appeals agree
that such review is available and the IRS
provides the time and manner for such
review.
A few commenters suggested that
pre-filing registration include a “pre-ap-
proval process” or “pre-approval certifica-
tion” that ensures that applicable entities
would be able to make elective payment
elections for their projects. A few of
these commenters sought the distribution
of cash refunds earlier than the filing of
a return; for example, when a project is
placed in service or when pre-filing reg-
istration is complete, perhaps by allowing
for third-party attestations or verification
of initial pre-filing information. One com-
menter asked that the process of obtaining
a registration number provide as much
assurance as possible for applicants that
they are indeed eligible for the applica-
ble credit for which they intend to make
an elective payment election, opining that
the pre-filing registration portal should
function as a checklist, so an applicant
should have reasonable assurance that it
will be eligible for the applicable credits
if the information it provides is accurate.
This commenter stated that, similar to
pre-qualifying for a mortgage loan before
purchasing a home, those who receive
registration numbers should reasonably be
able to expect to receive an elective pay-
ment, barring any significant changes in
project design or entity status.
The pre-filing registration process is
not a guarantee that a project will qual-
ify for an applicable credit for which an

Bulletin No. 2024–15 829 April 8, 2024
elective payment election may be made,
as verification of initial pre-filing infor-
mation cannot be used by the IRS to con-
firm compliance with the requirements of
an underlying credit. Compliance with the
underlying credit requirements is reported
and verified in additional detail on the
annual tax return, and, as those require-
ments are provided in Code sections out-
side of section 6417, are largely outside
the scope of these final regulations. Fur-
ther, section 6417(d)(4) provides that the
payment is treated as being made by the
applicable entity on the later of the due
date for the return or the date the return
is actually filed, so the statute does not
permit the IRS to make any payments
earlier than such dates. Thus, these final
regulations do not adopt the commenters’
suggestions.
One commenter asked that the portal
allow users to track where they are in the
approval process and allow for a transpar-
ent and expedited appeals process if the
clean energy project is deemed ineligible
for a registration number. While outside
the scope of these final regulations, the
Treasury Department and the IRS note
that the pre-filing registration portal does
allow users to track where they are in the
approval process. See Publication 5884.
Proposed §1.6417-5(b)(5)(vii)(D)
would have required that, to complete the
pre-filing registration process, registrants
must provide information as to the begin-
ning of construction date and the placed
in service date of the applicable credit
property. A few commenters requested
that entities be able to complete pre-filing
registration prior to property being placed
in service, such as for residential or small
commercial systems or for Alaska Native
villages and other Tribal entities. Another
commenter requested that the final regu-
lations require registration more than 60
days before construction starts for pre-
vailing wage and apprenticeship (PWA)
purposes. The Treasury Department and
the IRS have determined that a registra-
tion number should not be given before
the applicable credit property is placed
in service, which is an important step to
ensuring that the applicable credit prop-
erty qualifies for the applicable credit for
which the applicable entity seeks to make
an elective payment election. Because a
credit must be determined in the taxable
year of the elective payment election,
maintaining the proposed requirement will
ensure that taxpayers are not attempting to
make an elective payment election in a
year in which a credit is not determined.
Further, this information will help the IRS
prevent fraud. The Treasury Department
and the IRS have also determined that it is
not necessary to require registration prior
to construction for PWA purposes. Thus,
these final regulations adopt proposed
§1.6417-5(b)(5)(vii)(D) without change.
Multiple commenters asked that the
final regulations allow the option to group
multiple qualified facilities as a “single
project” that would obtain a single regis-
tration number, or that consolidated filings
be available for multiple small projects.
Commenters asked that the final regula-
tions apply Section 4.04 of Notice 2013-
29, 2012-20 I.R.B. 1085, which provides
that multiple qualified facilities may be
treated as a single project for the “begin-
ning of construction” purposes, provided
the facilities share certain characteristics,
such as common ownership, contiguous
location, common PPA, or common per-
mits. A commenter suggested having a
“Master Registration Agreement” to allow
issuing a single registration number as a
single master project instead of a “thou-
sand or more” registration numbers which
would burden the applicable entity as well
as the IRS.
The definition of applicable credit
property in section 6417 is based on the
relevant rules for the underlying applica-
ble credit, and changes to the definition of
particular properties under the underlying
Code sections is outside the scope of this
rulemaking. If such underlying Code sec-
tion allows grouping to determine a qual-
ified property, then grouping for purposes
of a registration number is permitted. If
such definition does not allow group-
ing, then each applicable credit property
must be registered separately; however,
for some applicable credits, the pre-filing
registration portal allows applicable credit
property information to be uploaded by
way of a spreadsheet file (bulk upload).
See Publication 5884.
One commenter asked that the text
of §1.6417-5 be amended to specifically
include the words “restricted tax exempt
amounts.” These final regulations do not
adopt this suggestion because the term
“the source of funds the taxpayer used to
acquire the property” found in §1.6417-5
includes restricted tax exempt amounts (as
described in part II.C.3 of this Summary
of Comments and Explanation of Revi-
sions) and may also include information
about other sources of funding that the
IRS has determined is necessary for tax
administration.
One commenter asked that applicable
entities and electing taxpayers be required
to state during pre-filing registration
whether they intend to qualify for the pre-
vailing wage and apprenticeship bonus
amount. These final regulations do not
adopt this comment because the pre-filing
registration process is primarily intended
to verify that the applicant is an applica-
ble entity and that the registered property
is an applicable credit property. Calcula-
tion of the credit amount (including qual-
ifying for any bonus amounts that would
increase the base credit amount) is done
on the annual return. However, the Trea-
sury Department and the IRS will monitor
the pre-filing registration process to deter-
mine whether requesting additional infor-
mation is needed to prevent duplication,
fraud, improper payments, or excessive
payments under section 6417.
One commenter asked that the final reg-
ulations allow an applicable entity to use
a certificate, permit, or evidence of own-
ership, rather than all three, during pre-fil-
ing registration, especially since applica-
ble entities are required to maintain books
and records supporting the underlying
credit. Proposed §1.6417-5(b)(5)(vii)(C)
would have required an applicable entity
or electing taxpayer to provide informa-
tion related to applicable credit properties,
including “any” supporting documenta-
tion relating to the construction or acquisi-
tion of the applicable credit property. The
Treasury Department and the IRS did not
intend for proposed §1.6417-5(b)(5)(vii)
(C) to require all supporting documenta-
tion to be provided during the pre-filing
registration process. Rather, the intent was
to require information sufficient to verify
the applicable credit property. In response
to the comment, these final regulations
remove the word “any” from the provision
so that it now reads “[s]upporting docu-
mentation relating to the construction or
acquisition of the applicable credit prop-
erty...”

April 8, 2024 830 Bulletin No. 2024–15
The documentation to support the exis-
tence of valid applicable credit property
will vary by the credit being claimed. The
pre-filing registration portal and Publica-
tion 5884 list, for each credit, a description
of the types of documents that will facil-
itate processing of the pre-filing registra-
tion. A registrant does not need to provide
all information that may be available; in
fact, in February 2024, Publication 5884
states:
If detailed project plans or contractual
agreements are the best support that
the taxpayer is engaging in activities
or making tax credit investments that
qualify the registrant to claim a credit,
the registrant should submit an extract
of the document showing the name
of the taxpayer, date of purchase and
identifying information such as serial
numbers, rather than the entire docu-
ment.
However, to the extent the information
provided is insufficient for purposes of
the pre-filing registration process, the IRS
may request further information. See Pub-
lication 5884.
One commenter recommended that the
Treasury Department and the IRS consider
authorizing users to renew their registra-
tions on an annual basis rather than submit
entirely new registrations each year. Sev-
eral commenters stated that renewal of reg-
istration numbers should not be required
because an annual renewal is a significant
burden on taxpayers and may disincentiv-
ize taxpayers from undertaking a produc-
tion tax credit project. A few commenters
stated that renewal should not be required
if the project is extended or delayed from
going into operation or if there is no
change in the relevant facts with respect
to the facility, and one of these comment-
ers requested that registration numbers be
valid for multiple years for public projects
that are more likely to be delayed. Several
commenters suggested that, if no factual
information required for the pre-filing
registration process has changed, then
the registration portal should provide an
expedited or streamlined process such as
a “short form.”
Proposed §1.6417-5(c)(3) provided,
and these final regulations also state, that a
renewal must be made “in accordance with
applicable guidance, including attesting
that all the facts previously provided are
still correct or updating any facts.” Thus,
any changes to the pre-filing registration
process to make it be more streamlined for
renewals will be addressed in applicable
guidance. Further, a registration number
is not provided until an applicable credit
property is placed in service; therefore,
project delays should be irrelevant to the
pre-filing registration process.
A commenter asked whether two unre-
lated taxpayers who own separate applica-
ble credit properties (for example, a single
process train under section 45Q and a qual-
ified facility as defined in section 45Z(d)
(4)), could each complete the preregis-
tration process so long as such taxpayers
ultimately make an elective payment elec-
tion or a transfer election under section
6418 in accordance with the qualification
rules. The commenter added it did not
expect that both taxpayers would be able
to claim their respective tax credits in the
same taxable year. The commenter seems
to misunderstand that pre-filing registra-
tion and elective payment elections are
made on the basis of individual applica-
ble credit properties, so to the extent there
are two applicable credit properties, sepa-
rate registration numbers are required. A
registration number can only be obtained
by the entity who owns the underlying
applicable credit property and conducts
the activities giving rise to the credit or,
in the case of section 45X (under which
ownership of applicable credit property
is not required), be considered (under the
section 45X regulations) the taxpayer with
respect to which the section 45X credit is
determined. Further, a registration number
is valid only for the taxable year for which
it is obtained.
A few commenters recommended that
tax professionals be allowed to apply for
registration numbers for their clients. The
Treasury Department and the IRS note
that the proposed regulations would not
have restricted a taxpayer from authoriz-
ing a representative to apply for a regis-
tration number on behalf of the taxpayer,
and these final regulations similarly do not
do so. See Publication 5884, which pro-
vides that a person who wishes to access
Energy Credits Online on behalf of a
taxpayer must authorize an IRS Energy
Credits Online account by selecting “Start
Authorization.” These final regulations
modify §1.6417-5(c)(5) to clarify that a
valid registration number is one that was
assigned to the particular taxpayer during
the pre-registration process.
A commenter requested clarification
that persons completing pre-filing regis-
tration documentation on behalf of appli-
cable entities do not, by virtue of such
activity, become “tax return preparers.”
The determination of whether a person is
a tax return preparer, as defined under sec-
tion 7701(a)(36), is based on facts and cir-
cumstances that are outside of the scope of
these final regulations.
VI. Special Rules
Section 6417(d)(6) provides rules
relating to excessive payment, and sec-
tion 6417(g) provides rules relating to
basis reduction and recapture. Proposed
§1.6417-6 would have implemented these
provisions.
A. Excessive payments
Pursuant to section 6417(d)(6), pro-
posed §1.6417-6(a) would have provided
that the IRS may determine that an amount
treated as a payment made by an applica-
ble entity under proposed §1.6417-2(a)
(1)(i) or an electing taxpayer under pro-
posed §1.6417-2(a)(2)(i), or the amount
of the payment made to a partnership
electing taxpayer pursuant to proposed
§1.6417-2(a)(2)(ii), constitutes an exces-
sive payment. Proposed §1.6417-6(a)
would have provided that, in the case of
an excessive payment determined by the
IRS, the amount of chapter 1 tax imposed
on the applicable entity or electing tax-
payer for the taxable year in which the
excessive payment determination is made
is increased by an amount equal to the
sum of (1) the amount of such excessive
payment, plus (2) an amount equal to 20
percent of such excessive payment (addi-
tional 20 percent tax). This would be the
case even if the applicable entity or elect-
ing taxpayer is otherwise not subject to
chapter 1 tax. If the additional 20 percent
tax is applicable, it would apply in addi-
tion to any penalties, additions to tax, or
other amounts applicable under the Code.
The additional 20 percent tax amount
would not apply if the applicable entity

Bulletin No. 2024–15 831 April 8, 2024
or electing taxpayer demonstrates to the
satisfaction of the IRS that the excessive
payment resulted from reasonable cause.
The preamble to the proposed regulations
stated that the Treasury Department and
the IRS anticipated that existing standards
of reasonable cause would inform the
determination by the IRS of whether rea-
sonable cause has been demonstrated for
this purpose.
Proposed §1.6417-6(a)(3) would have
defined “excessive payment” as an amount
equal to the excess of (1) the amount
treated as a payment under proposed
§1.6417-2(a)(1)(i) or proposed §1.6417-
2(a)(2)(i), or the amount of the payment
made pursuant to proposed §1.6417-2(a)
(2)(ii), with respect to such facility or
property for such taxable year, over (2) the
amount of the credit that, without applica-
tion of section 6417, would be otherwise
allowable (as described in parts II.C and
II. D. or part IV of this Summary of Com-
ments and Explanation of Revisions and
without regard to section 38(c)) under the
Code with respect to such facility or prop-
erty for such taxable year.
Commenters asked for “regulatory
relief” from the excessive payment rules,
and whether appeals rights, deficiency
procedures, and the right to petition the
Tax Court apply to excessive payment
determinations by the IRS. Any excessive
payment determination will be made by
the IRS under established examination
procedures and these final regulations do
not except any taxpayers or any calcula-
tions from this process.
Several commenters sought clarifica-
tion of the definition and application of
reasonable cause, including requesting
additional factors or examples (such as
the absence of fraud, reliance on a project
labor agreement, excessive payments that
stem from labor standards noncompliance,
or the misallocation of general versus ear-
marked funding). Multiple commenters
asked that reasonable cause be interpreted
broadly to include a taxpayer’s “reason-
able effort” or “good faith.” Another com-
menter recommended the final regulations
include a rebuttable presumption that
applicable entities have reasonable cause
because they lack internal resources, tax
expertise, and experience in the initial
period of elective payment implementa-
tion. Commenters also asked for guidance
on reasonable cause and the PWA bonus
amount. The Treasury Department and the
IRS recognize that taxpayers operating
under certain tax rules for the first time
will desire certainty. However, reasonable
cause standards are already well-estab-
lished under case law and administrative
and regulatory authorities. For example,
a taxpayer that receives an excessive
payment may assert defenses that are
commonly raised by taxpayers in other
situations in which the IRS has asserted
an addition to tax. Section 1.6664-4, for
example, provides guidance related to
reasonable cause in the context of accu-
racy-related penalties under section 6662.
Comments regarding reasonable cause
standards as they relate to specific pro-
visions concerning increased credit or
deduction amounts available for taxpayers
satisfying PWA requirements are outside
the scope of these final regulations. Thus,
these final regulations continue to provide
that existing standards and authorities for
determining reasonable cause apply for
purposes of the additional 20 percent tax
amount, and do not adopt commenters’
suggestions to create new, special rules for
certain types of entities or for purposes of
section 6417.
As described in part II.C.2 of this
Summary of Comments and Explanation
of Revisions, commenters requested that
the final regulations clarify whether a
taxpayer could amend its return to adjust
the elective payment amount and avoid
incurring the excessive payment addition
to tax. These final regulations clarify that,
if an applicable entity or electing taxpayer
amends its tax return or files an AAR
before the IRS opens an examination, and
the amended return or AAR adjusts the
elective payment amount to the amount
properly determined with respect to the
applicable entity or electing taxpayer, then
the excessive payment provisions of sec-
tion 6417(d)(6) and §1.6417-6(a) would
not apply.
B. Basis reduction and recapture
Section 6417(g) provides basis reduc-
tion and recapture rules. It states that,
except as otherwise provided in section
6417(d)(2)(A), rules similar to the rules of
section 50 apply for purposes of section
6417. (Section 6417(g) erroneously refers
to section 6417(c)(2)(A), a provision that
does not exist, and it is evident that such
reference was intended to be to section
6417(d)(2)(A). That error is accounted
for in these final regulations.) Proposed
§1.6417-6(b) would have provided these
rules.
One commenter addressed basis reduc-
tion, requesting that the basis reduction
under section 50(c)(3) not apply to a tax-
able electric cooperative that is an appli-
cable entity under the statute. The com-
menter stated that electric cooperatives
seldom dispose of or sell any significant
assets; instead, they typically retire the
assets once they are no longer used and
useful in providing electric service. The
commenter also stated that taxable elec-
tric cooperatives typically have little to no
tax liability and utilize longer straight-line
methods of tax depreciation; as a result,
there is no increase in tax that may result
from reduced depreciation deductions.
The Treasury Department and the IRS
note that most applicable entities listed in
section 6417(d)(1)(A) have little or no tax
liability and have concluded that, as sec-
tion 6417(g) states that rules “similar to”
the rules of section 50 apply for purposes
of section 6417 and there does not appear
to be any valid reason to treat a taxable
rural electric cooperative differently from
other applicable entities with respect to
this rule, these final regulations should not
adopt this suggestion.
A commenter asked that the final regu-
lations include an exception to the recap-
ture rules for certain sales by applicable
entities, for example, a sale to a party that
would (1) be a more suitable operator and
(2) be able to monetize tax depreciation
(unlike applicable entities in most circum-
stances). The Treasury Department and the
IRS have determined that allowing such
exceptions would be too far of a departure
from the general rules of section 50, as
section 6417(g) provides that rules similar
to section 50 apply. Section 50(a) provides
that if, during any taxable year, investment
credit property is disposed of, or otherwise
ceases to be investment credit property
with respect to the taxpayer, before the
close of the recapture period (which is five
years after the property is placed in ser-
vice), then the tax under chapter 1 for such
taxable year is increased by the recapture
percentage. To provide an exception for

April 8, 2024 832 Bulletin No. 2024–15
sales to a party that the seller determines
to be a more suitable operator, or because
the buyer would be able to take a depreci-
ation deduction, would severely limit the
application and Congressional purpose of
section 50. Thus, these final regulations do
not adopt this comment.
VII. Comments that are Outside the
Scope of These Final Regulations
Several commenters noted typos or
corrections to the proposed regulations,
which were generally corrected in these
final regulations. In addition, several cat-
egories of comments were outside the
scope of these final regulations but are
generally summarized below.
A. Requests to streamline or simplify the
process
In addition to general requests to
streamline the pre-filing registration pro-
cess, a few commenters asked that the
IRS prioritize support for low-income and
disadvantaged communities, and several
commenters requested that their particu-
lar entity be eligible for a simplified pro-
cess. One commenter requested that the
final regulations eliminate the tax return
requirement for governmental entities that
do not have a Federal tax obligation, and
another commenter requested a “waiver
process.” The Treasury Department and
the IRS acknowledge the potential for
complexity for applicable entities and
electing taxpayers seeking to make elec-
tive payment elections, especially for
taxpayers who have not historically had a
return-filing obligation, and have sought
to balance taxpayer compliance burdens
with the need to ensure payments are
being correctly made to applicable entities
and electing taxpayers. The proposed reg-
ulations specifically requested comments
on methods to reduce paperwork burden
or burdens on small entities. While these
final regulations do not adopt comments
recommending a streamlined process for
certain taxpayers, including comments
suggesting the removal of a return-filing
requirement, the Treasury Department
and the IRS will continue to monitor the
elective payment process to determine
whether there are areas in which more
efficiencies can be created.
B. Requests for plain language guidance
or other assistance
Multiple commenters asked for addi-
tional help in accessing applicable cred-
its, including developing and delivering
a far-reaching awareness campaign; pro-
viding a webinar or workshop to provide
clear guidance and clarification to some
of the issues raised; providing IRS staff
to answer questions via email, telephone,
or in-person outreach or via a taxpayer
customer service portal and ensuring this
support is culturally appropriate and lan-
guage-accessible; publishing straightfor-
ward materials (for example, a checklist
of necessary steps) to claim credits; pub-
lishing templates, filing manuals, sam-
ple forms, and documentation examples;
providing clear examples of timelines,
including for entities with different tax
filing years; providing regular updates
on when these credits will expire; testing
approaches with early potential users and
using feedback to adjust as necessary; col-
laborating with other agencies; leveraging
community partnerships; and expanding
efforts to proactively consult communities
with the greatest barriers to access, among
other things.
The Treasury Department and the IRS
acknowledge the learning curve many
taxpayers will face in registering for and
making elective payment elections for
applicable credits and intend to provide
as much additional assistance as possible
to taxpayers. The Treasury Department
and the IRS are endeavoring to provide as
much plain language guidance as possible
to taxpayers to expand access and uptake
of applicable credits. As previously dis-
cussed, the Treasury Department and the
IRS will monitor the pre-filing registra-
tion and filing processes and have already
embarked on many of these recommenda-
tions. For example, as of the publication
of these final regulations, the Treasury
Department and the IRS have conducted
webinars; issued FAQs; published infor-
mation on IRS.gov
12
on how taxpayers
can complete the pre-filing registration
process; and have held “office hours” with
taxpayers offering assistance with the
pre-filing registration process.
One commenter recommended cre-
ation of a simple online “elective pay-
ment amount estimator” tool that would
estimate (without guarantees) the elective
payment amount and the timing of key
actions (for example, when to register and
file, when receipt of payment is estimated)
that could aid taxpayers considering the
making of an elective payment election.
Such a tool, according to the commenter,
would facilitate bridge financing by assist-
ing, for example, school construction
authorities or green banks by estimating
future elective payment amounts. It is
not possible for the IRS to estimate the
elective payment amount at the time of
pre-filing because the IRS will not have
adequate information, such as eligibility
for bonus credit amounts to make such a
calculation, but a taxpayer may be able to
estimate the amount of credit by complet-
ing a draft Form 3800 and any required
completed source form(s).
C. Tax exempt bonds
The proposed regulations did not con-
tain any rules specifically addressing the
use of tax-exempt bond financing. How-
ever, multiple commenters had questions
about the interplay between tax-exempt
bonds and section 6417. These questions
generally are outside of the scope of these
final regulations because the use of pro-
ceeds of tax-exempt bonds under section
103 may impact the amount of a particular
applicable credit in the underlying Code
sections (such as sections 45 and 48), and
such reduction in the credit amount occurs
before the application of section 6417 and
independently from the application of sec-
tion 6417.
One commenter requested that the
final regulations clarify that the amount
received pursuant to an elective payment
election is not treated as “proceeds” of a
tax-exempt bond issue, which would be
subject to use and investment limits under
the tax-exempt bond rules. This com-
menter stated that, if the payment were
12
For additional information, see https://www.irs.gov/credits-deductions/elective-pay-and-transferability.

Bulletin No. 2024–15 833 April 8, 2024
treated as proceeds of a bond issue, the use
of tax-exempt bond financing could ruin
the economics of the deal. The Treasury
Department and the IRS confirm that sec-
tion 6417(a) provides that the applicable
credit is treated as a payment against the
tax imposed by subtitle A and, therefore,
the amount received as an elective pay-
ment is not proceeds of a tax-exempt bond
issue.
Multiple commenters addressed the
reduction to the section 45 credit required
by section 45(b)(3) (section 45(b)(3)
credit reduction) for the use of tax-ex-
empt bond proceeds and its interaction
with section 6417(a). One commenter
requested clarification that the section
45(b)(3) credit reduction is not required
if parties use tax-exempt bridge financ-
ing for credit property and retire it before
the facility is placed in service. One
commenter recommended that project
owners be granted permission to use the
tax-exempt bond allocation rules (that is,
the allocation rules for purposes of deter-
mining a bond’s tax-exempt status) to
determine the percentage of tax-exempt
bond financing utilized and calculate any
reduction necessary if energy credits are
utilized. One commenter stated that cal-
culation of the credit reduction percentage
should be permitted to occur when the
tax-exempt bonds are structured, sold, or
issued, because unless additional funds
are added to the project, a final allocation
of tax-exempt bond proceeds to expendi-
tures under §1.148-6 should not result in
a change in the amounts of tax-exempt
bond proceeds and other funds for pur-
poses of calculating the credit reduction
percentage. One commenter requested
examples for local governments or munic-
ipal utilities of how the section 45(b)(3)
credit reduction affects elective payment
amounts. One commenter requested con-
firmation that the cost determination
necessary to calculate the extent of any
section 45(b)(3) credit reduction with
respect to a production tax credit facility
should be based on criteria and guidance
developed in the context of investment
tax credits. One commenter stated that the
allocation of tax-exempt bond proceeds
for purposes of the section 45(b)(3) credit
reduction to property that is qualified or
non-qualified for a credit within a larger
facility that includes both types of prop-
erty should not impact the application of
the bond rules under §1.141-6 relating to
private business use. This commenter also
stated there should be no requirement that
the allocations under section 45(b)(3) and
§1.141-6 be consistent with regards to
floating allocations of sources of funding
to uses. One commenter recommended
that the final regulations treat tax-exempt
bond proceeds as automatically allocated
to any portions of the overall facility that
are not part of the “qualified facility” (as
that term is used in section 45(b)(3)).
The rules for the allocation of tax-ex-
empt bond proceeds for purposes of the
credit reduction fraction under section
45(b)(3) and §1.148-6(d) are generally
outside the scope of these final regula-
tions. Section 1.148-6(d) provides that
an issuer must account for the allocation
of proceeds to expenditures not later than
18 months after the later of the date the
expenditure is paid or the date the proj-
ect, if any, that is financed by the issue is
placed in service. Further, the allocation
must be made in any event by the date 60
days after the fifth anniversary of the issue
date or the date 60 days after the retire-
ment of the issue.
One commenter requested that, if the
rules for allocation of tax-exempt bond
proceeds to expenditures under §1.148-6
are applied to credit reduction for tax-ex-
empt bond financing under section 45(b)
(3), the final regulations should provide
an automatic extension to file a supersed-
ing return to reflect changes with regards
to tax-exempt financing, or issue other
guidance to accommodate this situation.
As discussed in part II.B.2 of this Sum-
mary of Comments and Explanation of
Revisions, these final regulations allow
an applicable entity or electing taxpayer
that has made an elective payment elec-
tion on an original return to file a super-
seding return if permissible, or to amend
their return or file an AAR to the extent
the amount of the applicable credit is later
determined to need adjustment.
Commenters asked that excessive pay-
ment provisions not apply if allocations
of tax-exempt bond proceeds to expendi-
tures under §1.148-6 occur after a project
is placed in service. As described in part
IV.A of this Summary of Comments and
Explanation of Revisions, excessive pay-
ment provisions may apply if the amount
the applicable entity treats as a payment
under section 6417(a) (including the allo-
cations of tax-exempt bond expenditures)
is greater than the amount of the credit
that, without application of section 6417,
would be otherwise allowable (as deter-
mined pursuant to section 6417(d)(2) and
without regard to section 38(c)). However,
as described in part VI.A of this Summary
of Comments and Explanation of Revi-
sions, if a taxpayer amends their return
or files an AAR before the IRS opens an
examination, then the 20-percent addition
to tax does not apply.
One commenter requested guidance
that the rules under section 50(c) regard-
ing the reduction of basis (section 50(c)
basis reduction rules) and the recapture
of credits will not cause tax-exempt bond
proceeds to be deallocated from project
costs. The section 50(c) basis reduction
rules are outside of the scope of these final
regulations. The Treasury Department and
the IRS clarify that the section 50(c) basis
reduction rules apply to the credit that is
determined, but any effect on the alloca-
tion or deallocation of tax-exempt bond
proceeds occurs outside of these final reg-
ulations.
A few commenters asked whether
refundable credits pledged as security or
used to pay debt service for a bond issue
results in a Federal guarantee of the bonds
per section 149 of the Code. The Treasury
Department and the IRS confirm that a
pledge of the refundable credits as secu-
rity for, or the use of the refundable credits
to pay debt service on, the bonds by itself
does not result in a Federal guarantee of
the bonds.
One commenter wanted confirmation
that the existing allocation and account-
ing rules in §1.141-6 apply with respect to
the credit reduction for tax-exempt bond
financing under section 45(b)(3), whereas
another commenter requested that the reg-
ulations under section 141 be “modern-
ized” in light of the enactment of section
6417. Regulations under section 141 are
outside of the scope of these final regula-
tions.
Commenters requested that the reduc-
tion for restricted tax exempt amounts
considered in the special rule for invest-
ment-related credit property acquired with
tax exempt income in proposed §1.6417-
2(c)(3) be calculated after the 15 percent

April 8, 2024 834 Bulletin No. 2024–15
credit reduction under section 45(b)(3)
related to tax-exempt financing is made.
The Treasury Department and the IRS
confirm that the rule in §1.6417-2(c)(3)
applies after application of any reduction
under section 45(b)(3) because determi-
nation of the underlying credit amount
occurs before the amount is possibly
adjusted by section 6417 and the regula-
tions thereunder.
Commenters requested confirmation
that the 15-percent credit reduction under
section 45(b)(3) for the use of tax-ex-
empt financing is applied separately and
independently to each co-tenant’s undi-
vided interest in cases in which applicable
credit property is held as a TIC or JOA.
The Treasury Department and the IRS can
confirm that each co-tenant’s undivided
interest is an undivided ownership share
of the applicable credit property and will
be treated as a separate applicable credit
property owned by such applicable entity
under §1.6417-2(a)(1)(iii). Thus, it will
be necessary for each owner to determine
whether its undivided ownership share
is subject to the reduction under section
45(b)(3).
D. Comments about other Code
provisions
Multiple commenters asked about the
application of other Code provisions. For
example, commenters asked for guidance
on the underlying credits or bonus pro-
visions such as the energy communities
bonus amount, the prevailing wage and
apprenticeship bonus amounts, and the
domestic content bonus amount and for
domestic content waivers. Commenters
asked that the placed in service require-
ments be clarified or relaxed in various
ways. Commenters requested guidance
under section 30C, including a map or
searchable address database that clearly
shows eligible census tracts. Comment-
ers also asked for guidance under sections
45U, 45V, and 48; asked whether the 5
MW maximum threshold for projects
qualifying for the Low-Income Bonus to
the ITC applies to individual sites or inter-
connection points; asked what is allowed
in the cost basis of the project (e.g., infra-
structure costs and soft costs); asked for
guidance on the “clean electricity ITC
and PTC;” and asked for clarifications
regarding 45X facilities (how to desig-
nate different parts as different facilities).
Commenters asked what methods tax-ex-
empt entities could use to monetize depre-
ciation deductions and that applicable
entities should be able to make elective
payment elections with respect to section
179D deductions. All of these comments
are outside the scope of this rulemaking,
which addresses only sections 6417 and
6241.
E. Comments about provisions outside
the Internal Revenue Code.
Multiple commenters asked for guid-
ance on provisions that are not a part
of the Code. For example, commenters
requested (1) guidance on how a city
could protect itself from liability with-
out losing the ability to make an elective
payment election because of the per se
corporation rule; (2) guidance on how
an applicable entity could obtain funding
related to payments it expects to receive
from making an elective payment elec-
tion; (3) clarification on whether applica-
ble credits are treated as “proceeds... from
any other activities of the Corporation”
under 16 U.S.C. 831y; (4) guidance on
whether refunds greater than $5 million
will require review by the Joint Commit-
tee on Taxation; (5) confirmation that for
a partnership (i) with a tax-exempt elec-
tric cooperative as a partner, and (ii) that
elects under section 761 to be excluded
from the application of subchapter K, the
basis of the allocable share of property
to the tax exempt electric cooperative is
determined both by tax law plus any other
costs incurred by the tax exempt elec-
tric cooperative using book accounting
in accordance with generally acceptable
accounting principles (GAAP) that are
properly capitalizable;
13
and (6) guidance
on whether a municipal utility that builds
a qualifying bioenergy project and seeks
the tax incentive could also consider
implementing an eRINs program with
the renewable energy produced, and if
so, whether this impacts the tax incentive
in any way, or causes a reduction in the
incentive. All of these comments are out-
side the scope of this rulemaking.
Effect on Other Documents
The temporary regulations are removed
May 10, 2024.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum of Agree-
ment, Review of Treasury Regulations
under Executive Order 12866 (June 9,
2023), tax regulatory actions issued by the
IRS are not subject to the requirements of
section 6(b) of Executive Order 12866, as
amended. Therefore, a regulatory impact
assessment is not required.
II. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520) (PRA) generally
requires that a Federal agency obtain the
approval of the Office of Management
and Budget (OMB) before collecting
information from the public, whether such
collection of information is mandatory,
voluntary, or required to obtain or retain
a benefit. An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless the collection of information dis-
plays a valid control number.
The collections of information in these
final regulations contain reporting and
recordkeeping requirements. The record-
keeping requirements mentioned within
these final regulations are considered gen-
eral tax records under section 1.6001-1(e).
These records are required for the IRS to
validate that taxpayers have met the reg-
ulatory requirements and are entitled to
make an elective payment election. For
PRA purposes, general tax records are
13
The commenter stated that tax-exempt electric cooperatives, as tax-exempt entities, use book accounting based on GAAP and Uniform Systems of Account such as provided by the Rural
Utilities Service, and stated that it would be helpful to know that, while their initial basis in a partnership asset may have been determined on a tax basis, cost subsequent to the election under
section 761 to be excluded from the application of subchapter K that are properly capitalizable under GAAP are also properly includible in the cost basis of a qualifying asset for Federal
income tax purposes.

