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- [00:02]
A
You're listening to ASBO International's School Business Insider. I'm your host, John Brucato. Each week on School Business Insider, I sit down with school business officials and industry experts from around the world to share their stories and explore the topics that matter most to you. Find out what it means to be a school business official and get your insider pass on all things school business. Hey everyone, Just a quick note before we get started with today's episode. Since recording this, the IRS provided new information in an FAQ about the term acquired, noting that a vehicle will now be treated as acquired as of the date a written binding contract is entered into and a payment has been made. A payment includes a nominal down payment or a vehicle trade in. Importantly, the FAQs also indicate that, quote, acquisition alone does not immediately entitle a taxpayer to a credit, end quote. The IRS continues by noting that, quote, if a taxpayer acquires a vehicle by having a written binding contract in place and a payment made on or before September 30, 2025, then the taxpayer will be entitled to claim the credit when they place the vehicle in service and namely when they take possession of the vehicle. Even if the vehicle is placed in service after September 30, 2025, taxpayers should receive a time of sale report from the dealer at the time they take possession or within three days of taking possession of the vehicle, end quote. What this really means is that school bus operators do not need to take possession of their vehicles prior to September 30, 2025 to be explicitly eligible for the tax credit also addressed in the FAQs. It is very important to note that the new user registration for the Clean Vehicle Credit program through the Energy Credits online portal will close on September 30, 2025. If you have not yet registered as a new user and plan to claim the credit in the future, you must register by September 30, 2025. I know that was a lot before we even get to the conversation, but please keep that in the back of your mind as you listen to our conversation today about the EV tax credits. I'll about also provide a link in the show notes for that FAQ document and if you have any other questions, you can reach out to me directly or our guests to help kind of usher along that EV credit process. Now onto today's episode. Hello everyone and welcome back to School Business Insider. This week we're diving into a topic that's both urgent and complex. Federal tax credits for electric school buses and EV chargers. Today I'm joined by Katherine Robuff, Deputy Director of External affairs for the Electric School Bus Initiative at the World Resources Institute, and Carolina Chacon, Coalition Manager for the alliance for Electric School Buses. Both bring deep expertise in helping school districts navigate funding, partnerships and advocacy around clean transportation. However, before we begin, I do want to note that this conversation is for informational purposes only. We are not providing official tax or legal advice. We encourage you to please review the official IRS guidance and consult your accountants, attorneys, or other qualified professionals before making any financial or legal decision related to these credits. Although every effort has been made to provide complete and accurate information, WRI and Alliance for Electric School Buses make no warranties, express or implied to the accuracy of this summary, and assume no liability for use. All right, now that that legal stuff is out of the way, Katherine and Carolina, welcome to School Business Insider. I'm so happy to have you today.
- [03:41]
B
Thanks for having us.
- [03:42]
A
Absolutely. So why don't we kick it off? Katherine, can you start by maybe walking us through and sharing a little bit about your role at WRI and really how Electric School Bus Initiative is supporting districts nationwide?
- [03:54]
B
Sure. So the World Resources Institute is a global research organization working to improve people's lives, protect nature, and halt climate change. Within wri, I work on our Electric School Bus Initiative, which works with school districts, communities and other stakeholders toward the equitable electrification of school buses across the United States.
- [04:17]
A
Awesome. And Carolina, how about you? Can you tell us a little bit about the alliance for Electric School Buses? It's been a leading voice for advocacy and equity, but kind of tell us what's been going on from your vantage point and why it's so important for communities and school districts.
- [04:31]
C
Yeah, absolutely. And thank you so much for having us here. The alliance for Electric School Buses we are a national coalition of nonprofit organizations that are all united in the same goal. We want to clean up the air that our children breathe and we want to do that by switching to zero emission electric school buses. We have over two dozen members, again, nonprofit organizations who do work at the federal and the local levels and across 38 states. What many of our members do is work with parents, students and community members who all want cleaner air in their communities and they help them find ways to reduce that pollution. Of course, electric school buses are a very clear solution for communities who want cleaner air, especially for children given the benefits that they provide having zero tailpipe pollution. So many of our members, they work with parents and students to give them the tools to engage their local school districts on how electric school buses might fit their plans for their fleets. And they can also encourage them to apply for electric school bus funding or connect them to resources that resources that will help them learn more about a clean ride for kids. A lot of our members also work with federal and state governments to pass policies and regulations that support electric school buses and that prioritize transitioning the dirtiest, oldest diesel buses that traditionally are serving the communities that have been already more harmed by disenfranchisement or marginalized or just historically underserved. For the last few years, our members have really been focused on helping school districts learn about federal programs, including these tax credits that can help them fund electric school buses.
