IRS Publication 6022 – In the evolving landscape of tax incentives for clean energy and advanced manufacturing, tax-exempt organizations and certain applicable entities can benefit from elective payment elections under provisions like the Inflation Reduction Act (IRA) of 2022 and the CHIPS and Science Act of 2022. IRS Publication 6022 serves as a crucial resource for these entities, providing detailed guidance on how to complete Form 990-T solely for making an elective payment election. This article breaks down the key elements of Publication 6022, including who must file, step-by-step instructions, and essential resources, to help you navigate the process efficiently.
Whether you’re a tax-exempt organization exploring refundable credits or an applicable entity with no unrelated business taxable income (UBTI), understanding Form 990-T for elective payment purposes is vital. Let’s dive into the details.
What is IRS Publication 6022?
IRS Publication 6022, titled “Completing Form 990-T for Elective Payment Only,” is a specialized guide released by the Internal Revenue Service (IRS) to assist organizations in filing Form 990-T when the sole purpose is to claim an elective payment election under section 6417. This publication is particularly relevant for entities eligible for clean energy tax credits but not otherwise required to file tax returns.
The document is structured as a presentation transcript, outlining the requirements for applicable entities such as tax-exempt organizations, rural electric cooperatives, state and local governments, Indian tribal governments, Alaska Native Corporations, and U.S. territorial governments. It emphasizes that these entities must compute applicable credits using source credit forms, carry them over to Form 3800 (General Business Credit), and then report the elective payment on Form 990-T.
Released in January 2025, Publication 6022 ensures compliance with final regulations on elective payments of applicable credits, helping entities receive direct payments instead of non-refundable tax credits. This is especially useful for organizations with no federal income tax liability, allowing them to monetize credits like those for renewable energy investments.
Who Must File Form 990-T for Elective Payment Only?
Not every organization needs to file Form 990-T traditionally, which is typically used to report UBTI. However, for elective payment elections:
- Applicable Entities: These include tax-exempt organizations under IRC Section 501(c), governmental entities, and others specified in the IRA and CHIPS Act. If you have no UBTI but are claiming credits under section 6417 (e.g., for clean electricity production or investment credits), you must file Form 990-T to make the election.
- Entities Not Subject to Tax: Organizations not otherwise required to file any annual tax or information return still need to complete Form 990-T for this purpose.
- Key Requirement: The filing is mandatory only if you’re electing direct payment for applicable credits and have computed them via the necessary forms.
Recent IRS updates, including automatic six-month extensions for certain tax-exempt organizations filing Form 990-T for elective pay, provide flexibility in meeting deadlines. Always check the latest IRS announcements for your specific situation.
Step-by-Step Instructions for Completing Form 990-T
Publication 6022 provides a streamlined approach to filling out Form 990-T when there’s no UBTI involved. Here’s a breakdown based on the guidance:
1. Prepare Source Credit Forms
Before touching Form 990-T, calculate your specific credits using the appropriate source forms. Examples include:
- Form 3468 for Investment Credit (e.g., clean energy investments).
- Form 8835 for Renewable Electricity Production Credit.
- Other forms for credits under the IRA or CHIPS Act.
These forms help determine the credit amounts, which are then aggregated on Form 3800.
2. Complete Form 3800
- Part V: This section summarizes the general business credits. Once source forms are prepared, carry over the totals to Form 3800 to compute the net elective payment amount.
- Attach all supporting credit forms to ensure accuracy.
3. Fill Out Form 990-T
For elective payment only (no UBTI):
- Heading Area (Above Part I): Complete all required fields except items B, C, E, J, K, and L. Include your organization’s name, address, EIN (from Publication 1635 if needed), and tax year.
- Part II: The lines to complete vary by entity type. For tax-exempt organizations, focus on lines relevant to your classification (e.g., total tax computation for trusts or corporations).
- Part III: Fill in lines 6g (elective payment election amount from Form 3800), 7 (total payments and credits), 10 (amount owed or overpayment), and 11 (payment details).
- Signature Area: The return must be signed by an authorized officer (e.g., president, treasurer). Paid preparers must sign and provide their information, but certain employees (like secretaries) should not sign.
Attach Form 3800 and all source credit forms. Paper filing may be required for certain elective pay elections, with extensions available.
Common Pitfalls and Cautions
- Ensure all credits are properly computed; incomplete source forms can lead to delays or denials.
- For entities with UBTI, additional parts of Form 990-T must be completed—refer to the full Form 990-T Instructions.
- Double-check eligibility under section 6417 to avoid invalid elections.
Additional Resources from Publication 6022
Publication 6022 lists several helpful tools and publications:
- Legislation: Inflation Reduction Act (Subtitle D) and CHIPS and Science Act (Section 107).
- IRS Guidance: Final Regulations on Elective Payment of Applicable Credits; Elective Pay and Transferability webpage.
- Publications: 1635 (Understanding Your EIN), 5817 series (Elective Pay Overviews for various entities), 5817-G (Clean Energy Tax Incentives).
- Other: Credits and Deductions Under the IRA; IRS Telephone Assistance; Form 990-T Instructions.
For the full presentation, visit the IRS page on Form 990-T for Elective Payment Election Only.
Why Elective Payment Matters for Tax-Exempt Organizations?
The elective payment option transforms non-refundable credits into direct refunds, enabling tax-exempt entities to invest in sustainable projects without tax liability barriers. By following Publication 6022, you can ensure a smooth filing process and maximize benefits from federal incentives.
If you’re unsure about your eligibility or need personalized advice, consult a tax professional. Stay updated with IRS resources, as rules can evolve—especially with ongoing clean energy initiatives.
This guide is based on the latest available information as of February 2026. For the most current details, download Publication 6022 directly from IRS.gov.