Tax Credit Insurance

Protecting the Value of The Investment Tax Credit

Tax Credit Insurance (also known as Tax Liability Insurance) is a key component of the No-Loss Method. Through our extensive experience, we are able to secure this specialized coverage from highly rated insurance carriers licensed in New York State.

It protects against financial loss if the IRS challenges, disallows, or recaptures any portion of the Investment Tax Credit for up to 7 years after the credit has been claimed. 

In practical terms, if a $10 million project were to face a significant disallowance or recapture of its Investment Tax Credit, the insurance policy would cover the financial shortfall — meaning you, the property owner, would not be forced to repay the IRS out of pocket.

Documentation Required for Tax Credit Insurance

Advanced CleanTech Solutions fully pays for and manages the entire tax liability insurance process for you. However, securing this coverage requires significant documentation and lead time. Because the paperwork is extensive, we recommend starting the process as early as possible — especially with the July 4, 2026 begin-construction deadline approaching.

To secure Tax Credit Insurance and successfully monetize the ITCs, the following documentation is typically required:

1. Final engineering and drafting of blueprints for submission to the utility company.

2. Interconnection application, including required studies and associated costs.

3. Underwriting of the Sunstone Loan Facility.

4. Appraisal / Valuation for the insurer.

5. Cost Segregation Analysis — Prepared by qualified professionals with supporting documentation, clear methodology, line-item costs, legal citations, proper land allocation, and reconciliation to the purchase price.

6. Financial modeling.

7. Applicable transaction legal documents (Developer/Sponsor Agreement, EPC agreements, tax credit transfer agreement, tax equity partnership agreement, operating agreements, etc.).

8. Applicable tax opinions/memos covering qualification for adders and safe harbors (domestic content, energy community, low-income community, beginning of construction, partnership structure, etc.).

9. PWA monitoring reports (if available) or scope of work for a third-party provider.

10. Property & casualty insurance details / insurance report (Dec page).

11. Project-level debt details and confirmation of whether it is back-leveraged or subject to a forbearance agreement.

12. Project overview / summary (investor deck, CIM, or original proposal).

Tax Credit Insurance Premium

Typically ranges from 2% to 5% of the ITC value insured.

Ready to protect the ITC and meet the deadline?

Contact us today to begin your free assessment and documentation process.