The following is the text of the September 9, 2024, newsletter from the Internal Revenue Service. To subscribe, visit irs.gov/itgnews.

The Internal Revenue Service strongly urges Indian tribal governments to complete the pre-filing registration process now for projects placed in service in 2023 if they plan to claim elective pay.

Tribal governments should file their annual return after completing the pre-filing registration process. A timely filed return (including extensions) is required to make an elective payment election. Electronic return filing, if not required, is strongly encouraged.

Tribal governments that file their return electronically can review information about IRS approved-e-file providers to find a Modernized e-File (MeF) provider, and should confirm that the software chosen supports all necessary forms, such as Form 3800, General Business Credit, and forms required to figure and report each credit.

The Inflation Reduction Act and the CHIPS Act of 2022 allow tribal governments to take advantage of certain manufacturing investment, clean energy investment and production tax credits through elective pay.

Elective payment creates an alternative way for eligible tribal governments who have earned one of the IRA clean energy or the CHIPS credits to get the benefit of the credit even if the tribal government cannot use the credit to offset its tax liability.

Tribal governments who intend to make an elective payment election must earn the credit, which means they must make a tax credit qualifying investment or undertake tax credit qualifying production activities to earn a credit eligible for an elective payment election.

Tribal governments must complete the pre-file registration process to receive a registration number. The registration number must be included on the tribal government’s annual return as part of making a valid election. Complete and submit the pre-filing registration request no earlier than the beginning of the tax year in which the tribal government will earn the credit related to an elective payment election.

The IRS recommends that tribal governments submit the pre-filing registration at least 120 days prior to when the tribal government plans to file its tax return on which it will make its election. This should allow time for IRS review, and for the tribal government to respond if the IRS requires additional information before issuing the registration numbers.

The IRS will share information about the status of the tribal government’s pre-file registration package exclusively through the IRA/CHIPS Pre-Filing Registration tool. If the tribal government affirmatively opts in to receive email communications, the IRS will notify the tribal government by email that the status of a registration package has changed.

Tribal governments are not required to opt in to receiving email notifications. However, if they choose not to opt in to receive email notifications, they are responsible to return to the IRA/CHIPS Pre-Filing Registration tool to monitor the status of the registration packages.

The IRS is hosting office hour sessions to assist organizations and entities with the pre-filing registration process and the IRA/CHIPS Pre-filing Registration Tool for elective payment and transferability of clean energy and CHIPS credits. Subject matter experts from Large Business & International and Tax Exempt/Government Entities are available to answer questions.

Tribal governments may register to attend the following sessions:

For more information, visit us at IRS.gov/tribes or IRS.gov/cleanenergy.