Tax Credit Filing Process

Governor Mikie Sherrill • Lt. Governor Dr. Dale G. Caldwell

New Jersey Infrastructure Investment Tracker

Tax Credit Filing Process

The Inflation Reduction Act of 2022 (IRA) created new opportunities for public entities and non-profit agencies to take advantage of changes to the requirements governing tax investment credits.  Public Entities and non-profit agencies are now able to submit a tax return to the Internal Revenue Service (IRS) for a Direct Pay or cash payment for certain Clean Energy projects that qualify for this initiative.

The following section outlines the Direct Pay process created by the IRA which allows public entities such as States, Local Governments and Non-Profit agencies that do not pay taxes to file a tax return with the IRS. Public entities and non-profit agencies that file will receive a “Direct Pay” for their Clean Energy projects investments helping to defray project costs and spur investment.  In addition, projects located in energy or low-income communities may qualify for increased payment under some of these programs.

Disclaimer: The information and material presented on this website is for general informational purposes only and is not intended to provide legal or financial advice and should not be relied on as such. Please consult with your legal and finance professionals regarding the use of IRA tax credits.

Navigation Diagram

Tax Credit Filing Steps

Step 1: Earn the Credit

Make an investment that qualifies for a tax credit investment or undertake tax credit production activities to earn a credit that qualifies for the elective payment election in one of the 12 Clean Energy programs shown in the adjacent table.

To learn more about eligible activities and other requirements for the various programs, check out the Direct Pay Programs tool in this website or IRS published resources (Publication 5817-G).

Publication 5817g Table

Step 2: Register for Credit

Pre-Filing Registration

You must pre-register with the IRS to be eligible to file for a direct payment.  Pre-registration will include the opportunity to specify if the intention is to request an elective payment or a transfer election to a third party.  The election must be made on a return that is filed within the eligible dates. 

  1. As 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. They currently recommend submitting the pre-filing registration at least 120 days prior to when your organization or agency plans to file its tax return. 

       b. A registration submission can be amended after it has been processed by the IRS and returned.                              

The IRS has published a Pre-Filing Registration User Guide with detailed instructions.

Accessing the IRA/CHIPS Pre-Filing Registration Tool

You will find the IRA/CHIPS Pre-Filing Registration tool at: www.irs.gov/eptregister.

Sign In or Create an ID.me Account.

Pre-Filing Registration Tool Sign-in

Gather Data Required for Registration

The website will walk you through the registration process and ask for information about your organization. The worksheet to the right shows the information that will be requested.

Pre-Filing Registration Tool Sign-in

Track your Progress

You will be able to track your progress in the diagram at the top of the screen. You are able to save your work and return to the registration to review and/or complete.

Pre-Filing Registration Tool Progress Indicator

Receive your Confirmation of Successful Completion

Your application will be scanned for errors. When it is correct, you will see a green bar across the top of the screen saying your registration has been received. Your submittal will be reviewed by Treasury personnel who will approve it or request additional information. You can sign up to receive notifications on the status of the review.

Pre-Filing Registration Tool Successful Completion

Step 3: Submit Documentation (if req.)

Certain requirements may affect the amount of elective pay applicable tax credits for certain programs. The box at the right outlines the documentation required for bonuses or additional credit.

Tax Credit Program Additional/Bonus Requirements

Step 4: File Tax Return

Once approved, use the registration number from Step 2 to file the tax return Form 990-T before the IRS filing deadline.

Form 990-T page 1

Step 5: Receive Credit

Collect the credit!