- [06:08]
A
Great. And I'm excited to get into that. But before we dive into the individual tax credits and what districts can do to really kind of take advantage of those, why now? It seems that electrification of school buses has really gained some momentum. It's gaining a lot of popularity. There are states like the one I'm in in New York where there's an actual mandate for school districts to transition over to electric school buses. Can you tell me why you feel like this moment in time is really so monumental and why this traction is really kind of taking off with school buses?
- [06:41]
B
Yeah, I can go ahead on that one. I think you're right, John. There is a lot of momentum for school bus electrification in states and communities across the country. We are focused in this particular moment on a couple of the clean energy tax credits that are most relevant to school bus electrification. We'll get into the details of them in a minute, but they are the qualified commercial clean vehicle tax credit for the buses and the 30C alternative fuel vehicle refueling property credit, which supports charging infrastructure. The budget bill that was signed into law on July 4th of this year dramatically accelerated the expiration of those two credits. Previously, they had been available through 2032, but the vehicle credit, the 45W credit, now expires for vehicles placed into service after September 30th, 2025. So that's this September. And the 30C credit, which can support charging infrastructure, expires for chargers that are placed into service after June 30th of 2026. So that's next summer. So a lot sooner than 2032. And that's why we're here. We want to help get the word out to school districts about how they can still take advantage of those credits despite the expedited timeline.
- [07:57]
A
And I will say, coincidentally, it sounds very familiar. I just purchased my first electric vehicle a couple of weeks ago, and I saw that that credit is expiring for consumers obviously as well. So the timing sounds very urgent. If you want to take advantage of those, especially as a school district, you have limited funds, you have limited revenue streams. Anything you can do to offset those expenses, because I'm sure we'll get into it. The electric buses comparatively are a lot more expensive, do offer more benefits, but the upfront cost is pretty significant. So anything that districts can do to leverage those tax credits is incredibly important, especially in such a condensed timeline. So I'm glad we're talking about this now. Although, you know, September 30th is right around the corner. So let's talk a little bit more about that. You were Talking about the 45W tax credit, the electric school bus piece. Can you break down that tax credit for our audience and what does it really cover? Who's eligible and you know, what are districts know, potentially eligible to save on with using these tax credits?
- [08:54]
B
Absolutely. The 45W credit defrays the cost of acquiring certain commercial clean vehicles, which includes electric school buses. The credit is up to $40,000 per electric school bus. More specifically, the credit offers up to 30% of the cost of an electric school bus or the incremental costs, whichever is less. And again, that's capped at $40,000. In this case, incremental cost refers to the price difference between an electric school bus and a comparable gas or diesel internal combustion engine school bus. You asked who's eligible? Starting somewhat recently, entities like public school districts that don't owe federal income tax can claim clean energy tax credits, including the 45W credit I'm talking about now, as well as 30C, which we'll discuss in a minute. And that's all thanks to a new process called elective payment. Under elective payment by filing forms with the irs, tax exempt entities that make qualifying investments will receive a check or a direct payment that's equal to the value of the credit that they're claiming. So in other words, a school district doesn't need to have tax liability in order to receive the credit. They can receive it as a direct payment under elective payment. Fortunately, the credits are non competitive. So this isn't a grant competition in which some applicants will be selected and others they're also unlimited. So there's no cap on the number of credits available to any given school district. If you are electrifying your whole fleet, you can apply for credits for each one of those buses. And like I mentioned, they're reimbursable as cash. Finally, and this is an important piece that's kind of the. The latest breaking news. To qualify for the credit, the vehicles in question need to be in your possession and ready to use by September 30th. So that's the new expiration date for the tax credit. They must be, quote, placed in service by that date, and that means that the property is ready and available for use.
