• The One Big Beautiful Bill Act accelerates clean energy tax credit deadlines and tightens eligibility for state and local governments and Tribal nations.

• Key credits for EV fleets, charging stations, and clean power generation now require faster project timelines to qualify.

• Acting now could help your government or Tribal nation preserve access to millions in federal clean energy funding before it disappears.

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In recent years, federal incentives have made it easier for state and local government and Tribal nations to fund sustainability projects such as electric vehicle (EV) fleets, charging stations, and renewable energy power infrastructure. But many of these benefits are now expiring sooner than expected.

The One Big Beautiful Bill Act (OBBBA) accelerates the deadlines and narrows the eligibility criteria for several cornerstone energy tax credits. These changes are already affecting planning decisions for fiscal year 2025 and beyond. If you don’t take action soon, your government or Tribal nation could lose access to millions of dollars in direct federal support for clean energy projects.

From the IRA to OBBBA: How We Got Here

When Congress passed the Inflation Reduction Act (IRA) of 2022, it dramatically expanded clean energy incentives across the country. Most notably, it introduced elective pay (also called direct pay) starting with tax years beginning after December 31, 2022 — giving state and local governments and Tribal nations the ability to receive the full value of qualifying clean energy tax credits as a cash payment from the IRS even if they have no federal tax liability.

The elective pay option helped governments, Tribes, and nonprofits (tax-exempt) launch projects that previously lacked financial viability. However, with the passage of the OBBA on July 4, 2025, new restrictions are coming into play. Understanding these changes is essential if you want to stay on track — and fully capture the credits you’re eligible for.

What’s Changing — and What It Means for Your Government or Tribal Nation

Several key clean energy tax credits have been modified under the OBBBA. Here’s what’s changing and how it could affect your clean energy initiatives:

Commercial Clean Vehicle Credit (§45W)

If your government or Tribal nation is planning to transition to electric buses, trucks, or light-duty fleet vehicles, this credit likely plays a critical role in your funding model.

Previous Rule:

Credit available through December 31, 2032

OBBA Update:

Accelerated expiration — vehicles must be placed in service by September 30, 2025

Credit Value:

• Up to $7,500 per vehicle under 14,000 pounds
• Up to $40,000 per vehicle over 14,000 pounds

What This Means for You:

Fleet upgrades must be finalized soon. Procurement and delivery timelines are critical — if vehicles aren’t placed in service by the deadline, you may miss out entirely.

Alternative Fuel Infrastructure Credit (§30C)

If you’re installing EV charging stations or alternative fuel infrastructure (like hydrogen), this credit directly offsets installation costs.

Previous Rule:

Available through December 31, 2032

OBBA Update:

Accelerated expiration — equipment must be placed in service by June 30, 2026

Credit Value:

• 6% base credit, up to $100,000 per unit/port
• 30% credit when prevailing wage and apprenticeship requirements are met

What This Means for You:

If you have eligible projects in the pipeline, now is the time to accelerate timelines — ideally placing ports in service by the end of the current calendar year. This strategy could help you preserve credit eligibility.

Clean Electricity Investment and Production Credits (§48 and §48E)

These credits apply to large-scale clean energy generation projects — including solar, wind, and other qualifying technologies.

OBBA Update:

• Construction on wind and solar projects that begins by June 2026 (12 months from the passage of the OBBBA) is not subject to the accelerated placed-in-service date. These projects can be placed in service within four calendar years after the year construction begins.
• Accelerated timeline applies to wind and solar projects starting construction after June 2026. These projects must be placed in service by December 31, 2027.
• Prohibited foreign entity restrictions and material assistance applies for projects starting construction in 2026 or later, disqualifying projects with certain supply chain components.

Credit Value:

• 6% to 70% for investment credit
• Production credit varies depending on source and place-in-service date. Credit is between 0.3 cents to 2.8 cents/kWh.

