view of sky from building

The Inflation Reduction Act (IRA) is a federal legislation that was signed into law in August 2022. It includes billions of dollars of funding for school districts looking to complete eligible energy improvement projects such as purchasing electric vehicles, electric vehicle charging stations, and geothermal, thermal, and solar energy storage.

The IRA is a 10-year legislation; however, some tax credits for certain types of energy projects expire sooner than the 10-year time frame.

Does your school district know what IRA opportunities are waiting to be unlocked?

Baker Tilly school specialists, Jesse Nelson, CPA, and Matt Bubness co-authored an insightful article for the March 2024 School Business Affairs Magazine that has been reprinted with the permission of the Association of School Business Officials (ASBO). The article covers:

  • Understanding IRA funding through direct pay tax credits for school district projects
  • Step by step guide to the IRA project process
  • Common projects for school districts, such as electric vehicles (EVs) and EV charging stations

Key takeaways from the article

Electric vehicle charging in city
  • Early discussion with a tax consultant: It is advisable to discuss and review an IRA project with a tax consultant as early as possible.
  • Understanding the IRA direct pay tax credit: The concept of the IRA direct pay tax credit is straightforward. It involves multiplying an eligible cost by an applicable IRA tax credit percentage.
  • Project specifics matter: Factors such as project size (over/under one megawatt), construction start date, and construction bidding/timing significantly impact the final direct payment received.
  • Follow key IRA tax concepts: Starting a project without adhering to IRA tax concepts may lead to a reduction in the tax credit percentage.
  • Include IRA in school district planning: If your school district is evaluating equipment and facility needs, consider including IRA as part of the planning process.

For more information, or to learn more about how Baker Tilly advisors can help your institution, connect with our team.

This article originally appeared in the March 2024 School Business Affairs Magazine and is reprinted with the permission of the Association of School Business Officials (ASBO). The text herein does not necessarily represent the views or policies of ASBO International, and use of this imprint does not imply any endorsement or recognition by ASBO International and its officers or affiliates.

Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and controlled subsidiary of Baker Tilly Advisory Group, LP. Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm and provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. ©2024 Baker Tilly Municipal Advisors, LLC

Jesse Nelson
Matt Bubness
Woman working remote at her home
Next up

Beyond the paycheck: top benefit trends for 2024