The Internal Revenue Service (IRS) will publish a notice in Wednesday’s Federal Register providing guidance on the prevailing wage and apprenticeship requirements that allow bonus credit percentages for certain renewable energy provisions of the Inflation Reduction Act (IRA). The notice also provides guidance for determining the beginning of construction date for certain credits. Under the IRA, properties that meet prevailing wage and apprenticeship requirements qualify for the 30% renewable energy investment tax credit (ITC) and the $26 per megawatt-hour production tax credit (PTC). Those requirements apply for facilities, projects, property or equipment that begin construction 60 days or more after publication in the Federal Register, which means those standards are not required for any project that begins construction before Jan. 28, 2023. The IRS guidance provides the process to determine the applicable wage determination and provides specificity concerning the apprenticeship labor hour, ratio and participation requirements, along with examples. The notice also confirms that properties are determined to have begun construction if they meet tests and safe harbors in earlier IRS notices, including those in Notice 2013-29 and Notice 2016-31.

Novogradac’s Renewable Energy team can help clients navigate the requirements for various clean energy incentives.