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IRS Clarifies Capacity Limitations for 2024 Round of Low-Income Communities ITC Adder

Friday, March 29, 2024 - 4:09PM

The Internal Revenue Service (IRS) today issued guidance providing the capacity limitations for the four project categories in the 2024 program round of the 1.8-gigawatt low-income communities bonus credit program established in 2022’s Inflation Reduction of Act (IRA) for solar and wind projects using the investment tax credit (ITC). Compared to the 2023 program year, Rev. Proc. 2024-19 moves 100 megawatts (MW) of capacity from Category 1 for projects located in low-income communities to Category 4, qualified low-income economic benefit projects. Category 2, which is up to 200 MW for projects on Indian lands, and Category 3, which offers the incentive for up to 200 MW to qualified low-income residential building projects, are unchanged from the 2023 program year. For the 2024 program year, at least 50% of the capacity of each category is reserved for projects meeting certain ownership and/or geographic selection criteria. Applications for the 2024 round will open in the second quarter of 2024.

Delve deeper into the guidance of renewable energy adders from the IRA at the Novogradac 2024 Spring Renewable Energy Tax Credits Conference, May 16-17 at the Rancho Bernardo Inn in San Diego.

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