Bulletin No. 2024–15 835 April 8, 2024
already approved by OMB under 1545-
0047 for tax-exempt organizations and
government entities; 1545-0074 for indi-
viduals; and under 1545-0123 for business
entities.
These final regulations also mention
reporting requirements related to mak-
ing elections as detailed in §§1.6417-2
and 1.6417-3 and calculating the claim
amounts as detailed in §§1.6417-2 and
1.6417-4. These elections will be made by
taxpayers on Forms 990-T, 1040, 1120-S,
1065, and 1120; and credit calculations
will be made on Form 3800 and sup-
porting forms. These forms are approved
under 1545-0047 for tax-exempt organi-
zations and governmental entities; 1545-
0074 for individuals; and 1545-0123 for
business entities.
These final regulations also men-
tion recapture procedures as detailed
in §1.6417-6. These recaptures are per-
formed using Form 4255. This form is
approved under 1545-0047 for tax-exempt
organizations and governmental entities;
1545-0074 for individuals; and 1545-
0123 for business entities. These final
regulations are not changing or creating
new collection requirements not already
approved by OMB.
These final regulations mention a
requirement to register with the IRS to
be able to elect payments as detailed in
§1.6417-5. The pre-filing registration por-
tal is approved under 1545-2310 for all
filers.
The IRS solicited feedback on the
collection requirements for reporting,
recordkeeping, and pre-filing registration.
Although no public comments received by
the IRS were directed specifically at the
PRA or on the collection requirements,
several commenters generally expressed
concerns about the burdens associated
with the documentation requirements
contained in the proposed regulations. As
described in the relevant portions of this
preamble, the Treasury Department and
the IRS believe that the documentation
requirements are necessary to administer
the elective payment election under sec-
tion 6417.
III. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) (RFA) imposes cer-
tain requirements with respect to Fed-
eral rules that are subject to the notice
and comment requirements of section
553(b) of the Administrative Procedure
Act (5 U.S.C. 551 et seq.) and that are
likely to have a significant economic
impact on a substantial number of small
entities. Unless an agency determines
that a proposal is not likely to have a
significant economic impact on a sub-
stantial number of small entities, sec-
tion 603 of the RFA requires the agency
to present a final regulatory flexibility
analysis (FRFA) of the final regulations.
The Treasury Department and the IRS
have not determined whether these final
regulations will likely have a significant
economic impact on a substantial num-
ber of small entities. This determination
requires further study. Because there
is a possibility of significant economic
impact on a substantial number of small
entities, a FRFA is provided in these
final regulations.
Pursuant to section 7805(f) of the
Code, this notice of final rulemaking has
been submitted to the Chief Counsel of
Advocacy of the Small Business Admin-
istration for comment on its impact on
small business, and no comments were
received.
1. Need for and Objectives of the Rule
These final regulations provide greater
clarity to taxpayers that intend to take
advantage of the credit monetization
mechanism in section 6417. It provides
needed definitions, the time and manner to
make the election, and information about
the pre-filing registration process, among
other items. The Treasury Department and
the IRS intend and expect that giving tax-
payers guidance that allows them to use
section 6417 will beneficially impact var-
ious industries, delivering benefits across
the economy, and reduce economy-wide
greenhouse gas emissions.
In particular, section 6417 allows appli-
cable entities to treat an applicable credit
as a payment against Federal income taxes
and defines applicable entities to include
many entities that may not have any tax
liability. Allowing entities without suffi-
cient Federal income tax liability to use
a business tax credit to instead make an
election to receive a refund of any over-
payment of taxes created by the elective
payment election will increase the incen-
tive for taxpayers to invest in clean energy
projects that give rise to applicable credits
because it will increase the amount of cash
available to those entities, thereby reduc-
ing the amount of financing needed for
clean energy projects.
2. Significant Issues Raised by Public
Comments in Response to the IRFA
There were no comments filed that
specifically addressed the Proposed Rules
and policies presented in the IRFA. Addi-
tionally, no comments were filed by the
Chief Counsel of Advocacy of the Small
Business Administration.
3. Affected Small Entities
The RFA directs agencies to provide
a description of, and if feasible, an esti-
mate of, the number of small entities that
may be affected by the final regulations,
if adopted. The Small Business Admin-
istration’s Office of Advocacy estimates
in its 2023 Frequently Asked Questions
that 99.9 percent of American businesses
meet its definition of a small business.
The applicability of these final regula-
tions does not depend on the size of the
business, as defined by the Small Busi-
ness Administration. As described more
fully in the preamble to these final reg-
ulations and in this FRFA, section 6417
and these final regulations may affect a
variety of different entities across sev-
eral different industries as there are 12
different applicable credits for which an
elective payment election may be made.
Further, the elective payment election
for 3 of the applicable credits may be
made both by applicable entities and by
taxpayers other than applicable entities.
Although there is uncertainty as to the
exact number of small businesses within
this group, the current estimated num-
ber of respondents to these final rules is
20,000 taxpayers.
The Treasury Department and the
IRS expect to receive more information
on the impact on small businesses once
taxpayers start to make the elective pay-
ment election using the guidance and
procedures provided in these final reg-
ulations.

April 8, 2024 836 Bulletin No. 2024–15
4. Impact of the Rules
These final regulations provide rules for
how taxpayers can take advantage of the
section 6417 credit monetization regime.
Taxpayers that elect to take advantage of
section 6417 will have administrative costs
related to reading and understanding the
rules as well as recordkeeping and report-
ing requirements because of the pre-filing
registration and tax return requirements.
The costs will vary across different-sized
entities and across the type of project(s) in
which such entities are engaged.
The pre-filing registration process
requires a taxpayer to register itself as
intending to make the elective payment
election, to list all applicable credits it
intends to claim, and to list each applica-
ble credit property that contributed to the
determination of such credits. This pro-
cess must be completed to receive a reg-
istration number for each applicable credit
property with respect to which the appli-
cable taxpayer intends to make an elective
payment election. To make the elective
payment election and claim the credit, the
taxpayer must file an annual tax return.
The reporting and recordkeeping require-
ments for that return would be required
for any taxpayer that is claiming a general
business credit, regardless of whether the
taxpayer was making an elective payment
election under section 6417.
Although the Treasury Department
and the IRS do not have sufficient data
to determine precisely the likely extent
of the increased costs of compliance, the
estimated burden of complying with the
recordkeeping and reporting requirements
are described in the Paperwork Reduction
Act section of the preamble.
5. Alternatives Considered
The Treasury Department and the IRS
considered alternatives to the final reg-
ulations. For example, in adopting the
pre-filing registration requirements, the
Treasury Department and the IRS con-
sidered whether such information could
be obtained at the filing of the relevant
annual tax return. However, the Treasury
Department and the IRS decided that such
an option would increase the opportunity
for duplication, fraud, improper pay-
ments, or excessive payments under sec-
tion 6417 as well as potentially delaying
payments to qualifying taxpayers. Section
6417(d)(5) specifically authorizes the
IRS to require such information or regis-
tration as the Secretary deems necessary
for purposes of preventing duplication,
fraud, improper payments, or excessive
payments under section 6417 as a con-
dition of, and prior to, any amount being
treated as a payment that is made by an
applicable entity under section 6417. As
described in the preamble to these final
regulations, these final rules carry out that
Congressional intent as pre-filing regis-
tration allows for the IRS to verify certain
information in a timely manner and then
process the annual tax return with mini-
mal delays. Having a distinction between
applicable entities or electing taxpayers
that are small businesses versus others
making an elective payment election
would create a scenario in which a subset
of taxpayers seeking to make an elective
payment election would not have been
verified or have received registration
numbers, potentially delaying payment
not only to them but to other taxpayers
seeking to use section 6417.
Additionally, in considering how
taxpayers should claim the credits and
make the elective payment election,
the Treasury Department and the IRS
considered creating an election system
outside of the tax return filing system.
However, it was determined that such a
process would not be an efficient use of
resources, especially given the statutory
due date to make an election, which is the
return filing date for the taxpayers with a
filing obligation (which would include
small business taxpayers). The Treasury
Department and the IRS decided that
the most efficient and reliable method is
to use the existing method for claiming
business tax credits; that is, the filing of
the annual tax return. To create a differ-
ent method for small businesses making
an elective payment election than for a
small business claiming the credit (or a
larger business making an elective pay-
ment election or claiming the credit)
would create an additional burden for
both small businesses and the IRS, with-
out any commensurate benefit.
The Treasury Department and the IRS
solicited comments on the requirements in
the proposed regulations, including specif-
ically whether there are less burdensome
alternatives that do not increase the risk of
duplication, fraud, improper payments, or
excessive payments under section 6417.
The comments received in response to this
request have been discussed in the preced-
ing paragraphs.
6. Duplicative, Overlapping, or
Conflicting Federal Rules
These final regulations do not dupli-
cate, overlap, or conflict with any relevant
Federal rules. As discussed above, these
final regulations merely provide proce-
dures and definitions to allow taxpayers to
take advantage of the ability to make an
elective payment election. The Treasury
Department and the IRS solicited input
from interested members of the public
about identifying and avoiding overlap-
ping, duplicative, or conflicting require-
ments. No comments were received in
response to this request.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
that agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result in
expenditures in any one year by a State,
local, or Indian tribal government, in the
aggregate, or by the private sector, of $100
million (updated annually for inflation).
These final regulations do not include any
Federal mandate that may result in expen-
ditures by State, local, or Indian tribal
governments, or by the private sector in
excess of that threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding
requirements of section 6 of the Executive
Order. These final regulations do not have
federalism implications and do not impose
substantial direct compliance costs on

Bulletin No. 2024–15 837 April 8, 2024
State and local governments or preempt
State law within the meaning of the Exec-
utive Order.
VI. Executive Order 13175: Consultation
and Coordination with Indian Tribal
Governments
Executive Order 13175 (Consulta-
tion and Coordination with Indian Tribal
Governments) prohibits an agency from
publishing any rule that has Tribal impli-
cations if the rule either imposes substan-
tial, direct compliance costs on Indian
tribal governments, and is not required
by statute, or preempts Tribal law, unless
the agency meets the consultation and
funding requirements of section 5 of the
Executive Order. These final regulations
do not have substantial direct effects on
one or more federally recognized Indian
tribes and do not impose substantial
direct compliance costs on Indian tribal
governments within the meaning of the
Executive Order.
Nevertheless, on July 17, 2023, the
Treasury Department and the IRS held a
consultation with Tribal leaders request-
ing assistance in addressing questions
related to the proposed rules published on
June 21, 2023, which informed the devel-
opment of these final regulations.
VII. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs desig-
nated this rule as a major rule as defined
by 5 U.S.C. 804(2).
Statement of Availability of IRS
Documents
Guidance cited in this preamble is pub-
lished in the Internal Revenue Bulletin
and is available from the Superintendent
of Documents, U.S. Government Publish-
ing Office, Washington, DC 20402, or by
visiting the IRS website at www.irs.gov.
Drafting Information
The principal authors of these final
regulations are Jeremy Milton and James
Holmes, Office of the Associate Chief
Counsel (Passthroughs and Special Indus-
tries), IRS. However, other personnel
from the Treasury Department and the
IRS participated in their development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
26 CFR Part 301
Employment taxes, Estate taxes,
Excise taxes, Gift taxes, Income taxes,
Penalties, Reporting and recordkeeping
requirements.
Amendments to the Regulations
Accordingly, the Treasury Department
and the IRS amend 26 CFR parts 1 and
301 as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
Sections 1.6417-0 through 1.6417-6
also issued under 26 U.S.C. 6417(h).
* * * * *
Par. 2. Sections 1.6417-0 through
1.6417-6 are added to read as follows:
Sec.
* * * * *
1.6417-0 Table of contents.
1.6417-1 Elective payment of applica-
ble credits.
1.6417-2 Rules for making elective
payment elections.
1.6471-3 Special rules for electing tax-
payers.
1.6417-4 Elective payment election for
electing taxpayers that are partnerships or
S corporations.
1.6417-5 Additional information and
registration.
1.6417-6 Special rules.
* * * * *
§1.6417-0 Table of contents.
This section lists the table of contents
for §§1.6417-1 through 1.6417-6.
§1.6417-1 Elective payment election of
applicable credits.
(a) In general.
(b) Annual tax return.
(c) Applicable entity.
(d) Applicable credit.
(e) Applicable credit property.
(f) Disregarded entity.
(g) Electing taxpayer.
(h) Elective payment amount.
(i) Elective payment election.
(j) Guidance.
(k) Indian tribal government.
(l) Partnership.
(m) S corporation.
(n) Section 6417 regulations.
(o) Statutory references.
(p) U.S. territory.
(q) Applicability date.
§1.6417-2 Rules for making elective
payment elections.
(a) Elective payment elections.
(b) Manner of making election.
(c) Determination of applicable credit.
(d) Timing of payment.
(e) Denial of double benefit.
(f) Applicability date.
§1.6417-3 Special rules for electing
taxpayers.
(a) In general.
(b) Elections with respect to the credit
for production of clean hydrogen.
(c) Election with respect to the credit
for carbon oxide sequestration.
(d) Election with respect to the
advanced manufacturing production
credit.
(e) Election for electing taxpayers.
(f) Applicability date.
§1.6417-4 Elective payment election for
electing taxpayers that are partnerships or
S corporations.
(a) In general.
(b) Elections.
(c) Effect of election.
(d) Determination of amount of the
credit.
(e) Partnerships subject to subchapter
C of chapter 63.
(f) Applicability date.

April 8, 2024 838 Bulletin No. 2024–15
§1.6417-5 Additional information and
registration.
(a) Pre-filing registration and election.
(b) Pre-filing registration requirements.
(c) Registration number.
(d) Applicability date.
§1.6417-6 Special rules.
(a) Excessive payment.
(b) Basis reduction and recapture.
(c) Mirror code territories.
(d) Partnerships subject to subchapter
C of chapter 63 of the Code.
(e) Applicability date.
§1.6417-1 Elective payment election of
applicable credits.
(a) In general. An applicable entity
may make an elective payment election
with respect to any applicable credit deter-
mined with respect to such applicable
entity in accordance with section 6417 of
the Code and the section 6417 regulations.
Paragraphs (b) through (p) of this section
provide definitions applicable to the sec-
tion 6417 regulations. See §1.6417-2 for
rules and procedures under which all elec-
tive payment elections must be made, rules
for determining the amount and the timing
of payments, and statutory rules denying
double benefits. See §1.6417-3 for special
rules pertaining to electing taxpayers. See
§1.6417-4 for special rules pertaining to
electing taxpayers that are partnerships or
S corporations. See §1.6417-5 for pre-fil-
ing registration requirements and other
information required to make any elective
payment election effective. See §1.6417-6
for special rules related to excessive pay-
ments, basis reduction and recapture, any
U.S. territory with a mirror code tax sys-
tem, and payments made to partnerships
subject to subchapter C of chapter 63 of
the Code.
(b) Annual tax return. The term annual
tax return means the following returns
(and for each, any successor return)—
(1) For any taxpayer normally required
to file a tax return with the IRS on an
annual basis, such return (including the
Form 1040 for individuals; the Form
1120 for corporations, certain rural elec-
tric cooperatives, and certain agencies and
instrumentalities; the Form 1120-S for S
corporations; the Form 1065 for partner-
ships; and the Form 990-T for organiza-
tions subject to tax imposed by section
511 of the Code or a proxy tax under sec-
tion 6033(e) or that are required to file a
Form 990 pursuant to section 6033(a));
(2) For any taxpayer that is not nor-
mally required to file a tax return with the
IRS on an annual basis (such as taxpayers
located in the U.S. territories), the return
they would be required to file if they were
located in the United States, or, if no such
return is required (such as for governmen-
tal entities), the Form 990-T; and
(3) For taxpayers filing a return for a
taxable year of less than 12 months (short
year), the short year tax return.
(c) Applicable entity. The term applica-
ble entity means—
(1) Any organization exempt from the
tax imposed by subtitle A of the Code—
(i) By reason of subchapter F of chap-
ter 1 of subtitle A; or
(ii) Because it is the government of any
U.S. territory or a political subdivision
thereof;
(2) Any State, the District of Columbia,
or political subdivision thereof;
(3) An Indian Tribal government or a
subdivision thereof;
(4) Any Alaska Native Corporation
(as defined in section 3 of the Alaska
Native Claims Settlement Act, 43 U.S.C.
1602(m));
(5) The Tennessee Valley Authority;
(6) Any corporation operating on a
cooperative basis that is engaged in fur-
nishing electric energy to persons in rural
areas as described in section 1381(a)(2)
(C) of the Code; and
(7) An agency or instrumentality of any
applicable entity described in paragraph
(c)(1)(ii) or (c)(2) or (3) of this section.
(d) Applicable credit. The term appli-
cable credit means each of the following:
(1) So much of the credit for alternative
fuel vehicle refueling property determined
under section 30C of the Code that, pur-
suant to section 30C(d)(1), is treated as a
credit listed in section 38(b) of the Code
(section 30C credit).
(2) So much of the renewable electric-
ity production credit determined under
section 45(a) of the Code as is attributable
to qualified facilities that are originally
placed in service after December 31, 2022
(section 45 credit).
(3) So much of the credit for carbon
oxide sequestration determined under sec-
tion 45Q(a) of the Code as is attributable
to carbon capture equipment that is origi-
nally placed in service after December 31,
2022 (section 45Q credit).
(4) The zero-emission nuclear power
production credit determined under sec-
tion 45U(a) of the Code (section 45U
credit).
(5) So much of the credit for produc-
tion of clean hydrogen determined under
section 45V(a) of the Code as is attribut-
able to qualified clean hydrogen produc-
tion facilities that are originally placed in
service after December 31, 2012 (section
45V credit).
(6) In the case of a tax-exempt entity
described in section 168(h)(2)(A)(i), (ii),
or (iv) of the Code, the credit for qualified
commercial vehicles determined under
section 45W of the Code by reason of sec-
tion 45W(d)(2) (section 45W credit).
(7) The credit for advanced manu-
facturing production determined under
section 45X(a) of the Code (section 45X
credit).
(8) The clean electricity production
credit determined under section 45Y(a) of
the Code (section 45Y credit).
(9) The clean fuel production credit
determined under section 45Z(a) of the
Code (section 45Z credit).
(10) The energy credit determined
under section 48 of the Code (section 48
credit).
(11) The qualifying advanced energy
project credit determined under section
48C of the Code (section 48C credit).
(12) The clean electricity investment
credit determined under section 48E of the
Code (section 48E credit).
(e) Applicable credit property. The
term applicable credit property means
each of the following units of property
with respect to which the amount of an
applicable credit is determined:
(1) In the case of a section 30C credit, a
qualified alternative fuel vehicle refueling
property described in section 30C(c).
(2) In the case of a section 45 credit,
a qualified facility described in section
45(d).
(3) In the case of a section 45Q credit,
a component of carbon capture equipment
within a single process train described in
§1.45Q-2(c)(3).

Bulletin No. 2024–15 839 April 8, 2024
(4) In the case of a section 45U credit, a
qualified nuclear power facility described
in section 45U(b)(1).
(5) In the case of a section 45V credit, a
qualified clean hydrogen production facil-
ity described in section 45V(c)(3).
(6) In the case of a section 45W credit,
a qualified commercial clean vehicle
described in section 45W(c).
(7) In the case of a section 45X credit,
a facility that produces eligible compo-
nents, as described in guidance under sec-
tions 48C and 45X.
(8) In the case of a section 45Y credit,
a qualified facility described in section
45Y(b)(1).
(9) In the case of a section 45Z credit,
a qualified facility described in section
45Z(d)(4).
(10) Section 48 credit property—(i) In
general. In the case of a section 48 credit
and except as provided in paragraph (d)
(10)(ii) of this section, an energy property
described in section 48.
(ii) Pre-filing registration and elec-
tions. At the option of an applicable entity
or electing taxpayer, and to the extent
consistently applied for purposes of the
pre-filing registration requirements of
§1.6417-5 and the elective payment elec-
tion requirements of §§1.6417-2 through
1.6417-4, an energy project as described
in section 48(a)(9)(A)(ii) and defined in
guidance.
(11) In the case of a section 48C credit,
an eligible property described in section
48C(c)(2).
(12) In the case of a section 48E credit,
a qualified facility described in section
48E(b)(3) or, in the case of a section 48E
credit relating to a qualified investment
with respect to energy storage technology,
an energy storage technology described in
section 48E(c)(2).
(f) Disregarded entity. The term disre-
garded entity means an entity that is disre-
garded as an entity separate from its owner
for Federal income tax purposes under
§§301.7701-1 through 301.7701-3 of this
chapter. The term includes a Tribal cor-
poration incorporated under section 17 of
the Indian Reorganization Act of 1934, as
amended, 25 U.S.C. 5124, or under section
3 of the Oklahoma Indian Welfare Act, as
amended, 25 U.S.C. 5203, that is not rec-
ognized as an entity separate from the tribe
for Federal tax purposes, and therefore is
disregarded as an entity separate from its
owner for purposes of section 6417.
(g) Electing taxpayer. The term elect-
ing taxpayer means any taxpayer that is
not an applicable entity described in para-
graph (c) of this section but makes an elec-
tion in accordance with §§1.6417-2(b),
1.6417-3, and, if applicable, 1.6417-4, to
be treated as an applicable entity for a tax-
able year with respect to applicable credits
determined with respect to an applicable
credit property described in paragraph (e)
(3), (5), or (7) of this section.
(h) Elective payment amount—(1)
In general. The term elective payment
amount means, with respect to an appli-
cable entity or an electing taxpayer that is
not a partnership or an S corporation, the
applicable credit(s) for which an applica-
ble entity or electing taxpayer makes an
elective payment election to be treated as
making a payment against the tax imposed
by subtitle A for the taxable year, which is
equal to the sum of—
(i) The amount (if any) of the current
year applicable credit(s) allowed as a gen-
eral business credit under section 38 for
the taxable year, as provided in §1.6417-
2(e)(2)(iii), and
(ii) The amount (if any) of unused cur-
rent year applicable credits that would
otherwise be carried back or carried for-
ward from the unused credit year under
section 39 and that are treated as a pay-
ment against tax, as provided in §1.6417-
2(e)(2)(iv).
(2) Elective payment amount with
respect to partnerships and S corporations.
With respect to an electing taxpayer that is
a partnership or an S corporation, the term
elective payment amount means the sum of
the applicable credit(s) for which the part-
nership or S corporation makes an elec-
tive payment election and that results in a
payment to such partnership or S corpora-
tion equal to the amount of such credit(s)
(unless the partnership owes a Federal tax
liability, in which case the payment may be
reduced by such tax liability).
(i) Elective payment election. The term
elective payment election means an elec-
tion made in accordance with §1.6417-
2(b) for applicable credit(s) determined
with respect to an applicable entity or
electing taxpayer.
(j) Guidance. The term guidance
means guidance published in the Federal
Register or Internal Revenue Bulletin, as
well as administrative guidance such as
forms, instructions, publications, or other
guidance on the IRS.gov website. See
§§601.601 and 601.602 of this chapter.
(k) Indian Tribal government. The term
Indian Tribal government means the rec-
ognized governing body of any Indian or
Alaska Native Tribe, band, nation, pueblo,
village, community, component band, or
component reservation, individually iden-
tified (including parenthetically) in the
most recent list published by the Depart-
ment of the Interior in the Federal Regis-
ter pursuant to section 104 of the Feder-
ally Recognized Indian Tribe List Act of
1994 (25 U.S.C. 5131) prior to the date on
which a relevant elective payment elec-
tion is made.
(l) Partnership. The term partnership
has the meaning provided in section 761
of the Code.
(m) S corporation. The term S corpo-
ration has the meaning provided in section
1361(a)(1) of the Code.
(n) Section 6417 regulations. The
term section 6417 regulations means
§§1.6417-1 through 1.6417-6.
(o) Statutory references—(1) Chapter
1. The term chapter 1 means chapter 1 of
the Code.
(2) Code. The term Code means the
Internal Revenue Code.
(3) Subchapter K. The term subchapter
K means subchapter K of chapter 1.
(4) Subtitle A. The term subtitle A
means subtitle A of the Code.
(p) U.S. territory. The term U.S. terri-
tory means the Commonwealth of Puerto
Rico, Guam, the U.S. Virgin Islands,
American Samoa, and the Commonwealth
of the Northern Mariana Islands.
(q) Applicability date. This section
applies to taxable years ending on or after
March 11, 2024. For taxable years ending
before March 11, 2024, taxpayers, how-
ever, may choose to apply the rules of
§§1.6417-1 through 1.6417-4 and 1.6417-
6, provided the taxpayers apply the rules in
their entirety and in a consistent manner.
§1.6417-2 Rules for making elective
payment elections.
(a) Elective payment elections—(1)
Elections by applicable entities—(i) In
general. An applicable entity that makes

April 8, 2024 840 Bulletin No. 2024–15
an elective payment election in the man-
ner provided in paragraph (b) of this
section will be treated as making a pay-
ment against the Federal income taxes
imposed by subtitle A for the taxable
year with respect to which an applica-
ble credit is determined in the amount
determined under paragraph (c) of this
section.
(ii) Disregarded entities. If an applica-
ble entity is the owner (directly or indi-
rectly) of a disregarded entity that directly
holds an applicable credit property, the
applicable entity may make an elective
payment election in the manner provided
in paragraph (b) of this section for appli-
cable credits determined with respect to
the applicable credit property held directly
by the disregarded entity.
(iii) Undivided ownership interests.
If an applicable entity is a co-owner in
an applicable credit property through an
arrangement properly treated as a tenan-
cy-in-common for Federal income tax
purposes, or through an organization that
has made a valid election under section
761(a) of the Code to be excluded from
the application of subchapter K of the
Code, then the applicable entity’s undi-
vided ownership share of the applicable
credit property will be treated as a separate
applicable credit property owned by such
applicable entity, and the applicable entity
may make an elective payment election
in the manner provided in paragraph (b)
of this section for the applicable credits
determined with respect to such applica-
ble credit property.
(iv) Partnerships and S corporations
not applicable entities. Partnerships and
S corporations are not applicable entities
described in §1.6417-1(c), and thus are
not eligible to make any election under
paragraph (b) of this section, unless the
partnership or S corporation is an elect-
ing taxpayer. This is the case no matter
how many of the partners of a partnership
are described in §1.6417-1(c), including
if all of a partnership’s partners are so
described.
(v) Members of a consolidated group of
which an applicable entity is the common
parent. In the case of a consolidated group
(as defined in §1.1502-1) the common
parent of which is an applicable entity,
any member that is an electing taxpayer
may make an elective payment election
with respect to applicable credits deter-
mined with respect to the member. See
§1.1502-77 (providing rules regarding the
status of the common parent as agent for
its members).
(2) Electing taxpayers—(i) Electing
taxpayers that are not partnerships or
S corporations. An electing taxpayer other
than a partnership or an S corporation that
has made an elective payment election in
accordance with §1.6417-3 and paragraph
(b) of this section will be treated as mak-
ing a payment against the Federal income
taxes imposed by subtitle A of the Code
for the taxable year with respect to which
the applicable credit is determined, in the
amount determined under paragraph (c) of
this section.
(ii) Electing taxpayers that are part-
nerships or S corporations. In the case of
an electing taxpayer that is a partnership
or S corporation that has made an elec-
tive payment election in accordance with
§§1.6417-3 and 1.6417-4 and paragraph
(b) of this section, the Internal Revenue
Service will make a payment to such
partnership or S corporation equal to the
amount of such credit determined under
paragraph (c) of this section and §1.6417-
4(d) (unless the partnership owes any
Federal income tax liability, in which case
the payment may be reduced by such tax
liability).
(iii) Partners and S corporation share-
holders prohibited from making any
elective payment election. Under section
6417(c)(1) of the Code, any elective pay-
ment election with respect to applicable
credit property held directly by a partner-
ship or S corporation must be made by the
partnership or S corporation. As provided
under section 6417(c)(2), no partner in a
partnership, or shareholder of an S cor-
poration, may make an elective payment
election with respect to any applicable
credit determined with respect to such
applicable credit property.
(iv) Disregarded entities. If an electing
taxpayer is the owner (directly or indi-
rectly) of a disregarded entity that directly
holds any applicable credit property, the
electing taxpayer may make an elective
payment election in the manner provided
in paragraph (b) of this section for appli-
cable credits determined with respect to
the applicable credit property held directly
by the disregarded entity.
(v) Undivided ownership interests.
If an electing taxpayer is a co-owner in
an applicable credit property through an
arrangement properly treated as a tenan-
cy-in-common for Federal income tax
purposes, or through an organization that
has made a valid election under section
761(a) to be excluded from the applica-
tion of subchapter K of the Code, then
the electing taxpayer’s undivided owner-
ship interest in or share of the applicable
credit property will be treated as a sepa-
rate applicable credit property owned by
such electing taxpayer, and the electing
taxpayer may make an elective payment
election in the manner provided in para-
graph (b) of this section for the applicable
credits determined with respect to such
applicable credit property.
(vi) Members of a consolidated group.
A member of a consolidated group may
make an elective payment election with
respect to applicable credits determined
with respect to the member. See §1.1502-
77 (providing rules regarding the status of
the common parent as agent for its mem-
bers).
(3) Special rules for certain cred-
its—(i) Renewable electricity production
credit. Any election under this paragraph
(a) with respect to a section 45 credit—
(A) Applies separately with respect to
each qualified facility;
(B) Must be made in the manner pro-
vided in paragraph (b) of this section for
the taxable year in which such qualified
facility is originally placed in service; and
(C) Applies to such taxable year and to
any subsequent taxable year that is within
the period described in section 45(a)(2)
(A)(ii) with respect to such qualified facil-
ity.
(ii) Credit for carbon oxide sequestra-
tion. Except as provided in §1.6417-3(c),
which provides a special rule for electing
taxpayers, any election under this para-
graph (a) with respect to a section 45Q
credit—
(A) Applies separately with respect to
the carbon capture equipment originally
placed in service by the applicable entity
during a taxable year;
(B) Must be made in the manner pro-
vided in paragraph (b) of this section for
the taxable year in which such carbon
capture equipment is originally placed in
service; and

