Tax Structuring & Incentives

On Nov. 17, the IRS and Treasury Department released long-awaited proposed regulations for the Section 48 investment tax credit. Representing the first update to these regulations since 1987, they provide instructions reflecting new statutes under the Inflation Reduction Act of 2022, incorporate previous legislative changes and formally adopt administrative guidance the energy market has used

On Oct. 19, 2023, the Department of Energy began accepting applications for all categories of the Low-Income Communities Bonus Credit Program for small-scale wind and solar projects. Read on for further details about the submission portal and the tax credit program.

On Aug. 29, the U.S. Department of the Treasury and the IRS proposed regulations and new guidance regarding the prevailing wage and apprenticeship (PWA) prerequisites associated with eligibility for full-value clean energy tax credits under the Inflation Reduction Act. Read on for an overview of the rules and guidance, which provide more certainty and greater

The Inflation Reduction Act of 2022 (IRA) created a 10% tax credit adder to encourage the use of “domestic content” in renewable projects that qualify for the production tax credit (PTC) and investment tax credit (ITC). Projects built using the required amounts of U.S.-produced steel, iron and manufactured products can receive a significant 10% increase to the credits. Taxpayers have been eagerly anticipating Treasury and IRS guidance on this credit adder since the IRA was signed into law in August 2022.Continue Reading Domestic Content 10% Bonus Guidance Released (IRS Notice 2023-38)

The application process for the first round of funding for the Section 48C credit will open May 31, 2023. The IRS will issue additional guidance on the program before the application process opens but the application window closes July 31, 2023, so interested taxpayers should prepare submissions now.Continue Reading Opening Soon — Application for Section 48C Advanced Energy Project Investment Tax Credit

The Inflation Reduction Act of 2022 (IRA) created several new tax incentives to encourage the development of clean energy projects that would benefit specific communities. Among these incentives, Congress included a tax credit adder for the production tax credit (PTC) and investment tax credit (ITC) for projects in “energy communities.” The energy community adder gives a 10% multiplier to a project’s PTC value and a potential 10% addition to the ITC rate. On April 4, 2023, the IRS released Notice 2023-29 to outline the rules for claiming the energy community enhanced tax credits under Internal Revenue Code Sections 45, 45Y, 48 and 48E.Continue Reading IRS Issues Guidance for Energy Community Bonus Tax Credits – Notice 2023-29

Direct pay and transferability for energy tax credits have been available since Jan. 1, 2023, but credit transactions using these provisions have been slow to materialize due to lack of Treasury or IRS guidance. On March 22, 2023, official Treasury Department remarks by Asst. Secretary for Tax Policy Lily Batchelder offered insights into that future guidance. Continue Reading Energy Credits — Treasury, IRS Promise Direct Pay and Transferability Registry and Guidance

The Inflation Reduction Act of 2022 (IRA) created several new tax incentives to encourage developing clean energy projects that would benefit underserved communities and individuals. Among these incentives, Congress included generous adders to the Section 48 investment tax credit (ITC) for qualified solar and wind facilities deployed in specified low-income communities or residential developments (low-income community benefit adders).Continue Reading IRS Issues Guidance for Energy Tax Credits in Low-Income Communities – Notice 2023-17

On Aug. 16, 2022, President Joe Biden signed into law the Inflation Reduction Act of 2022 (IRA), which includes new and revised tax incentives for clean energy projects. This alert provides a summary of the IRA impact on solar energy tax credits, which were extended and significantly expanded. Additional alerts will provide summaries of the IRA’s impact on other clean energy technologies.Continue Reading Inflation Reduction Act Extends and Modifies Tax Credits for Solar Projects

On Aug. 16, 2022, President Joe Biden signed into law the Inflation Reduction Act of 2022 (IRA), which includes new and revised tax incentives for clean energy projects. This alert provides a summary of the IRA’s impact on tax credits for energy storage technologies, which were extended and significantly expanded. Additional alerts will provide summaries of the IRA focused on credits for other clean energy technologies.Continue Reading Inflation Reduction Act Creates New Tax Credit Opportunities for Energy Storage Projects