How to Claim Direct Pay for Solar as a Nonprofit

Nonprofits, houses of worship, schools, and local governments don’t pay federal income tax, which historically meant they couldn’t use the federal solar tax credit at all. The Inflation Reduction Act changed that with elective pay (often called “direct pay”) under Section 6417: your organization earns the credit, registers with the IRS, files a return, and the IRS pays the credit’s full value to you in cash. Getting from a completed project to a check involves two distinct stages: registering the project with the IRS before you file, and then making the election on a tax return. This guide walks through both.

Disclaimer The information provided is for informational and educational purposes only and does not constitute legal, financial, or tax advice. We are not licensed tax advisors or financial professionals. The underlying tax laws and regulations mentioned in the article are complex and subject to change and interpretation. You should consult with a qualified professional to understand how the law applies to your specific circumstances.

Additional Resources

For the most current forms, publications, and frequently asked questions about elective pay, refer to:

Who Completes the Registration?

The registration must be made by the organization that will file the return and claim the payment, under its own EIN. The IRS is explicit: never use the EIN of another organization, even a closely related one (mismatched taxpayer identification is one of the most common reasons registrations get kicked back). If your solar system is owned through a single-member LLC that your nonprofit owns, the registration is still made by the nonprofit, the entity that files the return, with the LLC’s role explained in the registration’s “Additional Information” field. If your organization has never confirmed how a subsidiary is treated for federal tax purposes, ask your tax professional before creating any accounts.

When to Register

You must complete the registration process before filing the return on which you make the election. The IRS user guide provides the following requirements:

“Placed in Service” Requirement: The solar facility must be placed in service before you can register it. You cannot request a registration number for a system that is not yet in service.
Earliest Date: Registration cannot be submitted before the beginning of the tax year in which the credit is earned. The IRS opens registration for each tax year early in the second calendar quarter of that year.
Specific Timeframe: Submit your pre-filing registration at least 120 days before the due date (including extensions) of the return on which you will claim the payment. For a calendar-year nonprofit, Form 990-T is due May 15, and a Form 8868 extension moves it to November 15.

Part 1: Access the IRS Portal and Set Up Your Account

Before you start: use Google Chrome or Microsoft Edge. The IRS troubleshooting guide attributes most display, save, and submit problems in this tool to unsupported browsers.

Step 1: Access the Portal and Verify Your Identity

Navigate to the Portal: The IRA/CHIPS Pre-Filing Registration tool can be found at www.irs.gov/eptregister. Select the option for first-time or returning users.
Verify Your Identity with ID.me: The IRS uses ID.me for sign-in. The person registering — an officer or other representative legally authorized to act for the organization — verifies their identity with a photo ID and a selfie. You are verifying your personal identity here, not the organization’s, and it only has to be done once — but allow extra time in case ID.me requires manual review.

Step 2: Authorize Your Organization’s Clean Energy Account

The first time you log in, you must authorize an Energy Credits Online account for your organization. You can access the business online accounts page here once you are logged in with the account created in Step 1.

Start Authorization: From the landing page, select “Start Authorization.”
Provide the Organization’s EIN: Enter your nonprofit’s unique Employer Identification Number.
Provide Personal Information: The authorized user enters their first name, last name, and address exactly as they appeared on their latest personal income tax return.
Provide Entity Information: Enter the organization’s official legal name and address exactly as they appear on past IRS filings.
Review the Attestations: You must attest that the information is true and that you have the legal authority to act on behalf of the organization.

Clarification: If Authorization Fails. The information you provide is compared to IRS records. Mismatches — a name that does not match the last filed return, a wrong address, a transposed EIN — can cause the authorization to fail or the registration to be returned later. Fix the information and try again.