What This Means for You:

Project lead times are long, especially for solar and wind. Now is the time to meet with relevant departments to identify project timelines and prioritize needs to begin construction by mid-2026. You should also assess any foreign involvement in current or planned energy projects as materials or partnerships linked to prohibited foreign entities could affect eligibility starting in 2026, and why starting construction by December 31, 2025, may be necessary for eligibility.

What You Should Do Now

These accelerated timelines mean waiting is no longer an option. To protect your ability to access elective pay and federal clean energy credits, you should:

• Engage tax and legal advisors immediately to review your current project portfolio and identify which initiatives can realistically meet the new requirements. Consider safe harbor strategies that might preserve current credit rates for projects already in development.
• Accelerate project timelines for any clean energy projects in your pipeline. Review permitting, financing, and construction schedules to ensure they align with new deadlines.
• Secure allocations and submit documentation now rather than waiting for more convenient timing. The administrative processes for these credits can be complex and time-consuming.
• Coordinate across departments to ensure your legal, tax, engineering, and procurement teams are aligned on the urgency of these changes and new timeline requirements.
• Explore transitional provisions or grandfathering opportunities that might apply to projects already in your planning pipeline.
• Stay agile with your project planning given ongoing legislative uncertainty around continued support for renewables under current terms.

Why These Changes Matter to Your Government or Tribal Nation

These credits represent not just funding — but flexibility. They make it possible to stretch your budget, pursue larger projects, and deliver visible environmental and economic benefits to your community. With federal support shifting, your ability to act decisively today will shape your portfolio for years to come. Delays now could mean leaving millions in funding on the table.

How MGO Can Help

Our team of experienced Tax Credits and Incentives professionals helps state and local governments and Tribal nations navigate the evolving clean energy tax landscape with confidence. We work closely with you to assess project eligibility, interpret the latest credit rules, and prepare the documentation required to claim elective pay. Don’t miss out on this critical funding for your government or Tribal nation — reach out to our team today.

The post New Clean Energy Credit Deadlines Are Here — Is Your Government or Tribal Nation Ready? appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Energy tax credits like §45W and §30C face 2025/2026 phaseouts, placing urgency on electric vehicle (EV) and charging station timelines for businesses planning capital expenditures.

• Many mid-market companies haven’t aligned project timelines with placed-in-service deadlines, risking partial or lost clean energy credits.

• Wage rules, documentation, and foreign-sourcing bans can disqualify credits — early compliance checks help preserve full tax benefit.

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For many businesses, the Inflation Reduction Act (IRA) was a green light to pursue electric vehicles, charging infrastructure, and other sustainable projects — backed by strong federal tax incentives. But in 2025, the rules have changed. And companies that haven’t adapted to new deadlines and eligibility requirements may leave valuable credits behind.

Tax provisions like §45W and §30C — which offer up to $7,500/$40,000 per EV and $100,000 per charging port — remain available. But with stricter placed-in-service timelines, prevailing wage requirements, and supply chain sourcing restrictions now in effect, the process has grown more complex.

At MGO, we’ve seen a growing sense of urgency among tax leaders and CFOs looking to retain the full value of these incentives. The common thread? It’s not enough to start building — you need to verify that your timeline, documentation, and sourcing all meet current standards.

What’s Changing — and Why It Matters

Businesses investing in clean energy may qualify for:

• §45W Commercial Clean Vehicle Credit: Up to $7,500 per eligible EV under 14,000 pounds (cars, vans, trucks, etc.) and up to $40,000 per eligible EV over 14,000 pounds (school buses, semi-trucks, etc.)

• §30C Alternative Fuel Infrastructure Credit: Up to $100,000 per qualified charging port

• § 48 (Pre-2025) Investment Tax Credit for Energy Property/§ 48E Clean Electricity Investment Tax Credit: 6% of qualified investment increased to 30% if a taxpayer meets prevailing wage and apprenticeship requirements or exceptions. Eligible to be transferred to an unrelated taxpayer.

