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July 11, 2024

IRS Posts FAQs about Applying for Registration for the Clean Fuel Production Credit

Lynn L. Bergeson Carla N. Hutton

On July 10, 2024, the Internal Revenue Service (IRS) announced that it issued frequently asked questions (FAQ) in Fact Sheet 2024-25 related to which entities must apply for registration for the Clean Fuel Production Credit. As reported in our June 10, 2024, blog item, the Inflation Reduction Act allows a credit for the production of clean transportation fuels beginning on January 1, 2025. To claim a Clean Fuel Production Credit, the taxpayer must be registered as a producer of clean fuel at the time of production. The IRS states that Notice 2024-49 provides guidance on the registration procedures for the credit, including how to apply for registration and what information a clean fuel producer must submit with its application. The FAQs address which entity must apply for registration pursuant to Notice 2024-49, including if the entity producing the clean fuel is a disregarded entity, and also which entity will be able to claim the credit when the registrant is a disregarded entity.

As noted in our June blog item, a taxpayer must have a signed registration letter from the IRS dated on or before January 1, 2025, to be eligible to claim the credit for production starting January 1, 2025. The IRS intends to process completed applications for registration received by July 15, 2024, so that an eligible taxpayer can receive its letter of registration by January 1, 2025.