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.
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).
Taxpayers must have profit as a primary objective of a venture to receive tax benefits that include renewable energy investment tax credits (ITCs), according to a decision issued this month by the U.S. Circuit Court of Appeals for the Tenth Circuit. The court upheld a lower court’s ruling that denied ITCs and depreciation deductions to a taxpayer, ruling that those benefits require a profit motive. The taxpayer entered a sale-and-leaseback transaction for solar lenses in a system that was never finished, yet the taxpayer claimed depreciation deductions and ITCs on the full price of the lenses, rather than the 30% that the taxpayer paid. The IRS ruled that the taxpayer lacked a profit motive and denied the depreciation deductions and ITCs.
The Internal Revenue Service (IRS) today issued an announcement with updated credit amounts for the renewable energy production tax credit (PTC) for facilities placed in service after Dec. 31, 2021. The changes are due to the Inflation Reduction Act. Announcement 2022-23 replaces the amounts published in Notice 2022-20 for those facilities. The total for such facilities is 2.75 cents per kilowatt hour for qualified energy resources of wind, closed-loop biomass, geothermal energy and solar energy. It is 1.25 cents per kilowatt hour on the sale of electricity produced by a qualified open-loop biomass, landfill gas, trash, qualified hydropower or marine and hydrokinetic renewable energy facilities.
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