- [11:02]
A
Wow. So that's even more constraining because that was going to be my question. Can you at least pay for them with a promise to take delivery? But it sounds like you actually need to take delivery and they need to be in service to be eligible for that tax credit. So by the time this episode comes out, you'll have a little over a month left in this. This window. What are you seeing in terms of supply chain with manufacturers and electric buses? So if somebody listening to this is like, oh, I need to jump on this and order buses and take delivery in a little less than a month, is that feasible? I mean, are suppliers able to keep up with this kind of demand?
- [11:38]
B
That's a good question. So the tax credits and the new expiration deadlines are going to be most relevant and helpful for those who already in the process. So folks who have taken delivery of their buses at some point during kind of this current tax year. And we can get into how we define a tax year for a school district. So that's going to be the most sort of relevant group. That said, if there's a school district that's expecting delivery soon, in September or October, you know, I would go ahead and call your dealer and see if they can get those buses to you prior to September 30, so that they are, you know, in your. In your position that you have acquired them in your possession. I should say you have acquired them by the deadline.
- [12:20]
A
Have you heard anything about any kind of waivers or extensions, or is this kind of set in stone? And September 30th is it right now?
- [12:28]
B
That's our understanding that September 30th is the deadline. You know, treasury routinely issues guidance for tax credits like this, so, you know, we're keeping an eye on that. But the September 30 deadline is what we're operating under, and that's what the text out of the July 4th bill said.
- [12:45]
A
All right, so, Carolina, from the coalition's perspective, what do you feel are the biggest barriers and opportunities districts are facing with leveraging this tax credit?
- [12:55]
C
I think the biggest barrier is the common misunderstanding that school districts, maybe they think, I can't qualify, I can't get this. I'm not Eligible, we don't have a tax liability, so why would we be applying for a tax credit or a rebate? And so we want to make sure that school districts understand that as tax except entities because of elective pay, they are eligible. And we want to correct that record and make sure that the biggest barrier is often self imposed. The other barrier that school districts might face, as you talked about, are the expedited timelines. So that could be a challenge for some school districts because they are going to have very limited window in which to get these vehicles delivered. So like Catherine said, realistically we're looking at school districts who have already placed a purchase order, just making sure that that vehicle gets delivered by that September 30 deadline. The biggest opportunity is that like Catherine mentioned earlier, these tax credits are non competitive, unlimited, stackable, and they arrive via a check. So every school district that is eligible, that has made that qualifying purchase, that is going to have that electric school bus delivered by September 30, they should not leave this money on the table and they should claim it as soon as they can.
- [14:15]
A
Great. You mentioned stacking. Can you talk to me a little bit more about that? What does that mean? What can districts do to leverage other funding sources or state grants or energy programs?
- [14:25]
C
Absolutely. So fortunately the 45W tax credit can be combined with other tax accept grants and forgivable loans. For example, clean school bus program grant or a state level grant or rebate. Not every single state level grant or rebate, but most of them. However, you have to make sure that the credit amount doesn't necessarily help anyone pay for more than the bus is worth. So you have to take a look at the cost basis or what a school district is paying for that bus, add up any grants or loans that they're receiving, and then calculate the tax credit according to that. So the credit amount would be reduced if the value of any grant grant plus the tax credit would exceed the price of the vehicle. So in other words, the IRS issued these rules so that no one is making money off the tax credit. But EPA specifically encouraged clean school bus program applicants, clean heavy duty vehicle program applicants, to factor in these tax credits into their grants and rebates and into their applications because these tax credits were available. And so we know that many school districts did just that and they pursued this other, these other forms of federal funding, thinking that they would also be able to combine it with the tax credit. And they can. And so we encourage folks that received any sort of EPA award in the last few years to take advantage of this tax credit, if that vehicle will be delivered by September 30th.
- [15:54]
A
Great. And I'm sure you've heard from or have worked with school districts that have gone through this process. Do you have an example of how difficult or maybe not difficult this process has been from a school district's perspective and making sure that they can secure these credits?
