IRS Clarifies Guidance for PTC, ITC Developments
The Internal Revenue Service (IRS) recently released Notice 2014-46, clarifying Notices 2013-29 and 2013-60, regarding how to satisfy the physical work test and the ability to transfer a facility after construction has begun for purposes of the production tax credit (PTC) or investment tax credit (ITC). Notice 2014-46 states that a fully or partially developed facility may be transferred without losing its qualification under the physical work test or the safe harbor for purposes of the PTC or ITC. In addition, the notice modifies the application of safe harbor for certain facilities where a taxpayer paid or incurred less than 5 percent, but at least 3 percent, of the total cost of the facility before Jan. 1, 2014.
Tune in to the Aug. 19 Tax Credit Tuesday podcast to learn more about Notice 2014-46.