The July 4, 2026 deadline changed the timeline for certain solar projects, leaving many Florida nonprofits wondering if they missed their chance to benefit from federal incentives.

Direct Pay (elective Pay) remains available to eligible tax-exempt organizations. Qualifying nonprofits may receive eligible clean-energy tax credits as a payment from the IRS. For qualifying solar projects, the credit can be up to 30% of eligible costs when applicable requirements are met.

This guide explains what the July 4 deadline means, what nonprofits may still claim, who qualifies, and which deadlines to watch.

Key Takeaways

• We can confirm that Direct Pay remains open to churches, schools, and charities even after the July 4, 2026 safe harbor deadline passed.
• We see the 30% value paid out as actual cash from the IRS, not as a tax credit that only helps organizations with a tax bill.
• We remind clients that the payment is claimed after the solar system is placed in service, through IRS registration and a tax return filing.

Who still qualifies for direct pay

Direct Pay is available to eligible tax-exempt and governmental organizations, including churches, charities, schools, hospitals, fire companies, and local governments. Qualifying organizations can receive certain clean-energy tax credits as an IRS payment, even without federal income-tax liability.

Missing the July 4, 2026 deadline does not automatically end Direct Pay eligibility. However, project timing and federal construction requirements still apply to solar projects starting after July 4.

What the 30% is worth as cash

Direct Pay allows eligible nonprofits to receive the value of qualifying clean-energy tax credits as a payment from the IRS, even without federal income-tax liability. For qualifying solar projects, the credit can be up to 30% of eligible costs when requirements are met.

Additional credits may be available for projects meeting requirements such as domestic-content or community-based criteria. Eligibility varies by project.

How the payment is actually claimed

Direct Pay is not automatic. The general process is:

1. Complete the solar project and place it in service.
2. Register the project through the IRS Energy Credits Online system and receive a registration number.
3. File the required annual tax return with the applicable credit forms and make the elective pay election.
4. Receive the payment from the IRS after the return is processed.

For most tax-exempt organizations, the return is generally due about four and a half months after the tax year ends, with extensions available. The IRS recommends completing registration well before the filing deadline.

What the December 31, 2027 cut-off applies to

For certain solar projects that begin construction after July 4, 2026, the federal clean electricity investment credit under Section 48E is terminated if the project is placed in service after December 31, 2027. Projects that established the required beginning-of-construction status before July 4, 2026 may follow different rules.

For a nonprofit starting a project after July 4, 2026, project timing is critical. Permitting, construction, and utility interconnection should be planned with the December 31, 2027 deadline in mind.

Moving forward

Missing July 4 does not automatically mean losing access to Direct Pay. Eligible nonprofits may still have a path to federal clean-energy incentives, but project eligibility, construction timing, and the December 31, 2027 placed-in-service deadline now matter.

Starting early gives your organization more time for design, permitting, construction, and utility approval.

Frequently asked questions

Can nonprofits still use Direct Pay after July 4?

Yes, eligible organizations may still qualify, subject to project requirements.

Is Direct Pay the same as a tax credit?

No. It allows eligible organizations to receive the credit’s value as an IRS payment.

Do we need to owe federal taxes?

No. Eligible tax-exempt organizations can use Direct Pay without federal tax liability.

Can we claim it before installation?

No. The project generally needs to be installed and in service first.

Will every project receive 30%?

No. The amount depends on the project and its eligibility.

Can we still start a project?

Yes. Projects starting after July 4, 2026 must meet the new timing rules.

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