- [16:08]
C
Yeah, we've certainly heard many school districts that have been successful in claiming the tax credits. Going through the process. We were able to work with Tim Farquhar out of Illinois, who was able to successfully claim the tax credit for many buses for his school district. And he was able to do a walkthrough, complete from start to finish of all the forms that he had to fill out, the pre registration process, all of that. And so we do have an example of that in the webinar webpage that we can share out so that any folks that want to go through that can see how he filed for that tax credit. And realistically, you file as early as 120 days before the annual filing deadline. And so you file, then you, I mean, you pre register, then you complete the actual filing deadline, your annual tax return that you have to fill out, which again, school districts typically don't. But in this case, they would need to fill out some forms and submit them by those annual deadlines, which can vary depending on whether you elect to use your tax, your fiscal year or your calendar year. And then you're able to, once you file those annual returns, shortly after that, after that annual return deadline has passed, you expect to receive that check from irs. There are again those two key the pre registration process and then the annual filing. Those are the key deadlines. But those are pretty quick and online processes if you have all your documents in a row. So we've seen school districts that say, yeah, it was relatively easy. And again, the size of the check that comes back can be really sizable, especially if you've invested in multiple buses, multiple chargers.
- [17:50]
A
Great. So you can't do much with an electric bus without a charger. So let's talk a little bit about the 30c tax credit. Katherine, can you walk us through this piece of it now again, what does it cover? What funding is available? You know, you mentioned the deadline in 26. Talk us through what school business officials should be aware of when they're thinking about the infrastructure side of this piece.
- [18:12]
B
Fortunately, the clean energy tax credits also include a credit that can be applied to charging infrastructure. And that's the one that we call 30C, the alternative fuel vehicle refueling Property credit. It's a bit of a mouthful, but it's worth provides a credit ranging from 6% to 30% of the EV charger cost with a maximum of $100,000 per charger. And just so you know, the way that they define that $100,000 per charger is per charging port. So each port on a single charger actually counts as its own qualified item of 30C property. So that's, that's good news. While this credit was also Originally available until 2032, the budget bill changed that that deadline as well. And the credit as you mentioned now expires for charging stations placed into service after June 30th of 2026. So there's a little more time on that one. But again it is a placed into service standard. So you want to have the charger in your possession and up and running and operational by June 30th of next year. The credit is restricted to low income and non urban areas and there's a bonus for meeting prevailing wage and apprenticeship requirements. What that means is that in order to receive the full value of the of the tax credit, any laborers and mechanics employed in the construction and the repair of the charging infrastructure would need to be paid at least the prevailing wage for that locality where the project is based on. It's also critical that apprentices from registered apprenticeship programs are utilized for a certain number of hours and IRS has has guidance and more details on all of that. If you do meet those requirements, it allows for a credit of up to 30% of the EV charger cost and again that's up to $100,000. If a school district does not meet those prevailing wage and apprenticeship requirements, the credit amount is capped at 6.6percent of the project costs. And finally, there's one other thing to know here. The only chargers that are located in an eligible census tract can receive the 30c credit and census tracts are eligible if they are a low income community or non urban area. The IRS has helpfully released a map of eligible census tracts for this credit and that can be found using the Department of Energy's Argonne National Lab 30C Eligibility Locator and we can include a link to that in the show notes if that's useful. So school districts can go in to that map, enter the location or the address of your charging infrastructure or your planned charging infrastructure and determine eligibility for the credit.
- [20:58]
A
Awesome. So I have to ask. I'm going through a feasibility study with my school district right now. In terms of electrification, there's a lot more than just a charger and a bus. There's infrastructure outside of that. You have to work with your utility. Katherine, you mentioned that the tax credit really is eligible on a per port basis, but I guess this goes to either of you. Do you know if there's any other funding opportunities outside of this to aid in terms of if you need to work with your utility to put a new transformer in or there's more infrastructure needs that are out there because districts may not have the capacity on site to put the chargers in to wire them. Do you know if there's anything else out there that would aid school districts, especially those in low income or rural communities?
- [21:42]
C
Tim Farquhar walked through this on the webinar where he was able to include some of the installation costs into the tax credit. There is official guidance onto what you can include. So encourage folks to check out his filing to double check what what he included. You can get some, but not all. And of course, anything that's on the utility side of the meter is usually not eligible for any federal funding. We know that through the clean school bus program, clean heavy duty vehicle program, and that is where the utility comes in. And so we are encouraging a lot of folks, they should already be talking to their utility. We know that many have been. But checking out what programs, resources or support utilities are able to provide because this is where they really step in to provide assistance with all the various other infrastructure upgrades that might be necessary. Because certainly it's not just like you said, the charger and the bus. There's a lot more that goes to it. And that is where the utility is a critical piece of that. I know in some cases school districts that have purchased an electric school bus through a third party, maybe they're not the ones having that conversation with the utility, but they should be. They should definitely be aware of what offerings the utility can provide, what fleet advisory services that they might want to take advantage of. Because again, those are going to be really, really useful for the school district.
