Production Tax Credit – Complete Application for Registration by July 15

In December, we shared this Tax Talks blog article on energy credits: 

Energy Credits: A Look at Applicable Provisions for the 2023 Tax Year

An energy credit not discussed in this previous blog is the Production Tax Credit (PTC) under Internal Revenue Code (IRC) section 45Z. This credit incentivizes the domestic production of sustainable transportation fuels, such as those that may be generated by an on-farm biomass digester, offering a per gallon tax credit for qualified fuels produced by the taxpayer and sold to an unrelated person. 

On May 31, 2024, the U.S. Department of Treasury and Internal Revenue Service released Notice 2024-49, addressing the registration requirements and certain other guidance under IRC Section 45Z. Of particular importance for any taxpayer considering claiming the PTC beginning with the 2025 tax year is the requirement to register in advance through Form 637, Application for Registration (for Certain Excise Tax Activities).

In this notice, the IRS announced their intent to have all applications for registration received by July 15, 2024, processed by January 1, 2025. This will enable the taxpayer to claim the credit for all 2025 production. Applications received after July 15, 2024, will be processed as quickly as possible, but the longer a taxpayer waits, the less likely they are to receive their registration ahead of January 1, 2025. 

The world of tax is constantly evolving, and it is important to monitor recent happenings and revisit your planning as often as needed. Our team at Farm Credit East is committed to staying up to date and bringing you the information needed to make informed decisions to optimize your unique tax situations.

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