On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the Act), which extends and expands existing tax credits and adds several new energy tax credits to encourage the production of clean energy and reduce carbon emissions. On November 30, 2022, the Internal Revenue Service published Notice 2022-61 (the Notice) providing initial guidance on the Inflation Reduction Act’s Prevailing Wage and Apprenticeship Requirements.
Under the Act, taxpayers who satisfy specified prevailing wage and apprenticeship requirements may qualify for increased credit amounts under Sections 30C (Alternative Fuel Vehicle Refueling Property Credit), 45 (Renewable Electricity Production Credit), 45Q (Credit for Carbon Oxide Sequestration), 45V (Credit for Production of Clean Hydrogen), 45Y (Clean Electricity Production Credit), 45Z (Clean Fuel Production Credit), 48 (Energy Credit), 48C (Qualifying Advanced Energy Project Credit) and 48E (Clean Electricity Investment Credit) or an increased deduction amount under Section 179D (Energy Efficient Commercial Building Deduction) of the Internal Revenue Code (the Code).
Those who satisfy prevailing wage requirements may also claim an increased credit amount under Sections 45L (New Energy Efficient Home Tax Credit) of the Code and 45U (Zero-Emission Nuclear Power Production Credit) of the Code.
Taxpayers looking to comply with...
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