The final regulations provide guidance on the transfer of certain tax credits to an IRA. The regulations provide guidance on the requirements for a transfer to be considered a qualified transfer, the tax consequences of a qualified transfer, and the reporting requirements for a qualified transfer. The regulations also provide guidance on the treatment of a qualified transfer for purposes of the prohibited transaction rules.
The U.S. Treasury Department and IRS today issued final regulations (T.D. 9993) concerning the election under section 6418 to transfer certain tax credits under the “Inflation Reduction Act of 2022” (IRA).
The final regulations affect eligible taxpayers who elect to transfer eligible credits and the transferee taxpayers and describe rules for the election to transfer eligible credits in a tax year, including definitions and special rules applicable to partnerships and S corporations and regarding excessive credit transfer or recapture events, as well as rules related to a required IRS pre-filing registration process. The Treasury Department and IRS in June 2023 released proposed regulations (REG-101610-23) providing guidance with respect to the section 6418 election to transfer eligible credit, as well as temporary regulations (T.D. 9975) (and concurrently released identical proposed regulations) setting forth mandatory information and registration requirements for making an election to transfer credits under section 6418. Read TaxNewsFlash
Today’s final regulations finalize those proposed regulations and remove the temporary regulations.
The final regulations are effective on July 1, 2024.
Read a related IRS release—IR-2024-120 (April 25, 2024)
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