Internal Revenue Code · 26 U.S.C.
§ 6417. Elective payment of applicable credits
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 6417
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- August 16, 2022 by Pub. L. 117–169
- Last amended
- July 4, 2025 by Pub. L. 119–21
- Amendments
- 1 dated changes in the source credit
- Length
- 8 subsections · 2,771 words · about 12 min to read
- Defines
- 3 terms
- Cross-references
- cites 23; cited by 7 Code sections and 17 other regulations
- Regulations
- 7 issued under this section
In the case of an applicable entity making an election (at such time and in such manner as the Secretary may provide) under this section with respect to any applicable credit determined with respect to such entity, such entity shall be treated as making a payment against the tax imposed by subtitle A (for the taxable year with respect to which such credit was determined) equal to the amount of such credit.
In the case of any facility or property held directly by a partnership or S corporation, no election by any partner or shareholder shall be allowed under subsection (a) with respect to any applicable credit determined with respect to such facility or property.
For purposes of section 1324 of title 31, United States Code, the payments under paragraph (1)(A) shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.
If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has placed in service a qualified clean hydrogen production facility (as defined in section 45V(c)(3)), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(5).
If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has, after December 31, 2022, placed in service carbon capture equipment at a qualified facility (as defined in section 45Q(d)), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(3).
If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has, after December 31, 2022, produced eligible components (as defined in section 45X(c)(1)), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(7).
Except as provided in subclause (II), if a taxpayer makes an election under this subparagraph with respect to any taxable year, such taxpayer shall be treated as having made such election for each of the 4 succeeding taxable years ending before January 1, 2033.
A taxpayer may elect to revoke the application of the election made under this subparagraph to any taxable year described in subclause (I). Any such election, if made, shall apply to the applicable year specified in such election and each subsequent taxable year within the period described in subclause (I). Any election under this subclause may not be subsequently revoked.
For any taxable year described in clause (ii)(I), no election may be made by the taxpayer under section 6418(a) for such taxable year with respect to eligible components for purposes of the credit described in subsection (b)(7).
For any taxable year described in clause (i)(II)(aa) with respect to carbon capture equipment, no election may be made by the taxpayer under section 6418(a) for such taxable year with respect to such equipment for purposes of the credit described in subsection (b)(3).
In the case of a taxpayer who makes an election described in paragraph (1)(C) with respect to carbon capture equipment, such taxpayer may, at any time during the period described in clause (i)(II)(aa), revoke the application of such election with respect to such equipment for any subsequent taxable years during such period. Any such election, if made, shall apply to the applicable year specified in such election and each subsequent taxable year within the period described in clause (i)(II)(aa). Any election under this subclause may not be subsequently revoked.
For any taxable year described in clause (i)(III)(aa) with respect to a qualified clean hydrogen production facility, no election may be made by the taxpayer under section 6418(a) for such taxable year with respect to such facility for purposes of the credit described in subsection (b)(5).
In the case of a taxpayer who makes an election described in paragraph (1)(B) with respect to a qualified clean hydrogen production facility, such taxpayer may, at any time during the period described in clause (i)(III)(aa), revoke the application of such election with respect to such facility for any subsequent taxable years during such period. Any such election, if made, shall apply to the applicable year specified in such election and each subsequent taxable year within the period described in clause (i)(II)(aa). Any election under this subclause may not be subsequently revoked.
As a condition of, and prior to, any amount being treated as a payment which is made by an applicable entity under subsection (a), the Secretary may require such information or registration as the Secretary deems necessary for purposes of preventing duplication, fraud, improper payments, or excessive payments under this section.
Subparagraph (A)(ii) shall not apply if the applicable entity demonstrates to the satisfaction of the Secretary that the excessive payment resulted from reasonable cause.
In the case of an applicable entity which made an election under subsection (a) with respect to an applicable credit for which there is a disallowance described in section 6662(m)(2), subparagraph (A) shall apply with respect to any excessive payment resulting from such disallowance.
In the case of an applicable entity making an election under this section with respect to an applicable credit, such credit shall be reduced to zero and shall, for any other purposes under this title, be deemed to have been allowed to such entity for such taxable year.
In the case of any possession of the United States with a mirror code tax system (as defined in section 24(k)), this section shall not be treated as part of the income tax laws of the United States for purposes of determining the income tax law of such possession unless such possession elects to have this section be so treated.
Except as otherwise provided in subsection (c)(2)(A), rules similar to the rules of section 50 shall apply for purposes of this section.
The Secretary shall issue such regulations or other guidance as may be necessary to carry out the purposes of this section, including guidance to ensure that the amount of the payment or deemed payment made under this section is commensurate with the amount of the credit that would be otherwise allowable (determined without regard to section 38(c)).
(Added Pub. L. 117–169, title I, § 13801(a), Aug. 16, 2022, 136 Stat. 2003; amended Pub. L. 119–21, title VII, §§ 70512(j)(2), 70522(c), July 4, 2025, 139 Stat. 268, 280.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Regulations under this section
Treasury regulations (26 CFR) issued under § 6417
- § 1.6417-0 Table of Contents.
- § 1.6417-1 Elective payment election of applicable credits.
- § 1.6417-2 Rules for making elective payment elections.
- § 1.6417-3 Special rules for electing taxpayers.
- § 1.6417-4 Elective payment election for electing taxpayers that are partnerships or S corporations.
- § 1.6417-5 Additional information and registration.
- § 1.6417-6 Special rules.
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 23 other sections
- § 30C Alternative fuel vehicle refueling property credit
- § 38(b) General business credit
- § 45(a) Electricity produced from certain renewable resources, etc.
