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The Internal Revenue Service (IRS) published in today’s Federal Register a notice and request for comments about the qualified advanced energy project credit.
The Internal Revenue Service (IRS) will publish proposed regulations in Wednesday’s Federal Register related to prevailing wage and apprenticeship requirements for projects to receive bonus clean energy tax credits included in the Inflation Reduction Act of 2022. Taxpayers can increase their credits or deductions by a factor of five–going from 6% to 30% for the investment tax credit (ITC), for example–if they meet the requirements for construction, installation, alteration or repair of a qualified property. The proposed guidance defines to whom the prevailing wage requirements apply, the statutory cure for failing to meet or incorrectly reporting prevailing wages and a provision that Treasury will waive penalties if there is a “qualifying project labor agreement” with workers. The proposed regulations require that qualified apprentices must perform 12.5% of total labor hours for facilities beginning construction in 2023 and 15% of total labor hours for facilities beginning construction Jan. 1, 2024, or later. The IRS released frequently asked questions document and a publication that provides an overview of the prevailing wage and apprenticeship requirements. Comments or requests for a public hearing must be received by Oct. 30 and a public hearing is scheduled for at 10 a.m. Nov. 21.
The Internal Revenue Service (IRS) will publish final regulations in Tuesday’s Federal Register for “adder” investment tax credit (ITC) percentages for solar or wind facilities built in low-income communities or in connection with federally subsidized residential buildings. The IRS and the U.S. Department of the Treasury also released a revenue procedure describing procedures to apply for allocation of the credits.
The U.S. Department of Housing and Urban Development (HUD) published updated guidance this week for public housing authorities (PHAs) and other properties participating in HUD multifamily assisted housing programs concerning financial benefits from participation in community solar energy programs or on-site solar facilities.
The Internal Revenue Service (IRS) published a notice today establishing the inflation adjustment factor for Internal Revenue Code (IRC) Section 45Q carbon sequestration for 2023 at 1.3471. Notice 2023-46 sets the Section 45Q credit for calendar year 2023 at $26.94 per metric ton of qualified carbon oxide under IRC Section 45Q(a)(1) and $13.47 per metric ton of qualified carbon oxide under IRC Section 45(Q)(a)(2). All 2023 figures represent a 7.5% increase over the 2022 levels.
The Internal Revenue Service (IRS) published a notice in Wednesday’s Federal Register, setting the 2023 reference price for the renewable energy production tax credit (PTC) for facilities producing electricity from wind. The 2023 reference price is 3.74 cents per kilowatt hour, which is 0.99 cents more than the 2022 figure. The IRS said that reference prices for other facilities producing electricity–closed-loop biomass, open-loop biomass, geothermal energy, solar energy, municipal solid waste, qualified hydropower production and marine and hydrokinetic renewable energy–have not been determined for calendar year 2023.
The Internal Revenue Service (IRS) today released two notices to clarify and update information stemming from last year’s passage of the Inflation Reduction Act (IRA) for communities that qualify for a bonus investment tax credit (ITC) and production tax credit (PTC) bonus credit of 10% due to fossil energy industry decline, particularly hard-hit coal communities.
The U.S. Department of the Treasury and Internal Revenue Service (IRS) today issued proposed guidance that will be published in the June 21 Federal Register on transferability and elective pay mechanisms established under the Inflation Reduction Act (IRA). Elective pay will allow states, local governments, nonprofits and other eligible entities access to receive a direct payment from the IRS for clean energy tax credits. Transferability allows other types of entities to sell their credits on the open market. A press release from Treasury said these provisions will expand the reach of clean energy tax credits and help developers build new projects quicker and more affordably. The IRS issued separate guidance for elective pay (which will apply to 12 clean energy tax credits, including the investment tax credit [ITC] and production tax credit [PTC]) and transferability (which will apply to 11 clean energy tax credits). It also released FAQ documents and fact sheets with key information. The Treasury press release included links to register for two stakeholder briefings–one Thursday and one June 29. Comments on the proposed guidance are due Aug. 14 and a public hearing will take place Aug. 21.
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.
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.
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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