Treasury Department to Issue Guidance on Clean Energy Tax Credits Provided Under the Inflation Reduction Act
The U.S. Treasury Department announced that it is set to release the guidance next week on the remaining energy tax credits included under the Inflation Reduction Act of 2022. The department will release proposed guidance on the tax credit for electric vehicles next week. The guidance will mark the end of the first phase of the implementation of the nearly $277 billion in Treasury Department clean energy credits.
Additional guidance on the bonus provisions for clean energy projects in communities whose economies are dependent on fossil fuel production is set for release before summer. The bonus provisions are designed to incentivize clean energy investment in these communities. The Treasury is awarding a 10 percent credit in addition to existing federal energy credits for projects in designated communities or designed and built with products made in the United States. The guidance will explain how to qualify for bonus credits and provide additional guidelines that define the domestic content incentive.
The Treasury Department will also issue additional guidance in the coming months on prevailing wage requirements for qualified projects. The Inflation Reduction Act set base production and investment tax credits that can be increased fivefold for projects that pay workers prevailing wages and meet apprenticeship requirements. Finally, the Treasury Department will establish IRS guardrails to ensure the credit application process for clean energy products is streamlined for rapid disbursement.