Elective pay (often referred to as direct pay) is a new mechanism that allows tax-exempt entities to take advantage of federal clean energy tax credits. Examples of eligible entities that can now receive payment for a portion of their clean energy investments include:
In line with its mission, the Michigan Infrastructure Office Technical Assistance Center (TAC) is committed to providing technical assistance and educational resources for elective pay-eligible entities to help draw federal infrastructure money to Michigan's communities.
Learn more about how your organization can use elective pay to get reimbursed for the investments it's making by checking out our fact sheets and other resources below.
Sign up for updates on what the TAC is doing to support eligible entities on elective pay.
In November 2025, MIO TAC launched its Elective Pay Ambassador Program (EPAP), which supports Elective Pay experts located at nonprofits in communities across Michigan. Ambassadors receive MIO TAC training on Elective Pay and can answer eligible entities’ questions about making use of the tax credits. The Ambassadors are also well versed in the technical assistance the TAC can offer to eligible entities in Michigan. Find the Ambassador responsible for your area below and reach out to them about your clean energy projects today!
Please choose your tax year from the menu on the left below to get the correct recommended pre-registration and filing deadline dates.
| Without extension | With extension | ||
|---|---|---|---|
| IRS- recommended date for completing pre-registration | Filing deadline | IRS- recommended date for completing pre-registration | Filing deadline after extension |
| April 15, 2025 | August 15, 2025 | October 15, 2025 | February 15, 2026 |
| Without extension | With extension | ||
|---|---|---|---|
| IRS- recommended date for completing pre-registration | Filing deadline | IRS- recommended date for completing pre-registration | Filing deadline after extension |
| July 15, 2025 | November 15, 2025 | January 15, 2026 | May 15, 2026 |
| Without extension | With extension | ||
|---|---|---|---|
| IRS- recommended date for completing pre-registration | Filing deadline | IRS- recommended date for completing pre-registration | Filing deadline after extension |
| October 15, 2025 | February 15, 2026 | April 15, 2026 | August 15, 2026 |
| Without extension | With extension | ||
|---|---|---|---|
| IRS- recommended date for completing pre-registration | Filing deadline | IRS- recommended date for completing pre-registration | Filing deadline after extension |
| January 15, 2026 | May 15, 2026 | July 15, 2026 | November 15, 2026 |
Fact Sheets:
Guidebooks:
Lawyers for Good Government resources
Michigan Saves
The IRS refers to organizations that are eligible for using Elective Pay as “applicable entities.” Applicable entities include tax-exempt organizations,* states, and political subdivisions such as local governments, Indian tribal governments and their subdivisions, Alaska Native Corporations, the Tennessee Valley Authority, rural electric cooperatives, U.S. territories and their political subdivisions, and agencies and instrumentalities of state, local, tribal, and U.S. territorial governments.**
*Tax-exempt organizations include any organization described in sections 501 through 530 that meets the requirements to be recognized as exempt from tax under those sections is eligible for elective pay. This includes, among others, all organizations described in section 501(c), such as public charities, private foundations, social welfare organizations, labor organizations, and business leagues. It also includes homeowners associations exempt under section 528.
**Agencies and instrumentalities of state, local, tribal governments include water districts, school districts, economic development agencies, and public universities and hospitals that are agencies and instrumentalities of states or political subdivisions.
The TAC is supporting tax exempt entities in Michigan by helping them understand and file for Elective Pay. The TAC has ten Elective Pay Ambassadors working across the state to provide one-on-one support to eligible entities. Contact your local Elective Pay Ambassador for assistance with your project. TAC may have additional assistance in the form of accounting services to assist with filing for Elective Pay – contact your local Ambassador to learn more. The TAC has also prepared many resources, including fact sheets and webinars available on this website. Sign up here to get the latest updates on what the TAC is doing to support eligible entities on Elective Pay.
Eligible tax credits include:
Energy Credit (48)
Clean Electricity Investment Credit (48E)
Renewable Electricity Production Credit (45)
Clean Electricity Production Credit (45Y)
Commercial Clean Vehicle Credit (45W)
Zero-emission Nuclear Power Production Credit (45U)
Advanced Manufacturing Production Credit (45X)
Clean Hydrogen Production Credit (45V)
Clean Fuel Production Credit (45Z)
Carbon Oxide Sequestration Credit (45Q)
Credit for Alternative Fuel Vehicle Refueling / Recharging Property (30C)
Qualifying Advanced Energy Project Credit (48C)
Take a look at this IRS Fact Sheet for more details.
Once a project is placed in service, a project must be pre-registered with the IRS through a portal on their website, which the IRS recommends doing 120 days prior to the relevant filing deadline for your organization’s tax year. (See the IRS’s Pre-Filing Registration Tool Guidebook that provides detailed instructions on using the pre-registration portal or contact your local Elective Pay Ambassador for assistance.) You will then receive pre-registration numbers for each of your projects, which you will use to complete a tax return by the relevant tax year deadline. The IRS has approximated it will take 45 days after a return is filed to receive a check for the elective payment.
