The IRS and Treasury Department have issued final regulations on direct pay of certain tax credits under the Internal Revenue Code. The regulations provide guidance on the direct pay option for the child tax credit and the earned income tax credit, as well as the American opportunity tax credit and the health coverage tax credit. The regulations also address the coordination of direct pay with other tax credits and the procedures for requesting direct pay.
The U.S. Treasury Department and IRS issued final regulations related to the direct pay election of certain tax credits available under the “Inflation Reduction Act of 2022” (IRA). These regulations respond to comments submitted by taxpayers, and describe the rules for the direct pay election, special rules applicable to certain types of entities, penalties for excessive payments, basis reductions and recapture, denial of double benefit, and the pre-filing registration process. Read TaxNewsFlash
The final regulations are effective, and the temporary regulations are removed, beginning May 10, 2024.
Read a March 2024 report [PDF 2.2 MB] prepared by KPMG LLP that provides analysis and observations of the final regulations.
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