The Financial Accounting Standards Board (FASB) today published Accounting Standards Update (ASU) 2023-02, which expands the proportional amortization method to account for investments in all tax credit structures. That accounting method was previously allowed only for low-income housing tax credit (LIHTC) investments, but now is available, by election, to all community development tax credit investment reporting that meets five conditions. Under the new guidance, reporting entities can make accounting policy elections on a tax-credit-program-by-tax-credit-program basis, rather than for individual investments or at the reporting entity level. For public business entities, the new amendments are effective for fiscal years beginning after Dec. 15, 2023. For all other entities, the amendments are effective for fiscal years beginning after Dec. 15, 2024. Early adoption is permitted for all entities in any interim period. For calendar-year-end entities, this would include the first quarter ending March 31, 2023.
Sens. Sheldon Whitehouse, D-Rhode Island, and Bill Cassidy, R-Louisiana, today introduced legislation to create parity between the credit value in the Internal Revenue Code (IRC) Section 45Q for use and sequestration of the carbon capture tax credit. S. 542, The Carbon Capture Utilization Parity Act, would increase the value for direct air capture use of carbon to $180 per metric ton and increase the value for power and industrial sector use to $85 per metric ton. Those amounts would equal the incentives for carbon capture and sequestration. The bill was also introduced in the House of Representatives as H.R. 1262. The text of the legislation was not yet available, but Whitehouse’s office released a summary of the legislation.
The Internal Revenue Service (IRS) today published initial guidance on how it will allocate 1.8 gigawatts of capacity in bonus renewable energy investment tax credits (ITCs) to low-income communities as provided in the Inflation Reduction Act (IRA) as well as guidance on the qualifying advanced energy project credit program.
Technical and administrative guidance released today by the Organization for Economic Co-Operation and Development (OECD)/Group of Twenty (G20) provides clarification on the treatment of key community development tax incentives concerning a global minimum tax (GMT) on multinational corporations. More than 140 nations agreed with the guidance, which will form a common approach for countries to implement the rules concerning the GMT.
The U.S. Department of the Treasury today announced plans to provide key guidance before the end of the year on specific clean energy tax provisions included in the Inflation Reduction Act of 2022.
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