Alert 09.07.23
Alert
Alert
11.30.23
On November 17, 2023, the Internal Revenue Service (IRS) published proposed regulations [REG-132569-17] in the Federal Register providing further guidance on the Energy Investment Tax Credit (ITC) under section 48 of the Internal Revenue Code (IRC) of 1986, as amended. The proposed regulations expand on existing Treasury regulations under IRC section 48 to incorporate the changes made by the Inflation Reduction Act of 2022. As relevant here, the Inflation Reduction Act of 2022 extended the existing ITC for most projects that begin construction before January 1, 2025, and modified it by expanding the types of energy properties that are eligible for the credit, allowing for increased credit amounts for energy projects that satisfy the prevailing wage and apprenticeship requirements and providing opportunities for several bonus credits.
High-Level Overview of the Proposed Regulations
The proposed regulations are broad in scope and thorough. Below is a high-level overview of the topics addressed in the proposed regulations:
Final Analysis
The proposed regulations provide needed clarity to taxpayers who intend to construct energy projects that qualify for the ITC under IRC section 48 as modified by the Inflation Reduction Act of 2022. Taxpayers may rely on the proposed regulations until final regulations on the topic are published in the Federal Register.