Bulletin No. 2024–15 841 April 8, 2024
(C) Applies to such taxable year and to
any subsequent taxable year that is within
the period described in section 45Q(3)(A)
or (4)(A) with respect to such equipment.
(iii) Credit for production of clean
hydrogen. Except as provided in §1.6417-
3(b), which provides a special rule for
electing taxpayers, any election under this
paragraph (a) with respect to a section
45V credit—
(A) Applies separately with respect to
each qualified clean hydrogen production
facility;
(B) Must be made in the manner pro-
vided in paragraph (b) of this section for
the taxable year in which such facility is
placed in service (or within the 1-year
period after August 16, 2022, for facilities
placed in service before December 31,
2022); and
(C) Applies to such taxable year and all
subsequent taxable years with respect to
such facility.
(iv) Clean electricity production credit.
Any elective payment election with
respect to a section 45Y credit—
(A) Applies separately with respect to
each qualified facility;
(B) Must be made in the manner pro-
vided in paragraph (b) of this section for
the taxable year in which such facility is
placed in service; and
(C) Applies to such taxable year and to
any subsequent taxable year that is within
the period described in section 45Y(b)(1)
(B) with respect to such facility.
(v) Advanced manufacturing produc-
tion credit. Any elective payment elec-
tion with respect to a section 45X credit
applies separately with respect to each
facility (whether the facility existed on or
before, or after, December 31, 2022) at
which a taxpayer produces, after Decem-
ber 31, 2022, eligible components (as
defined in section 45X(c)(1)) during the
taxable year.
(b) Manner of making election—(1)
In general—(i) Election is made on the
annual tax return. An elective payment
election is made on the annual tax return,
as defined in §1.6417-1(b), in the man-
ner prescribed by the IRS in guidance,
along with any required completed source
credit form(s) with respect to the appli-
cable credit property, a completed Form
3800, General Business Credit, (or its
successor), and any additional informa-
tion, including supporting calculations,
required in instructions.
(ii) Election must be made on original
return. An election must be made on an
original return (including any revisions on
a superseding return) filed not later than
the due date (including extensions of time)
for the original return for the taxable year
for which the applicable credit is deter-
mined. No elective payment election may
be made for the first time on an amended
return, withdrawn on an amended return,
or made or withdrawn by filing an admin-
istrative adjustment request under section
6227 of the Code. A numerical error with
respect to a properly claimed elective
payment election may be corrected on an
amended return or by filing an adminis-
trative adjustment request under section
6227 if necessary; however, the applica-
ble entity or electing taxpayer’s original
return, which must be signed under pen-
alties of perjury, must contain all of the
information, including a registration num-
ber, required by these final regulations. To
properly correct an error on an amended
return or administrative adjustment
request under section 6227, an applica-
ble entity or electing taxpayer must have
made an error in the information included
on the original return such that there is a
substantive item to correct; an applicable
entity or electing taxpayer may not correct
a blank item or an item that is described as
being “available upon request.” There is
no relief available under §301.9100-1 or
§301.9100-3 of this chapter for an elective
payment election that is not timely filed;
however, relief under §301.9100-2(b)
may apply if the applicable entity or elect-
ing taxpayer has not received an extension
of time to file a return after the original
due date, has timely filed a return, takes
corrective action under §301.9100-2(c)
within the six-month extension period,
and meets the procedural requirements
outlined in §301.9100-2(d).
(2) Pre-filing registration required.
Pre-filing registration in accordance with
§1.6417-5 is a condition for making an
elective payment election. An elective
payment election will not be effective with
respect to credits determined with respect
to an applicable credit property unless
the applicable entity or electing taxpayer
received a valid registration number for
the applicable credit property in accor-
dance with §1.6417-5(c) and provided the
registration number for each applicable
credit property on its Form 3800 (or its
successor), and on any required completed
source form(s) with respect to the appli-
cable credit property, attached to the tax
return, in accordance with guidance.
(3) Due date for making the election.
To be effective, an elective payment elec-
tion must be made no later than:
(i) In the case of any taxpayer for
which no Federal income tax return is
required under sections 6011 or no Fed-
eral return is required under 6033(a) of
the Code (such as a State; the District of
Columbia; an Indian Tribal government;
any U.S. territory; a political subdivision
of a State, the District of Columbia, or
a U.S. territory, or a subdivision of an
Indian Tribal government; certain agen-
cies or instrumentalities of a State, the
District of Columbia, an Indian Tribal
government, or a U.S. territory; or a tax-
payer excluded from filing pursuant to
section 6033(a)(3)), the 15th day of the
fifth month after the end of the taxable
year. For purposes of section 6417, an
applicable entity that is not required to
file a Federal income tax return pursu-
ant to sections 6011 or a Federal return
pursuant to 6033(a), but is filing solely to
make an elective payment election, may
choose whether to file its first return (and
thus adopt a taxable year for purposes
of section 6417) based upon a calendar
or fiscal year, provided that such entity
maintains adequate books and records,
including a reconciliation of any differ-
ence between its regular books of account
and its chosen taxable year, to support
making an elective payment election on
the basis of its chosen taxable year. Sub-
ject to issuance of guidance that specifies
the manner in which an entity for which
no Federal income tax return is required
under sections 6011 or no Federal return
is required pursuant to 6033(a) could
request an extension of time to file and
make the elective payment election, an
automatic paperless six-month extension
from the 15th day of the fifth month after
the end of the taxable year is deemed to
be allowed.
(ii) In the case of any taxpayer located
in a U.S. territory, the due date (including
extensions of time) that would apply if the
taxpayer were located in the United States.

April 8, 2024 842 Bulletin No. 2024–15
(iii) In any other case, the due date
(including extensions of time) for the
original return for the taxable year for
which the election is made, but in no event
earlier than February 13, 2023.
(4) Election is not revocable—(i) In
general. Except as provided in paragraphs
(b)(4)(ii) and (iii) of this section, any elec-
tive payment election, once made, is irre-
vocable and applies with respect to any
applicable credit for the taxable year for
which the election is made.
(ii) Election lasts for a period of years
for certain credits. For applicable entities
making elective payment elections with
respect to section 45 credits described in
§1.6417-1(d)(2) or section 45Y credits
described in §1.6417-1(d)(8), the election
applies to each taxable year in the 10-year
period provided in section 45(a)(2)(A)
(ii) or 45Y(b)(1)(B), respectively, begin-
ning on the date the facility was originally
placed in service. For applicable entities
making elective payment elections with
respect to section 45Q credits described
in §1.6417-1(d)(3), the election applies
to each taxable year in the 12-year period
provided in section 45Q(a)(3)(A) or (4)
(A) beginning on the date the carbon cap-
ture equipment was originally placed in
service. For applicable entities making
elective payment elections with respect to
section 45V credits described in §1.6417-
1(d)(5), the election applies to the taxable
year in which the qualified clean hydrogen
production facility was originally placed
in service and all subsequent taxable
years.
(iii) Electing taxpayers. For electing
taxpayers who make an elective payment
election, the election applies for one five-
year period per applicable credit property,
but such election may be revoked once per
applicable credit property, as provided in
§1.6417-3.
(5) Scope of election. An elective pay-
ment election applies to the entire amount
of applicable credit(s) determined with
respect to each applicable credit property
that was properly registered for the tax-
able year, resulting in an elective payment
amount that is the entire amount of appli-
cable credit(s) determined with respect to
the applicable entity or electing taxpayer
for a taxable year.
(c) Determination of applicable
credit—(1) In general. In the case of any
applicable entity making an elective pay-
ment election, any applicable credit is
determined—
(i) Without regard to section 50(b)(3)
and (4)(A)(i) of the Code, and
(ii) By treating any property with
respect to which such credit is determined
as used in a trade or business of the appli-
cable entity.
(2) Effect of trade or business rule. The
trade or business rule in paragraph (c)(1)
(ii) of this section—
(i) Allows the applicable entity to treat
an item of property as if it is: of a charac-
ter subject to an allowance of depreciation
(such as under sections 30C and 45W);
one for which depreciation (or amortiza-
tion in lieu of depreciation) is allowable
(such as in sections 48, 48C, and 48E);
and used to produce items in the ordinary
course of a trade or business of the tax-
payer (such as in sections 45V and 45X);
(ii) Allows the applicable entity to
apply the capitalization and accelerated
depreciation rules (such as sections 167,
168, 263, 263A, and 266 of the Code) that
apply to determining the basis and the
depreciation allowance for property used
in a trade or business;
(iii) Makes applicable those credit lim-
itations generally applicable to persons
engaged in the conduct of a trade or busi-
ness, such as section 49 of the Code in
the context of investment tax credits and
section 469 of the Code for all applicable
credits;
(iv) Does not create any presumption
that the trade or business is related (or
unrelated) to a tax-exempt entity’s exempt
purpose; and
(v) Subjects the applicable entity to the
credit limitation in paragraph (c)(3)(ii) of
this section.
(3) Special rule for investment-related
credit property acquired with amounts,
including income from certain grants
and forgivable loans, that are exempt
from taxation—(i) Amounts included in
basis. Subject to paragraph (c)(3)(ii) of
this section, for purposes of section 6417,
amounts that are exempt from taxation
under subtitle A or otherwise excluded
from taxation (such as income from cer-
tain grants and forgivable loans), and used
to purchase, construct, reconstruct, erect,
or otherwise acquire an applicable credit
property described in section 30C, 45W,
48, 48C, or 48E (investment-related credit
property) are included in basis for pur-
poses of computing the applicable credit
amount determined with respect to the
applicable credit property, regardless of
whether basis is required to be reduced (in
whole or in part) by such amounts under
general tax principles.
(ii) No excess benefit from restricted tax
exempt amounts. If an applicable entity
receives a grant, forgivable loan, or other
income exempt from taxation under subti-
tle A or otherwise excluded from taxation
(tax exempt amount) for the specific pur-
pose of purchasing, constructing, recon-
structing, erecting, or otherwise acquir-
ing an investment-related credit property
(restricted tax exempt amount), and the
sum of any restricted tax exempt amounts
plus the applicable credit otherwise deter-
mined with respect to that investment-re-
lated credit property exceeds the cost of
the investment-related credit property,
then the amount of the applicable credit
is reduced so that the total amount of
applicable credit plus the amount of any
restricted tax exempt amounts equals the
cost of investment-related credit property.
The determination of whether a tax exempt
grant is made for the specific purpose of
purchasing, constructing, reconstructing,
erecting, or otherwise acquiring an invest-
ment-related credit property is made at the
time the grant is awarded to the applicable
entity. A tax exempt grant awarded after
the investment-related credit property is
purchased, constructed, reconstructed,
erected, or otherwise acquired is generally
not a restricted tax exempt amount unless
approval of the grant was perfunctory
and the amount of the grant was virtually
assured at the time of application. The
determination of whether a loan is made
for the specific purpose of purchasing,
constructing, reconstructing, erecting, or
otherwise acquiring an investment-related
credit property and whether forgiveness
of that loan is dependent on satisfying
that specific purpose is made at the time
the loan is approved. This paragraph does
not apply if a tax exempt amount is not
received for the specific purpose of pur-
chasing, constructing, reconstructing,
erecting, or otherwise acquiring a property
eligible for an investment-related credit;
for example, if the tax exempt amount is
from the organization’s general funds or

Bulletin No. 2024–15 843 April 8, 2024
if such amount’s use is not restricted to
the purpose of purchasing, constructing,
reconstructing, erecting, or otherwise
acquiring an investment-related credit
property (such as purchasing an electric
vehicle) and could be used for any of sev-
eral different applicable credit properties
(such as purchasing an electric vehicle
or purchasing solar panels) or can be put
to other purposes (such as purchasing an
electric vehicle or making a building more
energy efficient).
(4) Credits must be determined with
respect to the applicable entity or electing
taxpayer. Any credits for which an elec-
tive payment election is made must have
been determined with respect to the appli-
cable entity or electing taxpayer. An appli-
cable credit is determined with respect to
an applicable entity or electing taxpayer if
the applicable entity or electing taxpayer
owns the underlying applicable credit
property and conducts the activities giving
rise to the credit or, in the case of section
45X (under which ownership of applica-
ble credit property is not required), to be
considered (under the section 45X regula-
tions) the taxpayer with respect to which
the section 45X credit is determined.
Thus, no election may be made under this
section for any credits transferred pursu-
ant to section 6418, allowed pursuant to
section 45Q(f)(3), acquired by a lessee
from a lessor by means of an election to
pass through the credit to a lessee under
former section 48(d) (pursuant to section
50(d)(5)), owned by a third party, or oth-
erwise not determined with respect to the
applicable entity or electing taxpayer.
(5) Examples. The following examples
illustrate the rules of this paragraph (c).
(i) Example 1. School district A receives a tax
exempt grant in the amount of $400,000 from the
Environmental Protection Agency to purchase
electric school bus B. The grant is a restricted tax
exempt amount described in paragraph (c)(3)(ii) of
this section. A purchases B for $400,000. Pursuant
to paragraph (c)(3)(i) of this section, A’s basis in B
is $400,000. B qualifies for the maximum section
45W credit, $40,000. However, because the amount
of the restricted tax exempt grant plus the amount
of the section 45W credit exceeds the cost of B, the
no excess benefit rule found in paragraph (c)(3)(ii)
of this section applies. A’s section 45W credit is
reduced by the amount necessary so that the total
amount of the section 45W credit plus the restricted
tax exempt amount equals the cost of B. A’s section
45W credit is therefore reduced by $40,000 to zero.
(ii) Example 2. Assume the same facts as in para-
graph (c)(5)(i) of this section (Example 1), except
that the grant is in the amount of $300,000. This
grant is still a restricted tax exempt amount described
in paragraph (c)(3)(ii) of this section. A purchases
B using the grant and $100,000 of A’s unrestricted
funds. A’s basis in B is still $400,000 and A’s sec-
tion 45W credit is $40,000. Since the amount of the
restricted tax exempt amount plus the amount of the
section 45W credit ($340,000) is less than the cost
of B, A’s 45W credit under section 6417(b)(6) is not
subject to the no excess benefit rule found in para-
graph (c)(3)(ii) of this section.
(iii) Example 3. Public charity B receives a
$60,000 grant from a private foundation to build
energy property, P, a qualified investment credit
property that costs $80,000. The $60,000 grant is a
restricted tax exempt amount described in paragraph
(c)(3)(ii) of this section. B uses $20,000 of its own
funds plus the $60,000 grant to build P. Pursuant
to paragraph (c)(3)(i) of this section, B’s basis in
P is $80,000. Assume that, based upon acquisition
cost, B can earn a section 48 investment credit (with
bonus credit amounts) of $40,000 (50% of basis).
However, because the amount of the restricted tax
exempt amount ($60,000) plus the section 48 credit
($40,000) exceeds P’s cost by $20,000, the no excess
benefit rule found in paragraph (c)(3)(ii) of this sec-
tion applies to reduce B’s section 48 applicable credit
by $20,000 so that the total amount of the section
48 investment credit plus the restricted tax exempt
amount equals the cost of P.
(iv) Example 4. The U.S. Department of Hous-
ing and Urban Development annually provides
Capital Funds to Public Housing Agencies (PHAs)
for the development, financing, and modernization
of public housing developments and for manage-
ment improvements. Public Housing Authority H
uses its annual allotment of Capital Funds to pur-
chase rooftop solar panels for its property and to
pay for the related equipment and labor to install
the panels. These purchases are considered among
the list of eligible uses, but are not the exclusive
uses, of H’s Capital Funds. Although the Capital
Funds are exempt from taxation under subtitle A
and used to purchase, construct, reconstruct, erect,
or otherwise acquire an investment-related credit
property, pursuant to paragraph (c)(3)(i) of this
section, they are included in basis for purposes of
computing the applicable credit amount determined
with respect to the applicable credit property. In
addition, because the Capital Funds were not given
for the specific purpose of purchasing, constructing,
reconstructing, erecting, or otherwise acquiring an
investment-related credit property, they are not con-
sidered restricted tax exempt amounts and the no
excess benefit rule found in paragraph (c)(3)(ii) of
this section does not apply.
(v) Example 5. Taxpayer Q is engaged in the busi-
ness of capturing carbon oxide. Q properly elects to
be treated as an applicable entity with respect to the
section 45Q credit determined with respect to single
process trains A, B, and C for 2024. In the same year,
Q also purchases section 45Q credits under section
6418 from an unrelated taxpayer and has section 45Q
credits allowed to itself pursuant to section 45Q(f)
(3). Q can make an elective payment election only
with respect to section 45Q applicable credits deter-
mined with respect to A, B, and C. Q cannot make an
elective payment election with respect to any credits
transferred to Q pursuant to section 6418 or allowed
to Q pursuant to section 45Q(f)(3).
(d) Timing of payment. Except as pro-
vided in §1.6417-4(d) (relating to pay-
ments to partnerships and S corporations),
the elective payment amount will be
treated as made—
(1) In the case of any taxpayer for
which no Federal income tax return is
required under section 6011 or no Federal
return is required under 6033(a), on the
later of—
(i) The date that is the 15th day of the
fifth month after the end of the taxable
year, or
(ii) The date on which such taxpayer
submits a claim for credit or refund in
accordance with paragraph (b) of this sec-
tion.
(2) In any other case, on the later of—
(i) The due date (determined without
regard to extensions) of the return for the
taxable year, or
(ii) The date on which such return is
filed.
(e) Denial of double benefit—(1) In
general. Under section 6417(e), in the case
of an applicable entity or electing taxpayer
making an elective payment election with
respect to an applicable credit, such credit
is reduced to zero and is, for any other
purposes of the Code, deemed to have
been allowed as a credit to such entity or
taxpayer for such taxable year. Paragraph
(e)(2) and (3) of this section explain the
application of the section 6417(e) denial
of double benefit rule to an applicable
entity or electing taxpayer (other than a
partnership or S corporation). The appli-
cation of section 6417(e) for an electing
taxpayer that is a partnership or S corpo-
ration is provided in §1.6417-4(c)(1)(ii).
(2) Application of the denial of dou-
ble benefit rule. An applicable entity or
electing taxpayer (other than an electing
taxpayer that is a partnership or S corpo-
ration) making an elective payment elec-
tion applies section 6417(e) by taking the
following steps:
(i) Compute the amount of the Federal
income tax liability (if any) for the tax-
able year, without regard to the general
business credit allowed by section 38 of
the Code (GBC), that is payable on the
due date of the return (without regard to
extensions), and the amount of the Federal
income tax liability that may be offset by

April 8, 2024 844 Bulletin No. 2024–15
GBCs pursuant to the limitation based on
amount of tax under section 38.
(ii) Compute the allowed amount of
GBC carryforwards carried to the tax-
able year under section 38(a)(1) plus the
amount of current year GBCs (including
current applicable credits) for the tax-
able year under section 38(a)(2) and (b).
Because the election is made on an orig-
inal return for the taxable year for which
the applicable credit is determined, any
business credit carrybacks are not consid-
ered in determining the elective payment
amount for the taxable year.
(iii) Calculate the net elective payment
amount for all applicable credits, which
equals the lesser of the sum of all applica-
ble credits for which an elective payment
election is made or the excess (if any, oth-
erwise the excess is zero) of the total GBC
credits described in paragraph (e)(2)(ii) of
this section over the amount of the Fed-
eral income tax liability that may be offset
by GBCs pursuant to the limitation based
on amount of tax under section 38 com-
puted in paragraph (e)(2)(i) of this section.
Treat the net elective payment amount of
all applicable credits for which an elective
payment election is made as a payment
against the tax imposed by subtitle A for
the taxable year with respect to which
such credits are determined.
(iv) Excluding the net elective payment
amount determined under paragraph (e)
(2)(iii) of this section, but including any
applicable credits that are not part of the
net elective payment amount, compute the
allowed amount of GBC carryforwards
carried to the taxable year plus the amount
of current year GBCs allowed for the tax-
able year under section 38 (including, for
clarity purposes, the ordering rules in sec-
tion 38(d)). Apply these GBCs against the
tax liability computed in paragraph (e)(2)
(i) of this section.
(v) Reduce the applicable credits for
which an elective payment election is
made by the net elective payment amount,
as provided in paragraph (e)(2)(iii) of
this section, and by the amount (if any)
allowed as a GBC under section 38 for the
taxable year, as provided in paragraph (e)
(2)(iv) of this section, which results in the
applicable credits being reduced to zero.
(3) Use of applicable credit for other
purposes. The full amount of the applica-
ble credits for which an elective payment
election is made is deemed to have been
allowed for all other purposes of the Code,
including, but not limited to, the basis
reduction and recapture rules imposed by
section 50 and calculation of tax, calcula-
tion of the amount of any underpayment
of estimated tax under sections 6654 and
6655 of the Code, and the addition to tax
for the failure to pay under section 6651(a)
(2) of the Code (if any).
(4) Examples. The following examples
illustrate the rules of this paragraph (e).
(i) Example 1. U is a tax-exempt university that
is not a trust subject to section 469 and is described
in section 501(c)(3). U’s fiscal year runs from July
1 to June 30. U places in service P, energy property
eligible for a section 48 credit, in June 2024. P is
an asset used in connection with its unrelated busi-
ness. U completes the pre-filing registration in accor-
dance with §1.6417-5 as an applicable entity that has
placed P into service and intends to make an elective
payment election with respect to section 48 credits
determined with respect to P. U timely files its 2024
Form 990-T on November 15, 2024. On its return, U
properly determines that it has $500,000 of Unrelated
Business Income Tax (UBIT) under section 512. On
its Form 3800 attached to its return, U calculates its
limitation of GBC under section 38(c) (simplified)
is $375,000 (paragraph (e)(2)(i) of this section). U
attaches Form 3468 to claim a section 48 credit of
$100,000 with respect to P (its GBC for the taxable
year) (paragraph (e)(2)(ii) of this section). Under
paragraph (e)(2)(iii) of this section, the net elective
payment amount is $0, so the section 48 credit is
considered a credit that reduces U’s UBIT liability
to $400,000 under paragraph (e)(2)(iv) of this sec-
tion. U pays its $400,000 tax liability on November
15, 2024. Under paragraph (e)(2)(v) of this section,
the $100,000 of section 48 credit is reduced by the
$100,000 of applicable credits claimed as GBCs for
the taxable year, which results in the applicable cred-
its being reduced to zero. However, the $100,000 of
current year section 48 credit is deemed to have been
allowed to U for 2024 for all other purposes of the
Code (paragraph (e)(3) of this section).
(ii) Example 2. Assume the same facts as in para-
graph (e)(4)(i) of this section (Example 1), except
that U has $80,000 of Unrelated Business Income
Tax (UBIT) under section 512 and calculates its
limitation of GBC under section 38(c) (simplified) is
$60,000 (paragraph (e)(2)(i) of this section). Under
paragraph (e)(2)(iii) of this section, the net elective
payment amount is $40,000 (lesser of $100,000
applicable section 48 credit or $100,000 of total
GBC credits described in paragraph (e)(2)(ii) of this
section minus $60,000 of section 38(c) limitation).
Under paragraph (e)(2)(iv) of this section, U uses
$60,000 of its $100,000 of section 48 credit against
its tax liability. U reduces its applicable credit by
the $40,000 net elective payment amount deter-
mined in paragraph (e)(2)(iii) of this section and by
the $60,000 section 48 credit claimed against tax in
paragraph (e)(2)(iv) of this section, resulting in the
applicable credit being reduced to zero (paragraph
(e)(2)(v) of this section). When the IRS processes
U’s 2024 Form 990-T, the net elective payment
amount results in a $20,000 refund to U (after apply-
ing $20,000 of the $40,000 net elective payment
amount to cover U’s tax shown on the return). How-
ever, for other purposes of the Code, the $100,000
section 48 credit is deemed to have been allowed to
U for 2024 (paragraph (e)(3) of this section).
(iii) Example 3. V is a city located in the United
States that never has Federal income tax liability, so
paragraph (e)(2)(i) of this section does not apply.
V timely completes pre-filing registration in accor-
dance with §1.6417-5 as an applicable entity that
will be eligible to make an elective payment elec-
tion, with regard to its annual accounting period end-
ing in 2024, for the credit determined under section
30C(a) from properties A, B, and C; the credit deter-
mined under section 45(a) for facility D; the credit
determined under section 45U(a) for facility E; the
credit determined under section 45W(a) with respect
to vehicles F, G, and H; and the credit determined
under section 48(a) with respect to property I and J.
V timely files its 2024 Form 990-T. V properly com-
pletes and attaches the relevant source credit forms
and Form 3800 with registration numbers and all
required information in the instructions, properly
making the elective payment election for all of the
credits, and properly determining that the amount of
applicable credits determined with respect to A, B,
C, D, E, F, G, H, I, and J is $500,000 (its GBC for the
taxable year) (paragraph (e)(2)(ii) of this section).
Under paragraph (e)(2)(iii) of this section, the net
elective payment amount is $500,000. Under para-
graph (e)(2)(iii) of this section, the entire $500,000
net elective payment amount is a payment against
the tax imposed by subtitle A for the taxable year
with respect to which such credits are determined.
When the IRS processes V’s 2024 Form 990-T, the
net elective payment amount results in a $500,000
refund to V. V’s elective payment amount is reduced
by the net elective payment amount, so all applicable
credits for 2024 are reduced to zero (paragraph (e)
(2)(v) of this section). However, for other purposes
of the Code, the $500,000 of applicable credits are
deemed to have been allowed to V for its annual
accounting period ending in 2024 (paragraph (e)(3)
of this section).
(iv) Example 4. W is a business taxpayer engaged
in the manufacturing of components, including eli-
gible components as defined in section 45X(c)(1)
at facility F. W completes pre-filing registration in
accordance with §1.6417-5 stating that it intends to
elect to be treated as an applicable entity with respect
to eligible components produced at F in 2024. In
2025, W timely files its 2024 return electing to be
treated as an applicable entity, calculating its Federal
income tax before GBCs of $125,000 and that its
limitation of GBC under section 38(c) (simplified)
is $100,000 (paragraph (e)(2)(i) of this section). W
attaches Form 7207 to claim a current section 45X
credit of $50,000 with respect to eligible compo-
nents produced at F (its applicable credits). W also
attaches Form 5884 to claim a current work oppor-
tunity tax credit (WOTC) of $50,000 (WOTC is not
an applicable credit). W also has business credit car-
ryforwards of $25,000, which together with the 45X
credit and WOTC results in a total of $125,000 of
GBC for the taxable year (paragraph (e)(2)(ii) of this
section). Under paragraph (e)(2)(iii) of this section,
the net elective payment amount is $25,000. Under