- [23:08]
B
In addition to what Carolina just mentioned about the utility potentially supporting some of those other infrastructure needs, the 30C charging infrastructure credit can in some cases cover costs outside of the charger itself, including potentially like an electric panel conduit and wiring and some of those other costs. Definitely check with the IRS guidance and check with your, you know, your accountant to see what you might be able to include under the cost basis for the 30C credit.
- [23:41]
A
Right. So as part of this initiative, Carolina, this is for you. You know, many rural or low income communities worry a Lot about access in many different facets of how they do their operations. Tell me how you see equity playing a role in how the 30C credit is applied.
- [23:59]
C
Yeah, well, the great thing about 30C is that like Catherine mentioned, it is really targeted at reaching communities that are low income and rural or non urban. We think that that's important because it helps address common equity concerns because low income communities are many times more likely to breathe dirtier air and could most benefit from zero emissions technology like cleaner school buses. And so having these incentives and supports in place to put charging infrastructure there is important for non urban communities. For rural communities, oftentimes they lack the resources to make these kinds of investments because infrastructure upgrades might be more costly, more extensive. So it is really important for them to receive additional support so that they can invest in clean energy and clean transportation and not get left behind. And so we hear that often from rural school districts that electrification might be tougher in their communities because of the routes or the distance or the utility infrastructure that it might already be lacking. And so this is an opportunity to help get up to $100,000 with 30c, which is very significant because with that amount of money, what you're really looking at is most likely a fast charger. And a fast charger is what is going to enable those rural communities that might have longer routes to be able to pursue electrification. Because you can go back and charge very quickly and continue that route, especially if you're talking about a school bus, you know, you do the morning route, go back, charge, go back to the afternoon route. And so that is why 30C is so critical, is because you are looking at a fast charger versus many other incentives that are like, you know, 10,000, 20,000. Those are really geared at your slower, critical, but slower chargers. 30C is really to help get those fast chargers in those rural communities that might not otherwise get them. And then I also want to point out that amount of funding. Usually when you're talking about that kind of charger, you're also often talking about a charger that might be bi directional. And so it can send energy back to the grid, which is a very important component for school districts, because not only is that a potential revenue source of the school district being able to tap into the power that is stored in their batteries to send energy back to the grid and be compensated by their utility, but it can also serve as a resilience project. And so we've seen school districts that are exploring how to use that energy in their batteries, not necessarily to send energy back to the grid, but to send energy to a building. So if there's a power outage or a natural disaster, they can keep the lights on. We've seen some examples of this already play out in places like Southern California, Maryland, there are, I think in Illinois, Tim Farquhar has been looking at this as well. How can you keep the lights on during a heat wave or a power outage? How can you use this and combine it maybe with a solar array to create a small power plant so that you can keep your community going in times of needs, or you can keep your buses or your buildings going when you need to. And again, when you're talking about 100k per charger, which is what is available with 30C, you're really looking at fast chargers that might be able to use some of this latest technology. And so that's a huge benefit that we see, is that 30C is going to enable more school districts to make that investment that could pay further dividends down the line.
- [27:29]
A
Are you looking for ways to save your district time and money on purchases while ensuring full compliance with state and federal procurement laws? The association of Educational Purchasing Agencies, or aepa, connects schools with competitively bid contracts across the nation. From technology and facilities to classroom essentials and services, AEPA helps you stretch your budget further and simplify the buying process. Trusted by schools across the country, AEPA brings the power of cooperative purchasing to your district. Find your local state agency and learn more@aepacoop.org so you could theoretically have a whole fleet of generators, right? If you need extra power for your buildings, if there's an outage or something like that. That's fascinating.
- [28:13]
C
Yeah, you definitely can. There are many school districts that are exploring just that. They want to see how they can again improve their own reliance, make sure that they can keep the lights on. Schools are so often a community resource. Whenever there's some kind of emergency, you go to your school, you go to the gym. And so they want to be able to keep those lights on. And electric school buses can really help with that.
