Recent News
The Internal Revenue Service (IRS) and the U.S. Department of Energy (DOE) today released additional guidance on provisions in the Inflation Reduction Act of 2022 (IRA) concerning investment in underserved communities and hard-hit coal communities. Included in the guidance is a notice of proposed rulemaking for the investment tax credit (ITC) bonus for low-income communities. The proposed rule supplements February guidance released in Notice 2023-17. It provides definitions of terms, including energy storage technology and “financial benefits” for low-income residential buildings. Comments on the notice of proposed rulemaking are due by June 30.
Legislation to give renewable energy projects the ability to use master limited partnerships (MLPs) was reintroduced in the House of Representatives. The Financing Our Energy Future Act would expand MLPs–a structure currently only available for oil, gas and coal projects–to clean energy. MLPs are structured as a partnership, but the ownership interest can be traded. Solar, wind, fuel cells, energy storage and wide swath of other green energy sources would be eligible under the legislation. That would give those projects access to larger and more liquid sources of capital. Text of the bill was not immediately released, but similar legislation was introduced in 2021.
The Internal Revenue Service (IRS) today released Notice 2023-38, which details information on the domestic content bonus under the Inflation Reduction Act (IRA) of 2022 for clean energy projects and facilities that meeting American manufacturing and sourcing requirements. The bonus applies to domestically built facilities built using steel, iron and manufactured products. All steel and iron manufacturing processes must take place in the United States to receive the bonus. Developers can receive up to a 10% bonus on the production tax credit (PTC) and an additional 10 percentage points on top of the investment tax credit (ITC).
The Internal Revenue Service (IRS) today released Notice 2023-29, detailing information on the bonus credit under the Inflation Reduction Act (IRA) for clean energy projects and facilities located in communities that have historically been at the forefront of energy production. Developers can receive up to an additional 10 percentage points on top of the renewable energy investment tax credit (ITC) and production tax credit (PTC). The bonus is also available in:
areas with significant employment or local tax revenue from fossil fuel industries as long as such areas have unemployment rates at or above the national average rate over the previous 12 months, as defined by the guidance,census tracts (including adjoining tracts) in which a coal mine has closed after 1999 or in which a coal-fired electric generating plant has been retired after 2009, andBrownfields as defined in the guidance.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.
Recent Updates