Bulletin No. 2024–15 845 April 8, 2024
paragraph (e)(2)(iv) of this section, including using
the ordering rules in section 38(d), W is allowed
$25,000 of the carryforwards, $50,000 of WOTC
plus only $25,000 of section 45X credit against net
income tax, as defined under section 38(c)(1)(B).
The $25,000 of unused section 45X credit is the net
elective payment amount that results in a $25,000
payment against tax by W (paragraph (e)(2)(iii) of
this section). On its return, W shows net tax liability
of $25,000 ($125,000 - $100,000 allowed GBC) and
the net elective payment of $25,000 that W applied
to net tax liability, resulting in zero tax owed on the
return. Under paragraph (e)(2)(v) of this section, W’s
applicable credit is reduced by the $25,000 of the net
elective payment amount, as well as by the $25,000
of section 45X credit claimed as a GBC for the
taxable year, resulting in the $50,000 of applicable
credit being reduced to zero. However, for all other
purposes of the Code, the $50,000 of 45X applicable
credits are deemed to have been allowed to W for
2024 (paragraph (e)(3) of this section). Even though
W did not owe tax after applying the net elective
payment amount against its net tax liability, W may
be subject to the section 6655 penalty for failure to
pay estimated income tax. The net elective payment
is not an estimated tax installment, rather, it is treated
as a payment made at the filing of the return.
(v) Example 5. Assume the same facts as in para-
graph (e)(4)(iv) of this section (Example 4), except
W filed the return on a timely filed extension after the
due date of the return (excluding extensions). Even
though the net elective payment amount is sufficient
to cover W’s tax liability, W may also be subject to
the section 6651(a)(2) penalty for failure to pay tax.
(vi) Example 6. Assume the same facts as in
paragraph (e)(4)(iv) of this section (Example 4),
except W’s activities gave rise to a $100,000 section
45Q credit and W filed a Form 8933, Carbon Oxide
Sequestration Tax Credit, instead of a $50,000 sec-
tion 45X credit and Form 7207. Assume also that
W’s activities gave rise to a $50,000 small employer
health insurance credit under section 45R (section
45R credit) and W filed Form 8941, Credit for Small
Employer Health Insurance Premiums, instead of a
$50,000 WOTC and Form 5884. Under paragraph
(e)(2)(iii) of this section, the net elective payment
amount is $75,000. Under paragraph (e)(2)(iv) of
this section, including using the ordering rules in
section 38(d), W is allowed $25,000 of the carry-
forwards, $25,000 of the section 45Q credit, plus its
$50,000 of section 45R credit against net income tax,
as defined under section 38(c)(1)(B). The $75,000 of
unused section 45Q credit that is the net elective pay-
ment amount results in a $75,000 payment against
tax by W (paragraph (e)(2)(iii) of this section).
On its return, W shows net tax liability of $25,000
($125,000 - $100,000 allowed GBC) and the net
elective payment amount of $75,000 that W applied
to net tax liability, resulting in a refund of $50,000.
Under paragraph (e)(2)(v) of this section, W’s appli-
cable credit is reduced by the $75,000 of the net
elective payment amount, as well as by the $25,000
of section 45Q credit claimed as a GBC for the tax-
able year, resulting in the $100,000 of applicable
credit being reduced to zero. However, for all other
purposes of the Code, the $100,000 of section 45Q
applicable credits are deemed to have been allowed
to W for 2024 (paragraph (e)(3) of this section).
(f) Applicability date. This section
applies to taxable years ending on or after
March 11, 2024. For taxable years ending
before March 11, 2024, taxpayers, how-
ever, may choose to apply the rules of
§§1.6417-1 through 1.6417-4 and 1.6417-
6, provided the taxpayers apply the rules
in their entirety and in a consistent man-
ner.
§1.6417-3 Special rules for electing
taxpayers.
(a) In general. This section relates to
the election available to electing taxpay-
ers. An electing taxpayer that makes an
elective payment election in accordance
with this section is treated as an appli-
cable entity for the duration of the elec-
tion period, but only with respect to the
applicable credit property described in
proposed §1.6417-1(e)(3), (5), or (7),
respectively, that is the subject of the elec-
tion. See paragraphs (b), (c), and (d) of
this section for the specific rules regarding
taxpayers making an election under sec-
tion 6417(d)(1)(B), (C), or (D), respec-
tively. See paragraph (e) of this section for
rules relating to the making the election.
See §1.6417-4 for special rules related to
electing taxpayers that are partnerships or
S corporations.
(b) Elections with respect to the credit
for production of clean hydrogen. An
electing taxpayer that has placed in ser-
vice applicable credit property described
in §1.6417-1(e)(5) (in other words, a
qualified clean hydrogen production
facility as defined in section 45V(c)
(3)) during the taxable year may make
an elective payment election for such
taxable year (or by August 16, 2023, in
the case of facilities placed in service
before December 31, 2022), but only
with respect to the qualified clean hydro-
gen production facility, only with respect
to the applicable credit described in
§1.6417-1(d)(5) (in other words, the sec-
tion 45V credit), and only if the pre-filing
registration required by §1.6417-5 was
properly completed. An electing taxpayer
that elects to treat qualified property that
is part of a specified clean hydrogen pro-
duction facility as energy property under
section 48(a)(15) may not make an elec-
tive payment election with respect to
such facility.
(c) Election with respect to the credit
for carbon oxide sequestration. An elect-
ing taxpayer that has, after December 31,
2022, placed in service applicable credit
property described in §1.6417-1(e)(3)
(in other words, a single process train
described in §1.45Q-2(c)(3) at a quali-
fied facility (as defined in section 45Q(d))
during the taxable year may make an elec-
tive payment election for such taxable
year, but only with respect to the single
process train, only with respect to the
applicable credit described in §1.6417-
1(d)(3) (in other words, the section 45Q
credit), and only if the pre-filing registra-
tion required by §1.6417-5 was properly
completed.
(d) Election with respect to the
advanced manufacturing production
credit. An electing taxpayer that produces,
after December 31, 2022, eligible compo-
nents (as defined in section 45X(c)(1)) at
an applicable credit property described in
§1.6417-1(e)(7) during the taxable year
(whether the facility existed on or before,
or after, December 31, 2022) may make
an elective payment election for such
taxable year, but only with respect to the
facility at which the eligible components
are produced by the electing taxpayer in
that year, only with respect to the applica-
ble credit described in §1.6417-1(d)(7) (in
other words, the section 45X credit), and
only if the pre-filing registration required
by §1.6417-5 was properly completed.
(e) Election for electing taxpayers—
(1) In general. If an electing taxpayer
makes an elective payment election under
§1.6417-2(b) with respect to any taxable
year in which the electing taxpayer places
in service a qualified clean hydrogen pro-
duction facility for which a section 45V
credit is determined, places in service a
single process train at a qualified facility
for which a section 45Q credit is deter-
mined, or produces, after December 31,
2022, eligible components (as defined in
section 45X(c)(1)) at a facility, respec-
tively, the electing taxpayer will be treated
as an applicable entity for purposes of
making an elective payment election for
such taxable year and during the election
period described in paragraph (e)(3) of
this section, but only with respect to the
applicable credit property described in
§1.6417-1(e)(3), (5), or (7), as applica-
ble, that is the subject of the election. The

April 8, 2024 846 Bulletin No. 2024–15
taxpayer must otherwise meet all require-
ments to earn the credit in the electing
year and in each succeeding year during
the election period described in paragraph
(e)(3) of this section.
(2) Election is per applicable credit
property. An elective payment election
under §1.6417-2(b) is made separately for
each applicable credit property, which is,
respectively, a qualified clean hydrogen
production facility placed in service for
which a section 45V credit is determined,
a single process train placed in service at a
qualified facility for which a section 45Q
credit is determined, or a facility at which
eligible components are produced for
which a section 45X credit is determined.
An electing taxpayer may only make one
election with respect to any specific appli-
cable credit property.
(3) Election period—(i) In general.
Except as provided in paragraph (e)(3)
(ii) of this section, if an electing taxpayer
makes an elective payment election under
§1.6417-2(b) with respect to applicable
credit property described in §1.6417-1(e)
(3), (5), or (7) for which an applicable
credit is determined under §1.6417-1(d)
(3), (5), or (7), the election period during
which such election applies includes the
taxable year for which the election is
made and each of the four subsequent
taxable years that end before January 1,
2033. The election period cannot be less
than a taxable year but may be made for
a taxable period of less than 12 months
within the meaning of section 443 of the
Code.
(ii) Revocation of election. An electing
taxpayer may, during a subsequent year
of the election period described in para-
graph (e)(3)(i) of this section, revoke the
elective payment election with respect to
an applicable credit property described in
§1.6417-1(e)(3), (5), or (7), in accordance
with forms and instructions. See §601.602
of this chapter. Any such revocation, if
made, applies to the taxable year for which
the revocation is made (which cannot be
less than a taxable year but may be made
for a taxable period of less than 12 months
as described in section 443 of the Code)
and each subsequent taxable year within
the election period. Any such revocation
may not be subsequently revoked.
(4) No transfer election under section
6418(a) permitted while an elective pay-
ment election is in effect. No transfer elec-
tion under section 6418(a) may be made
by an electing taxpayer with respect to
any applicable credit under §1.6417-1(d)
(3), (5), or (7) determined with respect
to applicable credit property described
in §1.6417-1(e)(3), (5), or (7) during the
election period for that applicable credit
property. However, if the election period
is no longer in effect with respect to an
applicable credit property, any credit
determined with respect to such applica-
ble credit property can be transferred pur-
suant to a transfer election under section
6418(a), as long as the taxpayer meets the
requirements of section 6418 and the 6418
regulations.
(f) Applicability date. This section
applies to taxable years ending on or after
March 11, 2024. For taxable years ending
before March 11, 2024, taxpayers, how-
ever, may choose to apply the rules of
§§1.6417-1 through 1.6417-4 and 1.6417-
6, provided the taxpayers apply the rules
in their entirety and in a consistent man-
ner.
§1.6417-4 Elective payment election for
electing taxpayers that are partnerships or
S corporations.
(a) In general. In the case of any appli-
cable credit determined with respect to
any applicable credit property described
in §1.6417-1(e)(3), (5), or (7) that is held
directly (or treated as held directly because
it is held by a disregarded entity) by an
electing taxpayer that is a partnership or
S corporation, any elective payment elec-
tion under §1.6417-2(b) must be made by
the partnership or S corporation.
(b) Elections. If an electing taxpayer
that is a partnership or S corporation
makes an elective payment election under
§1.6417-2(b) with respect to any tax-
able year in which the electing taxpayer
places in service applicable credit prop-
erty described in §1.6417-1(e)(3) or (5),
or produces, after December 31, 2022,
eligible components (as defined in section
45X(c)(1)) at an applicable credit property
described in §1.6417-1(e)(7), the electing
taxpayer will be treated as an applicable
entity for purposes of making an elective
payment election for such taxable year
and during the election period described
in §1.6417-3(e)(3), but only with respect
to the applicable credit property described
in §1.6417-1(e)(3), (5), or (7), respec-
tively, that is the subject of the election.
In addition, the taxpayer must otherwise
meet all requirements to earn the credit in
the electing year and in each succeeding
year during the election period described
in §1.6417-3(e)(3).
(c) Effect of election—(1) In general.
If a partnership or S corporation electing
taxpayer makes an elective payment elec-
tion, with respect to the section 45V, 45Q,
or 45X credit—
(i) The Internal Revenue Service will
make a payment to such partnership or
S corporation equal to the amount of such
credit, determined in accordance with
paragraph (d) of this section (unless the
partnership or S corporation owes a Fed-
eral tax liability, in which case the pay-
ment may be reduced by such tax liabil-
ity);
(ii) Before determining any partner’s
distributive share, or S corporation share-
holder’s pro rata share, of such credit, such
credit is reduced to zero and is, for any
other purposes under the Code, deemed
to have been allowed solely to such entity
(and not allocated or otherwise allowed to
its partners or shareholders) for such tax-
able year;
(iii) Any amount with respect to which
such election is made is treated as tax
exempt income for purposes of sections
705 and 1366 of the Code;
(iv) A partner’s distributive share of
such tax exempt income is equal to such
partner’s distributive share of the other-
wise applicable credit for each taxable
year, as determined under §1.704-1(b)(4)
(ii);
(v) An S corporation shareholder’s pro
rata share (as determined under section
1377(a) of the Code) of such tax exempt
income for each taxable year (as deter-
mined under sections 444 and 1378(b)
of the Code) is equal to the S corporation
shareholder’s pro rata share (as deter-
mined under section 1377(a)) of the oth-
erwise applicable credit for each taxable
year; and
(vi) Such tax exempt income resulting
from such election is treated as received or
accrued, including for purposes of sections
705 and 1366, as of the date the applica-
ble credit is determined with respect to the
partnership or S corporation (such as, for

Bulletin No. 2024–15 847 April 8, 2024
investment credit property, the date the
property is placed in service).
(2) Electing partnerships in tiered
structures. If a partnership (upper-tier
partnership) is a direct or indirect partner
of a partnership that makes an elective
payment election (electing partnership)
and directly or indirectly receives an allo-
cation of tax exempt income resulting
from the elective payment election made
by the electing partnership, the upper-tier
partnership must determine its partners’
distributive shares of such tax exempt
income in proportion to the partners’ dis-
tributive shares of the otherwise applica-
ble credit as provided in paragraph (c)(1)
(iv) of this section.
(3) Character of tax exempt income.
Tax exempt income resulting from an
elective payment election by an S corpo-
ration or a partnership is treated as aris-
ing from an investment activity and not
from the conduct of a trade or business
within the meaning of section 469(c)(1)
(A) of the Code. As such, the tax exempt
income is not treated as passive income to
any partners or shareholders who do not
materially participate within the meaning
of section 469(c)(1)(B).
(d) Determination of amount of the
credit—(1) In general. In determining the
amount of an applicable credit that will
result in a payment under paragraph (c)
(1)(i) of this section, the partnership or
S corporation must compute the amount
of the applicable credit allowable as if an
elective payment election were not made.
Because a partnership or S corporation
is not subject to sections 38(b) and (c)
and 469 (that is, those sections apply at
the partner or S corporation shareholder
level), the amount of applicable credit
determined by a partnership or S corpora-
tion is not subject to limitation by those
sections. In addition, because the only
applicable credits with respect to which a
partnership or S corporation may make an
elective payment election are not invest-
ment credits under section 46 of the Code,
sections 49 and 50 of the code do not
apply to limit the amount of the applicable
credits.
(2) Example. The rules of this paragraph (d) are
illustrated in the following example. A and B each
contributed cash to P, a calendar-year partnership,
for the purpose of manufacturing clean hydrogen
at V, a qualified clean hydrogen facility that meets
the definition of section 45V(c)(3). The partnership
agreement provides that A and B share equally in
all items of income, gain, loss, deduction and credit
of P. P completes the pre-filing registration process
with respect to the section 45V credit at V for 2023
in accordance §1.6417-5. P places V in service in
2023. P timely files its 2023 Form 1065 and properly
makes the elective payment election in accordance
with §§1.6417-2(b),1.6417-3, and 1.6417-4. On its
Form 1065, P properly determined that the amount
of the section 45V credit with respect to the clean
hydrogen produced at V for 2023 is $100,000. The
IRS processes P’s return and makes a $100,000 pay-
ment to P. Before determining A’s and B’s distribu-
tive shares, P reduces the credit to zero. While the
$100,000 section 45V credit is deemed to have been
allowed to P for 2023 for any other purpose under
this title, the credit is not allocated or otherwise
allowed to its partners. The $100,000 is treated as
tax exempt income for purposes of section 705 and
is treated as arising from an investment activity and
not from the conduct of a trade or business within the
meaning of section 469(c)(1)(A). P allocates the tax
exempt income from the elective payment election
proportionately among the partners based on each
partner’s distributive share of the otherwise eligible
section 45V credit as determined under §1.704-1(b)
(4)(ii). Under that section, if partnership receipts or
expenditures give rise to a credit, the partner’s inter-
est in the partnership with respect to such credit is
in the same proportion as such partners’ distribu-
tive shares of such receipt, loss, or deduction. Sec-
tion 45V credits arise based on the amount of clean
hydrogen produced at a facility. Under the partner-
ship agreement, A and B share all items equally.
Thus, A and B will each be allocated $50,000 of
tax exempt income for 2023. P will continue to be
treated as an applicable entity with respect to V for
taxable years 2024-2027 unless P revokes its election
in accordance with §1.6417-3(e)(3)(ii). At the end of
2023, A and B increase their respective tax bases
in their partnership interest and capital accounts by
$50,000 each (that is, their share of the $100,000 of
tax exempt income).
(e) Partnerships subject to subchapter
C of chapter 63. For the application of
subchapter C of chapter 63 of the Code
to section 6417, see §301.6241-7 of this
chapter.
(f) Applicability date. This section
applies to taxable years ending on or after
March 11, 2024. For taxable years ending
before March 11, 2024, taxpayers, how-
ever, may choose to apply the rules of
§§1.6417-1 through 1.6417-4 and 1.6417-
6, provided the taxpayers apply the rules
in their entirety and in a consistent man-
ner.
§1.6417-5 Additional information and
registration.
(a) Pre-filing registration and election.
An applicable entity or electing taxpayer
is required to satisfy the pre-filing regis-
tration requirements in paragraph (b) of
this section as a condition of, and prior
to, making an elective payment election.
An applicable entity or electing taxpayer
must use the pre-filing registration pro-
cess to register itself as intending to make
the elective payment election, to list all
applicable credits it intends to claim, and
to list each applicable credit property
that contributed to the determination of
such credits as part of the pre-filing sub-
mission (or amended submission). An
applicable entity or electing taxpayer
that does not obtain a registration num-
ber under paragraph (c)(1) of this section
or report the registration number on its
annual tax return, as defined in §1.6417-
1(b), pursuant to paragraph (c)(5) of
this section with respect to an otherwise
applicable credit property, is ineligible
to receive any elective payment amount
with respect to the amount of any credit
determined with respect to that applica-
ble credit property. However, completion
of the pre-filing registration requirements
and receipt of a registration number does
not, by itself, mean the applicable entity
or electing taxpayer is eligible to receive
a payment with respect to the applicable
credits determined with respect to the
applicable credit property.
(b) Pre-filing registration require-
ments—(1) Manner of pre-filing regis-
tration. Unless otherwise provided in
guidance, an applicable entity or electing
taxpayer must complete the pre-filing reg-
istration process electronically through the
IRS electronic portal and in accordance
with the instructions provided therein.
(2) Pre-filing registration and election
for members of a consolidated group.
A member of a consolidated group is
required to complete pre-filing registration
as a condition of, and prior to, making an
elective payment election. See §1.1502-77
(providing rules regarding the status of the
common parent as agent for its members).
(3) Timing of pre-filing registration. An
applicable entity or electing taxpayer must
satisfy the pre-filing registration require-
ments of this paragraph (b) and receive a
registration number under paragraph (c)
of this section prior to making an elective
payment election under §1.6417-2(b) on
the applicable entity’s or electing taxpay-
er’s annual tax return for the taxable year
at issue.

April 8, 2024 848 Bulletin No. 2024–15
(4) Each applicable credit property
must have its own registration number.
An applicable entity or electing taxpayer
must obtain a registration number for each
applicable credit property with respect to
which it intends to make an elective pay-
ment election.
(5) Information required to complete
the pre-filing registration process. Unless
modified in future guidance, an applicable
entity or electing taxpayer must provide
the following information to the IRS to
complete the pre-filing registration pro-
cess:
(i) The applicable entity’s or electing
taxpayer’s general information, including
its name, address, taxpayer identification
number, and type of legal entity.
(ii) Any additional information
required by the IRS electronic portal, such
as information regarding the taxpayer’s
exempt status under section 501(a) of the
Code; that the applicable entity is a polit-
ical subdivision of a State, the District of
Columbia, or a U.S. territory, or subdi-
vision of an Indian tribal government; or
that the applicable entity is an agency or
instrumentality of a State, the District of
Columbia, an Indian tribal government, or
a U.S. territory.
(iii) The taxpayer’s taxable year.
(iv) The type of annual tax return(s)
normally filed by the applicable entity or
electing taxpayer, or that the applicable
entity or electing taxpayer does not nor-
mally file an annual tax return with the
IRS.
(v) The type of applicable credit(s) for
which the applicable entity or electing
taxpayer intends to make an elective pay-
ment election.
(vi) For each applicable credit, each
applicable credit property that the appli-
cable entity or electing taxpayer intends
to use to determine the credit for which
the applicable entity or electing taxpayer
intends to make an elective payment elec-
tion.
(vii) For each applicable credit prop-
erty listed in paragraph (b)(4)(vi) of this
section, any further information required
by the IRS electronic portal, such as—
(A) The type of applicable credit prop-
erty;
(B) Physical location (that is, address
and coordinates (longitude and latitude) of
the applicable credit property);
(C) Supporting documentation relating
to the construction or acquisition of the
applicable credit property (such as State,
District of Columbia, Indian tribal, U.S.
territorial, or local government permits to
operate the applicable credit property; cer-
tifications; evidence of ownership that ties
to a land deed, lease, or other documented
right to use and access any land or facility
upon which the applicable credit prop-
erty is constructed or housed; U.S. Coast
Guard registration numbers for offshore
wind vessels; and the vehicle identifica-
tion number of an eligible clean vehicle
with respect to which a section 45W credit
is determined);
(D) The beginning of construction date
and the placed in service date of the appli-
cable credit property,
(E) If an investment-related credit
property (as defined §1.6417-2(c)(3)),
the source of funds the taxpayer used to
acquire the property; and
(F) Any other information that the
applicable entity or electing taxpayer
believes will help the IRS evaluate the
registration request.
(viii) The name of a contact person for
the applicable entity or electing taxpayer.
The contact person is the person whom the
IRS may contact if there is an issue with
the registration. The contact person must
either possess legal authority to bind the
applicable entity or electing taxpayer or
must provide a properly executed power
of attorney on Form 2848, Power of Attor-
ney and Declaration of Representative.
(ix) A penalties of perjury statement,
effective for all information submitted
as a complete application, and signed by
a person with personal knowledge of the
relevant facts that is authorized to bind the
registrant.
(x) Any other information the IRS
deems necessary for purposes of pre-
venting duplication, fraud, improper pay-
ments, or excessive payments under this
section that is provided in guidance.
(c) Registration number—(1) In gen-
eral. The IRS will review the information
provided and will issue a separate regis-
tration number for each applicable credit
property for which the applicable entity or
electing taxpayer provided sufficient veri-
fiable information.
(2) Registration number is only valid
for one taxable year. A registration
number is valid only with respect to the
applicable entity or electing taxpayer that
obtained the registration number under
this section and only for the taxable year
for which it is obtained.
(3) Renewing registration numbers.
If an elective payment election will be
made with respect to an applicable credit
property for a taxable year after a regis-
tration number under this section has been
obtained, the applicable entity or electing
taxpayer must renew the registration for
that subsequent taxable year in accordance
with applicable guidance, including attest-
ing that all the facts previously provided
are still correct or updating any facts.
(4) Amendment of previously submit-
ted registration information if a change
occurs before the registration number is
used. As provided in instructions to the
pre-filing registration portal, if specified
changes occur with respect to one or more
applicable credit properties for which a
registration number has been previously
obtained but not yet used, an applicable
entity or electing taxpayer must amend
the registration (or may need to submit
a new registration) to reflect these new
facts. For example, if the owner of a facil-
ity previously registered for an elective
payment election for applicable credits
determined with respect to that facility
and the facility undergoes a change of
ownership (incident to a corporate reor-
ganization or an asset sale) such that
the new owner has a different employer
identification number (EIN) than the
owner who obtained the original regis-
tration, the original owner of the facility
must amend the original registration to
disassociate its EIN from the applicable
credit property and the new owner must
submit separately an original registration
(or if the new owner previously regis-
tered other credit properties, must amend
its original registration) to associate the
new owner’s EIN with the previously
registered applicable credit property. If
the change of ownership is with respect
to an electing taxpayer, then the 5-year
election period will continue despite the
change in ownership.
(5) Registration number is required to
be reported on the return for the taxable
year of the elective payment election. The
applicable entity or electing taxpayer must
include the registration number of the

Bulletin No. 2024–15 849 April 8, 2024
applicable credit property on its annual
tax return as provided in §1.6417-2(b)
for the taxable year. The IRS will treat an
elective payment election as ineffective
with respect to an applicable credit deter-
mined with respect to an applicable credit
property for which the applicable entity or
electing taxpayer does not include a valid
registration number that was assigned to
that particular taxpayer during the pre-reg-
istration process on the annual tax return.
(d) Applicability date. This section
applies to taxable years ending on or after
March 11, 2024.
§1.6417-6 Special rules.
(a) Excessive payment—(1) In gen-
eral. In the case of any elective payment
amount that the IRS determines constitutes
an excessive payment, the tax imposed on
such entity by chapter 1, regardless of
whether such entity or taxpayer would
otherwise be subject to chapter 1 tax, for
the taxable year in which such determi-
nation is made will be increased by an
amount equal to the sum of—
(i) The amount of such excessive pay-
ment, plus
(ii) An amount equal to 20 percent of
such excessive payment.
(2) Reasonable cause. The amount
described in paragraph (a)(1)(ii) of this
section will not apply to an applicable
entity or electing taxpayer if the appli-
cable entity or electing taxpayer demon-
strates to the satisfaction of the IRS that
the excessive payment resulted from rea-
sonable cause.
(3) Excessive payment defined. For pur-
poses of this section, the term excessive
payment means, with respect to an appli-
cable credit property for which an elective
payment election is made under §1.6417-
2(b) for any taxable year, an amount equal
to the excess of—
(i) The amount treated as a payment
under §1.6417-2(a)(1)(i) or (a)(2)(i), or
the amount of the payment made pursu-
ant to §1.6417-2(a)(2)(ii), with respect to
such applicable credit property for such
taxable year, over
(ii) The amount of the credit that, with-
out application of this section, would be
otherwise allowable under the Code (as
determined pursuant to §1.6417-2(c) and
(e) or §1.6417-4(d)(1) and (3), and with-
out regard to the limitation based on tax in
section 38(c)) with respect to such appli-
cable credit property for such taxable year.
For purposes of this section, the amount of
such credit that would be otherwise allow-
able is the amount claimed on an original
or amended return, including any admin-
istrative adjustment request under section
6227.
(4) Example. This example illustrates
the principles of this paragraph (a). B,
an instrumentality of State M, places in
service in 2023 facility F, which is eli-
gible for the energy credit determined
under section 48. B properly completes
the pre-filing registration as an applica-
ble entity that will earn the energy credit
from F in accordance with §1.6417-5,
and receives a registration number for
F. B timely files its 2023 Form 990-T,
properly providing the registration num-
ber for F and otherwise complying with
§1.6417-2(b). On its Form 990-T, B cal-
culates that the amount of energy credit
determined with respect to F is $100,000
and that the net elective payment amount
is $100,000. B receives a refund in the
amount of $100,000. In 2025, the IRS
determines that the amount of energy
credit properly allowable to B in 2023
with respect to F (as determined pursu-
ant to §1.6417-2(c) and (e) and without
regard to the limitation based on tax in
section 38(c)) was $60,000. B is unable
to show reasonable cause for the differ-
ence. The excessive payment amount is
$40,000 ($100,000 treated as a payment
- $60,000 allowable amount). In 2025,
the tax imposed under chapter 1 on B
is increased in the amount of $48,000
($40,000 + (20% * $40,000).)
(b) Basis reduction and recapture—
(1) In general. Rules similar to the rules
of section 50 (without regard to section
50(b)(3) and (4)(A)(i)) apply for purposes
of this section.
(2) Reporting recapture. Any report-
ing of recapture is made on the annual tax
return of the applicable entity or electing
taxpayer in the manner prescribed by the
IRS in any guidance, along with supple-
mental forms such as Form 4255, Recap-
ture of Investment Credit.
(3) Example. This example illustrates the prin-
ciples of this paragraph (b). In December 2023,
G, a government entity, places in service P, which
is energy property eligible for the energy credit
determined under section 48 (section 48 credit).
G properly completes the pre-filing registration in
accordance with §1.6417-5 as an applicable entity
to make an election under section 6417 for 2023. G
timely files its 2023 Form 990-T in 2024, properly
making the elective payment election in accordance
with §1.6417-2 for a section 48 energy credit deter-
mined with respect to P. On its Form 990-T, G prop-
erly determines that the amount of section 48 credit
determined with respect P is $100,000 and that its
net elective payment amount is $100,000. The IRS
sends G a $100,000 refund. Pursuant to section
50(c), G reduces its basis in P by $50,000. In July
2025, P ceases to be investment credit property with
respect to G. Because this occurs before the close of
the recapture period set forth in section 50, section
50(a)(1)(A) provides that the tax under chapter 1 for
2025 is increased by the recapture percentage of the
aggregate decrease in the credits allowed under sec-
tion 38 for all prior taxable years that would have
resulted solely from reducing to zero any credit
determined under subpart E of part IV of subchapter
A of chapter 1 with respect to such property. Because
P ceased to be investment credit property within 2
full years after P was placed in service, section 50(a)
(1)(B) provides that the recapture percentage is 80%.
G must properly report the recapture event in 2025,
paying an $80,000 tax. Because G is a government
entity, G reports the recapture event on a Form 990-T
or any Form provided in further guidance, along with
supplemental forms such as Form 4255, Recapture
of Investment Credit. G’s basis in P is increased by
$40,000.
(c) Mirror code territories. Pursuant to
section 6417(f) of the Code, section 6417
and the section 6417 regulations are not
treated as part of the income tax laws of the
United States for purposes of determining
the income tax law of any U.S. territory
with a mirror code tax system (as defined
in section 24(k) of the Code), unless such
U.S. territory elects to have section 6417
and the section 6417 regulations be so
treated. The applicable territory tax author-
ity for a U.S. territory determines whether
such an election has been made.
(d) Partnerships subject to subchapter C
of chapter 63 of the Code. See §301.6241-
7(j) of this chapter for rules applicable to
payments made to partnerships subject to
subchapter C of chapter 63 of the Code for
a partnership taxable year.
(e) Applicability date. This section
applies to taxable years ending on or after
March 11, 2024. For taxable years ending
before March 11, 2024, taxpayers, how-
ever, may choose to apply the rules of
§§1.6417-1 through 1.6417-4 and 1.6417-
6, provided the taxpayers apply the rules in
their entirety and in a consistent manner.
§1.6417-5T [Removed]
Par. 3. Section 1.6417-5T is removed.

