Accounting
Harnessing IRA changes for clean energy tax planning
As the renewable energy landscape continues to evolve, accountants are emerging as critical strategic partners in navigating the complex world of clean energy tax incentives.
The Inflation Reduction Act has fundamentally reshaped the approach to tax planning, transforming clean energy credits from a niche consideration into a pivotal financial strategy that offers substantial benefits for businesses across various sectors.
The IRA introduced new rules that expand access to clean energy credits, which include bonus incentives for businesses operating in energy communities, those using domestically sourced materials, and projects meeting prevailing wage and apprenticeship requirements.
Understanding these benefits allows accountants to guide clients toward larger tax savings and improved cash flow management.
There are two major types relevant to renewables:
- Investment Tax Credit: The ITC provides a tax credit based on a percentage of investment cost of eligible renewable energy systems, such as solar, wind, geothermal and energy storage technologies. It also extends to nonprofits and tax-exempt entities such as local governments through the direct pay option, promoting sustainable energy solutions across sectors.
- Production Tax Credit: The PTC rewards businesses for production of electricity from renewable sources or manufacturing of certain eligible clean energy systems. The main purpose of the Production Tax Credit is to boost economic growth, promote clean energy production and reduce carbon emissions.
Useful strategies to mitigate risk
Accountants must guide clients through proper record-keeping, payroll compliance and contractual documentation to avoid penalties and credit recapture. To mitigate risks, accountants should help clients:
- Maintain clear records of wages, hours worked and compliance with apprenticeship.;
- Track the purchase and installation costs of renewable energy equipment;
- Ensure documentation aligns with IRS reporting requirements, reducing the risk of audits.
A strong documentation strategy not only secures but also helps businesses make the most of their financial planning.
Strategic approaches for maximizing ITC and PTC benefits
Accountants play a pivotal role in helping clients fully leverage the benefits of the ITC and PTC through careful strategic planning. Here are some key ways they can maximise these advantages:
- Assess eligibility: Thorough understanding of the eligibility criteria is paramount to guarantee clients receive the appropriate incentives. Accountants are positioned to identify and incorporate these credits into clients’ long-term financial strategies, thereby optimizing their financial outcomes
- Monetizing tax credits: Accountants can help tax-exempt organizations — such as nonprofits, municipalities and tribal entities — access cash benefits through Direct Pay (also known as Elective Payment). Meanwhile, for-profit businesses can realize the value of their tax credits by transferring them to third parties (credit transferability) or by leveraging tax equity financing, bringing in investors who can make use of the credits.
- Maximize additional incentives: Beyond ITCs and PTCs, accountants should actively search for other federal, state and local incentives that can be combined with these credits, optimizing financial outcomes for their clients.
- Long-term tax planning: Accountants should guide clients in integrating these credits into their wider tax strategies, ensuring they not only receive immediate financial benefits but also build sustainable environmental and economic advantages over the long term.
The Iowa Society of CPAs announced Carrie Steffen as its next CEO, effective May 19.
Steffen succeeds Dawn Latham, who resigned from the role in November. Ardis Kelley, former executive at the Federal Home Loan Bank of Des Moines and ISCPA member, is serving as interim chief executive through May 19 and will continue to serve with the organization beyond that date to ensure a smooth transition.
“It’s an amazing time to be in accounting,” Steffen said in a statement. “CPAs have so many incredible opportunities, and while the accounting landscape is changing quickly, what remains the same is that people are at the heart of the profession. I’m excited to work together with the ISCPA team and its board of directors to support both current and future CPAs in pursuing their passions. Also, as a vocal advocate for the accounting profession, I’m eager to help ISCPA become a leader in solving some of the profession’s most pressing challenges.”
Steffen brings over 25 years of experience and comes from her most recent role as co-founder and president of The Whetstone Group. Prior, she was a national marketing director for RSM US. She is also a member and past president of CPA Consultants’ Alliance and has held various roles with the National Association for Accounting Marketing, including board member, treasurer, finance committee chair and education committee chair. Steffen has been listed on Accounting Today‘s Top 100 Most Influential Consultant to Watch List.
“We are very excited to announce Carrie Steffen as ISCPA’s CEO,” ISCPA chair Erik Bonstrom said in a statement. “Carrie brings a wealth of experience serving CPAs as president of the Whetstone Group, Inc., is a nationally recognized speaker, and was the national marketing director for a large CPA firm. I know that members will benefit from Carrie’s passion for supporting CPAs.”
“I also want to thank Ardis Kelley for her excellent leadership as ISCPA’s interim CEO,” Bonstrom said. “Ardis successfully led a significant legislative initiative for an
Accounting Today is in the midst of collecting submissions for its 2025 ranking of the Top Firms by AUM.
Now in its nineteenth year, this report from Accounting Today ranks CPA firms involved in financial planning by assets under management, providing an invaluable insight into the field.
Candidates for the list must be CPA firms that have a financial planning practice (including subsidiaries and affiliates), and at least one of the financial planners in the practice must hold a CPA credential.
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The final listing will appear in June on AccountingToday.com and in the print edition of Accounting Today.
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Submissions now open for the 2025 VAR 100
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