26 USC 6417 - Elective payment of applicable credits

U.S Code last checked for updates: Nov 22, 2024

§ 6417.

Elective payment of applicable credits

(a)

In general

(b)

Applicable credit

The term “applicable credit” means each of the following:

(1)

So much of the credit for alternative fuel vehicle refueling property allowed under section 30C which, pursuant to subsection (d)(1) of such section, is treated as a credit listed in section 38(b).

(2)

So much of the renewable electricity production credit determined under section 45(a) as is attributable to qualified facilities which are originally placed in service after December 31, 2022.

(3)

So much of the credit for carbon oxide sequestration determined under section 45Q(a) as is attributable to carbon capture equipment which is originally placed in service after December 31, 2022.

(4)

The zero-emission nuclear power production credit determined under section 45U(a).

(5)

So much of the credit for production of clean hydrogen determined under section 45V(a) as is attributable to qualified clean hydrogen production facilities which are originally placed in service after December 31, 2012.

(6)

In the case of a tax-exempt entity described in clause (i), (ii), or (iv) of section 168(h)(2)(A), the credit for qualified commercial vehicles determined under section 45W by reason of subsection (d)(3) thereof.

(7)

The credit for advanced manufacturing production under section 45X(a).

(8)

The clean electricity production credit determined under section 45Y(a).

(9)

The clean fuel production credit determined under section 45Z(a).

(10)

The energy credit determined under section 48.

(11)

The qualifying advanced energy project credit determined under section 48C.

(12)

The clean electricity investment credit determined under section 48E.

(c)

Application to partnerships and S corporations

(1)

In general

In the case of any applicable credit determined with respect to any facility or property held directly by a partnership or S corporation, any election under subsection (a) shall be made by such partnership or S corporation. If such partnership or S corporation makes an election under such subsection (in such manner as the Secretary may provide) with respect to such credit—

(A)

the Secretary shall make a payment to such partnership or S corporation equal to the amount of such credit,

(B)

subsection (e) shall be applied with respect to such credit before determining any partner’s distributive share, or shareholder’s pro rata share, of such credit,

(C)

any amount with respect to which the election in subsection (a) is made shall be treated as tax exempt income for purposes of sections 705 and 1366, and

(D)

a partner’s distributive share of such tax exempt income shall be based on such partner’s distributive share of the otherwise applicable credit for each taxable year.

(2)

Coordination with application at partner or shareholder level

(3)

Treatment of payments to partnerships and S corporations

(d)

Special rules

For purposes of this section—

(1)

Applicable entity

(A)

In general

The term “applicable entity” means—

(i)

any organization exempt from the tax imposed by subtitle A,

(ii)

any State or political subdivision thereof,

(iii)

the Tennessee Valley Authority,

(iv)

an Indian tribal government (as defined in section 30D(g)(9)),

(v)

any Alaska Native Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602(m)), or

(vi)

any corporation operating on a cooperative basis which is engaged in furnishing electric energy to persons in rural areas.

(B)

Election with respect to credit for production of clean hydrogen

(C)

Election with respect to credit for carbon oxide sequestration

(D)

Election with respect to advanced manufacturing production credit

(i)

In general

(ii)

Limitation

(I)

In general

(II)

Exception

(iii)

Prohibition on transfer

(E)

Other rules

(i)

In general

(ii)

Limitation

(2)

Application

In the case of any applicable entity which makes the election described in subsection (a), any applicable credit shall be determined—

(A)

without regard to paragraphs (3) and (4)(A)(i) of section 50(b), and

(B)

by treating any property with respect to which such credit is determined as used in a trade or business of the applicable entity.

(3)

Elections

(A)

In general

(i)

Due date

Any election under subsection (a) shall be made not later than—

(I)

in the case of any government, or political subdivision, described in paragraph (1) and for which no return is required under section 6011 or 6033(a), such date as is determined appropriate by the Secretary, or

(II)

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 this section.