April 8, 2024 850 Bulletin No. 2024–15
PART 301—PROCEDURE AND
ADMINISTRATION
Par. 4. The authority citation for part
301 is amended by revising the entries for
§§301.6241-1 and 301.6241-7 to read in
part as follows:
Authority: 26 U.S.C. 7805.
* * * * *
Section 301.6241-1 also issued under
sections 48D(d), 6241, and 6417.
* * * * *
Section 301.6241-7 also issued under
sections 48D(d), 6241, and 6417.
* * * * *
Par. 5. Section 301.6241-1 is amended
by:
a. Adding a sentence after the second
sentence in paragraph (a)(6)(iii); and
b. Adding a sentence to the end of para-
graph (b)(1).
The additions read as follows:
§301.6241-1 Definitions.
(a) * * *
(6) * * *
(iii) * * * Notwithstanding the previous
two sentences, any tax, penalty, addition
to tax, or additional amount imposed on
the partnership under chapter 1 is an item
or amount with respect to the partnership.
* * *
* * * * *
(b) * * *
(1) * * * The third sentence of para-
graph (a)(6)(iii) of this section applies to
partnership taxable years ending on or
after June 21, 2023.
* * * * *
Par. 6. Section 301.6241-7 is amended
by:
a. Redesignating paragraph (j) as para-
graph (k);
b. Adding new paragraph (j);
c. Revising the first sentence of newly
redesignated paragraph (k)(1); and
d. Adding paragraph (k)(3).
The additions and revisions read as fol-
lows:
§301.6241-7 Treatment of special
enforcement matters.
* * * * *
(j) Elections resulting in payments to a
partnership. The IRS may adjust any elec-
tion that results or could result in a pay-
ment to the partnership in lieu of a Federal
tax credit or deduction without regard to
subchapter C of chapter 63. The IRS may
also make determinations, without regard
to subchapter C of chapter 63, about the
payment itself as well as any partner-
ship-related item relevant to adjusting the
election or the payment.
* * * * *
(k) * * *
(1) * * * Except as provided in para-
graphs (k)(2) (relating to paragraph (b)
of this section) and (k)(3) of this section
(relating to paragraph (j) of this section),
this section applies to partnership taxable
years ending on or after November 20,
2020. * * *
* * * * *
(3) Elections resulting in payments to a
partnership. Paragraph (j) of this section
applies to taxable years ending on or after
June 21, 2023.
Douglas W. O’Donnell,
Deputy Commissioner for
Services and Enforcement.
Approved: February 27, 2024.
Aviva Aron-Dine,
Acting Assistant Secretary of
the Treasury (Tax Policy).
(Filed by the Office of the Federal Register March
5, 2024, 8:45 a.m., and published in the issue of the
Federal Register for March 11, 2024, 89 FR 17546)
26 CFR 1.48D-6: Elective Payment of Advanced
Manufacturing Investment Credit
T.D. 9989
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Elective Payment of
Advanced Manufacturing
Investment Credit
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations and removal
of temporary regulations.
SUMMARY: This document contains
final regulations concerning the elective
payment election of the advanced manu-
facturing investment credit under the Cre-
ating Helpful Incentives to Produce Semi-
conductors (CHIPS) Act of 2022. The
regulations describe rules for the elective
payment election, including special rules
applicable to partnerships and S corpora-
tions, repayment of excessive payments,
basis reduction and recapture, and the IRS
pre-filing registration process that taxpay-
ers wanting to make the elective payment
election are required to follow. These
final regulations affect taxpayers eligible
to make the elective payment election of
the advanced manufacturing investment
tax credit in a taxable year. This document
also removes temporary regulations pub-
lished on June 21, 2023 in the Federal
Register.
DATES: Effective date: These regulations
are effective May 10, 2024.
Applicability dates: For dates of appli-
cability see §1.48D-6(h).
FOR FURTHER INFORMATION
CONTACT: Concerning these final reg-
ulations, Lani M. Sinfield of the Office of
Associate Chief Counsel (Passthroughs
and Special Industries) at (202) 317-4137
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
Section 48D was added to the Inter-
nal Revenue Code (Code) on August 9,
2022, by section 107(a) of the CHIPS Act
of 2022 (CHIPS Act), which was enacted
as Division A of the CHIPS and Science
Act of 2022, Public Law 117-167, 136
Stat. 1366, 1393. Section 48D established
the advanced manufacturing investment
credit (section 48D credit) and section
48D(d) allows taxpayers (other than part-
nerships and S corporations) to elect to
treat the amount of the section 48D credit
determined under section 48D(a) as a
payment against their Federal income tax
liabilities. Section 48D(d) also provides
special rules relating to elective payments

Bulletin No. 2024–15 851 April 8, 2024
to partnerships and S corporations and
directs the Secretary of the Treasury or her
delegate (Secretary) to provide rules for
making elections under section 48D and
to require information or registration nec-
essary for purposes of preventing duplica-
tion, fraud, improper payments, or exces-
sive payments under section 48D. Section
48D applies to qualified property placed
in service after December 31, 2022, and,
for any property the construction of which
began prior to January 1, 2023, only to
the extent of the basis thereof attributable
to the construction, reconstruction, or
erection of such qualified property after
August 9, 2022 (the date of enactment of
the CHIPS Act). See section 107(f)(1) of
the CHIPS Act.
On March 23, 2023, the Treasury
Department and the IRS published in the
Federal Register (88 FR 17451) a notice of
proposed rulemaking (REG-120653-22),
which contained proposed definitions and
rules to implement the general provisions
relating to the section 48D credit under
proposed §§1.48D-1 through 1.48D-6
and the special 10-year recapture rule
under proposed §1.50-2 (March 2023 pro-
posed regulations). Proposed §§1.48D-1
through 1.48D-5 and §1.50-2 addressed
who would be an eligible taxpayer, what
would qualify as qualified property or an
advanced manufacturing facility, whether
the beginning of construction requirement
would be met, and what would qualify as
a significant transaction involving a mate-
rial expansion of semiconductor manu-
facturing capacity in a foreign country
of concern for purposes of the special
10-year recapture rule under section 50(a)
(3) of the Code. In addition, §1.48D-6 of
the March 2023 proposed regulations set
forth the general requirements that would
apply for making an elective payment
election under section 48D(d), and the
specific requirement that an eligible tax-
payer, partnership, or S corporation would
need to comply with the registration pro-
cedures in proposed §1.48D-6(c)(2) as
a condition of, and prior to, any amount
being treated as a payment under section
48D(d)(1) or (d)(2)(A)(i)(I). However, the
March 2023 proposed regulations under
proposed §1.48D-6(c)(2) reserved on the
procedures and additional information
required for completing the pre-filing reg-
istration process.
Over 40 comments were received by
the Treasury Department and the IRS in
response to the March 2023 proposed reg-
ulations. A public hearing on the March
2023 proposed regulations was held on
July 26, 2023. Comments and testimony
regarding proposed §§1.48D-1 through
1.48D-5 and 1.50-2 will be addressed in a
forthcoming Treasury decision containing
final regulations under those provisions.
On June 21, 2023, the Treasury Depart-
ment and the IRS published proposed
regulations under section 48D(d) (REG-
105595-23) in the Federal Register (88 FR
40123) revising proposed §1.48D-6 of the
March 2023 proposed regulations (June
2023 proposed regulations) to set forth
the additional information and registration
requirements for taxpayers planning to
make an elective payment election under
section 48D(d) to treat the amount of the
section 48D credit as a payment of Federal
income tax, or in the case of a partnership
or S corporation, to receive a payment in
the amount of such credit. The June 2023
proposed regulations also described rules
for the elective payment election, includ-
ing special rules applicable to partner-
ships and S corporations, repayment of
excessive payments, and basis reduction
and recapture. Also on June 21, 2023, the
Treasury Department and the IRS pub-
lished temporary regulations (T.D.9975)
(temporary regulations) in the Federal
Register (88 FR 40086) that implement
the prefiling registration process described
in §1.48D-6(b) of the June 2023 proposed
regulations. The temporary regulations
apply to property placed in service on or
after December 31, 2022, and during a
taxable year ending on or after June 21,
2023. Twelve commenters provided com-
ments to the Treasury Department and the
IRS in response to the June 2023 proposed
regulations, and a public hearing was held
on August 24, 2023.
This Treasury decision removes the
temporary regulations effective on May
10, 2024 and adopts §1.48D-6 of the
June 2023 proposed regulations with
certain modifications after full consider-
ation of all the comments and testimony
received on §1.48D-6 of the March 2023
proposed regulations and June 2023 pro-
posed regulations, as described in the
Summary of Comments and Explanation
of Revisions.
Summary of Comments and
Explanation of Revisions
I. Overview
The final regulations set forth in
§1.48D-6 retain the basic approach and
structure of the June 2023 proposed reg-
ulations with certain revisions in response
to comments received.
The Treasury Department and the IRS
have refined and clarified certain aspects
of the June 2023 proposed regulations in
these final regulations. Specifically, the
final regulations modify the limitations
for making an elective payment election
in proposed §1.48D-6(c)(2), modify the
denial of double benefit rule in proposed
§1.48D-6(e), and provide an interim rule
for determining a partner’s distributive
share of the tax exempt income described
in section 48D(d)(2)(A)(i)(III) and pro-
posed §1.48D-6(d)(2).
II. Elective Payment Election
One commenter requested that the final
regulations clarify whether a taxpayer
is considered to have made an elective
payment election upon completing the
pre-filing registration requirement. The
commenter noted that proposed §1.48D-
6(b)(7)(iv) states in relevant part, that, if
an eligible taxpayer that is the owner of
an advanced manufacturing facility previ-
ously registered for an elective payment
election for a section 48D credit deter-
mined with respect to that advanced manu-
facturing facility, and if the facility under-
goes a change in ownership such that the
new owner has a different employer identi-
fication number (EIN) than the owner who
obtained the original registration, then the
original owner of the advanced manufac-
turing facility must amend the original
registration to disassociate its EIN from
the advanced manufacturing facility. The
commenter suggested that this sentence
from proposed §1.48D-6(b)(7)(iv) creates
some confusion as to whether the elective
payment election is made pursuant to the
pre-filing registration as opposed to on the
taxpayer’s original tax return as provided
in proposed §1.48D-6(c). The commenter
further suggested that an example would
be helpful to demonstrate a taxpayer’s
ability to make an elective payment elec-

April 8, 2024 852 Bulletin No. 2024–15
tion per facility not per the taxpayer. The
commenter explained that there could be
instances in which the taxpayer would
make an elective payment election for one
advanced manufacturing facility versus
another advanced manufacturing facility.
The Treasury Department and the IRS
have determined that a modification to
the proposed rule is appropriate to clarify
that a taxpayer makes an elective payment
election pursuant to section 48D(d)(1) in
the time and manner required by §1.48D-
6(c) of the final regulations. Accordingly,
proposed §1.48D-6(b)(7)(iv) is revised in
the final regulations to provide that the
taxpayer registers the “qualified invest-
ments in the advanced manufacturing
facility or the advanced manufacturing
facility” as opposed to registering for
“an elective payment election for a sec-
tion 48D credit determined with respect
to that advanced manufacturing facility.”
Given this clarification, the Treasury
Department and the IRS have determined
that an example to demonstrate this point
is not needed.
III. Pre-filing Registration Requirement
A. Qualified investment
Proposed §1.48D-6(b)(5) would
require a taxpayer to obtain a registration
number for each qualified investment in
an advanced manufacturing facility of an
eligible taxpayer with respect to which
an elective payment election is made.
Several commenters requested that the
final regulations clarify the meaning of
the term “qualified investment” in pro-
posed §1.48D-6(b)(5). Some comment-
ers requested that the final regulations
allow a taxpayer to obtain a registration
number for an advanced manufacturing
facility. Other commenters requested that
the final regulations allow a taxpayer to
obtain a registration number for a single
advanced manufacturing facility project
that would cover all qualified investments
made with respect to such advanced man-
ufacturing facility project within the tax-
able year. Another commenter requested
that the final regulations allow a taxpayer
to obtain a registration number for all
qualified investments placed in service
as a part of an advanced manufacturing
facility during the taxable year, or for
any reasonable grouping of investments
or assets.
Section 48D(a) provides that the sec-
tion 48D credit for any taxable year is an
amount equal to 25 percent of the qual-
ified investment for such taxable year
with respect to any advanced manufactur-
ing facility of an eligible taxpayer. Sec-
tion 48D(b) generally provides that the
qualified investment with respect to any
advanced manufacturing facility for any
taxable year is the basis of any qualified
property placed in service by the taxpayer
during such taxable year which is part
of an advanced manufacturing facility.
Consistent with section 48D(a), proposed
§1.48D-6(b)(5) would require a taxpayer to
obtain a registration number for each qual-
ified investment in an advanced manufac-
turing facility as a prerequisite to making
an elective payment election with respect
to the section 48D credit determined with
respect to such qualified investment for
the taxable year. Consequently, a taxpayer
must obtain a registration number for any
qualified property placed in service during
the taxable year. A taxpayer is able to reg-
ister a single property, properties, or an
advanced manufacturing facility. How-
ever, a taxpayer must be the owner of an
advanced manufacturing facility to regis-
ter the facility. A taxpayer that places in
service qualified property that is part of
an advanced manufacturing facility must
register the qualified property if such tax-
payer is not the owner of the facility. The
proposed regulations provide flexibility to
taxpayers in determining the appropriate
properties, or advanced manufacturing
facility, for which it must obtain a regis-
tration number.
Section 48D(d)(2)(E) provides that the
Secretary may require additional informa-
tion or registration as a condition of, and
prior to, an amount being treated as a pay-
ment under section 48D(d)(1) to prevent
duplication, fraud, improper payments, or
excessive payments. A rule allowing a tax-
payer to register a single advanced man-
ufacturing facility project, which could
include multiple qualified investments in
more than one advanced manufacturing
facility, would create an administrative
burden on the IRS because the determi-
nation of the section 48D credits with
respect to the separate facilities could be
different. Such a rule could thus increase
the risk of duplication, fraud, improper
payments, or excessive payments. For the
foregoing reasons, these final regulations
do not adopt these recommendations. The
Treasury Department and the IRS recom-
mend that taxpayers consult Form 3468,
Investment Credit, and Form 3800, Gen-
eral Business Credit, and those form’s
accompanying instructions, as well as the
current version of Publication 5884, Infla-
tion Reduction Act (IRA) and CHIPS Act
of 2022 (CHIPS) Pre-Filing Registration
Tool User Guide and Instructions, for the
latest guidance on the pre-filing registra-
tion process. Proposed §1.48D-6(b)(7)(ii)
would provide that a registration number
is valid only for the taxable year for which
it was obtained. Proposed §1.48D-6(b)(7)
(iii) would provide that a taxpayer must
renew a previously obtained registration
in a subsequent taxable year. A commenter
requested that the final regulations allow a
taxpayer to obtain one registration number
that could be renewed over a period of sev-
eral taxable years for all qualified progress
expenditures in an advanced manufactur-
ing facility. The Treasury Department and
the IRS have determined that allowing a
taxpayer to obtain one registration num-
ber that can be used for a period of several
years for all qualified progress expendi-
tures would increase the risk of duplica-
tion, fraud, improper payments or exces-
sive payments. Accordingly, the requested
change is not adopted.
B. Information required to complete the
pre-filing registration process
Commenters recommended that the
final regulations modify the informa-
tion and documentation requirements in
proposed §1.48D-6(b). One commenter
requested that the final regulations specify
the “additional information” that may be
required by the IRS electronic portal pur-
suant to proposed §1.48D-6(b)(6)(ii) to
ensure that taxpayers have clarity and time
to prepare all necessary documentation.
One commenter requested that the final
regulations eliminate all “open-ended”
categories that do not specify the types of
information or documentation as in pro-
posed §1.48D-6(b)(6)(ii), (vi), (vi)(F), and
(ix). The commenter also requested limit-
ing the requirement for information on the
beginning of construction and placed in

Bulletin No. 2024–15 853 April 8, 2024
service date in proposed §1.48D-6(b)(6)
(vi)(D). The commenter further requested
that the final regulations eliminate or sig-
nificantly limit the supporting document
requirement in §1.48D-6(b)(6)(vi)(C).
The pre-filing registration process
has been designed to help prevent fraud
and duplication, while also allowing for
more efficient processing and payment
upon filing of the return. The information
requested is also that which a taxpayer
claiming a section 48D credit should have
available. Except for a taxpayer making
a qualified progress expenditure election
pursuant to section 48D(b)(5), a taxpayer
must first place in service qualified prop-
erty before the taxpayer may register the
property with the intention of making an
elective payment election. Maintaining
this proposed requirement ensures that
taxpayers are not completing pre-filing
registration in an earlier year, before a
credit can be determined. Therefore, these
final regulations do not adopt these rec-
ommendations.
One commenter recommended that
the final regulations include informa-
tion reporting requirements similar to
the information reporting requirements
in §1.48-4 (election of lessor to treat the
lessee as having acquired investment
credit property). More specifically, the
commenter suggested that the information
requirements should be satisfied when a
taxpayer attaches a signed statement to
its return that provides, for each unit of
property for which an election is made,
including a single advanced manufactur-
ing facility, a description of the property,
the basis of the property, the year when
construction of the property began, and
the placed in service date. The commenter
also requested that, in the years after the
filing of the initial statement, a taxpayer
should be able to satisfy the information
requirements by reporting changes to any
information in the prior year’s filed state-
ment such as basis adjustments and any
additional property with respect to which
additional credits are claimed.
Consistent with section 48D(d)(2)(E),
the final regulations provide for a pre-fil-
ing registration process that allows the
IRS to verify certain information before
the election is made and then to process
the tax return on which the election is
made with minimal delays. Similarly,
the final regulations provide the time and
manner for making an elective payment
election that is consistent with the existing
framework for claiming business tax cred-
its; that is, the filing of the annual return
including the completed source credit
form and completed Form 3800. As pre-
viously noted, the pre-filing registration
process has been designed to help prevent
fraud and duplication, while also allowing
for more efficient processing and payment
upon filing of the return. For the forego-
ing reasons, the final regulations adopt the
information requirements as proposed.
A commenter asked whether the IRA
and CHIPS pre-filing registration portal
could handle large files in order to sat-
isfy the information requirements under
proposed §1.48D-6(b)(6)(vi)(C). The
Treasury Department and the IRS did not
intend for proposed §1.48D-6(b)(6)(vi)
(C) to require all supporting documenta-
tion to be provided during the pre-filing
registration process. Rather, the intent
was to require information sufficient to
verify the taxpayer’s qualified invest-
ment and provide examples of informa-
tion that may be helpful in doing so. In
response to the comment, these final reg-
ulations remove the word “any” from the
provision. The documentation to support
the existence of a valid qualified invest-
ment will vary by the property or proper-
ties for which the credit is being claimed,
and a registrant does not need to provide
all information that may be available.
However, to the extent the information
provided is insufficient for purposes of
the pre-filing registration process, the
IRS may request further information. See
Publication 5884.
Another commenter generally recom-
mended that the final regulations “could
be slightly more specific in guiding tax-
payers when determining their pre-filing
eligibility,” but did not include any par-
ticular recommendations for modifica-
tions to the proposed regulations. Consis-
tent with section 48D(d)(2)(E), proposed
§1.48D-6(b) would provide the informa-
tion and pre-filing registration require-
ments that the Secretary deems necessary
and appropriate for purposes of prevent-
ing duplication, fraud, improper payments
or excessive payments and which specify
pre-filing eligibility. Accordingly, the final
regulations do not include any modifica-
tions to the specifications for determining
pre-filing eligibility.
C. Timing of the pre-filing registration
process
Commenters requested that the final
regulations clarify the timeframe for the
IRS to review the registration information
provided, and notify the taxpayer whether
the registration requirements have or
have not been satisfied. One commenter
recommended that the final regulations:
(1) allow the IRS 90 days to determine
whether a taxpayer submitted sufficient
information required to complete the
pre-filing registration process, (2) pro-
vide a taxpayer with 14 days to correct
the registration, and (3) allow the IRS 45
days to review the corrected information.
Because the timeframe and procedures of
the pre-filing registration process may be
modified over time as both the IRS and
taxpayers gain experience with it, these
final regulations do not contain any such
timeframe or procedure. Instead, the Trea-
sury Department and the IRS recommend
that taxpayers consult the current version
of Publication 5884 for the latest guidance
on the pre-filing registration process. As
of February 2024, Publication 5884 states:
Even though registration is not possible
prior to the beginning of the tax year in
which the credit will be earned, the IRS
recommends that taxpayers register as
soon as reasonably practicable during
the tax year. The current recommen-
dation is to submit the pre-filing regis-
tration at least 120 days prior to when
the organization or entity plans to file
its tax return. This should allow time
for IRS review, and for the taxpayer to
respond if the IRS requires additional
information before issuing the registra-
tion numbers.
One commenter requested that the
final regulations clarify the outcome of a
missed registration with respect to a por-
tion of a qualified investment. The com-
menter asked whether a missed registra-
tion for a portion of a qualified investment
will impact a taxpayer’s ability to make
an election for the portion of the qual-
ified investment for which registration
was properly made and whether a tax-

April 8, 2024 854 Bulletin No. 2024–15
payer may claim a section 48D credit for
the portion for which the registration was
not properly made. This is a factual mat-
ter that cannot be addressed in these final
regulations as it depends on the facts and
circumstances of the qualified investment
made by the taxpayer. However, as further
described in part IV.B of this Summary
of Comments and Explanation of Revi-
sions, the final regulations provide that a
taxpayer may take curative action for an
ineffective election prior to the due date
of the election (including extensions) by
filing a superseding return.
No comments were received on the
remaining proposed rules under §1.48D-
6(b). This Treasury decision therefore
adopts those proposed regulations as final
regulations.
IV. Time and Manner of Election
A. Qualified progress expenditures
Commenters requested that the final
regulations clarify whether a taxpayer
can make an elective payment election
with respect to a section 48D credit deter-
mined pursuant to a qualified progress
expenditure election. Section 48D(b)(5)
provides that “[r]ules similar to the rules
of subsections (c)(4) and (d) of section 46
(as in effect on the day before the date of
enactment of the Revenue Reconciliation
Act of 1990) shall apply for purposes of
subsection [48D](a).” Thus, a taxpayer
has the ability to make a qualified prog-
ress expenditure election, as provided in
§1.46-5, to increase its qualified invest-
ment with respect to an advanced manu-
facturing facility for the taxable year by
any qualified expenditures made during
such taxable year. Section 48D(d)(1)
allows a taxpayer to make an elective
payment election with respect to a sec-
tion 48D credit determined with respect to
such taxpayer. Section 48D(d)(2) allows
a partnership or S corporation to make an
elective payment election under section
48D(d)(1). The statutory text of sections
48D(b)(5) and (d)(1) and (2) thus permit
a taxpayer (or partnership or S corpora-
tion) to make an elective payment elec-
tion with respect to a section 48D credit
determined pursuant to a qualified prog-
ress expenditure election. For this reason,
the Treasury Department and the IRS have
determined that a clarification is not nec-
essary in the final regulations. The Trea-
sury Department and the IRS recommend
that taxpayers consult the current version
of Publication 5884 for the latest guidance
on the pre-filing registration with respect
to property for which the taxpayer makes
a qualified progress expenditure election.
As of February 2024, Publication 5884
states:
If the registrant intends to elect pay-
ment for certain progress expenditures
under IRC section 48D(b)(5), enter the
date of the entity’s last progress expen-
diture made during the tax year.
A commenter stated that a calendar-year
taxpayer with qualifying progress expen-
ditures made between August 9, 2022,
and December 31, 2022, may not have
sufficient time to successfully complete
the pre-filing registration requirements as
described in the proposed regulations to
make a timely elective payment election
on an original return. The IRA and CHIPS
pre-filing registration portal opened on
December 22, 2023. Thus, a calendar-year
taxpayer with qualifying progress expen-
ditures made between August 9, 2022,
and December 31, 2022, would have been
unable to complete the pre-filing registra-
tion requirements. In such cases, the tax-
payer should anticipate that the tax return
on which the elective payment election is
made may undergo heightened scrutiny to
mitigate the risk of fraud and duplication
that pre-filing registration is intended to
address before a payment is issued.
One commenter requested that the final
regulations or other guidance provide
guidance on the definitions of “self-con-
structed” versus “non-self-constructed
property” and “integrated unit” for pur-
poses of determining the construction
period under §1.46-5. Whether a property,
including qualified property under sec-
tion 48D(b)(2) and the section 48D reg-
ulations, is progress expenditure property
is determined based on the facts known
at the close of the first taxable year to
which a progress expenditures election
is made. Whether property is “self-con-
structed” versus “non-self-constructed
property” or an “integrated unit” pursuant
to §1.46-5(k), (l) and (e)(3), respectively,
is also a factual determination. Additional
guidance on the definitions of “self-con-
structed” versus “non-self-constructed
property” and “integrated unit,” would
inject significant complexity into the final
regulations and likely cause additional
uncertainty regarding the scope of those
terms. Moreover, such guidance is beyond
the scope of these final regulations.
Accordingly, the final regulations do not
address the modifications requested by the
commenter.
B. Manner of making the election
A commenter requested that the final
regulations clarify whether a taxpayer
is “released from the requirements of
an elective payment election” if the tax-
payer completes pre-filing registration but
chooses not to make the elective payment
election. Proposed §1.48D-6(c)(1) would
provide, in part, that any elective payment
election under section 48D(d)(1) must be
made on the taxpayer’s original return
of tax (including a superseding return)
filed not later than the due date (includ-
ing extensions of time) for the taxable
year for which the section 48D credit is
determined. Proposed §1.48D-6(b) would
provide the requirements for pre-filing
registration. Neither section 48D nor the
proposed regulations would mandate that
a taxpayer is required to make an elective
payment election if the taxpayer success-
fully completed the pre-filing registra-
tion requirements set forth in proposed
§1.48D-6(b). As noted in Part II of this
Summary of Comments and Explanation
of Revisions, the final regulations modify
proposed §1.48D-(6)(b)(7)(iv) by clarify-
ing that the taxpayer previously registered
the “advanced manufacturing facility” as
opposed to previously registering for “an
elective payment election for a section
48D credit determined with respect to that
advanced manufacturing facility.” For the
foregoing reasons, the Treasury Depart-
ment and the IRS have determined that
no further clarification is necessary in the
final regulations as requested by the com-
menter.
One commenter requested that the final
regulations clarify that any additional
information and supporting calculations
required by any source credit form and
Form 3800 may be submitted electroni-
cally and will be reviewed by the appro-

Bulletin No. 2024–15 855 April 8, 2024
priate persons. Proposed §1.48D-6(c)(1)
would provide a manner for making an
elective payment election that is consistent
with the existing framework for claiming
business tax credits; that is, the filing of
the annual return including the completed
source credit form and completed Form
3800 which may be submitted electron-
ically. The proposed regulations would
provide for a pre-filing registration pro-
cess that would allow the IRS to verify
certain information before the election is
made and then process the tax return on
which the election is made with minimal
delays. Additional guidance on this sub-
ject is beyond the scope of these final reg-
ulations.
Consistent with proposed §1.48D-6(c)
(1)(iv)(A), the final regulations require a
taxpayer to include a statement on the tax-
payer’s original return (including a super-
seding return) attesting under the penalties
of perjury that the taxpayer has not made
an applicable transaction as defined in
proposed §1.50-2(b)(3) during the taxable
year that the qualified property is placed
in service. One commenter recommended
that the statement whether the taxpayer
has made an applicable transaction should
be requested either at pre-filing registra-
tion or on the tax return. The commenter
explained that including this requirement
would allow the IRS and taxpayers to be
proactive in preventing any unnecessary
claiming of the section 48D credit or the
taxpayer making an incorrect elective
payment election. Section 48D(a) pro-
vides that the section 48D credit for any
taxable year is determined with respect
to any advanced manufacturing facility
of an eligible taxpayer. Section 48D(c)
defines an eligible taxpayer, in part, as any
taxpayer which has not made an appli-
cable transaction (as defined in section
50(a)) during the taxable year. Requiring
the statement on the taxpayer’s return as
opposed to during pre-filing registration
is consistent with the requirements of sec-
tions 48D(a) and (c) and allows taxpayers
sufficient time for such a determination
while deterring erroneous elective pay-
ment elections.
One commenter requested clarifica-
tion on superseding returns. Neither the
Code nor regulations define a superseding
return, but administrative IRS guidance
provides that a superseding return is a
return filed subsequent to the original-
ly-filed return but before the due date for
filing the return (including extensions).
For example, if a taxpayer subject to an
automatic extension files an original return
on the due date and also files a subsequent
return within the automatic extension
period, the subsequent return would gen-
erally be considered a superseding return.
If a return for a particular taxable year is
originally filed after the due date (exclud-
ing extensions) but during the automatic
extension period, then such return would
be considered an original return. Unlike a
superseding return, an amended return is
a return filed subsequent to the originally
filed or superseding return and filed after
the due date for filing the return (including
extensions).
The commenter stated that the refer-
ence to a superseding return seems to be
an acknowledgment that some taxpayers
will use a provisional tax return filed on
the due date (before extensions) to has-
ten the election process. This commenter
asked whether, if a taxpayer files a pro-
visional return on March 15, 2024, and
files a superseding return on September
15, 2024, the taxpayer would be treated
as making payment against tax under sec-
tion 48D(d)(2)(C) on March 15, 2024.
The Treasury Department and the IRS
note that the designation “provisional”
return has no basis in the Code or regula-
tions and accordingly, such returns are not
treated differently by the IRS upon filing.
Taxpayers are reminded that a tax return
is signed under penalties of perjury that
the return is true, correct, and complete.
If an original return is filed on March 15,
2024, and contains a valid elective pay-
ment election, the taxpayer is treated as
making a payment against tax on that day.
A superseding return could increase or
reduce the amount of the net elective pay-
ment election. If the amount is increased,
the additional elective payment is treated
as paid on the date the superseding return
was filed. Taxpayers should be aware that
filing a superseding return could result in
a delay by the IRS in processing the addi-
tional elective payment amount. If the
net elective payment amount is reduced
because of the superseding return, the
taxpayer could be subject to interest and,
if the taxpayer fails to pay the difference
with the superseding return, penalties.
The Treasury Department and the
IRS have determined that clarification
is needed to address situations in which
a taxpayer intended to make an elective
payment election but made a reporting
error with respect to an element of a valid
election (for example, miscalculating the
amount of the credit on the original return
or making a typographical error in the pro-
cess of inputting a registration number),
and to allow the taxpayer to correct any
errors that would result in a disallowance
of the election or to correct an excessive
payment before an excessive payment
determination is made by the IRS. Con-
sistently, it is appropriate to allow taxpay-
ers to correct errors that would result in a
larger payment than indicated on the orig-
inal return as long as such larger amount
is accurate. As a result, these final regu-
lations remove the words “or revised” in
proposed §1.48D-6(c)(2) and now state
“[n]o elective payment election may be
made for the first time on an amended
return, withdrawn on an amended return,
or made or withdrawn by filing an admin-
istrative adjustment request under section
6227 of the Code, although a numerical
error with respect to a properly claimed
elective payment election may be cor-
rected on an amended return or by filing an
administrative adjustment request under
section 6227 if necessary.” This provision
cannot be used to revoke an election or to
make an election for the first time on an
amended return. In addition, the taxpay-
er’s original return, which must be signed
under penalties of perjury, must contain
all of the information, including a registra-
tion number, required by these final reg-
ulations. To properly correct an error on
an amended return or in an administrative
adjustment request, a taxpayer must have
made an error in the information included
on the original return such that there is
a substantive item to correct; a taxpayer
cannot correct an item that is left blank or
an item that is described as being “avail-
able upon request.”
These final regulations also mod-
ify the proposed regulations to permit
an extension of time under §301.9100-
2(b) to allow for an automatic six-month
extension of time from the due date of
the return (excluding extensions) to make
the election prescribed in section 48D(d).
The elective payment election is a stat-

April 8, 2024 856 Bulletin No. 2024–15
utory election in that its due date is pre-
scribed by statute. As such, the section
9100 relief procedures apply only insofar
as the late election is being filed pursuant
to §301.9100-2(b), which requires that
the taxpayer timely filed its return for the
year the election should have been made.
Relief under this provision will apply only
to taxpayers that have not received an
extension of time to file a return after the
original due date (excluding extensions).
Taxpayers eligible for this relief must take
corrective action under §301.9100-2(c)
and follow the procedural requirements of
§301.9100-2(d).
No comments were received on the
remaining proposed rules regarding the
manner and time of making an elective
payment election under §1.48D-6(c). This
Treasury decision therefore adopts those
proposed regulations as final regulations.
C. Timing of payment
Multiple commenters advocated that
elective payment amounts be permitted
to be used against estimated tax payments
or that the Treasury Department and the
IRS allow for quarterly elections and pay-
ments even though the elective payment is
not deemed effective until the later of the
due date or filing date of the tax return.
Another commenter opined that the IRS
could use its authority under section
48D(d)(6) to allow taxpayers to make and
receive quarterly elections and payments,
align quarterly elections with quarterly
returns, and replicate the quarterly excise
tax reporting mechanism similar to rules
under sections 6426 and 6427, allowing
taxpayers to claim payments every quar-
ter.
The distinction between estimated tax
installments (which are the obligation of
the taxpayer to calculate) versus an end
of year estimated tax penalty (that may
result if the taxpayer’s calculations are not
correct and/or if the taxpayer’s annual tax
liability is not paid on the due date for the
return, including a “payment” that is made
through an elective payment election)
appeared to confuse several commenters.
For example, one commenter stated that
proposed §1.48D-6(e)(2) could be inter-
preted to permit a taxpayer to calculate
their estimated tax installments and any
underpayment by considering properly
determined refundable credits in making
quarterly estimated tax payments, even
though the elective payment amount is not
deemed to be paid until the later of the due
date or filing date of the tax return.
Commenters asked that section 48D
credits be considered to have been esti-
mated tax payments, resulting in no tax
liability at the end of the year or, at a mini-
mum, that the final regulations waive esti-
mated tax penalties related to an elective
payment election. In other words, com-
menters requested clarification that the
elective payment election may be applied
as a reduction to any quarterly estimated
tax payments (without penalty) and to off-
set any taxes that are reported on the tax-
payer’s income tax return for any taxable
year in which those elections are in effect.
These final regulations do not adopt
these recommendations. Section 48D(d)
(2)(C) contemplates a single payment
and clearly states the timing of when the
payment is treated as made, which at
the earliest, is the return due date (deter-
mined without regard to extensions). In
that sense, payments made under section
48D are no different than other kinds of
payments a taxpayer may make as part of
filing a timely return (excluding exten-
sions) or making a payment with a timely
filed application for extension. Taxpayers
can adequately determine whether their
quarterly estimated payments are suffi-
cient based on their projected income and
by considering any expected and properly
determined credit. For the same reasons,
the section 48D credit may not be included
to calculate estimated tax for Form 4466,
which, under section 6425(a)(1) of the
Code must be filed after the close of a cor-
poration’s taxable year, on or before the
15th day of the fourth month following
the close of such taxable year, and prior
to the filing of the corporation’s return for
such taxable year. Comments requesting
examples showing how the full amount of
the section 48D credit reduces tax under
section 6655 are outside the scope of these
final regulations. For the sake of clarity,
however, the final regulations modify the
examples under §1.48D-6(e)(4) to better
reflect the conclusion that a taxpayer that
files its return after the due date for filing
(excluding extensions) may also be sub-
ject to a penalty under section 6651(a)(2)
for the failure to timely pay tax, even if
it did not owe tax after applying the net
elective payment amount against its net
tax liability.
One commenter stated that in the
absence of quarterly elections and pay-
ments, the final regulations should provide
a mechanism for a corporate partner to
reduce quarterly estimated taxes for cred-
its generated through partnerships; oth-
erwise, the commenter thought it would
be penalizing taxpayers that operate their
businesses through partnerships. The
Treasury Department and the IRS note
that the treatment of partners in a partner-
ship (or shareholders of an S corporation)
that makes an elective payment election is
different from the treatment of a taxpayer
that directly makes an elective payment
election. This is a result of the special
rules in section 48D(d)(2)(A) that require
an elective payment election for section
48D credits determined with respect to
any property held directly by a partnership
to be made by the partnership. An elective
payment election made by a partnership is
not reduced by the Federal tax liabilities
of its partners. Instead, it is only reduced
by any partnership level Federal tax lia-
bility. If partners were allowed to reduce
their quarterly estimated taxes for section
48D credits determined with respect to
property held by a partnership to which
the partnership makes an elective payment
election, then the amount of the elective
payment made to the partnership should
be reduced by the partners’ corresponding
quarterly estimated tax liabilities. Other-
wise, the partners would receive a wind-
fall because the same section 48D credit
would be used to both reduce the partners’
estimated tax payments and generate an
elective payment to the partnership. Sec-
tion 48D(d)(2)(A) does not allow for such
a mechanism. Instead, section 48D(d)(2)
(A) provides that if a partnership makes
an elective payment election, any elective
payment amount is treated as tax exempt
income for purposes of section 705 and
a partner’s distributive share of such tax
exempt income is equal to such partner’s
distributive share of the section 48D credit
otherwise available for each taxable year.
As the elective payment election results
in a section 48D credit being treated as
tax exempt income rather than a credit, it
is inappropriate to adopt a rule allowing
the partners to treat the same amount as

