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New IRS Guidance for Domestic Content 10% Bonus Tax Credit for Renewable Energy Projects

Notice 2023-38 and Requirements for Bonus Production Tax Credits or Investment Tax Credits Under IRC Sections 45, 45Y, 48, or 48E

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

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Conducted on Wednesday, August 2, 2023

Recorded event now available

or call 1-800-926-7926

This CLE/CPE webinar will discuss key items under recently issued Notice 2023-38, applicable projects and the domestic content bonus opportunity, a description of domestic content items, certification and recordkeeping requirements, and next steps for renewable energy developers.

Description

The Inflation Reduction Act created a 10 percent tax credit adder to encourage the use of "domestic content" in renewable projects that qualify for the production tax credit and investment tax credit. The domestic content bonus credit is available to projects that qualify for the ITC or PTC under current Sections 48 or 45 or, beginning in 2025, Sections 48E or 45Y beginning in 2025 if all of the steel and iron and the required percentage of manufactured products included in the completed project are produced in the United States. Attorneys assisting renewable energy developers, manufacturers and investors must understand these domestic content requirements and the potential challenges involved in satisfying them.

On May 12, 2023, the IRS published Notice 2023-38, providing the rules for establishing satisfaction of the requirements to qualify for the bonus credit and a safe harbor regarding the classification of certain components. Qualifying renewable energy and storage projects built with 100 percent domestically produced steel and iron and the required percentage of manufactured products (currently 40 percent) can receive an additional 10 percent ITC or increase their PTCs by 10 percent. However, qualification for this bonus tax credit involves a thorough analysis of complex rules, providing evidence that may be difficult to obtain and consideration of available planning strategies to address related matters concerning expected tax credits, financing and the overall success of a renewable project.

Listen as our panel discusses key items under recently issued Notice 2023-38, applicable projects and the domestic content bonus opportunity, and next steps for renewable energy developers.

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Outline

  1. Inflation Reduction Act of 2022: new 10 percent domestic content bonus credit on renewables
  2. Impact of new 10 percent bonus credit for renewables
  3. Notice 2023-38: key provisions and challenges
  4. Certification and recordkeeping
  5. Key issues and pitfalls to avoid for renewable projects

Benefits

The panel will discuss these and other key issues:

  • Inflation Reduction Act of 2022 and new 10 percent domestic content bonus credit on renewables
  • Key items and challenges stemming from IRS Notice 2023-38
  • Requirements and processes involved to qualify for the domestic content bonus credit
  • Determining classification of the components of the completed project under the rules
  • Safe harbor requirements and pitfalls to avoid
  • Navigating the certification and recordkeeping requirements

Faculty

Haun, Michael
Michael D. Haun

Partner
Paul Hastings

Mr. Haun is a partner in the Tax practice of Paul Hastings and is based in the firm’s Los Angeles...  |  Read More

Levin-Nussbaum, Anne
Anne S. Levin-Nussbaum

Partner
Akerman

Ms. Levin-Nussbaum's practice encompasses a broad spectrum of US federal income tax matters, with a particular...  |  Read More

Nickel, Marc
Marc D. Nickel

Attorney
McGuireWoods

Mr. Nickel advises business on a broad range of energy issues related to U.S. federal, state, and local taxes. He has...  |  Read More

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