- [28:37]
A
And so when we think about logistics and process, is the process for applying to 30C very similar to 45W or is it a completely different experience?
- [28:48]
C
Very similar. You can even apply for both of them at the same time in that same pre filing registration. And then again you'll do the annual filing at the same time. What will change the deadlines, of course. So for 30C, you have basically an entire year to put your chargers into service. You have until June 30th of 2026 for 45W, you really only have until the end of September to put your vehicles into service or have them delivered and be ready for use. And then when you're going through.
- [29:24]
A
The.
- [29:24]
C
Filing for these tax credits, there will be slightly different documentation. So to claim 45W, the user is going to need to provide supporting documents related to the vehicle's location, the vehicle identification number, the vin, the certificate of title, the purchase agreement, the vehicle registration. But that changes when you're talking about a charger. You're going to need to provide supporting documents related to the fuel type, the construction permit, purchase agreement, any government permits that were issued, and then of course the census tracts, because you need to be able to demonstrate that the charger was placed in a low income or non urban community. So the process is the same. You can even do it at the same time. It's just a matter of the documentation that you will need.
- [30:09]
A
Sure. So Catherine, as you mentioned before, districts aren't typically used to filing any kind of tax, IRS credits or anything like that. Can you tell us some key steps that districts should really follow to be successful in these claims and that they don't get kicked back? And before you know it, the deadline is here.
- [30:27]
B
Absolutely. And it's not as scary as it might seem. I like to think about it in terms of four basic steps. The first one is simply making the investment. So purchasing your electric school buses and acquiring and placing your charging stations into service. So that one we got. The second is that once you've actually placed your buses and charging infrastructure into service, you can begin the process of claiming elective pay through the pre filing process. This is the process that allows the IRS to verify that the school district is planning to claim the credits each property. So that's each bus or each charging station must receive its own registration number through this pre filing process. And that number will be unique to that property. And you're going to need that for step three, which I'll get to in a second. The irs, you should know, allows for bulk upload of multiple properties when you're pre filing. So you don't need to necessarily go by one by one. This can actually save you a lot of time and they even provide a template spreadsheet for the information that you're going to need. So I know school districts that are putting 25 electric school buses into service. They can complete all of that in one spreadsheet and one upload. So that's very helpful in terms of streamlining the process. IRS recommends that you Register as early as feasible and at least 120 days prior to your annual tax return deadline. A couple other things about pre filing. One is that pre filing registration does not confirm your credit eligibility. It simply provides the IRS with information to ensure prompt processing of your elective payment once the tax return is later completed. You still have to establish eligibility for the tax credit on the tax return before the payment occurs. And pre filing registration can only be completed once each annual accounting period. So if you are filing both for school buses and chargers, you can put those together into one pre filing registration. People ask, you know, I have my buses now, but I don't have my chargers. What should I do? A pre filing registration submission can be amended later in the year to register new buses or charging stations that you add later, but only after that initial pre filing has been processed and assigned those registration numbers by the irs. So that's, that's helpful to know as well. So in sum, step one is to acquire and place and service the property. Step two is that pre filing. Step three is the actual filing of the tax return. So before the next annual deadline for the tax year that the project is placed into service, the school district files its tax return, provides those pre reg. Excuse me, provides those registration numbers obtained during the pre filing, and also provides other required documentation. And then you would select elective pay as a school district. On a side note, we get a lot of questions about how you know what your tax year and your filing deadlines are. Since school districts don't normally pay taxes, the IRS actually allows them to use either their fiscal fiscal year or the calendar year to determine their tax year. So your business office probably has a procedure in place or would establish for this purpose a reporting year. So for tax exempt entities like school districts, the annual filing deadline is going to be four and a half months after the end of that taxable year. Again, which you can determine that could be the calendar year or a different accounting year. So step three is to file that annual tax return and then step four is to receive the payment. So it's, you know that that one's pretty easy. Hopefully you open the mail and the payment has arrived. So as you can see, step one and four are pretty straightforward. Step two and three are as well, especially since we have a lot of resources to help you pre file and then complete your annual filing.