Bulletin No. 2024–15 857 April 8, 2024
a credit for estimated tax purposes. Thus,
the final regulations do not adopt the com-
menter’s recommendation of a rule allow-
ing corporate (or any other) partners to
reduce quarterly estimated taxes for sec-
tion 48D credits determined with respect
to property held through a partnership that
makes an elective payment election.
Commenters asked that the final regu-
lations specify a timeframe within which
a taxpayer will receive an elective pay-
ment amount. Commenters also requested
that the IRS should be required to pro-
cess the elective payment within 45 days
from the date the election is filed, similar
to the quick refund process under Form
4466, Corporation Application for Quick
Refund of Overpayment of Estimated Tax.
The Treasury Department and the IRS
decline to specify a particular time within
which an elective payment election will
be processed. Several factors, including
the volume of returns on which elective
payment elections are made, and whether
any particular return contains complete
and accurate information, will affect pro-
cessing time. However, as stated in this
preamble, the pre-filing registration is
intended to allow the IRS to verify certain
information about a taxpayer in a timely
manner while mitigating the risk of fraud
or improper payments and then process
the annual tax return with minimal delays.
A commenter requested that the final
regulations clarify whether refunds greater
than $5 million will require review by the
Joint Committee on Taxation. The com-
menter noted that the review is not neces-
sary because an elective payment is not a
refund of tax based on any position taken
on the tax return. This comment is outside
the scope of these final regulations.
V. Special Rules for Partnerships and S
Corporations
Commenters requested that the final
regulations allow a partnership to deter-
mine a partner’s distributive share of
the section 48D credit without regard to
§1.46-3(f). For the reasons explained in
this Part V of the Summary of Comments
and Explanation of Revisions, the Trea-
sury Department and the IRS decline to
adopt this request in the final regulations.
The Treasury Department and the IRS
have determined, however, that an interim
rule allowing partnerships that meet cer-
tain requirements to determine a part-
ner’s distributive share of the tax exempt
income resulting from an elective pay-
ment election in accordance with the basic
principles governing partnership income
allocations under the section 704(b) reg-
ulations, instead of in accordance with the
principles under the section 704(b) regu-
lations and §1.46-3(f) for allocations of
investment tax credits, is appropriate for
purposes of section 48D.
Section 48D is among the investment
credits listed under section 46. See section
46(6). The investment credit under section
46 is a business credit under section 38(b)
(1). Thus, property with respect to which a
section 48D credit is determined is section
38 property. Section 1.704-1(b)(4)(ii),
which requires allocations with respect
to the investment credit provided by sec-
tion 38(b)(1) to be made in accordance
with the partners’ interests in the partner-
ship, provides that allocations of cost or
qualified investment made in accordance
with §1.46-3(f) are deemed to be made
in accordance with the partners’ interests
in the partnership. Pursuant to §1.46-3(f)
(1), in the case of a partnership that owns
section 38 property, each partner is treated
as the taxpayer with respect to the part-
ner’s share of the basis of partnership
section 38 property. Section 1.46-3(f)(2)
(i) provides that a partner’s share of basis
of any section 38 property is determined
in accordance with the ratio in which the
partners share general profits. Pursuant
to §1.46-3(f)(2)(ii), if all related items of
income, gain, loss, and deduction with
respect to any item of partnership section
38 property are specially allocated in the
same manner and if such special alloca-
tion is recognized under section 704(a)
and (b) and §1.704-1(b) (that is, the allo-
cation must have substantial economic
effect), then each partner’s share of the
basis of such item of section 38 property
is determined by reference to the special
allocation effective for the date on which
the property is placed in service, rather
than in accordance with the ratio in which
the partners share general profits. Thus,
§1.46-3(f), as currently in effect, already
permits special allocations of a partner’s
share of the basis of an item of section 38
property independent of the ratio in which
the partners divide the general profits of
the partnership if all requirements under
§1.46-3(f)(2)(ii) are met. Accordingly,
the final regulations do not incorporate
the commenter’s request to allow a part-
nership to allocate a partner’s distributive
share of the section 48D credit without
regard to §1.46-3(f).
Section 48D(d)(2)(A)(i)(IV) provides
that a partner’s distributive share of the
tax exempt income resulting from a part-
nership receiving an elective payment is
based on such partner’s distributive share
of the otherwise applicable credit (section
48D credit) for each taxable year. Con-
sistent with section 48D(d)(2)(A)(i)(IV),
proposed §1.48D-6(d)(2)(iv) would pro-
vide that a partner’s distributive share of
such tax exempt income is equal to such
partner’s distributive share of its other-
wise allocable basis in qualified property
under proposed §1.48D-2(h)(2)(i) (refer-
ring to §1.46-3(f)) for such taxable year.
Notwithstanding section 48D(d)(2)(A)(i)
(IV), section 48D(d)(6) expressly autho-
rizes the Secretary to issue regulations
or other guidance as may be necessary or
appropriate to carry out the purposes of
section 48D(d), including regulations or
other guidance providing rules for deter-
mining a partner’s distributive share of
the tax exempt income described in sec-
tion 48D(d)(2)(A)(i)(III). The Treasury
Department and the IRS have determined
that a general rule in the final regulations
that would allow a partnership to deter-
mine a partner’s distributive share of the
tax exempt income described in section
48D(d)(2)(A)(i)(III) without regard to
section 48D(d)(2)(A)(i)(IV) is inconsis-
tent with the language in section 48D(d)
(2)(A)(i)(IV) and the structure and the
purpose of the statute.
The Treasury Department and the
IRS are aware that taxpayers may have
entered into written binding partnership
agreements for the joint ownership and
operation of an advanced manufacturing
facility or qualified property in antici-
pation of the enactment of the CHIPS
Act on August 9, 2022. Other taxpayers
may have entered into such written bind-
ing partnership agreements on or after
August 9, 2022, and before publication
of the proposed regulations under section
48D(d) in the Federal Register on June
21, 2023. The Treasury Department and
the IRS are also aware that such taxpayers

April 8, 2024 858 Bulletin No. 2024–15
may have made erroneous assumptions in
their partnership agreements concerning
the allocation of the tax exempt income
described in section 48D(d)(2)(A)(i)
(III), and, more specifically, that such tax
exempt income could be allocated other-
wise than as provided in section 48D(d)
(2)(A)(i)(IV). These binding partnership
agreements may have the effect of dimin-
ishing or negating the benefit of elective
pay under section 48D(d) for taxpayers
that are engaging in activities incentivized
by the CHIPS Act through partnerships if
a partner’s distributive share under section
704(b) of the tax exempt income must be
determined in accordance with its distrib-
utive share of the otherwise applicable
section 48D credit.
For this reason, the Treasury Depart-
ment and the IRS have determined that
an interim rule allowing a partner’s dis-
tributive share of the tax exempt income
described in section 48D(d)(2)(A)(i)(III)
to be determined in accordance with the
basic principles for partnership income
allocations as described in §1.704-1(b)
(1)(i), as opposed to pursuant to the rules
for credits provided in §§1.704-1(b)(4)
(ii) and 1.46-3(f), is consistent with the
structure and purpose of the CHIPS Act to
incentivize the manufacture of semicon-
ductors and semiconductor manufactur-
ing equipment within the United States.
Accordingly, the final regulations provide
that if a written binding partnership agree-
ment was entered into after December 31,
2021, and before June 22, 2023, and if the
partnership was formed for the purpose
of owning and operating an advanced
manufacturing facility or qualified prop-
erty, a partner’s distributive share of the
tax exempt income described in section
48D(d)(2)(A)(i)(III) may be determined
in accordance with the basic principles
for partnership income allocations as
described in §1.704-1(b)(1)(i), instead of
in accordance with the manner in which
the otherwise applicable section 48D
credits would have been allocated under
§§1.704-1(b)(4)(ii) and 1.46-3(f).
In determining the amount of the sec-
tion 48D credit that will result in a pay-
ment to the partnership or S corporation
under section 48D(d)(2)(A)(i)(I) and
in §1.48D-6(d)(2)(ii)(A), the Treasury
Department and the IRS have clarified
under §1.48D-6(d)(6)(i) that, in addition
to section 469 of the Code, a partnership
or S corporation is not subject to section
38(b) and (c) because those sections apply
at the partner or S shareholder level.
No comments were received with
respect to the remaining special rules for
a partnership or S corporation making
an elective payment election, including
the timing of tax exempt income under
proposed §1.48D-6(d)(2)(vi), the char-
acter of tax exempt income under pro-
posed §1.48D-6(d)(5), the methodology
for determining the amount of section
48D credit including the application of
sections 49, 50, and 469 under proposed
§1.48D-6(d)(6), and rules applicable to
payments made to partnerships subject to
the centralized partnership audit regime
found in subchapter C of chapter 63 of the
Code under proposed §1.48D-6(d)(7). The
Treasury Department and the IRS adopt
the proposed regulations without further
modification, but their designations have
been revised to better accommodate the
interim rule.
VI. Denial of Double Benefit Rule
Commenters requested further guid-
ance regarding the method for computing
the elective payment amount. One com-
menter requested additional examples
with other general business credits (GBCs)
to demonstrate the effect of the ordering
rule in determining the elective payment
amount. Several commenters requested
that the final regulations not include
the section 38 ordering rule in proposed
§1.48D-6(e)(2). These commenters stated
that section 48D requires, with respect
to an elective payment election, that the
taxpayer is treated as making a payment
against tax equal to the amount of the sec-
tion 48D credit, and the treatment of the
section 48D credit as a payment thereby
exempts it from the ordering rule. They
also claimed that the inclusion of the
ordering rule limits the elective payment
amount of the section 48D credit deter-
mined for the taxable year subject to elec-
tive pay while also limiting the amount of
other GBCs that may be claimed.
The Treasury Department and the IRS
agree with commenters that the GBC
ordering rules can result in a lowered
elective payment amount; thus, these final
regulations include changes to address
that result. Section 48D(d)(1) provides
that the taxpayer making an elective pay-
ment election will be treated as making a
payment against tax equal to the amount
of the credit, and section 48D(d)(2)(C)
references such payment, as noted by the
commenters. It is section 48D(d)(3) that
creates a bifurcated treatment for purposes
of the Code by reducing the credit to zero,
but for any other purposes under the Code,
deeming the credit to have been allowed
to the taxpayer for such taxable year.
In reviewing these provisions, the
Treasury Department and the IRS have
determined that section 38 is the section
of the Code with respect to which the
credit should be reduced to zero as pro-
vided under section 48D(d)(3), other than
as explained in this paragraph. As section
38 is the operative provision under which
the section 48D credit would be taken into
account and allowed to reduce tax liabil-
ity, it is reasonable to read the no double
benefit rule in section 48D(d)(3) to reduce
the section 48D credit to zero for purposes
of section 38. This prevents a direct dou-
ble benefit that could be achieved from
claiming the credit. However, preventing
such a double benefit does not require
reducing the section 48D credit to zero
for purposes of section 38 to the extent a
credit is needed to reduce tax liability up
to the section 38(c) limitation. In addition,
reducing a section 48D credit to zero in
such situations would unnecessarily dis-
advantage a taxpayer filing on extension
by preventing them from claiming the
section 48D credit as a current year GBC.
This is because, to the extent applied as a
credit, the section 48D credit will reduce
tax liability as of the due date of the
return, while the elective payment amount
is not treated as being made until the later
of the due date of the return or the date of
filing. See section 48D(d)(2)(C). Treating
the entire credit as zero in the case of a
taxpayer filing on extension could result
in more tax due on the due date of the
return and, if not paid, would result in the
taxpayer owing interest and could result in
penalties assessed against the taxpayer.
The proposed rules accounted for this
situation and helped mitigate any potential
estimated tax penalties if amounts owed
were not paid by the due date. No com-
menters objected to this aspect of the pro-
posed rule. Thus, the Treasury Department

Bulletin No. 2024–15 859 April 8, 2024
and the IRS conclude that these final regu-
lations should treat the section 48D credit
as a credit for section 38 in the limited sit-
uation that the credit is needed to reduce
tax liability up to the section 38(c) limita-
tion. It is also noted that, for a taxpayer
that is filing and making an election by the
due date of their return, there should be
no difference in outcome between treating
the credit as reduced to $0 for section 38,
or as a credit that reduces tax liability up
to the section 38(c) limitation and a pay-
ment beyond the section 38(c) limitation.
Based on these conclusions, the Trea-
sury Department and the IRS have made
revisions to the rules and examples in pro-
posed §1.48D-6(e), including adding two
new examples. Under these final regula-
tions, there is still a description of steps
for a taxpayer to complete, but there is a
change in the ordering of the steps and in
how to calculate the net elective payment
amount. The net elective payment amount,
consistent with the proposed regulations,
is the amount of the credit that is treated
as a payment against the tax imposed by
subtitle A. In the final regulations, the net
elective payment amount is equal to the
lesser of (1) the section 48D credit or (2)
the total GBC (including the section 48D
credit) over the total GBC allowed against
tax liability (determined with regard to
section 38(c)). Under these final regu-
lations, a taxpayer will calculate the net
elective payment amount prior to apply-
ing the ordering rules of section 38(d).
These revisions allow for a taxpayer that
has other GBCs to lower tax liability to
the section 38(c) limitation using those
GBCs without impact from the section
48D credit. But, the revisions also require
a taxpayer to use the section 48D credit as
a current year GBC to the extent that it is
necessary to reduce tax liability up to the
limitation under section 38(c). In all other
situations, the section 48D credit will be
zero for purposes of section 38 and the
credit will be considered a payment of tax
on the later of the due date of the return
or filing (as prescribed by section 48D(d)
(2)(C)).
In sum, these revisions to proposed
§1.48D-6(e) and the examples ensure
two outcomes. First, consistent with com-
menters’ recommendations, the final reg-
ulations ensure that taxpayers making an
elective payment election will not have
to delay using other GBCs because of the
section 48D credit. Second, consistent
with the proposed rule, these final regu-
lations allow a taxpayer to benefit from a
reduction in tax liability as of the due date
of the return by treating the section 48D
credit as a credit for purposes of section
38, up to the section 38(c) limitation.
A commenter requested that the final
regulations clarify why the taxpayer in
Example 2 under proposed §1.48D-6(e)
(4)(ii) may owe an estimated tax pen-
alty if the section 48D credit for which
an elective payment is made is deemed
to have been allowed for purposes of cal-
culating any underpayment of estimated
taxes under section 6655 of the Code.
The Treasury Department and the IRS
note that the final regulations revise and
include new examples in §1.48D-6(e).
The revised and new examples in §1.48D-
6(e) of these final regulations clarify that
it is this timing rule under section 48D(d)
(2)(C), and not the rules in proposed
§1.48D-6(e)(2) and (3) (regarding order-
ing and use of the section 48D credit)
that creates the issue related to penalties
for underpayment of estimated taxes. For
example, if a taxpayer with a tax liability
was solely relying on the elective pay-
ment amount to cover the tax liability,
such taxpayer would be treated as mak-
ing a payment related to the section 48D
credit but could still incur an estimated
tax penalty because section 48D(d)(2)(C)
explicitly states that the payment of tax
occurs on the date on which such return
is filed.
Although no commenters specifically
raised the application of potential penal-
ties under section 6651 in the context of
proposed §1.48D-6(e) (denial of double
benefit rule), the final regulations modify
§1.48D-6(e)(3) to clarify that a taxpayer
may also be subject to a penalty under
section 6651(a)(2) of the Code relating to
the taxpayer’s failure to timely pay tax if
a return is filed after the original due date.
The Treasury Department and the IRS
requested comments on additional Code
sections under which it may be necessary
to consider the section 48D credit to have
been deemed allowed for the taxable year
in which an elective payment election is
made. In response, several commenters
urged that the final regulations treat the
entire elective payment amount as a pay-
ment against tax for purposes of determin-
ing base erosion minimum tax (known as
the base erosion anti-abuse tax or BEAT)
under section 59A and corporate alterna-
tive minimum tax (CAMT) credit under
section 53(c) instead of as an investment
tax credit. In contrast with the analysis
earlier for section 38, the Treasury Depart-
ment and the IRS conclude that treatment
of the section 48D credit for purposes of
BEAT and CAMT falls within the portion
of section 48D(d)(3) that provides, for any
other purposes under the Code, the credit
will be deemed to have been allowed to
such taxpayer for such taxable year. In
contrast to section 38, BEAT and CAMT
are not provisions pursuant to which the
section 48D credit would be directly
claimed, and treatment of the elective
payment amount as suggested by the com-
menters would conflict with the language
in section 48D(d)(3). Further, since sec-
tion 48D(d)(3) provides that the section
48D credit is treated as a credit for other
purposes of the Code, the section 48D
credit is not analogous to other credits that
are considered pre-payments of tax and
for which the BEAT and CAMT regula-
tions have an exception. See, for example,
§1.59A-5(b)(3)(i)(C) of the Income Tax
Regulations, which provides that regular
tax liability is not reduced for “[a]ny cred-
its allowed under sections 33, 37, and 53”
of the Code. Section 33 credits are related
to withholding of tax at the source with
respect to payments to foreign corpora-
tions and nonresident aliens. Section 37 is
a credit for the overpayment of taxes. Sec-
tion 53 relates to a credit for alternative
minimum tax paid in a prior year. Thus,
the final regulations adopt the rule as pro-
posed.
VII. Special Rules
A. Excessive payments
Proposed §1.48D-6(f) would define the
term “excessive payment” consistent with
section 48D(d)(2)(F)(iii) and provide an
example of an excessive payment, includ-
ing the year in which the tax is imposed
and the calculation of the additional 20
percent tax. The Treasury Department and
the IRS requested comments on whether
additional guidance on excessive pay-
ments is needed.

April 8, 2024 860 Bulletin No. 2024–15
Commenters requested clarification
of the proposed excessive payment rules
related to their application, the reasonable
cause standard, and appeals rights and defi-
ciency procedures that apply to excessive
payments. One commenter asked if the
excessive payment addition to tax applies
if the taxpayer does not make an elective
payment election. Several commenters rec-
ommended adopting the reasonable cause
standard under section 6664(c) for which
the determination is based on the facts and
circumstances and providing exceptions
for reliance on professional advice and iso-
lated computational or transcriptional error.
One commenter specifically requested that
the final regulations provide examples of
reasonable cause relating to the beginning
of construction issues.
The Treasury Department and the IRS
recognize that taxpayers desire certainty
when operating under tax rules for the
first time. The Treasury Department and
the IRS anticipate that existing standards
of reasonable cause will inform the deter-
mination by the IRS of whether reason-
able cause has been demonstrated for this
purpose, and these final regulations do
not create special rules for the elective
payment election context. And, as noted
by the commenters, existing standards of
reasonable cause would be fact specific
and including additional examples would
inject significant complexity into the final
regulations and likely cause additional
uncertainty due to the inherently factual
nature of the inquiry.
B. Basis reduction and recapture
Proposed §1.48D-6(g)(2) would
provide rules for adjusting basis with
respect to property for which an election
is made under section 48D(d)(1). Pro-
posed §1.48D-6(g)(3) would provide that
any reporting of recapture is made on the
taxpayer’s annual return in the manner
prescribed by the IRS in any guidance.
No comments were received in response
to proposed §1.48D-6(g). Therefore, this
Treasury decision adopts the proposed
rules as final regulations.
Effect on Other Documents
The temporary regulations are removed
May 10, 2024.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum of
Agreement, Review of Treasury Regula-
tions under Executive Order 12866 (June
9, 2023), tax regulatory actions issued by
the IRS are not subject to the requirements
of section 6 of Executive Order 12866, as
amended. Therefore, a regulatory impact
assessment is not required.
II. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520) (PRA) generally
requires that a Federal agency obtain the
approval of the Office of Management
and Budget (OMB) before collecting
information from the public, whether such
collection of information is mandatory,
voluntary, or required to obtain or retain
a benefit. An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless the collection of information dis-
plays a valid control number.
The collections of information in these
final regulations contain reporting and
recordkeeping requirements. The record-
keeping requirements mentioned within
these final regulations are considered gen-
eral tax records under §1.6001-1(e). These
records are required for the IRS to vali-
date that taxpayers have met the regula-
tory requirements and are entitled to make
an elective payment election. For PRA
purposes, general tax records are already
approved by OMB under 1545-0074 for
individuals and 1545-0123 for business
entities.
These final regulations also mention
reporting requirements related to making
elections and calculating the section 48D
credit amount as detailed in §1.48D-6.
These elections will be made by eligible
taxpayers as part of filing a return (such
as the appropriate Form 1040, Form 1120,
Form 1120-S, or Form 1065); and credit
calculations will be made on Form 3800
and supporting forms. These forms are
approved under 1545-0074 for individuals
and 1545-0123 for business entities.
These final regulations also describe
recapture procedures as detailed in
§1.48D-6 that are required by section
48D(d)(5). The reporting of a recapture
event will still be required to be reported
using Form 4255, Recapture of Invest-
ment Credit. This form is approved under
1545-0074 for individuals and 1545-0123
for business entities. These final regu-
lations are not changing or creating new
collection requirements for recapture not
already approved by OMB.
These final regulations mention the
reporting requirements to complete
pre-filing registration with the IRS to be
able to make an elective payment election
in §1.48D-6. The pre-filing registration
portal and its associated burden has been
reviewed and approved by OMB under
1545-2310 for all filers. These final reg-
ulations are not changing or creating new
collection requirements for the prefiling
registration that are already approved by
OMB.
III. Regulatory Flexibility Act
In accordance with the Regulatory Flex-
ibility Act (5 U.S.C. chapter 6), it is hereby
certified that these final regulations will
not have a significant economic impact
on a substantial number of small entities.
Although these final regulations may affect
small entities, data are not readily available
about the number of small entities affected.
Regardless, the economic impact of these
final regulations on small entities is not
likely to be significant.
The Deputy Chief Counsel for Advo-
cacy, Small Business Administration, rec-
ommended that the Treasury Department
and the IRS provide a statement of the
factual basis for the certification that the
proposed rule will not have a significant
economic impact on a substantial number
of small entities including, at a minimum,
a description of the affected entities, and
provide the economic impact that the
rules would have on small entities includ-
ing estimates of the costs of reading and
understanding the rules and any report-
ing and recordkeeping requirements. The
Deputy Chief Counsel for Advocacy rec-
ommended including an analysis of the
semiconductor industry associated with
the North American Industry Classifi-
cation System (NAICS) codes 334413
(Semiconductor and Related Device Man-
ufacturing) and 333242 (Semiconductor
Machinery Manufacturing).

Bulletin No. 2024–15 861 April 8, 2024
The Treasury Department and the IRS
agree that industries associated with semi-
conductor manufacturing are likely to
be impacted by these rules but note that
not all industries classified with NAICS
codes 334413 and 333424 would be eligi-
ble for the section 48D credit. The March
2023 proposed regulations would provide
proposed definitions for “semiconduc-
tor manufacturing” and “semiconductor
equipment manufacturing” that may be
different from classifications for NAICS
code purposes.
For these reasons, the Treasury Depart-
ment and the IRS believe that that it would
not be appropriate to limit determining the
number of impacted taxpayers based on
existing data of entities associated with
NAICS codes 334413 and 333424. As
described in the Paperwork Reduction Act
section to the temporary regulations, the
Treasury Department and IRS expect 50
taxpayers to be impacted by the reporting
requirements contained in the temporary
regulations. The Treasury Department and
the IRS determined this figure based on
the number of entities expected to build
or expand semiconductor manufacturing
facilities and semiconductor manufac-
turing equipment facilities. The Treasury
Department and the IRS believe this
methodology more accurately reflects the
number of taxpayers impacted by these
final rules because it is based on the num-
ber of known projects.
The Treasury Department and the IRS
do not have sufficient data to determine
the number of small entities included
in the estimate that are expected to be
impacted by these final regulations. The
Treasury Department and IRS are aware
of ongoing and proposed projects involv-
ing large corporations that are unlikely to
meet the definition of a small business, as
that term is defined by the Small Business
Administration. Nonetheless, the Trea-
sury Department and the IRS recognize
that small businesses may be impacted by
these final rules but believe the economic
impact is not likely to be significant.
Section 48D is an investment credit for
taxpayers that make qualified investments
in advanced manufacturing facilities the
primary purpose of which is manufactur-
ing semiconductors and semiconductor
manufacturing equipment. Section 48D(d)
allows such taxpayers to make an elective
payment election to treat the section 48D
credit as a refundable payment against the
income tax in lieu of claiming the credit.
A partnership or S corporation may elect
to receive a payment equal to the amount
of the credit. Section 48D(d)(2)(E) autho-
rizes the IRS to require such information
or registration as the Secretary deems nec-
essary for purposes of preventing duplica-
tion, fraud, improper payments, or exces-
sive payments, as a condition of, and prior
to, any amount being treated as a payment
made or received by the taxpayer, as may
be the case.
These final regulations describe the
rules for making the elective payment
election, the special rules applicable to
partnerships and S corporations, the repay-
ment of excessive payments, and basis
reduction and recapture. These final regu-
lations provide the manner for making an
elective payment election which includes
the filing of the annual return including the
completed source credit form and com-
pleted Form 3800. These final regulations
also provide that taxpayers wanting to
make the elective payment election must
complete the pre-filing registration pro-
cess and provide the rules relating to the
pre-filing registration process. The pre-fil-
ing registration process would allow the
IRS to verify certain information before
the election is made and then process the
tax return on which the election is made
with minimal delays.
The economic impact associated with
these final regulations include admin-
istrative costs related to reading and
understanding the rules and reporting and
recordkeeping requirements. The costs
related to reading and understanding the
rules is not quantifiable. However, the
cost is not likely to be significant because
projects seeking to qualify for the section
48D credit will involve complex legal and
commercial transactions, and the cost of
understanding these final rules would be
implicit in such transactions. The report-
ing and recordkeeping requirements asso-
ciated with the elective payment election
is not likely to be significant because they
are consistent with the existing framework
for claiming business tax credits absent of
an election. The reporting requirements
and recordkeeping requirements associ-
ated with the pre-filing registration pro-
cess is not likely to be significant because
the information requested at pre-filing reg-
istration is that which a taxpayer claiming
a section 48D credit should have avail-
able, and taxpayers claiming a section
48D credit are likely to have the resources
available given the complexity of their
projects. The estimated burden of comply-
ing with the recordkeeping and reporting
requirements are further described in the
Paperwork Reduction Act section of the
preamble.
For these reasons, the Treasury Depart-
ment and the IRS certify that the final
regulations will not have a significant eco-
nomic impact on a substantial number of
small entities.
IV. Section 7805(f)
The Chief Counsel for the Office of
Advocacy submitted comments on the
proposed regulations, which are discussed
in this part III of this Special Analysis sec-
tion.
V. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandate
Reform Act of 1995 requires that agencies
assess anticipated costs and benefits and
take certain other actions before issuing a
final rule that includes any Federal man-
date that may result in expenditures in
any one year by a State, local, or Tribal
government, in the aggregate, or by the
private sector, of $100 million in 1995
dollars (updated annually for inflation).
These final regulations do not include any
Federal mandate that may result in expen-
ditures by State, local, or Tribal govern-
ments, or by the private sector in excess of
that threshold.
VI. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding
requirements of section 6 of the Executive
order. These final regulations do not have
federalism implications and do not impose
substantial, direct compliance costs on