But, beginning in 2025, these credits are affected by key IRS updates. Most notably:

• Credits are tied more strictly to placed-in-service deadlines

• For EVs, the deadline to place in service is September 30, 2025

• For charging ports, the deadline to place in service is June 30, 2026

• For wind and solar, allowed to be placed in service in four calendar years if construction occurs prior to June 30, 2026; if not, then deadline is December 31, 2027

• Bonus credits now require detailed compliance with wage and apprenticeship standards

• The foreign entity of concern rule may limit credit access based on component sourcing, particularly for EV batteries

In short, technical compliance now carries real financial consequences. Projects that would have qualified two years ago may fall short today — even if the investment itself hasn’t changed.

Where CFOs Stand on Readiness

During a recent MGO webinar, we asked mid-market tax leaders how ready they felt for the upcoming shift. Their responses reflected a common trend:

• 40% said they were not prepared

• 30% were somewhat prepared

• Only 5% were fully prepared

• 25% said it was not applicable to their business

This signals a significant planning gap. Despite rising investment in electric fleets and infrastructure, many companies haven’t realigned their tax strategy to fit the changing requirements. Without that alignment, even well-intentioned efforts can lose value.

Key Areas Where Companies Face Risk

Several issues have emerged as common barriers to full credit access:

• Project delays that affect placed-in-service eligibility

• Inconsistent wage documentation that disrupts bonus credit calculations

• Foreign-sourced components that invalidate certain credits

• Disconnection between tax and operations, leading to missed planning windows

As these rules evolve, companies that aren’t regularly reviewing their compliance posture may struggle to capture the full benefits — or may face clawbacks if later audited.

Planning Priorities for 2025

To prepare for the upcoming changes and protect your tax position, MGO recommends focusing on four core actions:

1. Check Placed-in-Service Schedules 

Review your project timelines to confirm that EVs, chargers, or facilities will be operational before IRS deadlines. Delays — even short ones — can affect eligibility. 

2. Coordinate with Tax Early

Bring your tax team into capital expenditure planning discussions to evaluate credit exposure and prioritize projects with the most favorable timelines and tax treatment.

3. Review Wage and Sourcing Documentation

Work closely with contractors and procurement teams to track wage compliance and verify sourcing for battery or component parts.

4. Run Credit Risk Scenarios 

Model potential loss of credits based on current projections, and adjust project sequencing or vendors accordingly to maintain incentive value.

How MGO Supports Clean Energy Credit Planning

MGO works with businesses across industries to evaluate, strengthen, and align your approach to energy tax incentives. Our teams help assess eligibility, document compliance, and provide the analysis you need to make informed decisions — especially as 2025/2026 deadlines draw closer.

If your organization is investing in EVs, charging stations, or energy property, now is the time to revisit how those projects connect to your tax strategy. Reach out to our Tax Credits and Incentives team today for support.

The post Clean Energy Tax Credits: 2025 Deadlines and Strategy appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Governments can leverage energy tax credits to fund clean energy projects and receive direct payments, even without federal income tax liability.

• Key filing deadlines, such as pre-filing registration and May 15 submissions, require careful planning to align with project timelines and optimize credit opportunities.

• Bonus credits offer additional financial benefits, requiring strategic planning and documentation.

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For state and local governments, leveraging energy tax credits can drive impactful projects while optimizing budgets. The recently finalized guidance for the Inflation Reduction Act (IRA) offers clarity on maximizing these benefits. Whether you’re planning for 2024 filings or strategizing for future projects, this guide will take you through the process, timelines, and key considerations to help your community thrive.

Background: The Energy Tax Credit and Elective Pay

The energy tax credit became available to governments in 2023, providing a new pathway for state and local entities to benefit from clean energy investments. Through the elective pay mechanism, governments can receive direct payments equivalent to the value of the tax credit — even though they do not owe federal income taxes. This approach enables governments to fund clean energy projects effectively and generate tangible returns on investments.

Understanding the Timeline for 2024 Filing

The 2024 filing year brings opportunities for your government to claim credits for eligible energy projects. Staying organized and proactive is essential to meet requirements and deadlines. Here’s how to stay on track:

1. Pre-filing registration: Pre-filing registration with the IRS is a foundational step. This process involves registering eligible projects and submitting necessary documentation to the IRS portal. For governments filing by May 15, plan to finish pre-filing by January or February.