Part 2: Navigate to the Registration Dashboard

Select Your Organization: After authorization, you will land on “Welcome to your business online accounts,” which lists every entity for which you are an authorized user. Click the tile for your organization.
Choose the Program Area: On the “Welcome to IRS Clean Energy” page, find the area titled “Elective Pay and Transferability Registration” and click “Get Started.” (The vehicle-related tiles on that page are for dealers and manufacturers — not you.)
Opt In to Email Notifications: On the registration dashboard, the “Email Notifications” panel lets you receive an alert whenever your submission status changes. If you do not opt in, you are responsible for returning to the portal to check status manually. Notifications come from DoNotReply@account.irs.gov — watch your spam folder.
Open “Credit Registration”: The dashboard’s other tile, Credit Registration, includes “View Registrations” — the page where you monitor submissions, read IRS comments, and eventually retrieve your registration numbers.
Start the Application: Choose the tax year from the dropdown — this is the year your tax year begins, for the year the system was placed in service — then select “Add New Package.” Have your EIN, filing history, and the solar facility details ready.

Tip: Every data-entry page has “Next,” “Back,” and “Save Progress” buttons at the bottom. Save as you go — you can leave the tool and finish the registration across as many sessions as you need.

Part 3: Complete the Registration Application

General Information (Four Pages)

Page 1 — Registrant information: The tax period and registrant identity. You will enter two date fields that must line up: the tax year of the election (the 4-digit year in which your tax year begins) and the month/year your tax period ends. Many nonprofits run fiscal years — an organization with a July–June year that includes the placed-in-service date selects the year the fiscal year began and “June” as the end month; a calendar-year organization selects the placed-in-service year and “December.” Misaligned entries here are a named troubleshooting issue in the IRS guide. You will also enter the organization’s legal name, EIN, and registrant type — select the option for an organization exempt from tax under subtitle A (the tax-exempt organization choice), and select exactly one.
Page 2 — Address: Choose domestic or foreign format, then enter the mailing address from your last annual filing. The registration tool cannot be used to change an address in IRS records.
Page 3 — Banking: A bank account in the organization’s name: the account number (8–17 digits) and routing number (9 digits), each entered twice to confirm. The IRS collects this for program integrity; the actual payment arrives through your Form 990-T refund process.
Page 4 — Returns Filed: Check every type of federal return the organization filed in the last two years — Form 990 or 990-T and employment tax returns in the Form 94X series (Form 941 payroll filings count). If you select “None,” a text field asks you to explain why the organization has no filing requirements.

Credit Selection

Clarification: Choosing the Right Solar Credit. For solar placed in service after December 31, 2024, select Section 48E, Clean Electricity Investment Credit. Section 48, Energy Credit, applies to earlier projects. Both are computed on Form 3468, but they are different credits in the registration tool, and the same facility cannot be registered for both an investment credit and a production credit for the same tax year. If you are unsure which applies, your placed-in-service date decides. Check the box for the credit, click “NEXT,” and confirm your selection on the Credit Summary screen before moving to facility information.

Facility/Property Information

Each individual facility needs its own registration number. Click “ADD FACILITY/PROPERTY” and enter, for each solar project:

Type of Election: Indicate that you intend to make an elective payment election for this property.
Important Dates: The date construction began and the date the system was placed in service.
Physical Location: The street address of the system (with city and ZIP), or — if the site has no street address — the state, county, and GPS coordinates. Coordinates must be decimal format with six digits after the decimal point (for example, latitude 38.897957, longitude -77.036560) — no degrees/minutes/seconds, no letters, and remember U.S. longitudes are negative. Use the same coordinates you will report on Form 3468 with the return.
Type of Facility: Solar (including photovoltaic).
Source of Funds: This question matters for elective pay. If the system was purchased with restricted grant funds or a forgivable loan — money given specifically to buy this system — that can affect how your payment is computed. Answer accurately and flag any grant funding for your tax professional; unrestricted donations and general funds are not an issue.
Low-Income Community Bonus: Answer whether the project received a low-income community bonus allocation.
Published 48E Table: A yes/no question asking whether the facility type appears in the IRS’s annually published table of qualifying 48E technologies — solar photovoltaic is among the listed technologies.
Additional Information: A free-text field for anything that helps the reviewer — for example, ownership through a supporting organization or single-member LLC.