April 8, 2024 862 Bulletin No. 2024–15
State and local governments or preempt
State law within the meaning of the Exec-
utive order.
VII. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs desig-
nated this rule as a major rule as defined
by 5 U.S.C. 804(2).
Statement of Availability of IRS
Documents
Guidance cited in this preamble is pub-
lished in the Internal Revenue Bulletin and
is available from the Superintendent of
Documents, U.S. Government Publishing
Office, Washington, DC 20402, or by visit-
ing the IRS website at https://www.irs.gov.
Drafting Information
The principal author of this regulation
is Lani M. Sinfield, Office of the Associate
Chief Counsel (Passthroughs and Special
Industries), IRS. However, other person-
nel from the Treasury Department and the
IRS participated in its development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
Amendments to the Regulations
Accordingly, the Treasury Department
and the IRS amend 26 CFR part 1 as fol-
lows:
PART 1—INCOME TAXES
Paragraph. 1. The authority citation
for part 1 is amended by adding an entry
for §1.48D-6 in numerical order to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
Section 1.48D-6 also issued under 26
U.S.C. 48D(d)(6).
* * * * *
Par. 2. Sections 1.48D-0 through
1.48D-6 are added to read as follows:
Sec.
* * * * *
1.48D-0. Table of contents.
1.48D-1 – 1.48D-5 [Reserved]
1.48D-6 Elective payment election.
* * * * *
§1.48D-0. Table of contents.
This section lists the table of contents
for §§1.48D-1 through 1.48D-6.
§1.48D-1 – 1.48D-5 [Reserved]
§1.48D-6 Elective payment election.
(a) Elective payment election.
(1) In general.
(2) Partnerships and S corporations.
(3) Irrevocable.
(b) Pre-filing registration required.
(1) In general.
(2) Manner of registration.
(3) Members of a consolidated group.
(4) Timing of pre-filing registration.
(5) Each qualified investment in an
advanced manufacturing facility must
have its own registration number.
(6) Information required to complete
the pre-filing registration process.
(7) Registration number.
(i) In general.
(ii) Registration number is only valid
for one year.
(iii) Renewing registration numbers.
(iv) Amendment of previously submit-
ted registration information if a change
occurs before the registration number is
used.
(v) Registration number is required to
be reported on the return for the taxable
year of the elective payment election.
(c) Time and manner of election.
(1) In general.
(2) Limitations.
(d) Special rules for partnerships and S
corporations.
(1) In general.
(2) Election.
(i) Time and manner of election.
(ii) Effect of election.
(iii) Coordination with sections 705
and 1366.
(iv) Partner’s distributive share.
(A) In general.
(B) Interim rule.
(C) Partnership requirements.
(v) S corporation shareholder’s pro-
rata share.
(vi) Timing of tax exempt income.
(3) Disregarded entity ownership.
(4) Electing partnerships in tiered
structures.
(i) In general.
(ii) Electing partnerships in tiered
structures; interim rule.
(5) Character of tax exempt income.
(6) Determination of amount of the
section 48D credit.
(i) In general.
(ii) Application of section 49 at-risk
rules to determination of section 48D
credit for partnerships and S corporations.
(iii) Changes in at-risk amounts under
section 49 at partner or shareholder level.
(7) Partnerships subject to subchapter
C of chapter 63 of the Code.
(8) Example.
(e) Denial of double benefit.
(1) In general.
(2) Application of the denial of double
benefit rule.
(3) Use of the section 48D credit for
other purposes.
(4) Examples.
(i) Example 1.
(ii) Example 2.
(iii) Example 3.
(iv) Example 4.
(f) Excessive payment.
(1) In general.
(2) Reasonable cause.
(3) Excessive payment defined.
(4) Example.
(g) Basis reduction and recapture.
(1) In general.
(2) Basis adjustment.
(i) In general.
(ii) Basis adjustment by partnership or
S corporation.
(iii) Basis adjustment of partners and S
corporation shareholders.
(3) Recapture reporting.
(h) Applicability dates.
(1) In general.
(2) Prior taxable years.
§1.48D-1 – 1.48D-5 [Reserved]
§1.48D-6 Elective payment election.
(a) Elective payment election—(1) In
general. A taxpayer, after successfully
completing the pre-filing registration
requirements under paragraph (b) of this
section, may make an elective payment

Bulletin No. 2024–15 863 April 8, 2024
election with respect to any section 48D
credit determined with respect to such
taxpayer in accordance with section
48D(d)(1) of the Internal Revenue Code
(Code) and this section. A taxpayer, other
than a partnership or S corporation, that
makes an elective payment election in
the manner provided in paragraph (c)
of this section will be treated as making
a payment against the Federal income
taxes imposed by subtitle A of the Code
(subtitle A) for the taxable year with
respect to which a section 48D credit is
determined equal to the amount of the
section 48D credit with respect to any
qualified property otherwise allowable to
the taxpayer (determined without regard
to section 38(c) of the Code). The pay-
ment described in section 48D(d)(1), and
this paragraph (a)(1) will be treated as
made on the later of the due date (deter-
mined without regard to extensions) of
the return of tax imposed by subtitle A
for the taxable year or the date on which
such return is filed.
(2) Partnerships and S corporations.
See paragraph (d) of this section for spe-
cial rules regarding elective payment elec-
tions under section 48D(d) applicable to
partnerships and S corporations.
(3) Irrevocable. Any election under
section 48D(d)(1) and this section, once
made, will be irrevocable and, except
as otherwise provided, will apply with
respect to any amount of section 48D
credit for the taxable year for which the
election is made.
(b) Pre-filing registration required—
(1) In general. Pre-filing registration by
any taxpayer (including a partnership or
an S corporation) in accordance with this
paragraph (b) is a condition that must be
successfully completed prior to making an
elective payment election under section
48D(d)(1) and this section with respect
to qualified property placed in service by
the taxpayer as part of an advanced man-
ufacturing facility of an eligible taxpayer.
An elective payment election will not be
effective with respect to the section 48D
credit determined with respect to any such
qualified property placed in service by
any taxpayer unless the taxpayer received
a valid registration number for the taxpay-
er’s qualified investment in the advanced
manufacturing facility of an eligible tax-
payer in accordance with this paragraph
(b) and provided the registration num-
ber for each qualified investment in each
advanced manufacturing facility on its
Form 3800, General Business Credit (or
its successor), and on any required com-
pleted source form(s) with respect to the
qualified investment, attached to the tax
return in accordance with guidance. For
purposes of this section, the term guid-
ance means guidance published in the
Federal Register or Internal Revenue Bul-
letin, as well as administrative guidance
such as forms, instructions, publications,
or other guidance on the IRS.gov website.
See §§601.601 and 601.602 of this chap-
ter. However, completion of the pre-filing
registration requirements and receipt of
a registration number does not, by itself,
mean the taxpayer is eligible to receive a
payment with respect to any section 48D
credit determined with respect to the qual-
ified property.
(2) Manner of registration. Unless oth-
erwise provided in guidance, a taxpayer
must complete the pre-filing registration
process electronically through the IRS
electronic portal and in accordance with
the instructions provided therein.
(3) Members of a consolidated group.
A member of a consolidated group is
required to complete pre-filing registration
as a condition of, and prior to, making an
elective payment election. See §1.1502-77
(providing rules regarding the status of the
common parent as agent for its members).
(4) Timing of pre-filing registration. A
taxpayer must satisfy the pre-filing regis-
tration requirements of this paragraph (b)
and receive a registration number under
paragraph (b)(7) of this section prior to
making any elective payment election
under this section on the taxpayer’s tax
return for the taxable year at issue.
(5) Each qualified investment in an
advanced manufacturing facility must
have its own registration number. A tax-
payer must obtain a registration num-
ber for each qualified investment in an
advanced manufacturing facility of an
eligible taxpayer with respect to which an
elective payment election is made.
(6) Information required to complete
the pre-filing registration process. Unless
modified in future guidance, a taxpayer
must provide the following information to
the IRS to complete the pre-filing registra-
tion process:
(i) The taxpayer’s general informa-
tion, including its name, address, taxpayer
identification number, and type of legal
entity;
(ii) Any additional information required
by the IRS electronic portal;
(iii) The taxpayer’s taxable year, as
determined under section 441 of the Code;
(iv) The type of annual return(s) nor-
mally filed by the taxpayer with the IRS;
(v) A list of each qualified investment
in an advanced manufacturing facility that
the taxpayer intends to use to determine a
section 48D credit for which the taxpayer
intends to make an elective payment elec-
tion;
(vi) For each qualified investment in
an advanced manufacturing facility listed
in paragraph (b)(6)(v) of this section, any
further information required by the IRS
electronic portal, such as:
(A) The type of qualified investment in
the advanced manufacturing facility;
(B) Physical location (that is, address
and coordinates (longitude and latitude) of
the advanced manufacturing facility);
(C) Supporting documentation relat-
ing to the construction, reconstruction or
acquisition of the advanced manufactur-
ing facility (such as, State and local gov-
ernment permits to operate the advanced
manufacturing facility, certifications, and
evidence of ownership that ties to the land
deed, lease, or other documented right to
use and access any land upon which the
advanced manufacturing facility is con-
structed or housed);
(D) The beginning of construction date
and the placed in service date of any qual-
ified property that is part of the advanced
manufacturing facility, or the date of the
last progress expenditure made during the
taxable year;
(E) The source of funds the taxpayer
used to acquire the qualified property with
respect to which the qualified investment
was made; and
(F) Any other information that the tax-
payer or entity believes will help the IRS
evaluate the registration request;
(vii) The name of a contact person for
the taxpayer. The contact person is the
person whom the IRS may contact if there
is an issue with the registration. The con-
tact person must either:
(A) Possess legal authority to bind the
taxpayer; or

April 8, 2024 864 Bulletin No. 2024–15
(B) Must provide a properly executed
power of attorney on Form 2848, Power
of Attorney and Declaration of Represen-
tative;
(viii) A penalties of perjury statement,
effective for all information submitted
as a complete application, and signed by
a person with personal knowledge of the
relevant facts that is authorized to bind the
registrant; and
(ix) Any other information the IRS
deems necessary for purposes of pre-
venting duplication, fraud, improper pay-
ments, or excessive payments under this
section that is provided in guidance.
(7) Registration number—(i) In gen-
eral. The IRS will review the information
provided and will issue a separate regis-
tration number for each qualified invest-
ment in an advanced manufacturing facil-
ity of an eligible taxpayer for which the
taxpayer making the registration provided
sufficient verifiable information.
(ii) Registration number is only valid
for one year. A registration number is
valid only with respect to the taxpayer that
obtained the registration number under
this section and only for the taxable year
for which it is obtained.
(iii) Renewing registration numbers.
If an elective payment election will be
made with respect to any section 48D
credit determined with respect to a qual-
ified investment in an advanced manu-
facturing facility for a taxable year after a
registration number under this section has
been obtained, the taxpayer must renew
the registration for that subsequent year
in accordance with applicable guidance,
including attesting that all the facts previ-
ously provided are still correct or updating
any facts.
(iv) Amendment of previously submit-
ted registration information if a change
occurs before the registration number is
used. As provided in instructions to the
pre-filing registration portal, if specified
changes occur with respect to a qualified
investment in an advanced manufac-
turing facility for which a registration
number has been previously obtained, a
taxpayer must amend the registration (or
may need to submit a new registration)
to reflect these new facts. For example, if
an eligible taxpayer that is the owner of
an advanced manufacturing facility pre-
viously registered qualified investments
in the advanced manufacturing facility
or the advanced manufacturing facility,
and the advanced manufacturing facility
undergoes a change of ownership (inci-
dent to a corporate reorganization or an
asset sale) such that the new owner has a
different employer identification number
(EIN) than the owner who obtained the
original registration, the original owner
of the advanced manufacturing facility
must amend the original registration to
disassociate its EIN from the advanced
manufacturing facility and the new owner
must submit separately an original regis-
tration (or if the new owner previously
registered other qualified investments or
advanced manufacturing facilities, must
amend its original registration) to associ-
ate the new owner’s EIN with the previ-
ously registered advanced manufacturing
facility.
(v) Registration number is required to
be reported on the return for the taxable
year of the elective payment election. The
taxpayer must include the registration
number of the qualified investment in the
advanced manufacturing facility on the
taxpayer’s return as provided in this para-
graph (b) for the taxable year. The IRS
will treat an elective payment election as
ineffective with respect to a section 48D
credit determined with respect to a quali-
fied investment in an advanced manufac-
turing facility for which the taxpayer does
not include a valid registration number
that was assigned to that particular tax-
payer during the pre-registration process
on the annual return.
(c) Time and manner of election—(1)
In general. Any elective payment election
under section 48D(d)(1) and this section
with respect to any section 48D credit
determined with respect to a taxpayer’s
qualified investment must—
(i) Be made on the taxpayer’s origi-
nal return of tax (including a superseding
return) filed not later than the due date
(including extensions of time) for the tax-
able year for which the section 48D credit
is determined and the election is made in
the manner prescribed by the IRS in guid-
ance;
(ii) Include any required completed
source credit form(s), a completed Form
3800, and any additional information
required in instructions, including sup-
porting calculations;
(iii) Provide on the completed Form
3800 and on any required source credit
form(s) a valid registration number for the
qualified investment that is placed in ser-
vice as part of an advanced manufacturing
facility of an eligible taxpayer;
(iv) Include a statement attesting under
the penalties of perjury that—
(A) The taxpayer claiming to be an
eligible taxpayer is not a foreign entity of
concern with the meaning of regulations
under section 48D and has not made an
applicable transaction as defined under
regulations under section 50 during the
taxable year that the qualified property is
placed in service; and
(B) The taxpayer will not claim a dou-
ble benefit (within the meaning of sec-
tion 48D(d)(3) and paragraphs (d)(2)(ii)
(B) and (C) and (e) of this section) with
respect to any elective payment election
made by the taxpayer; and
(v) Be made not later than the due date
(including extensions of time) for the tax-
able year for which the election is made,
but in no event earlier than May 8, 2023.
(2) Limitations. No elective payment
election may be made for the first time
on an amended return, withdrawn on an
amended return, or made or withdrawn by
filing an administrative adjustment request
under section 6227 of the Code, although a
numerical error with respect to a properly
claimed elective payment election may be
corrected on an amended return or by fil-
ing an administrative adjustment request
under section 6227 if necessary. There is
no relief available under §301.9100-1 or
§301.9100-3 of this chapter for an elective
payment election that is not timely filed;
however, relief under §301.9100-2(b)
may apply.
(d) Special rules for partnerships and
S corporations—(1) In general. If a part-
nership or S corporation directly holds any
property for which an advanced manufac-
turing investment credit is determined, any
election under this section must be made by
the partnership or S corporation. No elec-
tion under section 48D(d) and this section
by any partner or shareholder is allowed.
(2) Election—(i) Time and manner of
election. An elective payment election by
a partnership or S corporation is made at
the same time and in the same manner,
and subject to the pre-filing registration
and other requirements for the election to

Bulletin No. 2024–15 865 April 8, 2024
be effective, as provided in paragraphs (b)
and (c) of this section.
(ii) Effect of election. If a partnership or
S corporation makes an elective payment
election with respect to a section 48D
credit, the following rules will apply:
(A) The Internal Revenue Service will
make a payment to such partnership or
S corporation equal to the amount of such
credit, determined in accordance with
paragraph (d)(6) of this section (unless
the partnership or S corporation owes
a Federal tax liability, in which case the
payment may be reduced by such tax lia-
bility);
(B) Before determining any partner’s
distributive share, or S corporation share-
holder’s pro rata share, of such credit, such
credit is reduced to zero and is, for any
other purposes under the Code, deemed
to have been allowed solely to such entity
(and not allocated or otherwise allowed to
its partners or shareholders) for such tax-
able year; and
(C) Any partner’s or S corporation
shareholder’s share of any qualified
investment in an advanced manufactur-
ing facility for which an elective payment
election has been made for the taxable
year, is reduced to zero for such taxable
year.
(iii) Coordination with sections 705
and 1366. Any amount with respect to
which the election is made is treated as tax
exempt income for purposes of sections
705 and 1366 of the Code.
(iv) Partner’s distributive share—(A)
In general. Except as provided in para-
graphs (d)(2)(iv)(B) and (C) of this sec-
tion, a partner’s distributive share of such
tax exempt income is equal to such part-
ner’s distributive share of its otherwise
allocable basis in qualified property under
regulations under section 48D that apply
for purposes of allocating a partner’s share
of its basis in qualified property placed in
service by the partnership for such taxable
year.
(B) Interim rule. If a partnership meets
the requirements of paragraph (d)(2)(iv)
(C) of this section, a partner’s distributive
share of the tax exempt income resulting
from a section 48D(d) elective payment
election made by the partnership with
respect to property held directly by the
partnership, may be determined in accor-
dance with the basic principles for part-
nership income allocations as described in
§1.704-1(b)(1)(i) instead of in accordance
with the partner’s distributive share of the
otherwise applicable section 48D credits
as determined under §§1.704-1(b)(4)(ii)
and 1.46-3(f).
(C) Partnership requirements. A part-
nership meets the requirements of this
paragraph (d)(2)(iv)(C) if its partnership
agreement is a written binding contract
that was entered into after December 31,
2021, and before June 22, 2023, and it
was formed for the purpose of owning
and operating an advanced manufacturing
facility or qualified property.
(v) S corporation shareholder’s pro-
rata share. An S corporation sharehold-
er’s pro rata share (as determined under
section 1377(a) of the Code) of such tax
exempt income is taken into account by
the S corporation shareholder in the tax-
able year (as determined under sections
444 and 1378(b) of the Code) in which
the section 48D credit is determined and
is based on the shareholder’s otherwise
apportioned basis in qualified property
under regulations under section 48D that
apply for purposes of allocating an S cor-
poration shareholder’s pro-rata share of
basis in qualified property placed in ser-
vice by the S corporation for the taxable
year.
(vi) Timing of tax exempt income. Such
tax exempt income resulting from such
election is treated as received or accrued,
including for purposes of sections 705
and 1366 of the Code, as of the date the
qualified property is placed in service with
respect to the partnership or S corporation.
(3) Disregarded entity ownership.
In the case of a qualified property held
directly by an entity disregarded as sep-
arate from a partnership or S corporation
for Federal income tax purposes, such
qualified property will be treated as held
directly by the partnership or S corpora-
tion for purposes of making an elective
payment election.
(4) Electing partnerships in tiered
structures—(i) In general. If a partnership
(upper-tier partnership) is a direct or indi-
rect partner of a partnership that makes an
elective payment election (lower-tier part-
nership) and directly or indirectly receives
an allocation of tax exempt income result-
ing from the elective payment election
made by the lower-tier partnership, the
upper-tier partnership must determine its
partners’ distributive shares of such tax
exempt income in proportion to each part-
ner’s distributive share of its otherwise
allocable basis in qualified property under
regulations under section 48D that apply
for purposes of allocating a partner’s share
of its basis in qualified property placed in
service by a partnership for such taxable
year.
(ii) Electing partnerships in tiered
structures; interim rule. If a lower-tier
partnership determined its partners’ dis-
tributive shares of the tax exempt income
described in paragraph (d)(2)(iii) of this
section using the interim rule described
in paragraph (d)(2)(iv)(B) of this section,
an upper-tier partnership that is a direct
or indirect partner in such lower-tier part-
nership may determine its partners’ dis-
tributive shares of the tax exempt income
in accordance with the basic principles
for partnership income allocations as
described in §1.704-1(b)(1)(i).
(5) Character of tax exempt income.
Tax exempt income resulting from an
elective payment election by an S corpo-
ration or a partnership is treated as aris-
ing from an investment activity and not
from the conduct of a trade or business
within the meaning of section 469(c)(1)
(A). As such, the tax exempt income is not
treated as passive income to any partners
or shareholders who do not materially
participate within the meaning of section
469(c)(1)(B).
(6) Determination of amount of the sec-
tion 48D credit—(i) In general. In deter-
mining the amount of the section 48D
credit that will result in a payment under
paragraph (d)(2)(ii)(A) of this section, the
partnership or S corporation must com-
pute the amount of the credit allowable
(without regard to section 38(c)) as if an
elective payment election were not made.
Because a partnership or S corporation is
not subject to sections 38(b) and (c) and
469 (that is, those sections apply at the
partner or shareholder level), the amount
of the credit determined by a partnership
or S corporation is not subject to limita-
tion by those sections. Because the section
48D credit is an investment credit under
section 46, sections 49 and 50 apply to
limit the amount of the credit.
(ii) Application of section 49 at-risk
rules to determination of section 48D

April 8, 2024 866 Bulletin No. 2024–15
credit for partnerships and S corporations.
Any amount of section 48D credit deter-
mined with respect to qualified property
held directly by a partnership or S corpo-
ration must be determined by the partner-
ship or S corporation taking into account
the section 49 at-risk rules at the partner or
shareholder level as of the close of the tax-
able year in which the qualified property is
placed in service. Thus, if the credit base
of a qualified property is limited to a part-
ner or S corporation shareholder by sec-
tion 49, then the amount of the section 48D
credit determined by the partnership or S
corporation is also limited. A partnership
or S corporation that directly holds qual-
ified property must request from each of
its partners or shareholders, respectively,
that is subject to section 49, the amount of
such partner’s or shareholder’s nonqual-
ified nonrecourse financing with respect
to the qualified property as of the close of
the taxable year in which the property is
placed in service. Additionally, the part-
nership or S corporation must attach to
its tax return for the taxable year in which
the qualified property is placed in service,
the amount of each partner’s or sharehold-
er’s section 49 limitation with respect to
any qualified property. Changes to at-risk
amounts under section 49 for partners or
S corporation shareholders after the close
of the taxable year in which the quali-
fied property is placed in service do not
impact the section 48D credit determined
by the partnership or S corporation, but
do impact the partner(s) or S corporation
shareholder(s) as provided in paragraph
(d)(6)(iii) of this section.
(iii) Changes in at-risk amounts under
section 49 at partner or shareholder level.
A partner or shareholder in a partnership
or S corporation, respectively, must apply
the rules under section 49 at the partner
or shareholder level if there is a change in
nonqualified nonrecourse financing with
respect to the partner or shareholder after
the close of the taxable year in which the
qualified property is placed in service and
the section 48D credit is determined. If
there is an increase in nonqualified nonre-
course financing to a partner, any adjust-
ment under the rules of section 49(b) is
calculated based on the partner’s share of
the basis (or cost) of the qualified prop-
erty to which the section 48D credit was
determined in accordance with regulations
under section 48D that apply for purposes
of allocating a partner’s share of its basis in
qualified property placed in service by the
partnership. If there is an increase in non-
qualified nonrecourse financing to a share-
holder, any adjustment under the rules of
section 49(b) is calculated based on the
shareholder’s pro rata share of the basis
(or cost) of the qualified property to which
the section 48D credit was determined in
accordance with regulations under section
48D that apply for purposes of allocating
an S corporation shareholder’s pro-rata
share of basis in qualified property placed
in service by the S corporation. If there is
a decrease in nonqualified nonrecourse
financing, any increase in the credit base
is taken into account by the partner or
shareholder as provided under section 49,
and any resulting credit is not eligible for
an elective payment election under section
48D(d).
(7) Partnerships subject to subchap-
ter C of chapter 63 of the Code. See
§301.6241-7(j) of this chapter for rules
applicable to payments made to partner-
ships subject to subchapter C of chapter
63 of the Code for a partnership taxable
year.
(8) Example. P is a calendar-year partnership
consisting of partners A and B, each 50 percent
owners. P constructs Facility A, an advanced man-
ufacturing facility, at V. P completes the pre-filing
registration with respect to Facility A at V for 2024
in accordance with paragraph (b) of this section. In
2024, P places in service qualified property that is
part of Facility A at V. P timely files its 2024 Form
1065 and properly makes the elective payment elec-
tion in accordance with paragraph (c) of this sec-
tion. On its Form 1065, P properly determines that
the amount of section 48D credit with respect to the
qualified property placed in service at Facility A for
2024 is $100,000. The IRS processes P’s return and
makes a $100,000 payment to P. Before determining
A’s and B’s distributive shares, P reduces the section
48D credit to zero. However, for other purposes of
the Code, the $100,000 section 48D credit is deemed
to have been allowed to P for 2024. P does not qual-
ify for the interim rule described in paragraph (d)(2)
(iv)(B) of this section. The $100,000 is treated as
tax exempt income for purposes of section 705, and
A’s and B’s distributive shares of such tax exempt
income is based on each partner’s otherwise allo-
cable basis in qualified property under regulations
under section 48D that apply for purposes of allo-
cating a partner’s share of its basis in qualified prop-
erty placed in service by the partnership for the 2024
taxable year ($50,000 each). A’s and B’s basis in
their partnership interests and capital accounts will
be appropriately adjusted to take into account basis
adjustments made to the qualified property under
section 50(c)(5) and §1.704-1(b)(2)(iv)(j). See para-
graph (g)(2) of this section. The tax exempt income
received or accrued by P as a result of the elective
payment election is treated as received or accrued,
including for purposes of section 705, as of date P
placed in service the qualified property in 2024.
(e) Denial of double benefit—(1) In
general. In the case of a taxpayer making
an election under section 48D(d) and this
section with respect to any section 48D
credit determined under section 48D(a)
and regulations under section 48D that
apply for purposes of determining the sec-
tion 48D credit, such credit is reduced to
zero and is, for any other purposes under
the Code, deemed to have been allowed
to the taxpayer for such taxable year.
Paragraphs (e)(2) and (3) of this section
explain the application of the section
48D(d)(3) denial of a double benefit rule
to a taxpayer (other than a partnership or
S corporation). The application of section
48D(d)(3) to a partnership or S corpora-
tion is provided in paragraphs (d)(2)(ii)(B)
and (C) of this section.
(2) Application of the denial of dou-
ble benefit rule. A taxpayer (other than a
partnership or S corporation) making an
elective payment election applies section
48D(d)(3) by taking the following steps:
(i) Compute the amount of the Federal
income tax liability (if any) for the tax-
able year, without regard to the general
business credit under section 38 of the
Code (GBC), that is payable on the due
date of the tax return (without regard to
extensions), and the amount of the Federal
income tax liability that may be offset by
GBCs pursuant to the limitation based on
the amount of tax under section 38.
(ii) Compute the allowed amount of
the GBC carryforwards carried to the
taxable year under section 38(a)(1) plus
the amount of the current year GBCs
(including the current section 48D credit)
for the taxable year under section 38(a)
(2) and (b). Because the election is made
on an original return for the taxable year
for which the section 48D credit is deter-
mined, any business credit carrybacks are
not considered when determining the elec-
tive payment amount for the taxable year.
(iii) Calculate the net elective payment
amount for the section 48D credit, which
equals the lesser of the section 48D credit
for which an elective payment election is
made or the excess (if any, otherwise the
excess is zero) of the total GBC credits
described in paragraph (e)(2)(ii) of this
section over the amount of the Federal

Bulletin No. 2024–15 867 April 8, 2024
income tax liability that may be offset by
GBCs pursuant to the limitation based on
amount of tax under section 38 computed
in paragraph (e)(2)(i) of this section. Treat
the net elective payment amount of the
section 48D credit for which an elective
payment election is made as a payment
against the tax imposed by subtitle A for
the taxable year with respect to which
such credit is determined.
(iv) Excluding the net elective pay-
ment amount determined under paragraph
(e)(2)(iii) of this section, but including
any portion of the section 48D credit that
is not part of the net elective payment
amount, compute the allowed amount of
GBC carryforwards carried to the tax-
able year plus the amount of current year
GBCs allowed for the taxable year under
section 38 (including, for clarity purposes,
the ordering rules in section 38(d)). Apply
these GBCs against the tax liability com-
puted in paragraph (e)(2)(i) of this section.
(v) Reduce the section 48D credit for
which an elective payment election is
made by the net elective payment amount,
as provided in paragraph (e)(2)(iii) of
this section, and by the amount (if any)
allowed as a GBC under section 38 for the
taxable year, as provided in paragraph (e)
(2)(iv) of this section, which results in the
section 48D credit being reduced to zero.
(3) Use of the section 48D credit for
other purposes. The full amount of the
section 48D credit for which an elective
payment election is made is deemed to
have been allowed for all other purposes
of the Code, including, but not limited to,
the basis reduction and recapture rules
imposed by section 50 and the calculation
of tax, calculation of the amount of any
underpayment of estimated tax under sec-
tions 6654 and 6655 of the Code, and the
addition to tax for the failure to pay under
section 6651(a)(2) of the Code (if any).
(4) Examples. The following examples
illustrate the rules of this paragraph (e).
(i) Example 1. Z Corp is a calendar-year C cor-
poration. Z Corp places in service qualified property
that is part of an advanced manufacturing facility in
June of 2024. Z Corp completes the pre-filing regis-
tration in accordance with this section and receives
a registration number for the qualified property. Z
Corp timely files (with extension) its 2024 Form
1120 on October 15, 2025, properly making the
elective payment election with respect to the section
48D credit earned with respect to the qualified prop-
erty in accordance with this section. On its return,
Z Corp properly determines that it has $500,000 of
tax imposed by subtitle A of the Code (see paragraph
(e)(2)(i) of this section). For simplicity, assume the
maximum amount of GBCs that can be claimed
for the taxable year is $375,000. Z Corp properly
determines that the amount of the section 48D credit
determined with respect to the qualified property (its
GBC for the taxable year) is $100,000 (see paragraph
(e)(2)(ii) of this section). Under paragraph (e)(2)(iii)
of this section, the net elective payment amount is
$0, so the section 48D credit is considered a credit
that reduces Z Corp’s tax liability to $400,000 under
paragraph (e)(2)(iv) of this section. Z Corp pays its
$400,000 tax liability on October 15, 2025. Under
paragraph (e)(2)(v) of this section, the $100,000 of
section 48D credit is reduced by the $100,000 of
section 48D credit claimed as GBCs for the taxable
year, which results in the section 48D credit being
reduced to zero. However, the $100,000 of the cur-
rent year section 48D credit is deemed to have been
allowed to Z Corp for 2024 for all other purposes of
the Code (paragraph (e)(3) of this section). Because
Z Corp paid its tax liability after the original due date
for the filing of its Form 1120, Z Corp will owe a
failure to pay penalty under section 6651(a)(2) and
interest. Z Corp may also owe a penalty for failure to
pay estimated income tax under section 6655.
(ii) Example 2. Assume the same facts as in para-
graph (e)(4)(i) of this section (Example 1), except
that Z Corp has $80,000 of tax imposed by subtitle A
(paragraph (e)(2)(i) of this section) and calculates its
limitation of GBC under section 38(c) (simplified) is
$60,000 (paragraph (e)(2)(i) of this section), and Z
Corp timely files its Form 1120 on April 15 instead
of October 15. Under paragraph (e)(2)(iii) of this
section, the net elective payment amount is $40,000
(lesser of $100,000 section 48D credit or $100,000
of total GBC credits described in paragraph (e)(2)
(ii) of this section minus $60,000 of section 38(c)
limitation). Under paragraph (e)(2)(iv) of this sec-
tion, Z Corp uses $60,000 of its $100,000 of section
48D credit against its tax liability. Z Corp reduces
the section 48D credit by the $40,000 net elective
payment amount determined in paragraph (e)(2)(iii)
of this section and by the $60,000 section 48D credit
claimed against tax in paragraph (e)(2)(iv) of this
section, resulting in the credit being reduced to zero
(paragraph (e)(2)(v) of this section). When the IRS
processes Z Corp’s 2024 Form 1120, the net elec-
tive payment amount results in a $20,000 refund to Z
Corp (after applying $20,000 of the $40,000 net elec-
tive payment amount to cover Z Corp’s tax shown
on the return). However, for other purposes of the
Code, the $100,000 section 48D credit is deemed to
have been allowed to Z Corp for 2024 (paragraph (e)
(3) of this section). Even though Z Corp did not owe
tax after applying the net elective payment amount
against its net tax liability, Z Corp may be subject
to the section 6655 penalty for failure to pay esti-
mated income tax. The net elective payment is not
an estimated tax installment, rather, it is treated as a
payment made at the filing of the return.
(iii) Example 3. X Corp is a calendar-year C cor-
poration. X Corp places in service qualified property
that is part of an advanced manufacturing facility in
June of 2025. X Corp completes the pre-filing regis-
tration in accordance with this section and receives
a registration number for the qualified property. In
2026, X Corp timely files its 2025 return (without
extension), calculating its federal income tax before
GBCs of $125,000 and that its limitation of GBC
under section 38(c) (simplified) is $100,000 (para-
graph (e)(2)(i) of this section). X Corp attaches
Form 3468 to claim a current section 48D credit of
$50,000. X Corp also attaches Form 5884 to claim
a current work opportunity tax credit (WOTC) of
$50,000. X Corp also has business credit carry-
forwards of $25,000, which together with the 48D
credit and WOTC results in a total of $125,000 of
GBC for the taxable year (paragraph (e)(2)(ii) of this
section). Under paragraph (e)(2)(iii) of this section,
the net elective payment amount is $25,000. Under
paragraph (e)(2)(iv) of this section, including using
the ordering rules in section 38(d), X Corp is allowed
$25,000 of the carryforwards, $25,000 of section
48D credit (as its section 46 investment credit)
plus $50,000 of WOTC against net income tax, as
defined under section 38(c)(1)(B). The $25,000 of
unused section 48D credit is the net elective payment
amount that results in a $25,000 payment against tax
by X Corp (paragraph (e)(2)(iii) of this section). On
its return, X Corp shows net tax liability of $25,000
($125,000 - $100,000 allowed GBC) and the net
elective payment of $25,000 which X Corp applied
to net tax liability, resulting in zero tax owed on the
return. Under paragraph (e)(2)(v) of this section, X
Corp’s section 48D credit is reduced by the $25,000
of the net elective payment amount, as well as by
the $25,000 of section 48D credit claimed as a GBC
for the taxable year, resulting in the $50,000 of sec-
tion 48D credit being reduced to zero. However, for
all other purposes of the Code, the $50,000 of sec-
tion 48D credit is deemed to have been allowed to
X Corp for 2025 (paragraph (e)(3) of this section).
Even though X Corp did not owe tax after applying
the net elective payment amount against its net tax
liability, X Corp may be subject to the section 6655
penalty for failure to pay estimated income tax. The
net elective payment is not an estimated tax install-
ment, rather, it is treated as a payment made at the
filing of the return.
(iv) Example 4. Assume the same facts as in para-
graph (e)(4)(iii) of this section (Example 3), except
X Corp filed the return on a timely filed extension
after the due date of the return (without extensions).
Even though X Corp did not owe tax after apply-
ing the net elective payment amount against its net
tax liability, X Corp may be subject to the section
6651(a)(2) penalty for failure to pay tax.
(f) Excessive payment—(1) In general.
Except as provided in paragraph (f)(2) of
this section, in the case of any amount
treated as a payment which is made by
the taxpayer under section 48D(d)(1) and
paragraph (a) of this section, or any pay-
ment made pursuant to section 48D(d)
(2)(A)(i)(I) and paragraph (d) of this
section, with respect to any property,
which amount the Commissioner deter-
mines constitutes an excessive payment
as defined in paragraph (f)(3) of this sec-
tion, the tax imposed on such taxpayer by
chapter 1 of the Code for the taxable year
in which such determination is made is

