Elective Pay Form 990-T Preparation

Who do you prepare elective pay returns for?

Organizations that claim the credit themselves, and the energy-credit platforms, developers and advisors whose customers need a CPA to prepare the return.

Our direct clients are nonprofits, schools, churches, cities, special districts and tribal governments that own clean energy property, such as solar or battery storage, and want the credit paid out.

Platforms, developers and advisors. When a platform, developer or consultant brings elective pay to a school, congregation, municipality or tribe, the customer still needs a CPA to prepare the return. We work as that preparer behind your team. Each customer remains the filer and signs its own return; we work from the project file you hold, track each customer’s tax year, registration and due date, and answer IRS questions from the same file.

What does SW handle?

The work from the eligibility question to the IRS payment: credit review, registration support, Form 990-T preparation with the credit forms, extension planning and IRS follow-up.

Eligibility and credit review. We confirm that the organization is an applicable entity, owns the property in a structure that allows the election, and can support the credit and any bonus amounts. Registration support. We assemble the property information, work with the organization’s authorized representative through the IRS registration until a number is issued, and renew it in later years.

Return preparation. We prepare Form 990-T with Form 3800 and the source credit forms, coordinated with the organization’s Form 990 information return. Extension planning and IRS follow-up. We set the original due date from the tax year, file Form 8868 where needed, and handle IRS questions on the registration, return or payment.

What should we send to get started?

Your EIN, tax year and filing history, and for each property the records that show what it cost, when it was placed in service, and how it was built and paid for.

That means the contract, invoices and placed-in-service documentation; output records for a production credit; the contractor’s prevailing wage and apprenticeship records where those requirements apply; support for domestic content or a location bonus; and any grant, loan or bond documents used to pay for the project. If registration has begun or a return or extension has been filed, send those records as well.

Who qualifies, and which credits can still be claimed?

Tax-exempt and governmental owners can have eligible credits paid out, but the One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, ended some credits early and put deadlines on others.

Under IRC §6417, added by the Inflation Reduction Act of 2022, an applicable entity is treated as having paid tax equal to the credit, and the IRS pays out what is not needed for tax owed. Applicable entities include tax-exempt organizations, states and local governments and their agencies, U.S. territories, Indian tribal governments, Alaska Native Corporations, the Tennessee Valley Authority and rural electric cooperatives. Apart from a narrow exception for the advanced manufacturing credit, the entity must own the property, directly or through a disregarded entity; a partnership does not qualify even if every partner does.

The main credits are the clean electricity investment and production credits (§48E and §45Y) and their predecessors (§48 and §45), alongside credits for refueling and recharging property, commercial clean vehicles, clean fuel and carbon capture; the Instructions for Form 990-T list all twelve. Under P.L. 119-21, the commercial clean vehicle credit ended for vehicles acquired after September 30, 2025, and the refueling property credit for property placed in service after June 30, 2026 (FS-2025-05). Wind and solar facilities that began construction after July 4, 2026 must be placed in service by December 31, 2027 (§48E, §45Y); see also our summary of the accelerated credit end dates.

What has to happen before we file?

Each property needs its own registration number from the IRS pre-filing registration, and the IRS advises registering at least 120 days before the return’s due date, including extensions.

Registration runs through the IRS Energy Credits Online portal, part of the IRS business tax account application. An authorized representative of the organization verifies their identity, sets up the entity’s clean energy account and submits each property with its placed-in-service date; the IRS then issues a number for each, as its registration page explains.

The IRS says to register after the property is placed in service, but no earlier than the start of the tax year in which the credit is earned. Under Treas. Reg. §1.6417-5, a number is valid for one tax year only and must be renewed for each later year. Without a number on the return there is no payment, and a number alone does not mean the credit has been accepted.

How is the election made, and what is the deadline?

On an original Form 990-T filed by its due date, including extensions — generally the 15th day of the fifth month after the tax year ends, or six months later if Form 8868 was filed on time.

For a government or other applicable entity with no annual federal return, Form 990-T is the return on which the election is made, with Form 3800, the form for each underlying credit and the registration numbers attached. Organizations subject to the unrelated business income tax rules must e-file it; other applicable entities may file on paper.

The election must be made on an original return, or a superseding return, filed by the due date including extensions; it cannot be made for the first time on an amended return. All entities filing Form 990-T, governments included, extend with Form 8868 filed by the original due date, as our post on Form 8868 and the elective payment deadline explains. Under Treas. Reg. §1.6417-2, relief for a missed election is limited to §301.9100-2(b), and it may apply only if the entity did not receive an extension, filed its original return on time, takes corrective action within the six-month extension period, and meets the procedural requirements.

The election is irrevocable. For the production credits under §45 and §45Y, it is made for the year the facility is placed in service and then applies to later years of the credit period.

Where do elective pay claims usually go wrong?

Late or missing registrations, returns filed after the deadline, and credit amounts the project records cannot support.

Timing. Registration starts too late, a second-year renewal is forgotten, or a first-time filer lets the original due date pass — and with it the chance to extend.

Documentation. The credit, including bonus amounts, has to be substantiated. For many credits the full rate requires paying prevailing wages and using registered apprentices — the IRS describes the increase as five times the base credit — and on a §45, §45Y, §48 or §48E project, failing the domestic content requirement can reduce the elective payment itself. Those records sit with contractors and are hard to rebuild later.

Funding and overstatement. Restricted grant money plus the credit cannot exceed the cost of the property, and tax-exempt bond financing can reduce some credits. If the IRS finds a payment excessive, the organization repays the excess plus 20% of it; only the 20% addition can be avoided, by showing reasonable cause.