(ii)

Additional rules

(B)

Renewable electricity production credit

In the case of the credit described in subsection (b)(2), any election under subsection (a) shall—

(i)

apply separately with respect to each qualified facility,

(ii)

be made for the taxable year in which such qualified facility is originally placed in service, and

(iii)

shall apply to such taxable year and to any subsequent taxable year which is within the period described in subsection (a)(2)(A)(ii) of section 45 with respect to such qualified facility.

(C)

Credit for carbon oxide sequestration

(i)

In general

In the case of the credit described in subsection (b)(3), any election under subsection (a) shall—

(I)

apply separately with respect to the carbon capture equipment originally placed in service by the applicable entity during a taxable year, and

(II)

(aa)

in the case of a taxpayer who makes an election described in paragraph (1)(C), apply to the taxable year in which such equipment is placed in service and the 4 subsequent taxable years with respect to such equipment which end before January 1, 2033, and

(bb)

in any other case, apply to such taxable year and to any subsequent taxable year which is within the period described in paragraph (3)(A) or (4)(A) of section 45Q(a) with respect to such equipment.

(ii)

Prohibition on transfer

(iii)

Revocation of election

(D)

Credit for production of clean hydrogen

(i)

In general

In the case of the credit described in subsection (b)(5), any election under subsection (a) shall—

(I)

apply separately with respect to each qualified clean hydrogen production facility,

(II)

be made for the taxable year in which such facility is placed in service (or within the 1-year period subsequent to the date of enactment of this section in the case of facilities placed in service before December 31, 2022), and

(III)

(aa)

in the case of a taxpayer who makes an election described in paragraph (1)(B), apply to such taxable year and the 4 subsequent taxable years with respect to such facility which end before January 1, 2033, and

(bb)

in any other case, apply to such taxable year and all subsequent taxable years with respect to such facility.

(ii)

Prohibition on transfer

(iii)

Revocation of election

(E)

Clean electricity production credit

In the case of the credit described in subsection (b)(8), any election under subsection (a) shall—

(i)

apply separately with respect to each qualified facility,

(ii)

be made for the taxable year in which such facility is placed in service, and

(iii)

shall apply to such taxable year and to any subsequent taxable year which is within the period described in subsection (b)(1)(B) of section 45Y with respect to such facility.

(4)

Timing

The payment described in subsection (a) shall be treated as made on—

(A)

in the case of any government, or political subdivision, described in paragraph (1) and for which no return is required under section 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 subdivision submits a claim for credit or refund (at such time and in such manner as the Secretary shall provide), and

(B)

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.

(5)

Additional information

(6)

Excessive payment

(A)

In general

In the case of any amount treated as a payment which is made by the applicable entity under subsection (a), or the amount of the payment made pursuant to subsection (c), which the Secretary determines constitutes an excessive payment, the tax imposed on such entity by chapter 1 (regardless of whether such entity would otherwise be subject to tax under such chapter) for the taxable year in which such determination is made shall be increased by an amount equal to the sum of—

(i)

the amount of such excessive payment, plus

(ii)

an amount equal to 20 percent of such excessive payment.

(B)

Reasonable cause

(C)

Excessive payment defined

For purposes of this paragraph, the term “excessive payment” means, with respect to a facility or property for which an election is made under 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 applicable entity under subsection (a), or the amount of the payment made pursuant to subsection (c), with respect to such facility or property for such taxable year, over

(ii)

the amount of the credit which, without application of this section, would be otherwise allowable (as determined pursuant to paragraph (2) and without regard to section 38(c)) under this title with respect to such facility or property for such taxable year.

(e)

Denial of double benefit

(f)

Mirror code possessions

(g)

Basis reduction and recapture

(h)

Regulations

(Added Pub. L. 117–169, title I, § 13801(a), Aug. 16, 2022, 136 Stat. 2003.)

cite as: 26 USC 6417

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