April 8, 2024 868 Bulletin No. 2024–15
increased by an amount equal to the sum
of—
(i) The amount of such excessive pay-
ment; plus
(ii) An amount equal to 20 percent of
such excessive payment.
(2) Reasonable cause. Paragraph (f)
(1)(ii) of this section will not apply if the
taxpayer demonstrates to the satisfaction
of the Commissioner that the excessive
payment resulted from reasonable cause.
(3) Excessive payment defined. For
purposes of section 48D(d) and this para-
graph (f), the term excessive payment
means, with respect to any property for
which an election is made under section
48D(d) and this section for any taxable
year, an amount equal to the excess of—
(i) The amount treated as a payment
which is made by the taxpayer pursuant
to section 48D(d)(I) and paragraph (a) of
this section, or any payment made by the
Commissioner pursuant to section 48D(d)
(2)(A)(i)(I) and paragraph (d) of this sec-
tion, with respect to such property for
such taxable year; over
(ii) The amount of the section 48D
credit which, without application of sec-
tion 48D(d) and this section, would be
otherwise allowable (determined without
regard to section 38(c)) under section
48D(a) and the section 48D regulations
with respect to such property for such tax-
able year.
(4) Example. A Corp is a calendar-year C corpo-
ration. A Corp places in service qualified property
that is part of Facility A, an advanced manufactur-
ing facility in 2023. A Corp properly completes
the pre-filing registration in accordance with para-
graph (b) of this section and receives a registration
number for the advanced manufacturing facility.
A Corp timely files its 2023 Form 1120, properly
providing the registration number for Facility A
on Form 3800 and the relevant source credit form
and otherwise complying with paragraph (c) of this
section. On its return, A Corp calculates that the
amount of the section 48D credit with respect to the
qualified property is $100,000 and that the net elec-
tive payment amount is $100,000. A Corp receives
a refund in the amount of $100,000. In 2025, the
IRS determines that the amount of the section 48D
credit properly allowable to A Corp in 2023 with
respect to Facility A (as determined under regula-
tions under section 48D that apply for purposes of
determining the amount of the section 48D credit
and without regard to the limitation based on tax
in section 38(c)) was $60,000. A Corp is not able
to show reasonable cause for the difference. The
excessive payment amount is $40,000 ($100,000
treated as a payment - $60,000 allowable amount).
In 2025, the tax imposed under chapter 1 on A Corp
is increased in the amount of $48,000 ($40,000+
(20% * $40,000 = $8,000)).
(g) Basis reduction and recapture—(1)
In general. The rules in section 50(a) and
(c) of the Code apply with respect to elec-
tive payments under paragraphs (a) and
(d) of this section.
(2) Basis adjustment—(i) In general.
If a section 48D credit is determined with
respect to property for which a taxpayer
makes an election under section 48D(d)
(1), then the adjusted basis of the property
must be reduced by the amount of the sec-
tion 48D credit determined for which the
taxpayer made an election under section
48D(d)(1).
(ii) Basis adjustment by partnership
or S corporation. If an advanced manu-
facturing investment credit is determined
with respect to property for which a part-
nership or S corporation makes an elec-
tion under section 48D(d)(1), then the
adjusted basis of the property must be
reduced by the amount of the advanced
manufacturing investment credit deter-
mined with respect to the property held
by the partnership or S corporation, for
which the IRS made a payment to the
partnership or S corporation pursuant to
section 48D(d)(2)(A)(i)(I).
(iii) Basis adjustment of partners and
S corporation shareholders. The adjusted
basis of a partner’s interest in a partner-
ship, and stock in an S corporation, must
be appropriately adjusted pursuant to sec-
tion 50(c)(5) to take into account adjust-
ments made under paragraph (g)(2)(ii) of
this section in the basis of property held
by the partnership or S corporation, as the
case may be.
(3) Recapture reporting. Any report-
ing of recapture is made on the taxpayer’s
annual return in the manner prescribed by
the IRS in any guidance.
(h) Applicability dates—(1) In general.
Except as provided in paragraph (h)(2) of
this section, this section applies to taxable
years ending on or after March 11, 2024.
(2) Prior taxable years. For taxable
years ending before March 11, 2024,
taxpayers may choose to apply the rules
of this section to property that is placed
in service after December 31, 2022, pro-
vided the taxpayers apply the rules in their
entirety and in a consistent manner.
§1.48D-6T [Removed]
Par. 3. Section 1.48D-6T is removed.
Douglas W. O’Donnell,
Deputy Commissioner for Services and
Enforcement.
Approved: February 27, 2024.
Aviva Aron-Dine,
Acting Assistant Secretary of the Treasury
(Tax Policy).
(Filed by the Office of the Federal Register March
5, 2024, 8:45 a.m., and published in the issue of the
Federal Register for March 11, 2024, 89 FR 17596)

Bulletin No. 2024–15 869 April 8, 2024
Part III
Determination of Housing
Cost Amounts Eligible for
Exclusion or Deduction for
2024
Notice 2024-31
SECTION 1. PURPOSE
This notice provides adjustments to the
limitation on housing expenses for pur-
poses of section 911 of the Internal Rev-
enue Code for specific locations for 2024.
These adjustments are based on geo-
graphic differences in housing costs rela-
tive to housing costs in the United States.
SECTION 2. BACKGROUND
Section 911 allows a qualified individ-
ual to elect to exclude from gross income
the foreign earned income and to exclude
or deduct the housing cost amount of such
individual.
The term “housing cost amount” is
generally the total of the housing expenses
for the taxable year minus a base housing
amount. See § 911(c)(1). For this purpose,
the base housing amount for the taxable
year is limited to an amount that is tied
to the maximum foreign earned income
exclusion amount of the qualified indi-
vidual, which is $126,500 for 2024. See
§ 91 1(c)(1)(B). Specifically, the base hous-
ing amount is 16 percent of the maximum
foreign earned income exclusion amount
(computed on a daily basis), multiplied
by the number of days in the applicable
period that fall within the taxable year.
Assuming that the entire taxable year of
a qualified individual is within the appli-
cable period, the base housing amount for
2024 is $20,240 ($126,500 x .16).
Similarly, the housing expense amount
is also limited, based on a percentage of
the maximum foreign earned income
exclusion amount. Specifically, the limit
on such housing expenses generally equals
30 percent of the maximum foreign earned
income exclusion amount (computed on a
daily basis), multiplied by the number of
days in the applicable period for which
the taxpayer is a qualified individual. See
§ 911(c)(2)(A) and (d)(1). Thus, under this
general limitation, a qualified individual
whose entire taxable year is within the
applicable period is limited to maximum
housing expenses of $37,950 ($126,500
x .30) for 2024. However, section 911(c)
(2)(B) authorizes the Secretary to issue
regulations or other guidance to adjust
the percentage under section 911(c)(2)(A)
(i) (which determines the limit on hous-
ing expenses) based on geographic differ-
ences in housing costs relative to housing
costs in the United States. Pursuant to this
authority, the Department of the Treasury
(Treasury Department) and the Internal
Revenue Service (IRS) have published
annual notices concerning the limitation
on the section 911 housing cost amounts
since the 2006 taxable year.
For more background on the foreign
housing exclusion, see https://www.irs.
gov/individuals/international-taxpayers/
foreign-housing-exclusion-or-deduction.
SECTION 3. TABLE OF ADJUSTED
HOUSING LIMITATIONS FOR 2024
The following table provides adjusted
limitations on housing expenses (in lieu
of the otherwise applicable limitation of
$37,950) for 2024. All amounts are in U.S.
dollars.
CountryLocationLimitation on Housing
Expenses
(full year)
Limitation on Housing
Expenses (daily/366 days)
AngolaLuanda84,000229.51
Argentina Buenos Aires 56,500154.37
AustraliaMelbourne41,500113.39
AustraliaSydney67,000183.06
Bahamas, The Nassau 49,700135.79
Bahrain Bahrain48,300131.97
Belgium Brussels 40,000109.29
Bermuda Bermuda90,000245.90
Brazil Sao Paulo 56,600154.64
Canada Calgary 39,500107.92
Canada Montreal 54,000147.54
Canada Ottawa 48,100131.42
Canada Toronto 61,900169.13
Canada Vancouver 61,000166.67
Canada Victoria 42,200115.30

April 8, 2024 870 Bulletin No. 2024–15
CountryLocationLimitation on Housing
Expenses
(full year)
Limitation on Housing
Expenses (daily/366 days)
Cayman IslandsGrand Cayman48,000131.15
China Beijing 68,000185.79
China Hong Kong 114,300312.30
China Shanghai 57,001155.74
Colombia Bogota 58,700160.38
Colombia All cities other than Bogota49,400134.97
Democratic Republic of the
Congo
Kinshasa42,000114.75
DenmarkCopenhagen43,704119.41
Dominican Republic Santo Domingo 45,500124.32
Ecuador Quito 38,200104.37
EstoniaTallinn46,600127.32
France Garches68,600187.43
France Paris 68,600187.43
France Sevres68,600187.43
France Suresnes68,600187.43
France Versailles68,600187.43
Germany Berlin 41,100112.30
Germany Boeblingen41,000112.02
Germany Bonn42,000114.75
Germany Cologne56,200153.55
Germany Gelnhausen42,400115.85
Germany Hanau 42,400115.85
Germany Ingolstadt48,100131.42
Germany Kaiserslautern and Landkreis 41,300112.84
Germany Ludwigsburg41,000112.02
Germany Mainz46,000125.68
Germany Munich 48,100131.42
Germany Nellingen41,000112.02
Germany Pirmasens41,300112.84
Germany Sembach41,300112.84
Germany Stuttgart 41,000112.02
Germany Wahn42,000114.75
Germany Wiesbaden 46,000125.68
Germany Zweibrucken41,300112.84
Guatemala Guatemala City 42,000114.75
GuineaConakry51,300140.16
Holy See, The Holy See, The 45,700124.86
India Mumbai 67,920185.57
India New Delhi56,124153.34
Ireland Dublin39,700108.47
IsraelBeer Sheva54,800149.73
IsraelJerusalem49,000133.88

Bulletin No. 2024–15 871 April 8, 2024
CountryLocationLimitation on Housing
Expenses
(full year)
Limitation on Housing
Expenses (daily/366 days)
IsraelTel Aviv50,800138.80
IsraelWest Bank49,000133.88
Italy Genoa 41,800114.21
Italy La Spezia40,400110.38
Italy Milan 68,300186.61
Italy Naples 46,900128.14
Italy Rome 45,700124.86
Italy Vicenza 38,100104.10
Jamaica Kingston 41,200112.57
Japan Gifu74,300203.01
Japan Komaki74,300203.01
Japan Nagoya 74,300203.01
Japan Okinawa Prefecture 44,800122.40
Japan Osaka-Kobe 90,664247.72
Japan Tokyo 73,100199.73
Japan Yokohama 39,000106.56
Japan Yokosuka 42,000114.75
KazakhstanAlmaty48,000131.15
Korea Camp Colbern54,200148.09
Korea Camp Market49,200134.43
Korea Camp Mercer54,200148.09
Korea K-1649,200134.43
Korea Kimpo Airfield49,200134.43
Korea Seoul 49,200134.43
Korea Suwon49,200134.43
Kuwait Kuwait City 64,400175.96
Kuwait All cities other than Kuwait
City
57,700157.65
Malaysia Kuala Lumpur 46,200126.23
Malta Malta55,100150.55
Mexico Mexico City47,900130.87
Mexico All cities other than Ciudad
Juarez, Cuernavaca, Guadala-
jara, Hermosillo, Matamoros,
Mazatlan, Merida, Metapa,
Mexico City, Monterrey,
Nogales, Nuevo Laredo,
Tijuana, and Veracruz
39,400107.65
MozambiqueMaputo39,500107.92
Netherlands Amsterdam 52,900144.54
Netherlands Aruba39,300107.38
Netherlands Hague, The 54,500148.91
Netherlands Schiphol52,900144.54
Netherlands AntillesCuracao45,800125.14

April 8, 2024 872 Bulletin No. 2024–15
CountryLocationLimitation on Housing
Expenses
(full year)
Limitation on Housing
Expenses (daily/366 days)
OmanMuscat41,300112.84
Panama Panama City 39,500107.92
Peru Lima 39,100106.83
PolandWarsaw56,500154.37
Portugal Alverca41,800114.21
Portugal Lisbon 41,800114.21
Qatar Doha 45,888125.38
RomaniaBucharest41,200112.57
Russia Moscow 108,000295.08
Russia Saint Petersburg60,000163.93
Saudi Arabia Riyadh 40,000109.29
Singapore Singapore84,100229.78
SloveniaLjubljana47,900130.87
South AfricaPretoria39,300107.38
SpainBarcelona40,600110.93
SpainMadrid 55,700152.19
Switzerland Bern 75,500206.28
Switzerland Geneva 107,400293.44
Switzerland Zurich 39,219107.16
Taiwan Taipei 46,188126.20
TanzaniaDar Es Salaam44,000120.22
Thailand Bangkok 59,000161.20
Trinidad and TobagoPort of Spain54,500148.91
Ukraine Kiev 72,000196.72
United Arab Emirates Abu Dhabi 49,687135.76
United Arab Emirates Dubai 57,174156.21
United Kingdom Basingstoke 41,099112.29
United Kingdom Bath 41,000112.02
United Kingdom Bracknell62,100169.67
United Kingdom Caversham 73,800201.64
United Kingdom Cheltenham 47,300129.23
United Kingdom Farnborough 54,700149.45
United Kingdom Gibraltar 44,616121.90
United Kingdom Harrogate 43,200118.03
United Kingdom High Wycombe 62,100169.67
United Kingdom Lakenheath 44,300121.04
United Kingdom London 67,000183.06
United Kingdom Loudwater 54,300148.36
United Kingdom Menwith Hill43,200118.03
United Kingdom Mildenhall44,300121.04
United Kingdom Reading62,100169.67
United Kingdom Southampton44,200120.77
United Kingdom Surrey 48,402132.25

Bulletin No. 2024–15 873 April 8, 2024
CountryLocationLimitation on Housing
Expenses
(full year)
Limitation on Housing
Expenses (daily/366 days)
Venezuela Caracas 57,000155.74
Vietnam Hanoi 46,800127.87
Vietnam Ho Chi Minh City42,000114.75
SECTION 4. OPTION TO APPLY
2024 ADJUSTED HOUSING
LIMITATIONS TO 2023 TAXABLE
YEAR
For some locations, the limitation on
housing expenses provided in Section 3 of
this notice may be higher than the limita-
tion on housing expenses provided in the
“Table of Adjusted Limitations for 2023”
in Notice 2023-26, 2023-13 I.R.B. 577.
A qualified individual incurring housing
expenses in such a location during 2023
may apply the adjusted limitation on
housing expenses provided in Section 3 of
this notice for 2024 in lieu of the amounts
provided in the “Table of Adjusted Lim-
itations for 2023” in Notice 2023-26 (and
as set forth in the Instructions to Form
2555, Foreign Earned Income, for 2023).
The Treasury Department and the IRS
anticipate that future annual notices pro-
viding adjustments to housing expense
limitations will make a similar option
available to qualified individuals that incur
housing expenses in the immediately pre-
ceding year. For example, when adjusted
housing expense limitations for 2025 are
issued, it is expected that taxpayers will
be permitted to apply those adjusted lim-
itations to the 2024 taxable year.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
This notice supersedes Notice 2023-26,
2023-13 I.R.B. 577.
SECTION 6. EFFECTIVE DATE
This notice is effective for taxable
years beginning on or after January 1,
2024. However, as provided in Section
4, taxpayers may apply the 2024 adjusted
housing limitations contained in Section 3
of this notice to taxable year beginning in
2023.
SECTION 7. DRAFTING
INFORMATION
The principal author of this notice is
Kate Y. Hwa of the Office of Associate
Chief Counsel (International). For further
information regarding this notice, contact
Kate Y. Hwa at (202) 317-5001 (not a toll-
free number).
26 CFR 1.911-2: Qualified Individuals.
(Also: Part I, § 911.)
Rev. Proc. 2024-17
SECTION 1. PURPOSE
This revenue procedure provides infor-
mation to any individual who failed to
meet the eligibility requirements of sec-
tion 911(d)(1) of the Internal Revenue
Code (Code) for 2023 because of adverse
conditions in a foreign country.
SECTION 2. BACKGROUND
.01 Section 911 allows a “qualified
individual,” as defined in section 911(d)
(1), to elect to exclude from gross income
the foreign earned income and to exclude
or deduct the housing cost amount of such
individual.
.02 Section 911(d)(1) of the Code
defines the term “qualified individual” as
an individual whose tax home is in a for-
eign country and who is (A) a citizen of the
United States and establishes to the satis-
faction of the Secretary of the Treasury
that the individual has been a bona fide
resident of a foreign country or countries
for an uninterrupted period that includes
an entire taxable year, or (B) a citizen or
resident of the United States who, during
any period of 12 consecutive months, is
present in a foreign country or countries
during at least 330 full days.
.03 In addition, section 911(d)(4) of
the Code provides that an individual will
be treated as a qualified individual with
respect to a period in which the individual
was a bona fide resident of, or was present
in, a foreign country if the individual left
the country during a period for which the
Secretary of the Treasury, after consultation
with the Secretary of State, determines that
individuals were required to leave because
of war, civil unrest, or similar adverse con-
ditions that precluded the normal conduct
of business. An individual must establish
that but for those conditions the individual
could reasonably have been expected to
meet the eligibility requirements.
.04 The Internal Revenue Service pre-
viously has listed countries for which the
eligibility requirements of section 911(d)
(1) of the Code are waived under section
911(d)(4) because of adverse conditions in
those countries. See Rev. Proc. 2023-19,
2023-13 I.R.B. 626.
SECTION 3. SCOPE
.01 For 2023, the Secretary of the Trea-
sury, in consultation with the Secretary
of State, has determined that war, civil
unrest, or similar adverse conditions pre-
cluded the normal conduct of business in
the following countries beginning on the
specified date:
Country Date of Departure On or After
Ukraine January 18, 2023
Belarus January 26, 2023
Sudan April 20, 2023
Haiti July 27, 2023
Niger August 2, 2023
Iraq October 20, 2023
For example, for purposes of section
911 of the Code, an individual who left
Ukraine on or after January 18, 2023, will
be treated as a qualified individual with
respect to the period during which that

April 8, 2024 874 Bulletin No. 2024–15
individual was present in, or was a bona
fide resident of, Ukraine if the individual
establishes a reasonable expectation that
he or she would have met the requirements
of section 911(d) but for those conditions.
.02 To qualify for relief under section
911(d)(4) of the Code, an individual must
have established residency, or have been
physically present, in the foreign country
on or before the date that the Secretary of
the Treasury determines that individuals
were required to leave the foreign country.
For example, individuals who were first
physically present or established residency
in Ukraine after January 18, 2023, are not
eligible to qualify for the exception provided
in section 911(d)(4) of the Code for 2023.
SECTION 4. APPLICATION
A taxpayer who needs assistance on
how to claim this exclusion, or on how
to file an amended return, should consult
the foreign earned income exclusion topic
at https://www.irs.gov/individuals/inter-
national-taxpayers/foreign-earned-in-
come-exclusion or contact a local IRS
office.
SECTION 5. DRAFTING
INFORMA
TION
The principal author of this revenue
procedure is Kate Y. Hwa of the Office of
Associate Chief Counsel (International).
For further information regarding this rev-
enue procedure, contact Kate Y. Hwa at
(202) 317-5001 (not a toll-free number).
Rev. Proc. 2024-18
SECTION 1. PURPOSE
This revenue procedure supplements Rev.
Proc. 2023-32, 2023-41 I.R.B. 1064, by pub-
lishing amounts of unused housing credit
carryovers allocated to qualified states under
§ 42(h)(3)(D) of the Internal Revenue Code
for calendar year 2023 in addition to those
amounts published in Rev. Proc. 2023-32.
SECTION 2. BACKGROUND
Rev. Proc. 2019-45, 2019-48 I.R.B.
524, provides guidance to state housing
credit agencies of qualified states on the
procedure for requesting an allocation of
unused housing credit carryovers under
§ 42(h)(3)(D). The amount of unused
housing credit carryovers allocated to
qualified states for a calendar year from
a national pool of unused credit authority
(the National Pool) is published by the
Internal Revenue Service in the Internal
Revenue Bulletin.
On October 10, 2023, Rev. Proc. 2023-
32 published the amounts of unused hous-
ing credit carryovers allocated to qualified
states under § 42(h)(3)(D). This revenue
procedure publishes additional amounts
of unused housing credit carryovers allo-
cated to the same qualified states for cal-
endar year 2023.
SECTION 3. PROCEDURE
The unused housing credit carryover
amount allocated from the National Pool
by the Secretary to each qualified state
for calendar year 2023 in addition to the
amounts published in Rev. Proc. 2023-32
is as follows:
Qualified State
Additional Amount Allocated
Connecticut 136,793
Delaware 38,417
Florida 839,149
Georgia 411,670
Illinois 474,636
Maryland 232,551
Massachusetts 263,383
Michigan 378,520
Minnesota 215,671
Montana 42,358
Nebraska 74,237
Nevada 119,876
New Jersey 349,382
New Mexico 79,722
New York 742,288
North Carolina 403,601
Ohio 443,478
Oregon 159,952
Pennsylvania 489,347
Rhode Island 41,259
South Dakota 34,322
Texas 1,132,815
Utah 127,535
Vermont 24,409
Virginia 327,575
Washington 293,706
West Virginia 66,965
Wisconsin 222,286

Bulletin No. 2024–15 875 April 8, 2024
Any additional amount of unused hous-
ing credit carryover published in this reve-
nue procedure that a qualified state fails to
allocate before the close of 2023 will not be
considered in determining whether that state
qualifies for an allocation of unused housing
credit carryover for calendar year 2024.
EFFECT ON OTHER DOCUMENTS
This revenue procedure supplements
Rev. Proc. 2023-32 by increasing the
amounts of unused housing credit carry-
overs allocated to qualified states from the
2023 National Pool.
EFFECTIVE DATE
This revenue procedure is effective
for allocations of housing credit dollar
amounts attributable to the National Pool
component of a qualified state’s housing
credit ceiling for calendar year 2023.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Waheed Olayan of the Office
of Associate Chief Counsel (Passthroughs
and Special Industries). For further infor-
mation regarding this revenue procedure,
contact Mr. Olayan at (202) 317-6239 (not
a toll-free number).

April 8, 2024 876 Bulletin No. 2024–15
Part IV
Deletions From Cumulative
List of Organizations,
Contributions to Which
are Deductible Under
Section 170 of the Code
Announcement 2024-15
Table of Contents
The Internal Revenue Service has
revoked its determination that the organi-
zations listed below qualify as organiza-
tions described in sections 501(c)(3) and
170(c)(2) of the Internal Revenue Code of
1986.
Generally, the IRS will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the IRS is not pre-
cluded from disallowing a deduction for
any contributions made after an organiza-
tion ceases to qualify under section 170(c)
(2) if the organization has not timely filed
a suit for declaratory judgment under sec-
tion 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declar-
atory judgment has been timely filed,
contributions from individuals and orga-
nizations described in section 170(c)(2)
that are otherwise allowable will con-
tinue to be deductible. Protection under
section 7428(c) would begin on March
25, 2024 and would end on the date the
court first determines the organization is
not described in section 170(c)(2) as more
particularly set for in section 7428(c)(1).
For individual contributors, the maximum
deduction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were
the basis for revocation.
Name Of OrganizationEffective Date of RevocationLocation
Gods Clear View Ministries1/1/2018Lanse, PA
Institute for Specialized Literature, Inc.7/1/2021Granada Hills, CA

Bulletin No. 2024–15 i April 8, 2024
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations
to show that the previous published rul-
ings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.
—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

April 8, 2024 ii Bulletin No. 2024–15
Numerical Finding List
1
Bulletin 2024–15
Announcements:
2024-1, 2024-02 I.R.B. 363
2024-3, 2024-02 I.R.B. 364
2024-5, 2024-05 I.R.B. 635
2024-6, 2024-05 I.R.B. 635
2024-4, 2024-06 I.R.B. 665
2024-7, 2024-07 I.R.B. 673
2024-8, 2024-07 I.R.B. 674
2024-9, 2024-07 I.R.B. 675
2024-12, 2024-08 I.R.B. 676
2024-11, 2024-08 I.R.B. 683
2024-13, 2024-10 I.R.B. 710
2024-10, 2024-11 I.R.B. 711
2024-14, 2024-12 I.R.B. 719
2024-15, 2024-15 I.R.B. 876
Notices:
2024-1, 2024-02 I.R.B. 314
2024-2, 2024-02 I.R.B. 316
2024-3, 2024-02 I.R.B. 338
2024-4, 2024-02 I.R.B. 343
2024-5, 2024-02 I.R.B. 347
2024-6, 2024-02 I.R.B. 348
2024-7, 2024-02 I.R.B. 355
2024-8, 2024-02 I.R.B. 356
2024-9, 2024-02 I.R.B. 358
2024-11, 2024-02 I.R.B. 360
2024-10, 2024-03 I.R.B. 406
2024-12, 2024-05 I.R.B. 616
2024-13, 2024-05 I.R.B. 618
2024-16, 2024-05 I.R.B. 622
2024-18, 2024-05 I.R.B. 625
2024-19, 2024-05 I.R.B. 627
2024-21, 2024-06 I.R.B. 659
2024-22, 2024-06 I.R.B. 662
2024-20, 2024-07 I.R.B. 668
2024-23, 2024-07 I.R.B. 672
2024-24, 2024-10 I.R.B. 707
2024-25, 2024-12 I.R.B. 712
2024-26, 2024-12 I.R.B. 713
2024-27, 2024-12 I.R.B. 715
2024-28, 2024-13 I.R.B. 720
2024-29, 2024-14 I.R.B. 751
2024-31, 2024-15 I.R.B. 869
Proposed Regulations:
REG-118492-23, 2024-02 I.R.B. 366
REG-107423-23, 2024-03 I.R.B. 411
REG-121010-17, 2024-05 I.R.B. 636
REG-101552-24, 2024-13 I.R.B. 741
REG-117631-23, 2024-14 I.R.B. 754
Revenue Procedures:
2024-1, 2024-01 I.R.B. 1
2024-2, 2024-01 I.R.B. 119
2024-3, 2024-01 I.R.B. 143
2024-4, 2024-01 I.R.B. 160
2024-5, 2024-01 I.R.B. 262
2024-7, 2024-01 I.R.B. 303
2024-8, 2024-04 I.R.B. 479
2024-9, 2024-05 I.R.B. 628
2024-12, 2024-09 I.R.B. 677
2024-13, 2024-09 I.R.B. 678
2024-14, 2024-09 I.R.B. 682
2024-15, 2024-12 I.R.B. 717
2024-11, 2024-13 I.R.B. 721
2024-17, 2024-15 I.R.B. 873
2024-18, 2024-15 I.R.B. 874
Revenue Rulings:
2024-1, 2024-02 I.R.B. 307
2024-2, 2024-02 I.R.B. 311
2024-3, 2024-06 I.R.B. 646
2024-5, 2024-07 I.R.B. 666
2024-4, 2024-10 I.R.B. 686
2024-6, 2024-10 I.R.B. 688
2024-7, 2024-14 I.R.B. 749
Treasury Decisions:
9984, 2024-03 I.R.B. 386
9985, 2024-05 I.R.B. 573
9986, 2024-05 I.R.B. 610
9987, 2024-06 I.R.B. 648
9988, 2024-15 I.R.B. 794
9989, 2024-15 I.R.B. 850
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin
2023–52, dated December 26, 2023.

Bulletin No. 2024–15 iii April 8, 2024
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2024–15
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin
2023–52, dated December 26, 2023.

Internal Revenue Service
Washington, DC 20224
Official Business
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