Buy Tax Credits
With Confidence

You can buy a credit for the current year, up until the date that you file taxes for the current year. For example, a calendar year filer seeking to buy credits for 2024 has until April 15 of 2025 (or October 15, if they file an extension) to buy credits for the 2024 tax year.

Tax credits are generally purchased after they are generated. Buyers may commit to purchasing a credit in advance, but typically will only pay cash after the credit has been generated.
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Timing of payments is typically a topic of negotiation between buyer and seller. The buyer prefers to pay as late as possible, while the seller would prefer to receive cash as soon as possible. If a seller agrees to delay receipt of payment, it may result in a lower discount to the buyer to compensate for the cost of capital.
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The IRS regulation 6418 clearly states that a taxpayer can offset estimated tax payments with tax credits they purchase or “intend to purchase.” This has opened the door for structures in which buyers can achieve the full benefit of the credit before cash outlay. Many buyers seek to structure payments that coincide or occur after their quarterly estimated tax payment dates. For an in-depth discussion of the timing of credits, please read our article here.

For a §45 PTC, buyers should validate that the project qualifies for the tax credit. Due diligence includes confirming that electricity was generated and sold to a third party while also confirming the placed-in-service date of the project.
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For a §48 ITC, buyers should validate that the project qualifies for the tax credit and that the risks of tax credit recapture are mitigated. Due diligence includes confirming the cost basis of the project for purposes of calculating the tax credit, typically through a cost segregation analysis by a reputable third-party accounting firm. Buyers should also substantiate any step-up in cost basis, and confirm the placed in service date of the project.
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For projects that began construction after January 29, 2023 buyers should validate compliance with prevailing wage and apprenticeship (PWA) requirements. Buyers should also validate that projects qualify for any bonus credit adders such as energy community, domestic content, or the LMI adder (awarded to projects that serve low-income communities that meet certain requirements).