As previously discussed in our blog Inflation Reduction Act: Wage and Apprenticeship Requirements, the Inflation Reduction Act (the “IRA”) restructured the tax credit system associated with qualified clean energy projects. In particular, to receive the full value of various tax credits, companies must now pay the prevailing wage rates and employ a certain number of registered apprentices in the construction, alteration, and/or repair of qualified clean energy facilities or projects as defined under the Code.Continue Reading Inflation Reduction Act: Prevailing Wage and Apprenticeship Requirement FAQs and Key Takeaways from the Initial Guidance from the Treasury and IRS
President Joe Biden signed into law the Inflation Reduction Act of 2022 (“HR 5376”) (the “IRA” or the “Act”), on August 16, 2022.
There are numerous tax credits in the legislation that intend to facilitate access to clean energy. For the most part, these credits are available to energy producers or to support the construction or alteration of facilities to include energy efficient components. For example, the Act substantially changes and expands existing federal income tax benefits for renewable energy, including the existing Section 45 of the Internal Revenue Code production tax credit (“PTC”) and Section 48 of the Internal Revenue Code investment tax credit (“ITC”). Specifically, the Act replaced the renewable energy credit regime with a two-tiered system that would provide a “base” credit equal to 20% of the maximum credit and an “increased” credit equal to an additional 80% of the maximum credit that would be available only if certain prevailing wage and apprenticeship requirements are satisfied in connection with the relevant project.Continue Reading Inflation Reduction Act: Wage and Apprenticeship Requirements