Residential Tax Credits and Incentives for Individual Minnesotans

Not a tax-exempt organization, but curious about tax credits benefits for individuals? There’s still time to take advantage of the incentives and make upgrades to lower your energy costs through EVs, solar, energy efficient homes improvements, and more. Follow the new deadlines listed here.

Resources for Tax-Exempt Minnesota Entities 

Tax-exempt and governmental entities can now receive a payment equal to the full value of tax credits for qualifying clean energy projects. This is known as Elective (or Direct) Pay. Eligible entities can file to receive tax credits that can cover 30-70% of a projects’ cost without paying taxes! Eligible entities include:

Find out more by accessing the resource guide with trainings and information to determine if your organization's clean energy project is eligible. Please note that several requirements and deadlines have changed since the passage of H.R.1 (One Big Beautiful Bill Act); please consult this guide for additional information. For more information on the effects of H.R.1, please visit this page to learn more.

Submission deadlines to file a request for return or request a 6-month extension with the IRS occur annually based on when an organization’s fiscal year ends:

  • November 15th with the ability to extend to May 15th – for fiscal years ending on June 30 
  • January 15th with the ability to extend to July 15th – for fiscal years ending August 31
  • May 15th with the ability to extend to November 15th – for fiscal years ending December 31 

Filing and Project Eligibility Assistance

The Minnesota Departments of Administration and Management and Budget (MMB) are coordinating with MN Commerce to deploy a contract with Deloitte to provide 1-on-1 technical assistance for MN entities that are filing for Direct Pay tax credits. This assistance is provided at no cost to eligible organizations based in Minnesota to help file or request an extensions, or to discuss project plans in general. To request assistance, please email Deloitte  to provide information on your project and schedule a meeting. 

Deloitte will also host webinars for MN groups wanting more information and to ask questions registration site is here (all times CDT): Sept. 4, 2:00-4:00 p.m.; Oct. 2, 2:00-4:00 p.m.; & Nov. 3, 9:00 - 11:00 a.m. CDT

Direct Pay-Eligible Programs from MN Commerce 

As the State Energy Office, the Minnesota Department of Commerce has several programs that support clean energy projects for tax-exempt entities like local governments, rural electric cooperatives, nonprofits, and schools. Please see below for additional information on programs that can be paired with Direct Pay tax credit reimbursements – combining Direct Pay reimbursements and MN state grants can potentially cover 100% of project costs! 

Direct Pay Bridge Loans from MnCIFA 

A barrier to many organizations in pursuing Direct Pay-eligible projects is securing funds to begin construction of a clean energy project. Tax credit refunds can take upwards of 12-18 months to be processed, which can leave organizations accruing interest on traditional loans.

To address this gap, the Minnesota Climate and Innovation Finance Authority (MnCIFA) (a.k.a. Minnesota’s “green bank”) has more than $60 million available for low interest Bridge Loans from the State Competitiveness Fund (SCF) to provide coverage for eligible projects until a Direct Pay reimbursement is received. This funding helps to provide initial capital to complete a project and 'bridges' costs until a Direct Pay refund is received with minimal expense to the awarded organization.

Only eligible for projects over $250,000 that have begun construction or accruing at least 5% of total project cost on equipment or project-specific activities. Visit the MnCIFA website to learn more about their loan application process and to contact MnCIFA leadership to determine if your project is eligible. 

Other Resources: