Which statement correctly describes the irrevocability rule for tax credit options?

Which statement correctly describes the irrevocability rule for tax credit options?

• A. The carry-over option has no irrevocability
• B. The irrevocability rule applies to all tax credit options
• C. There is no irrevocability rule
• D. The carry-over option is irrevocable, but the option to refund or issuance of tax credit certificate is not irrevocable

Answer: (D)

Irrevocability means you’re stuck with your chosen path for the tax credit option. When you elect to carry the unused credit forward to future years, that choice is binding—you can’t reverse it later. The option to receive a refund or to obtain a tax credit certificate, on the other hand, isn’t irrevocable, so those paths can be adjusted under the program’s rules. That’s why this statement is correct: the carry-over option is irrevocable, but the refund or certificate option is not irrevocable. The other options aren’t accurate because they deny irrevocability altogether or claim it applies to all options.

Irrevocability means you’re stuck with your chosen path for the tax credit option. When you elect to carry the unused credit forward to future years, that choice is binding—you can’t reverse it later. The option to receive a refund or to obtain a tax credit certificate, on the other hand, isn’t irrevocable, so those paths can be adjusted under the program’s rules. That’s why this statement is correct: the carry-over option is irrevocable, but the refund or certificate option is not irrevocable. The other options aren’t accurate because they deny irrevocability altogether or claim it applies to all options.