The Internal Revenue Service issued proposed regulations and frequently asked questions describing rules for applicable entities that earn certain clean energy credits and choose to make an elective payment election and rules for eligible taxpayers that elect to transfer of certain credits to unrelated parties.
For tax years beginning after Dec. 31, 2022, applicable entities can choose to make an elective payment election, which will treat certain credits as a payment against their federal income tax liabilities rather than as a nonrefundable credit. This payment will first offset any tax liability of the entity and any excess will be refundable.
Applicable entities generally include tax-exempt organizations, State and local governments, Indian tribal governments, Alaska Native Corporations, the Tennessee Valley Authority and rural electric cooperatives. All other taxpayers may elect to be treated as an applicable entity for a limited number of credits.
Also, for tax years beginning after Dec. 31, 2022, certain eligible taxpayers (generally taxpayers that are not applicable entities) can make an election to transfer all or a portion of an eligible credit to unrelated taxpayers for cash payments.
The unrelated taxpayers are then allowed to claim the transferred credits on their tax return. The cash payments are not included in gross income of the eligible taxpayer and are not deductible by the unrelated taxpayers.
Temporary regulations were also issued, providing rules that relate to a mandatory IRS pre-filing registration process, which will be through an electronic portal. The pre-filing registration process must be completed, and a registration number received, prior to making an elective payment election or an election to transfer eligible credits.
?The process also applies prior to making an elective payment election related to advanced manufacturing investment credit amounts under the CHIPS Act of 2022. Proposed regulations were also issued describing other issues related to the advanced manufacturing investment credit.
Trader Joes Worker Op-Ed Highlighting Flaws of Unionization:
On June 13, a Trader Joe's worker wrote an op-ed for the Washington Examiner, explaining how their "union is not what [they] bargained for." The op-ed details how the coercive and misleading tactics they used to secure representation and during contract negotiations. The author, who identifies as a progressive, shows how disillusioned he has become with unions and current representation processes, and he advocates against the PRO Act.
Senate HELP Markup on PRO Act:
On June 21, the Senate Health, Education, Labor, and Pensions (HELP) Committee held a markup on three labor and employment bills, including the Protecting the Right to Organize (PRO) Act, S. 567. The bill was approved by the Committee down party lines, with all Democrats supporting passage and all Republicans rejecting the legislation. There were numerous amendments offered by the Republicans, all of which are identified below, but they all failed. Some Republican Senators did vote against the amendments, and they are identified below.
Sen. Cassidy Proposes Requiring Majority of Eligible Workers Vote for Union Representation:
On June 21, at the Senate HELP markup of the PRO Act, Sen. Bill Cassidy (R-LA) proposed an amendment that would require a union to win support from a majority of the eligible workers in the bargaining unit before they can represent those workers. Current law only requires a majority of the voters to be in favor of unionization, but Cassidy's amendment would have required a true majority of the workers to be in favor.
TIA recently sent letters to members of the 118th Congress outlining our concerns and opposition of the PRO Act. TIA is an active member in the Coalition for a Democratic Workplace.