- [34:48]
A
Okay, sounds pretty straightforward. So Carolina, this is for you. School districts more often than not have challenges meeting new mandates, having the capacity to get new things done, because strictly resources are just limited. So can you Tell me and talk to me about any partnerships or advocacy that can really help districts that may not have the staff to process this, albeit it sounds pretty straightforward. But sometimes even the smallest addition to a district's capacity can be really taxing on them. So tell me a little bit about what you feel is out there for districts.
- [35:23]
C
Yeah, definitely understand for a lot of school districts, you know this is an undertaking, right? Not just pursuing electric school buses, but then the grants, the funding, the tax credits. So we completely understand that school districts need support. So the number one recommendation, talk to your local electric school bus advocates because they want to see you succeed. That could be a parent group like Mom's Clean Air Force or an environmental group. They'll connect you with people who can help. There are some groups like Lawyers for Good Government, the Electrification Coalition, that are providing tax navigation assistance directly. Those are all nonprofits. And so you're talking to folks that, yes, they want you to invest in cleaner technology, but they're not going to charge you a fee necessarily for helping you. Undaunted K12, another great organization. They've really been devoted to helping school districts claim tax credits via elective payment so they can also provide assistance. You can reach out to me directly. I've sat through with some school districts, walked through the forms, answer their questions. Any of these groups, myself included, are happy to answer questions, point you to the official IRS guidance, connect you with other school districts who've completed the process, or help in any way that we can. We also know that many state energy offices are also providing support. Utility companies in some cases are helping. So definitely want to encourage reaching out to your state energy office, your state environmental department, maybe even your state association for People Transportation or your state board of Education. Any of these might have received communication from folks like WRI or myself or others and also have access to those resources. May have additional supports available as well. We've seen in some states like Michigan and Minnesota that they are directly reaching out to school districts and offering technical assistance. Not just school districts, but anyone that is looking to file for elective pay, which could be a municipal government, another nonprofit, a church school district, and helping them actually complete the filing process. So there are a lot of folks out there that want to see school districts succeed, that want to see these clean energy, clean transportation projects succeed. And most of all, we all want school districts to save money wherever they can. And so we don't want any school district to leave this money on the table. And we are eager to help you, however it is possible without being Tax specialists without doing the filing ourselves. Any help that we can provide, we're ready to. We want school districts to succeed and we want them to save money.
- [38:06]
A
That's great. And then are there any other pitfalls you could speak to that districts should watch out for? I mean, again, the deadlines are coming up pretty quickly. So anything you can offer to assist districts in not missing those deadlines. What would that be?
- [38:21]
C
Well, first of all, don't assume you can't do it or that it'll be too much work because once you get in your IRS account, you have your paperwork, you have the option to do a bulk upload. It should go pretty quickly. And then after that, it's just filling out a couple forms. You can, you know, work with with your business officers, you can work with your team, your school district team. And don't leave this money sitting on the table. Claim the tax credit, bring this funding to your school district. Keep in mind when you should be pre filing, depending on your accounting year. And again, the IRS does allow school districts to use either their fiscal school year or their accounting year or the calendar year to determine their tax year. So there's a lot of flexibility that is available. We do recommend pre filing as soon as your property is placed into service because it can take time. And so in order to give yourself that breathing room, great. Your chargers installed, your buses delivered, put all your documents together and get on that pre filing. Keep in mind that the annual filing deadline is going to be four and a half months after the end of your taxable year, which could be your calendar year, January through December, or it could be a different accounting year. I know a lot of school districts use July 1st through June 30th. And so four and a half months after that, you're going to need to do your annual return. So with that in mind, we definitely think that school districts can do this and get that money.
- [39:49]
A
Great. And Catherine, any anything else that you can offer that districts should be prioritizing right now? I mean, it's, it's a pretty quick turnaround. For those just listening in the 9-30-25 deadline, you have a little bit more time into next June, but anything else that you can offer to our listeners that they should really be focusing on?
- [40:07]
B
So if possible, place your vehicles into service by September 30th and you're charging infrastructure by by next June 30th, 2026. We will also include in the show notes a link to some slides where we have some timelines on in terms of Kind of when you actually acquired your vehicles and how long you have. So it's not just those who are acquiring them now, but it's folks who acquired them, perhaps earlier this year or even late last calendar year who would still be in a position to claim the credit. So we can provide more details on that. But if you haven't yet and you have the ability, go ahead and get those vehicles placed into service before September 30th. Then go on and create your IRS online account if you don't already have one. And then finally pre file as soon as your property is placed into service and at least 120 days prior to your tax return filing deadline. Those would be the steps.
