September 11, 2024

The Internal Revenue Service (IRS) is encouraging Tribal governments to complete the pre-filing registration process now for projects placed in service in 2023 if they plan to claim elective pay. The Inflation Reduction Act (IRA) and the CHIPS Act of 2022 allow Tribal governments to take advantage of certain manufacturing investment, clean energy investment, and production tax credits through elective pay. Elective payment creates an alternative way for eligible Tribal governments who have earned one of the IRA clean energy or the CHIPS credits to get the benefit of the credit even if the Tribal government cannot use the credit to offset its tax liability. Tribal governments who intend to make an elective payment election must earn the credit, which means they must make a tax credit qualifying investment or undertake tax credit qualifying production activities to earn a credit eligible for an elective payment election.

Tribal governments should file their annual return after completing the pre-filing registration process. A timely filed return—including extensions—is required to make an elective payment election. Electronic return filing, if not required, is strongly encouraged by IRS. Tribal governments that file their return electronically can review information about IRS approved-e-file providers to find a Modernized e-File (MeF) provider, and should confirm that the software chosen supports all necessary forms, such as Form 3800 - General Business Credit, and forms required to figure and report each credit. The IRS will share information about the status of the Tribal government’s pre-file registration package exclusively through the IRA/CHIPS Pre-Filing Registration tool. If a Tribal government opts in to receive email communications, the IRS will notify the Tribal government by email that the status of a registration package has changed. For more information on tax credits, please visit USET’s Infrastructure Development Program webpage on, “Tax Credits Information and Resources.”

For more information, please contact Brian Howard, USET SPF Senior Policy Analyst, at bhoward@usetinc.org.

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Established in 1969, the United South and Eastern Tribes, Inc. (USET) is a non-profit, inter-Tribal organization serving thirty-three (33) federally recognized Tribal Nations from the Northeastern Woodlands to the Everglades and across the Gulf of Mexico. USET is dedicated to enhancing the development of Tribal Nations, improving the capabilities of Tribal governments, and improving the quality of life for Indian people through a variety of technical and supportive programmatic services.

Established in 2014, the USET Sovereignty Protection Fund (USET SPF) is a non-profit, inter-Tribal organization advocating on behalf of thirty-three (33) federally recognized Tribal Nations from the Northeastern Woodlands to the Everglades and across the Gulf of Mexico. USET SPF is dedicated to promoting, protecting, and advancing the inherent sovereign rights and authorities of Tribal Nations and in assisting its membership in dealing effectively with public policy issues.