IRS Issues Notice of Proposed Rules on Wage, Apprenticeship Guidance for Clean Energy Tax Credits; Comments Due October 30
Published October 26, 2023
The Internal Revenue Service (IRS) and Treasury Department have released corrections to the text of the proposed rules released on August 31, 2023.
Comments are still required to be submitted by October 30, 2023.
(Updated October 26, 2023)
The Internal Revenue Service (IRS) and Treasury Department have issued proposed rules related to the increased tax credit or deduction amounts for clean energy facilities and projects if taxpayers satisfy certain prevailing wage and registered apprenticeship (PWA) requirements established by the Inflation Reduction Act of 2022 (IRA).
The Inflation Reduction Act provides increased credit or deduction amounts that generally apply for taxpayers who satisfy certain PWA requirements regarding the construction, installation, alteration or repair of a qualified facility, qualified property, qualified project, qualified equipment or for certain energy facilities.
Under the tax law, the increased credit or deduction amount is generally equal to the base amount multiplied by five if the taxpayer satisfies the PWA requirements. There are certain limited exceptions where a taxpayer may be eligible for an increased credit amount without satisfying the PWA requirements.
The proposed rules would:
- Affect taxpayers intending to satisfy the PWA requirements for increased Federal income tax credits or deductions
- Affect taxpayers intending to satisfy the prevailing wage requirements for increased Federal income tax credit amounts that do not have associated apprenticeship requirements;
- Affect taxpayers who initially fail to satisfy the PWA or prevailing wage requirements and subsequently comply with the correction and penalty procedures in order to be deemed to satisfy the PWA or prevailing wage requirements;
- Address specific PWA or prevailing wage recordkeeping and reporting requirements; and
- Affect taxpayers intending to claim increased credit or deduction amounts pursuant to the IRA, including those intending to make elective payment elections for available credit amounts, and those intending to transfer increased credit amounts.
A public hearing on the proposed regulations is scheduled to be held on November 21, 2023, at 10 a.m. ET. Requests to speak and outlines of topics to be discussed at the public hearing must be received by October 30, 2023. If no outlines are received by October 30, 2023, the public hearing will be cancelled. Requests to attend the public hearing must be received by 5 p.m. ET on November 17, 2023.
Comments on the proposed rules are due October 30, 2023.
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Publication 5855