Earlier today, Oct. 5, the IRS issued six new public notices concerning upcoming energy guidance on many of the tax incentives included in the recently passed Inflation Reduction Act (IRA). Each notice includes a brief description of the provision as drafted in the legislation, providing some preliminary insights on how these credits may be interpreted.
In the final section of each notice, several questions are posed to the public related to the implementation of each credit. Many of these questions concern the ongoing development of definitions and parameters for new, previously undefined terms. The IRS requests responses to this first round of questions by Friday, Nov. 4.
Tomorrow, Oct. 6, the White House is hosting a virtual briefing to begin to explain the rollout of guidance related to these credits. Individuals can register for the webinar here.
Last week, Treasury Secretary Janet Yellen announced that the IRS and Treasury Department would soon begin a series of meetings to discuss these credits. Yellen suggested that these events will be local roundtables that include representatives from the Treasury Department and the IRS, as well as experts from the private sector and nonprofits that could be eligible for benefits through the clean-energy sections of the IRA. Yellen said that these meetings would be helpful in shaping regulations to ensure that the credits work most effectively for taxpayers.
To date, the Treasury Department and IRS have released almost no information on a potential timeline for when taxpayers may expect guidance concerning the implementation of the IRA’s energy sections. While many aspects of the energy tax credits are relatively straightforward and/or extensions of current law, several key provision will require significant explanation. Guidance on these credits will likely come slowly as the Treasury Department works to expedite internal staffing to contend with the implementation of both new energy and several nonenergy tax provisions enacted in the new legislation.
The six notices are soliciting public feedback on the following Internal Revenue Code sections:
Clean Vehicles – Notice 2022-46
Sec. 30D Clean Vehicle Credit
Sec. 25E Previously Owned Clean Vehicle Credit
Advanced Manufacturing – Notice 2022-47
Sec. 45X Advanced Manufacturing Production Credit
Sec. 48C Advanced Energy Project Credit
Home and Business Energy Incentives – Notice 2022-48
Sec. 25C Energy Efficient Home Improvement Credit
Sec. 25D Residential Clean Energy Credit
Sec. 45L New Energy Efficient Home Credit
Sec. 197D Energy Efficient Commercial Buildings Deduction
Energy Generation – Notice 2022-49
Sec. 45 Renewable Electricity Production Credit
Sec. 48 Energy Investment Credit
Sec. 45U Zero-Emission Nuclear Power Production Credit
Sec. 45Y Clean Electricity Production Credit
Sec. 48E Clean Electricity Investment Credit
Credit Payment Structures – Notice 2022-50
Sec. 6417 Direct Payment of Certain Credits
Sec. 6418 Transfer of Certain Credits
Bonus Credit Requirements – Notice 2022-51
Prevailing Wage – (Secs. 30C, 45, 45L, 45Q, 45U, 45V, 45Y, 45Z, 48, 48C, 48E and 179D)
Apprenticeship – (Secs. 30C, 45, 45Q, 45V, 45Y, 45Z, 48, 48C, 48E and 179D)
Domestic Content – (Secs. 45, 45Y, 48 and 48E)
Energy Communities – (Secs. 45, 45Y, 48 and 48E)
If you are interested in providing feedback to the IRS and Treasury Department, please contact Russ Sullivan of the Brownstein Tax Policy Group at rsullivan@bhfs.com or 202-383-4423.
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