The U.S. IRS has announced guidance on Energy Project Credit Incentives for qualifying advanced energy projects and solar and wind power projects for low-income areas under the Inflation Reduction Act.
---
IRS and Treasury provide guidance on the Qualifying Advanced Energy Project Credit
IR-2023-27, Feb. 13, 2023
WASHINGTON — The Department of the Treasury and the Internal Revenue Service today provided guidance following the enactment of the Inflation Reduction Act to establish a program to allocate credits for qualified investments in eligible qualifying advanced energy projects.
Notice 2023-18 establishes the section 48C(e) program to allocate $10 billion in credits ($4 billion of which may only be allocated to projects located in certain energy communities census tracts). The notice also provides initial program guidance.
The Treasury Department and the IRS anticipate allocating $4 billion of section 48C credits in the first allocation round, with approximately $1.6 billion of these credits to be allocated to projects located in certain energy communities. The Treasury Department and the IRS will allocate the remaining credits in future allocation rounds. This notice also provides the general rules for determining the section 48C credit, definitions of qualifying advanced energy projects, and the procedures for allocating the credits.
The Treasury Department and the IRS will issue additional guidance by May 31, 2023, to provide more details regarding information applicants will be required to submit to request a credit allocation.
More information may be found on the Inflation Reduction Act of 2022 page on IRS.gov.
---
Treasury and IRS provide guidance on energy projects for low-income communities
IR-2023-26, Feb. 13, 2023
WASHINGTON — The Department of the Treasury and the Internal Revenue Service today provided guidance to establish a program to provide solar and wind power to certain low-income areas under the Inflation Reduction Act.
Notice 2023-17 establishes the Low-Income Communities Bonus Credit Program and provides initial guidance for potential applicants for allocations of calendar year 2023 capacity limitation.
This initial guidance provides the general eligibility requirements, a description of the four statutory facility categories for which an eligible facility may request an allocation, amounts of capacity limitation reserved for each facility category, a general description of the program design and goals, the application review process, and the proposed timeline for opening two 60-day application periods in 2023 based on project categories.
This guidance applies to owners of certain solar and wind facilities placed in service in connection with low-income communities that are eligible for the section 48 energy investment credit.
The Treasury Department and the IRS will issue additional program guidance outlining specific application procedures, applicable definitions, and other information necessary to submit an application.
More information may be found on the Inflation Reduction Act of 2022 page on IRS.gov.