2. Identify your tax year: Governments have flexibility in selecting a calendar year or fiscal year for filings. Consider the timing of your expenses and project completions. For example, if most significant expenses occur by June, a short tax year (January to June 2024) may make sense. Alternatively, a full calendar year filing might better suit projects completed by December 2024. More on this below.

3. File early: Given the potential for legislative changes with the new administration, filing as soon as possible reduces the risks of retroactive adjustments that could impact eligibility. By filing before May 15, you may better position yourself to avoid complications related to legislative changes.

Key Deadlines for Energy Tax Credits

Meeting critical deadlines is essential to take full advantage of energy tax credits. Here are the key dates to keep in mind:

• Pre-filing registration: Complete this step at least 120 days before your filing deadline.

• Bonus credit applications: Applications for the bonus credit are due by June 27, 2025.

Filing Deadlines:

• Calendar year filers: File returns for January–December 2024 by May 15, 2025 (without an extension) or November 15, 2025 (with an extension).

• Short tax year filers: For a January–June 2024 short tax year, file by October 15, 2024 (without an extension) or April 15, 2025 (with an extension).

What Tax Year Makes the Most Sense for Your Government?

Choosing the right tax year depends on your government’s specific circumstances and project timelines. Many governments operate on a fiscal year ending June 30, which influences their tax year planning. For 2024, you have two primary options:

• Full calendar year (January–December 2024): This option is ideal if you have significant projects completing by the end of the year or if you want to maximize a full year’s worth of expenses. It also allows for flexibility in adapting to potential legislative changes that might impact credits.

• Short tax year (January–June 2024): Transitioning to a fiscal year can align filings with your operational calendar, making future filings simpler. For governments with material expenses concentrated in the first half of the year, this approach may reduce the risk of losing out on eligible credits and allow for simplicity moving forward.

If there are major projects placed in service at the end of 2024, opting for a calendar year may safeguard millions in credits. Conversely, governments anticipating minimal activity in the latter half of the year might benefit from the short-year filing.

Carefully evaluate the timing of your projects and expenses, as well as the potential impact of legislative uncertainties, to determine the most strategic approach.

Avenues for Consideration: Immediate, Near-Term, and Long-Range

Planning for energy tax credits involves three primary approaches, depending on your government’s current needs and long-term goals:

Current Tax Year Focus (2024): 

• Focus on eligible projects placed in service during 2024.

• Complete cost allocation and credit computation early to avoid delays.

• Follow IRS guidance on eligible costs, such as renewable energy properties and infrastructure improvements.

Next Year’s Planning (2025):

• Evaluate the impact of projects starting construction before January 2025.

• Adjust for new requirements, including stricter emissions standards for some credits.

• Develop strategies to maximize credit claims under the upcoming Clean Electricity Investment Tax Credit guidelines.

Future Projects (2026 and Beyond):

• Lay groundwork for long-term projects by building robust documentation and tracking systems.

• Explore opportunities under the Low-Income Communities Bonus Credit and other location-based programs. Applications for the bonus credit program are due by June 27, 2025.

Key Opportunities: Bonus Credit Programs

Bonus credits offer additional financial incentives that can significantly enhance the return on investment for clean energy projects. Here are some examples to consider:

• Energy communities: Add up to 10% for projects located in designated energy communities.

• Low-income communities: Gain an additional 10% to 20% based on project location and community eligibility.

• Domestic content: By using equipment sourced from U.S. based manufacturers, projects may qualify for extra credits, adding value to infrastructure investments.

Eligibility often depends on geographic and socioeconomic factors. Conduct a detailed review of your project’s location and characteristics to identify opportunities.

Preparing for Uncertainty

While the IRA’s energy tax credits are set to last until 2032, political and legislative shifts could change their availability. To avoid disruptions:

• Submit filing returns promptly to reduce risks associated with retroactive legislative adjustments.

