New IRS Guidance for Beginning of Construction, Prevailing Wage, and Apprenticeship Requirements Under the IRA

Description

On Nov. 30, 2022, the IRS issued Notice 2022-61 providing guidance on requirements to qualify for enhanced credit amounts for several clean energy tax credits. Counsel must understand the challenges and key considerations for the PTC, ITC, and carbon capture credit, as well as the impact on renewable energy developers, producers, and investors in light of new IRS guidance.

The IRA expands tax incentives for various renewable energy resources, reshapes how eligible renewable energy projects are financed, and monetizes new and expanded tax credits. The Act includes (1) modifications to ITC, PTC, and carbon capture credit requirements and limitations; (2) the inclusion of a "direct pay" option for tax credits under certain circumstances; (3) the inclusion of a tax credit transfer regime; and (4) a variety of new energy tax credits.

IRS Notice 2022-61 provides guidance on the prevailing wage requirements under Section 45(b)(7)(A) and the apprenticeship requirements under Section 45(b)(8). These items must be satisfied to qualify for enhanced credit amounts for the ITC under Code Sections 48 and 48E, the PTC under Code Sections 45 and 45Y, and the carbon capture and sequestration credit under Section 45Q under certain circumstances. In addition, the IRS also provides guidance concerning the beginning of construction requirements under the IRA.

Listen as our panel discusses new green energy tax incentives and requirements under the IRA, beginning of construction guidance, and qualifying for enhanced credit amounts for the PTC, ITC, and carbon capture and sequestration credit in light of the IRA.