IRS Issues Guidance Extending Safe Harbor for RETC Properties Located Offshore or on Federal Land

Thursday, December 31, 2020 - 4:00pm

The Internal Revenue Service (IRS) today issued guidance to provide an extension of the safe harbor for taxpayers who are developing renewable energy projects offshore or on federal land. Notice 2021-5 provides flexibility for taxpayers using the production tax credit (PTC) or investment tax credit (ITC) to finance their qualifying projects despite ordinary-course delays that threaten their ability to claim the credits. Properties located offshore or on federal land that are using the ITC have the beginning-of-construction deadline extended until Dec. 31, 2025, and the phaseout for the PTC doesn’t apply. The beginning-of-construction deadline is also extended to Dec. 31, 2025, for qualifying projects for which a taxpayer can elect to claim the ITC in lieu of the PTC.