• Keep thorough and organized documentation for all projects, including contracts, costs, and location details.

• Strategize fund allocation to align with restrictions on restricted and unrestricted funds while maximizing credit eligibility.

For governments planning multi-year projects, maintaining flexibility in approach and staying informed about legislative developments is critical.

Action Steps to Take Now

1. Finalize your project list for 2024: Identify eligible energy projects and begin the pre-filing process.

2. Evaluate tax year options: Decide whether a short tax year or a full calendar year filing better suits your government’s expenses and project timeline.

3. Review bonus credit eligibility: Assess your projects’ locations and characteristics to determine if they qualify for additional credits.

4. Work with experienced tax professionals: Tax credit advisors can provide guidance to streamline the process and help avoid missed opportunities.

By taking these steps and leveraging available opportunities, your government can make the most of energy tax credits while advancing sustainability and innovation. The time to act is now — lay the groundwork for success and maximize benefits for your community.

How MGO Can Help

Navigating energy tax credits can be complex. Our Tax Credits and Incentives team simplifies the process, assisting with elective pay, credit opportunities, and IRS compliance. From identifying eligible projects to computing costs and meeting critical deadlines, we help your government get the most from the benefits available — whether filing for 2024 or planning for future projects.

Reach out to our team today to advance your sustainability goals and improve your financial efficiency.

Additional Resources:

• You’ve Pre-Filed for the Energy Tax Credit, Now What?
• 3 Key Insights to Unlocking Energy Tax Credits for Your State or Local Government
• How State and Local Governments Can Benefit from Federal Energy Tax Credits

The post Planning Your Government’s Energy Tax Credits in 2025 and Beyond appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Navigate the crucial “now what?” phase after pre-filing by focusing on cost allocation, credit computation, and timely return filing by November 15.
• Tackle complexities like multiple credits, thorough documentation, and tight timelines to maximize your clean energy tax benefits.
• Leverage professional guidance to optimize your credits and potentially secure substantial refunds for reinvestment in your community.

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You’ve taken the first step towards benefiting from clean energy tax credits by completing your pre-filing registration. But what comes next? For state or local government entities, navigating the world of energy tax credits can be complex. Let’s break down the crucial next steps to help you maximize your benefits and meet the necessary deadlines.

Understanding the Timeline

After pre-filing registration, you’re now in the “now what?” phase. This critical period involves two main steps:

1. Cost allocation and credit computation, and
2. Filing of the return (due November 15).

It’s essential to maintain momentum during this phase to receive the full benefits of the tax credit.

Cost Allocation and Credit Computation: Key Considerations

As you prepare to file your return, keep these important factors in mind:

Multiple Credits and Projects

If your entity is filing for more than one credit or managing multiple projects, the process becomes more intricate. Each credit may require separate forms and documentation, and careful management is needed to avoid errors that could delay your refund.

Documentation and Support

Given that this is a relatively new process for many governmental entities, thorough documentation is essential. From initial project costs to ongoing expenses, every financial detail must be meticulously recorded. Proper documentation not only supports your credit claims but also protects your entity in the event of an audit.

Timeline Considerations

The timeline for filing is tight. After prefiling registration, you have a few months to complete cost allocation, credit computation, and the final tax return. Missing the November 15 deadline could result in forfeiting your refund for the year. Working with knowledgeable tax professionals can help you streamline this process and meet all necessary deadlines.

How Professional Guidance Can Help Your Government

Given the complexities involved, your government may benefit from tax credits and incentives professionals to help you navigate the intricacies of:

• Proper assessment of eligible expenses
• Gathering and organizing necessary documentation
• Verifying compliance with all IRS requirements
• Maximizing your potential benefits

Filing the Return: The Final Step

Once your cost allocations and credit computations are complete, you’ll move on to filing your tax return. For 2023 tax filings, this return is due by November 15, 2024. Meeting this deadline is crucial to secure your refund.

