New concepts

The Act contains several new concepts that apply across numerous credits. When evaluating the applicability of many of the credits provided for in the Act, taxpayers will need to be aware of the following. We therefore begin with these new concepts.

Prevailing wage and apprenticeship requirements

Certain credit provisions provide that only 1/5^th of the credit amount is available unless one of the following is satisfied:

1. The facility’s maximum net output is less than 1 MWac;
2. Construction of the facility began prior to (or within 60 days after) the release by Treasury or the IRS of guidance for the implementation of the prevailing wage and apprenticeship requirements; or
3. The prevailing wage and apprenticeship requirements are satisfied.

Generally, to meet the prevailing wage requirement, laborers and mechanics employed by contractors and subcontractors in construction and alteration or repair of a facility must be paid wages not less than prevailing rates as determined by the Secretary of Labor. The apprenticeship requirement generally requires that (1) certain labor hour requirements for the construction, alteration or repair work with respect to the facility must be performed by apprentices and (2) for contractors with more than four employees, one in every four employees employed by contractors or subcontractors must be a qualified apprenticeship. Failure to satisfy the wage and apprenticeship requirements may be cured through additional payments to the...

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