- [41:02]
A
Great. So as we wind down here, Carolina advocacy is critically important. We talk a lot about it on the podcast here. But how do you see advocacy evolving around these tax credits and really just the electrification of school buses in general? Do you see policy changes coming down the line? I mean, a lot of this can be very political. What do you see kind of happening in the future?
- [41:28]
C
Well, I wish I had a crystal ball that so all of this is subject to change because who can really predict what will happen? But I will say that one thing we clearly see and have already been seeing is that we definitely see states stepping up where the federal government might be stepping back in supporting clean energy, clean transportation. States are stepping up already. There are many states who have announced funding for electric school buses in these last few months. Just off the top of my head, Maryland, Minnesota, Illinois, New Jersey, Georgia, New Mexico have all said, hey, we've got funding available for electric school buses, or we're starting electric school bus pilot projects or in some cases, utilities. Utilities are saying, hey, we're going to start a pilot project for electric school buses. We're going to create a new incentive program. So utilities are also providing more support, especially in states where there is maybe a transition goal to meet, or whether that's for transportation or for clean energy, for emissions, for sustainability, any kind of goal that the state has set for itself that school districts or other fleets may need to meet, utilities are usually providing some kind of fleet advisory support, make ready program, some sort of incentive level. So support will continue to be there. It may just be coming from a different source. At the same time, these tax credits are still going to be available. Elective pay is what's really taken a hit in this case in terms of this was a elective pay will continue to exist. So that will also be great. The tax credits themselves may look differently in the future. So the opportunity for non taxable entities like school districts to be able to claim tax credits will continue to be there. Maybe under a different Congress, a different administration, maybe even under the same administration. We may see new tax credits that school districts can take advantage of through elective payment. And that is really great. We also still have the clean School bus program which has about $2 billion left to distribute. And we are confident that EPA will follow the law, continue distributing those awards. And so that will be another opportunity for school districts to apply. And as advocates, our job is to knock on every door that we can to help school districts invest in cleaner school buses. So we're already looking at different funding and financing sources, whether that's a green bank, whether there are other financing loans or options that are available, different business models that school districts might look into, creative policies, supportive regulations, any goals or plans that can really make it easier for school districts to pursue a clean ride for kids. We know that there's a high upfront cost barrier, but we also know that the benefits, the long term total cost of ownership, the long term benefits to student health, to driver health can really outweigh those costs if you look at it holistically over the long view. And so we are seeing how we can pivot to supporting school districts where they're at, where their school boards are at, where their finances are at. And then again, there will always be some level of funding support available. It may just not be from the federal government, which is okay. This is a great time for states and for others to step up for utilities to provide that support. We know that there's demand for clean school buses. And so we're ready to see how we can meet that with all the support that we can muster.
- [45:03]
A
So Kathryn, starting with you, if listeners today want to find out a little bit more about wri, where can they go to check that out?
- [45:12]
B
Definitely. They can check out our website@electricschoolbusinitiative.org you can also reach out to me directly. I am Catherine Roboff and my email is katherine.roboffri.org I'm happy to answer questions about tax credits or school bus electrification more broadly.
- [45:32]
A
Great. And Carolina, what about aesb? Where can listeners go to find out more about what you guys are doing?
- [45:38]
C
Same thing. Our website is electric schoolbusesforkids.org we also work with WRI in that webinar. And and so I know Catherine has mentioned including that in the show Notes. That can be a really great resource. We have the slide deck that walks through all of these changes as well as other materials and resources that are available for school districts. So highly encourage folks to check that link out too. And yeah, we're here to help anyone who needs it.
- [46:05]
A
Great. Well, thank you both so much for joining me today. This is critical information and as we said at the top of the episode, there's a lot of momentum around the electrification of school buses and bring so many benefits. And you know, Carolina, to your point, it's not just these tax credits but there's many other funding streams available out there. So I encourage everybody listening to check out those resources. As was mentioned, I'll include all those links in the show notes. But with that, thank you both so much for joining me on School Business Insider.
- [46:32]
B
Thanks, John.
- [46:34]
A
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