A few key notes on filing your return:

• Your filing must include the registration number(s) provided after your pre-filing registration review.
• This is where you will make the formal election for elective pay (also referred to as “direct pay”).
• Complete and accurate filing will help you receive the full value of your eligible credits.

What If You Missed the Pre-Filing Registration?

If you haven’t completed your pre-filing registration yet, it’s crucial to act quickly. While the IRS recommended a July 15 deadline, it’s not a hard cutoff. However, delays from a late pre-filing could impact your ability to meet the November 15 filing deadline. Contact a professional as soon as possible to avoid missing out on potential opportunities.

Elective Pay: A Quick Refresher

Elective pay allows governmental entities to benefit from certain clean energy tax credits. The amount of the credit is treated as a payment of tax, and any overpayment results in a refund. This means you can receive the full value of your investment tax credit even if you don’t owe other federal income taxes.

For example, a Northern California city recently computed over $6 million in credits for a $28 million clean energy project. This city stands to receive a substantial refund, which can be reinvested in further sustainable initiatives or other community needs.

Unlock the Full Potential of Your Energy Tax Credits

By staying informed and proactive, you can navigate this process successfully and maximize the benefits of clean energy investments for your community. As you move forward, remember that you don’t have to go it alone — engaging with a tax credits and incentives professional can help you optimize your credits and create a smooth process from start to finish.

How MGO Can Help

Need assistance with your cost allocation and credit computation to meet the filing deadline, or just want to learn more about what energy incentives could be applicable for your entity? Visit our Renewable Energy Investments and Credits page or reach out to our Tax Credits and Incentives team today.

The post You’ve Pre-Filed for the Energy Tax Credit, Now What? appeared first on MGO CPA | Tax, Audit, and Consulting Services.

Even without tax liabilities, organizations investing in renewable energy, energy efficiency, or renewable energy equipment can access substantial incentives, potentially covering 6% to 70% of their investment costs.

MGO Tax Credits and Incentives Director Danielle Bradley details how state and local governments can benefit from federal energy tax credits:

The post SLG Guide to Federal Energy Tax Credit Benefits appeared first on MGO CPA | Tax, Audit, and Consulting Services.

1. Understanding Elective Pay and Eligibility 

Elective pay allows government entities, traditionally ineligible for tax credits, to receive refunds. This shift, introduced by the Inflation Reduction Act, opens the door for substantial financial incentives. For example, a Northern California city recently secured over $6 million in credits on a $28 million project.  

To take advantage of these opportunities, your government must navigate the elective pay process — including pre-filing registration and understanding critical timelines. 

2. Diverse Credit Opportunities 

Energy tax credits are not limited to one type of project. They encompass a wide range of investments, including: 

• Energy Property: Investments in renewable energy equipment. 

• Energy Production: Generating electricity from renewable sources. 

• Commercial Clean Vehicles: Purchasing new commercial clean vehicles. 

• Electric Vehicle Recharging: Installing recharging or refueling equipment. 

Each category has specific criteria and potential return rates, which can vary significantly based on factors like project location and adherence to prevailing wage requirements. 

3. Critical Timelines and Application Processes 

Timely action is crucial for maximizing these credits. For the 2023 tax year, pre-filing registration must be completed by July 15, 2024, to meet the IRS’s review period recommendations. Additionally, applications for the Low-Income Community Bonus Credit Program, which can increase credits by up to 20%, are due by June 27, 2024.  

Properly tracking and documenting project costs is essential for accurate credit computation and successful filing. 

Maximizing Energy Tax Credits for Your Government 

Your state or local government stands to gain significantly from energy tax credits by understanding and navigating the elective pay process, exploring diverse credit opportunities, and adhering to critical timelines. Engaging with tax professionals can help you maximize potential refunds and enhance your renewable energy investments. 

For more detailed information on how your government can take advantage of energy tax credits, watch the webinar video on this page or reach out to our Tax Credits and Incentive team today. 

The post 3 Tips to Unlock Energy Tax Credits Locally appeared first on MGO CPA | Tax, Audit, and Consulting Services.