What if I can’t use the RE-ITC against my current tax liability?
You, as the taxpayer, have several options when determining the use of the generated RE-ITC’s. If you are a not-for-profit, an election can be made to treat the RE-ITC as a tax payment, effectively making it a refundable tax credit that you can claim on your annual return. If you are a for-profit business, the RE-ITC can offset AMT, and then to the extent you cannot use the RE-ITC against current tax, it can either be carried back 3 years and forward 22 years or sold on a market exchange. If sold, due diligence will likely need to be performed to assure the value of the credits and to prevent overstatement and the 20% excess claim penalty.
Where can I learn more about options and the best choices for my business?
Our RE-ITC specialists can review the available alternatives with you and your energy team and consult on the qualification rules and best methods to capture costs. We can also prepare calculations and a report to substantiate credits to support tax filings and the due diligence process if you intend to sell your RE-ITC on the transfer market. If you do not have an energy engineer, we work with a number of consultants who would gladly help navigate the complexities and advantages, and disadvantages of various renewable energy types and their requirements.