Businesses generating tax credits may transfer those credits to unrelated taxpayers in exchange for cash.
Tri-Merit helps project owners validate eligibility, document credit calculations, and prepare for a compliant transfer transaction.
We work alongside your CPA and advisors to confirm credit qualification, strengthen documentation, and support the transfer process from validating through reporting.
Why Companies Sell Tax Credits
Many companies generate energy tax credits that exceed their current tax liability.
Selling these credits allows businesses to convert them into immediate liquidity.
Common reasons companies transfer credits include:
- Limited tax liability
- Need for project financing
- Capital reinvestment
- Avoiding complex tax equity structures
Eligible Projects
Credits may originate from a variety of projects, including:
- Solar energy installations
- Energy storage systems
- Hydrogen production
- Carbon capture facilities
- Renewable fuel production
- EV charging infrastructure
Generate eligible tax credits through a qualifying energy project.
Complete IRS pre-filing registration for the credit property.
Verify project eligibility and perform diligence.
Determine amount of credit to transfer (full or partial).
Identify potential buyers and negotiate pricing.
Execute a Tax Credit Transfer Agreement with buyer.
Receive cash proceeds from the buyer.
Businesses may sell credits if they cannot fully utilize them due to limited tax liability or if they want to monetize credits to improve cashflow for reinvestment.
Yes. A taxpayer may transfer all or a portion of an eligible credit to one or multiple buyers.
Transfers must be reported on a timely filed federal tax return for the applicable tax year.
- Incomplete documentation for buyer diligence
- Miscalculated the eligible basis
- Misunderstanding prevailing wage rules
- Improper IRS registration timing
- Transaction structures that create recapture exposure
Tri-Merit helps identify and resolve these issues before transactions occur.
See our full FAQ Page for additional technical and compliance questions.