Elective Pay (also called “direct pay”) allows applicable entities that do not owe Federal income taxes to, for the first time, receive a payment equal to the full value of tax credits for building qualifying clean energy projects or making qualifying investments. Unlike a competitive grant program, entities are eligible to get their payment if they meet the requirements for both elective pay and the underlying tax credit (however, some incentives do require an application and allocation; see below).

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Date: June 26, 2024

Type: Fact Sheet

Sector(s): Other Climate

State(s): None