The U.S. Department of the Treasury today issued six notices seeking public input on climate and clean energy incentives including renewable energy tax credits (RETCs) such as the production tax credit (PTC) and investment tax credit (ITC) related to the Inflation Reduction Act (IRA) passed in August. The notices, which cover energy generation incentives, credit enhancements, incentives for homes/buildings, consumer vehicle credits, manufacturing credits and credit monetization, request input on specific questions as well as solicit general comments. Further opportunities for public input will come at later dates. Today’s release also includes a fact sheet with additional information about the notices and the Internal Revenue Service’s plan for implementation. Treasury requested responses for the six proposals released today by Nov. 4.
Novogradac has resources available for private companies and nonprofits affected by Accounting Standards Codification (ASC) 842, which changed lease accounting standards. The change–which took effect Jan. 1 for fiscal years beginning after Dec. 15, 2021–affects the way certain contracts are accounted for under generally accepted accounting principles, particularly entities that are lessees. Rather than disclosing operating leases in notes to financial statements, but not on balance sheets, the new guidance requires lessees to record a right-of-use asset for the leased asset and a corresponding lease liability equal to the financial obligation over the lease term, as well as new disclosure requirements.
Internal Revenue Service (IRS)-published inflation adjustment rates for Internal Revenue Code Section 45Q carbon oxide sequestration for calendar year 2022 are a slight increase over 2021. Notice 2022-38 provides a 1.2534 adjustment multiplier, putting the credit for calendar year 2022 at $25.07 per metric ton of qualified carbon oxide under Section 45Q(a)(1) and $12.53 per metric ton of qualified carbon oxide under Section 45Q(a)(2). Those totals are $1.06 per ton and 48 cents per ton more than the 2021 figures.
The Financial Accounting Standards Board (FASB) today released an exposure draft of a proposed accounting standards update that would allow the expanded use of the proportional amortization method to account for investments in tax credit structures.
Massachusetts Gov. Charlie Baker signed into law a broad clean energy bill that creates a 50% investment tax credit (ITC) for large offshore wind facilities. H. 5060 allows the offshore wind tax credit to be taken ratably over five years and applies to properties where the owner or tenant has a total capital investment of at least $35 million and employs at least 200 new full-time employees by the fifth year. For tenants to take the credit, they must occupy at least 25% of the owner’s capital investment in the facility. The credit has a $35 million annual statewide cap.
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