Details continue to emerge about the programs authorized and funded by the Inflation Reduction Act (IRA) of 2022 that addresses climate change and clean air initiatives. The $720 million in tribal-specific funding covers a broad range of categories—clean air deployment and manufacturing, pollution reduction, conservation and nature-based resilience, climate-smart agriculture, and more—and requires planning and action in order to take part in this unprecedented opportunity for tribal communities.
For those wondering if the projects they’re considering may qualify for funding, consulting with professionals who are familiar with the legislation and program requirements is an excellent first step to take before dismissing the opportunity as too complex or not an exact fit for what they envision.
🎧Listen to our podcast episode with Thomas Miller, How Tribes Can Benefit from the Inflation Reduction Act
Inflation Reduction Act – Funding Your Projects
The dozens of programs covered by the IRA focus on distributing funding to communities to implement clean energy and climate investments. Two key parts of the legislation present ideal opportunities for tribal communities of all sizes to obtain potentially fully funded facilities and services for their tribal members.
- Grants, loans, and other earmarked funds for Tribes provide exclusive access to monies to build a more sustainable future for their communities.
- A new elective payment election process will allow tax-exempt Tribal Nations to access tax credit funds through direct payments or transfer credits to vendors.
This is an opportunity to receive pre-program funding through Federally backed loans that could then be paid off with refunds received after the projects are completed. Negating the need to pull together monies not previously in tribal budgets is a clear benefit to encourage Tribal Nations to participate in future-proofing their communities.
Process Overview
After one or more projects have been identified as qualifying for Federal funding under the Inflation Reduction Act, the next step is to complete the new pre-filing registration process with the IRS. You’ll provide details about your Tribal entity, identify which credits you intend to earn, and list each eligible project/property that will contribute to the credit. Only one registration may be submitted per entity for each tax year.
Once submitted, the IRS will review the registration information and provide a registration number for each applicable credit property. The IRS currently recommends allowing a 120-day review period to ensure that the registration numbers are issued before they are needed.
Satisfy all eligibility requirements for the tax credit and any applicable bonus credit—such as placing a solar energy generator project into service—then file the required annual tax return by its due date and make a valid elective payment election. IRS Form 3800 instructions now include information about filling out the form with the IRA registration numbers and attachments.
Inflation Reduction Act Tribal Nation Resources
Each of the 84 Tribe-eligible programs covered in the funding of the IRA is administered through the Department of Energy, Department of Agriculture, the Environmental Protection Agency, and others. Use the links below to learn more about the programs and then drill down to learn their specific requirements. The IRS links describe more about the tax return filing process.
- Whitehouse.gov – Inflation Reduction Act Tribal Guidebook
- Bureau of Indian Affairs (BIA) – Guidebook to the Inflation Reduction Act’s Clean Energy and Climate Investments in Indian Country
- Internal Revenue Service – Inflation Reduction Act of 2022 landing page
- Internal Revenue Service – Publication 5884: IRA Pre-Filing Registration Tool
Read more about featured opportunities in “Unlocking Potential: How Tribal Nations Can Benefit from the Inflation Reduction Act.”
Many of the programs continue to have new information released as questions from applicants are answered.
Get customized guidance.
Whether your Tribal community wants to focus on reducing heavy duty vehicle emissions or has a full slate of clean air initiatives to provide for your nation, the tax experts at REDW are here to support you as you work to provide a better planet for future generations. REDW’s trusted advisors work with Tribes of all sizes and we look forward to partnering with yours to help secure funding from this unique opportunity.
