IRS Guidance Releases Energy Community Bonus Credit Amounts Under the Inflation Reduction Act of 2022
The Internal Revenue Service (IRS) today released Notice 2023-29, detailing information on the bonus credit under the Inflation Reduction Act (IRA) for clean energy projects and facilities located in communities that have historically been at the forefront of energy production. Developers can receive up to an additional 10 percentage points on top of the renewable energy investment tax credit (ITC) and production tax credit (PTC). The bonus is also available in:
- areas with significant employment or local tax revenue from fossil fuel industries as long as such areas have unemployment rates at or above the national average rate over the previous 12 months, as defined by the guidance,
- census tracts (including adjoining tracts) in which a coal mine has closed after 1999 or in which a coal-fired electric generating plant has been retired after 2009, and
- Brownfields as defined in the guidance.
Further guidance incorporating county unemployment data for the fossil fuel industry eligibility category is expected to be released in May. Treasury and IRS also announced a 30-day comment period on the guidance. Comments are due May 4. Contact the Renewable Energy Working Group to participate in the group’s comment letter.
Treasury and the IRS intend to propose that the regulations will apply to taxable years ending after April 4, 2023.
Use and expansion of clean energy incentives will be a topic at the Novogradac 2023 Spring Renewable Energy and Environmental Tax Credits Conference, May 18-19 in San Diego.