New finance company will help small businesses access IRA tax credits
Climate fintech company Giraffe Financial has launched a service specifically focused on making Inflation Reduction Act (IRA) tax credits accessible to underserved small- and medium-sized businesses and tax-exempt organizations such as local governments, schools and nonprofits. Giraffe streamlines the process of finding, claiming and monetizing IRA tax credits to help these organizations navigate what can be a prohibitively difficult process.
The IRA represents over $1 trillion in tax credits to accelerate the adoption of clean energy technologies in the US. As a result of the IRA, there has been a surge of investment in clean technologies, and the value of associated tax credits is projected to grow from $50 to $100 billion per year by 2032. While most financial service providers have been squarely focused on supporting tax credit transferability — which typically involves larger, well-resourced players transferring an eligible tax credit to a third-party buyer for cash — long-awaited tax rules related to direct pay issues were finalized in April 2024.
Direct pay is an innovative mechanism that allows tax-exempt entities — which were historically excluded from taking advantage of tax credit incentives — to receive direct payment from the IRS for their clean technology investments. Now that the rules are final, the biggest hurdle is for potential recipients to navigate claiming these credits. That process is far from simple, and it is especially daunting for smaller or resource-constrained organizations without access to in-house tax experts or the budget to hire large, expensive consultancies.
“We built Giraffe to address the paradox that many of the organizations the IRA is intended to support are the least equipped to take advantage of it; we’re bringing IRA tax credits within reach for a broader audience,” said Giraffe co-founder and CEO Jason Prince. “With final rules now in hand, it’s time to get moving on building out more solar, storage, and EV charging technology across the US. We’re making tax credits far more accessible for entities that don’t have the wherewithal to become tax experts themselves.”
Giraffe is an AI-powered, end-to-end tax preparation solution that provides the education and clear guidance necessary to help users claim financial benefits with ease and ensure more clean energy technologies are deployed. Through its user-friendly site, Giraffe allows organizations to discover potential credits, generate new credits and monetize credits.
Giraffe supports tax-exempt users pursuing investments in EVs, EV charging, renewable energy, and energy storage projects. These users can access step-by-step assistance to claim the Commercial Clean Vehicle Credit (45W), Alternative Fuel Vehicle Refueling Property Credit (30C), and/or the Investment Tax Credit (48).
News item from Giraffe