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IRS Issues Guidance for Energy Communities and Bonus Credit Program

Friday, March 22, 2024 - 10:46AM

The Internal Revenue Service (IRS) issued Notice 2024-30 today to expand certain rules for determining what an energy community is for the production and investment tax credits. The Inflation Reduction Act of 2022 (IRA) allows for increased tax credit amounts or rates if certain requirements are met relating to energy communities. The IRS today published Appendix 1 to identify additional metropolitan statistical areas (MSAs) and non-MSAs that meet the Fossil Fuel Employment Threshold and Appendix 2 to identify additional MSAs and non-MSAs that qualify as energy communities in 2023 by meeting the Fossil Fuel Employment threshold and unemployment rate requirement for calendar year 2022.

The notice expands the Nameplate Capacity Attribution Rule in Notice 2023-29 to include additional attribution property and to add two 2017 North American Industry Classification System industry codes for purposes of determining the Fossil Fuel Employment Rate. The IRS also updated its frequently asked questions page for energy communities.

The effects and implications of the IRA will be a topic at the Novogradac 2024 Spring Renewable Energy Tax Credits Conference, May 16-17 in San Diego.

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