Direct-pay-eligible entities like local governments, public school districts, churches and hospitals will more easily be able to jointly invest in clean energy projects under rules released Tuesday.
Direct-pay eligible entities like local governments, public school districts, churches and hospitals will now more easily be able to jointly invest in clean energy projects, according to final regulations released by the U.S. Department of the Treasury and the IRS on Tuesday.
The regulations expand on an Inflation Reduction Act provision that allows entities with little to no federal tax liability to benefit from clean energy tax credits via direct pay instead.
Because partnerships are not generally eligible to qualify for the direct pay provision, the regulations clarify “how co-owned projects in the clean energy space can elect not to be treated as partnerships for tax purposes,” and provides those projects with additional flexibility, Treasury said in a release.