Supporting Documents

Expand the facility’s panel, select “edit,” then “Add/Edit Documents” to upload documentation showing the property exists and is owned by the registrant, and corroborating the key dates:

Proof of ownership of the solar system.
The construction permit showing commencement of construction.
The utility’s permission-to-operate letter (or, for off-grid systems, the electrical permit to operate from the authority having jurisdiction).

Documents should clearly reference the specific installation being registered. And mind the file-name rules — they are a leading cause of upload failures: names under 20 characters, letters and numbers only (no hyphens, underscores, or other special characters), exactly one period, and a unique name for every file. If uploads still fail, the “Connect With Us Using Secure Messaging” tile in the top-right corner of every page lets you send documents to the review team outside the system.

Part 4: Submission, Review, and Your Registration Number

Submit for Review: Review each field against your organization’s IRS records — mismatched names, numbers, and addresses are the leading cause of returned packages — then submit. A green “Success” banner and confirmation message mean it went through. If you get a save or submit error instead, try at least twice, then log out and back in and try again.
Note the Package ID: Every submitted package is assigned a unique Package ID. Reference it whenever you contact the IRS through Secure Messaging so the team can locate your submission.
Monitor Weekly: The IRS recommends checking “Your Registrations” weekly. Statuses run from “Awaiting Assignment” to “Under Review” to “Returned – Closed” (numbers issued) or “Returned – Open.” The package is locked against changes while under review.
Clarification: Responding to “Returned – Open.” This status means the reviewer needs more information. You have 35 days to respond; answering within the window keeps your place in line, while missing it closes the case and any resubmission goes to the back of the queue as a new request. Respond only after addressing every reviewer comment — each “Submit” locks the package again.
Receive the Registration Number: When approved, a unique 12-digit registration number appears in the Registration # column for each facility. It is tied to the election type, credit, facility, owner, and tax year — and it is valid only for that tax year.

Part 5: Filing for Payment on Your Tax Return

A registration number does not pay you by itself. The payment happens when you make the election on a timely filed annual return.

Use the Correct Tax Form: A nonprofit files Form 990-T, Exempt Organization Business Income Tax Return, to make the election — even if it owes no tax and has never filed one before. For calendar-year organizations it is due May 15; Form 8868 extends it to November 15.
Attach the Source Credit Form: Form 3468, Investment Credit, computes the credit — the registration number goes on Part I, line 1, with facility details and coordinates matching the registration.
Attach Form 3800: Form 3800, General Business Credits, carries the credit and the registration number and reports the elective payment amount.
Report the Elective Payment Amount on Form 990-T: The credit amount goes on the designated elective payment election line, and the IRS treats it as a payment against tax — since a tax-exempt organization typically owes nothing, the payment comes back as a refund of the full credit amount.

Two cautions. The election can only be made on an original, timely filed return (extensions count) — it cannot be made for the first time on an amended return. And a missing or mismatched registration number on Form 3800 makes the election ineffective, facility by facility — the same number must appear identically in the registration, on Form 3468, and on Form 3800.

Before You Apply: Practical Tips

A few things that make the difference between a smooth application and a frustrating one:

Fill out the worksheet before you log in. Appendix C of Publication 5884 is a printable worksheet with every General Information field. Completing it on paper first — and checking it against your last IRS filing — turns the portal session into simple data entry.
Know when the money actually arrives. The IRS does not owe the payment until your return’s due date, no matter how early you file — and organizations that file by the due date can anticipate payment within about 45 days after. An extension delays the cash by the same months it delays the return, so don’t build the refund into near-term budgets.
File the 990-T electronically. The IRS strongly encourages e-filing for elective pay even where it isn’t otherwise required — and it is the faster path to the refund.

The Bottom Line

Elective pay turns the solar tax credit into a cash refund for organizations that pay no tax — but the process rewards preparation: clean ownership records, a documented placed-in-service date, a registration submitted months before the 990-T, and consistent numbers across every form. At Energy Select, we design and install solar for nonprofits and provide the documentation this process depends on — permission-to-operate letters, cost records, and support for bonus credit qualification. If your organization is ready to put solar to work for your mission, contact us today.

Running a for-profit business that can’t use its solar credit? The mechanism for you is different — see our guide to selling a solar tax credit.