- § 45Q(a) Credit for carbon oxide sequestration
- § 45U(a) Zero-emission nuclear power production credit
- § 45V(a) Credit for production of clean hydrogen
- § 168(h)(2)(A) Accelerated cost recovery system
- § 45W Credit for qualified commercial clean vehicles
- § 45X(a) Advanced manufacturing production credit
- § 45Y(a) Clean electricity production credit
- § 45Z(a) Clean fuel production credit
- § 48 Energy credit
- § 48C Qualifying advanced energy project credit
- § 48E Clean electricity investment credit
- § 705 Determination of basis of partner’s interest
- § 1366 Pass-thru of items to shareholders
- § 30D(g)(9) Clean vehicle credit
- § 6418(a) Transfer of certain credits
- § 50(b) Other special rules
- § 6011 General requirement of return, statement, or list
- § 6033(a) Returns by exempt organizations
- § 6662(m)(2) Imposition of accuracy-related penalty on underpayments
- § 24(k) Child tax credit
Cited by 7 Code sections
- § 30D(g)(7)(B) Clean vehicle credit
- § 39(a)(4) Carryback and carryforward of unused credits
- § 45(b)(10)(A) Electricity produced from certain renewable resources, etc.
- § 45Y(g)(12)(A) Clean electricity production credit
- § 48(a)(13) Energy credit
- § 48E(d)(5) Clean electricity investment credit
- § 6418(f)(2) Transfer of certain credits
Cited in 17 regulations not issued under it
- § 1.25E-3 Transfer of credit.
- § 1.30D-5 Transfer of credit.
- § 1.45-7 Prevailing wage requirements.
- § 1.45V-1 Credit for production of clean hydrogen.
- § 1.45V-2 Special rules.
- § 1.45X-1 General rules applicable to the advanced manufacturing production credit.
- § 1.45X-2 Sale to unrelated person.
- § 1.48-9 Definition of energy property.
- § 1.48-14 Rules applicable to energy property.
- § 1.48(e)-1 Low-Income Communities Bonus Credit Program.
- § 1.48E-1 Clean electricity investment credit.
- § 1.48E-4 Rules of general application.
- § 1.48E(h)-1 Clean Electricity Low-Income Communities Bonus Credit Amount Program.
- § 1.761-2 Exclusion of certain unincorporated organizations from the application of all or part of subchapter K of chapter 1 of the Internal Revenue Code.
- § 1.6418-1 Transfer of eligible credits.
- § 1.6418-5 Special rules.
- § 301.7701-1 Classification of organizations for federal tax purposes.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 119–21Parts changed in 2025: (d)(3)(C)(i)(II)(bb) (d)(6)(D)
- Added by Pub. L. 117–169
Where it sits in the Code
- Subtitle F Procedure and Administration
- Chapter 65 ABATEMENTS, CREDITS, AND REFUNDS
- Subchapter B Rules of Special Application
Nearby sections
- § 6413 Special rules applicable to certain employment taxes
- § 6414 Income tax withheld
- § 6415 Credits or refunds to persons who collected certain taxes
- § 6416 Certain taxes on sales and services
- § 6417 Elective payment of applicable credits
- § 6418 Transfer of certain credits
- § 6419 Excise tax on wagering
- § 6420 Gasoline used on farms
- § 6421 Gasoline used for certain nonhighway purposes, used by local transit systems, or sold for certain exempt purposes
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
References in Text
The date of the enactment of this section, referred to in subsec. (d)(3)(A)(i)(II), (D)(i)(II), is the date of enactment of Pub. L. 117–169, which was approved Aug. 16, 2022.
Prior Provisions
A prior section 6417, act Aug. 16, 1954, ch. 736, 68A Stat. 801, related to a tax credit or refund to any person who has sold to a State, or a political subdivision thereof, any article containing any oil, combination, or mixture, upon the processing of which a tax has been paid under former section 4511, and to a refund to the exporter of the tax paid under former subchapter B of chapter 37, prior to repeal by Pub. L. 94–455, title XIX, § 1906(a)(25), (d)(1), Oct. 4, 1976, 90 Stat. 1827, 1835, effective on the first day of the first month beginning more than 90 days after Oct. 4, 1976.
Amendments
2025—Subsec. (d)(3)(C)(i)(II)(bb). Pub. L. 119–21, § 70522(c), substituted “section 45Q(a)(3)(A)” for “paragraph (3)(A) or (4)(A) of section 45Q(a)”.
Subsec. (d)(6)(D). Pub. L. 119–21, § 70512(j)(2), added subpar. (D).
Statutory Notes and Related Subsidiaries
Effective Date of 2025 Amendment
Amendment by section 70512(j)(2) of Pub. L. 119–21 applicable to taxable years beginning after July 4, 2025, see section 70512(l)(1) of Pub. L. 119–21, set out in a note under section 45 of this title.
Amendment by section 70522(c) of Pub. L. 119–21 applicable to facilities or equipment placed in service after July 4, 2025, see section 70522(d)(2) of Pub. L. 119–21, set out in a note under section 45Q of this title.
Effective Date
Pub. L. 117–169, title I, § 13801(g), Aug. 16, 2022, 136 Stat. 2013, provided that: “The amendments made by this section [enacting this section and section 6418 of this title and amending sections 39 and 50 of this title] shall apply to taxable years beginning after December 31, 2022.”
Gross-Up of Direct Spending
Pub. L. 117–169, title I, § 13801(f), Aug. 16, 2022, 136 Stat. 2013, provided that: “Beginning in fiscal year 2023 and each fiscal year thereafter, the portion of any payment made to a taxpayer pursuant to an election under section 6417 of the Internal Revenue Code of 1986, or any amount treated as a payment which is made by the taxpayer under subsection (a) of such section, that is direct spending shall be increased by 6.0445 percent.”