In a significant development for the construction industry, the Internal Revenue Service (IRS) has recently issued Notice 2024-09, providing crucial guidance on Clean Energy Credits for construction projects. This notice outlines essential details and clarifications related to the eligibility, requirements, and benefits associated with Clean Energy Credits, aiming to offer comprehensive insights to stakeholders involved in construction ventures with a focus on clean and sustainable energy practices. In this article, we will delve into the key aspects outlined in Notice 2024-09, shedding light on the implications and opportunities it brings for the construction sector.
Clean Energy Credits Overview
| Category | Details |
| Update | Clean Energy Credits |
| Issuing Authority | Department of the Treasury and IRS |
| Notice Number | 2024-09 |
| Purpose | Guidance on statutory exceptions to phase-outs for elective payment projects starting construction in 2024. |
| Applicable Credits | Renewable Electricity Production, Clean Electricity Production, Energy, Clean Electricity Investment Credits |
| Applicable Entities | Tax-exempt organizations, state and local governments, Indian tribal governments, Alaska Native Corporations, Tennessee Valley Authority, rural electric cooperatives |
| Domestic Content | Steel, iron, or manufactured products produced in the U.S. |
| Comment Period | Until Feb. 26, 2024 |
| How to Submit Comments | Online via the Federal eRulemaking Portal or by mail to the specified IRS address |
| Additional Information | Visit the IRS Inflation Reduction Act of 2022 webpage for detailed clean energy guidance. |
| Applicable Credits | Renewable Electricity Production, Clean Electricity Production, Energy, Clean Electricity Investment Credits |
| Applicable Entities | Tax-exempt organizations, state and local governments, Indian tribal governments, Alaska Native Corporations, Tennessee Valley Authority, rural electric cooperatives |
| Domestic Content | Steel, iron, or manufactured products produced in the U.S. |
| Comment Period | Until Feb. 26, 2024 |
| How to Submit Comments | Online via Federal eRulemaking Portal or by mail to the specified IRS address |
| Additional Information | Visit the IRS Inflation Reduction Act of 2022 webpage for detailed clean energy guidance. |
| Official website | www.irs.gov |
Clean Energy Credits
The Department of the Treasury and the Internal Revenue Service (IRS) have released Notice 2024-09, outlining procedures for applicable entities to claim the statutory exception to phaseouts for elective payment projects starting construction in 2024. This exception applies to projects failing the domestic content requirement, impacting credits such as the Renewable Electricity Production Credit and Clean Electricity Investment Credit.
Content:
The phaseouts and exceptions affect the following credits:
- Renewable Electricity Production Credit (IRC § 45)
2. Clean Electricity Production Credit (IRC § 45Y)
3. Energy Credit (IRC § 48)
4. Clean Electricity Investment Credit (IRC § 48E)
Applicable entities, including tax-exempt organizations, state and local governments, and others, are subject to these rules.
Domestic Content Requirement:
– Definition: Steel, iron, or manufactured products made in the U.S.
– Applicability: Unless a statutory exception applies, phaseouts affect projects generating 1+ megawatts of electricity failing to meet the domestic content requirement.
Comment Period:
– Comments Requested: Treasury and IRS invite comments for future proposed regulations.
– Focus Areas: Expected impact on qualified facilities, factors defining construction costs, and documentation requirements.
– Deadline: Written comments accepted until Feb. 26, 2024.
How to Submit Comments:
– Online: Via the Federal eRulemaking Portal (search IRS-2023-0062).
– Mail: Internal Revenue Service, Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
More Information:
– Visit the IRS Inflation Reduction Act of 2022 webpage for comprehensive clean energy guidance.
Bottom line
In a groundbreaking move for the construction industry, the Department of the Treasury and the Internal Revenue Service (IRS) have released Notice 2024-09, providing crucial guidance on Clean Energy Credits. This notice details procedures for claiming the statutory exception to phaseouts for elective payment projects commencing construction in 2024. Applicable to credits such as the Renewable Electricity Production Credit and Clean Electricity Investment Credit, the guidelines set standards for domestic content requirements and invite public comments on various focus areas. Stakeholders, including tax-exempt organizations, local governments, and others, should stay informed for future proposed regulations and contribute insights by the February 26, 2024 deadline. For more details, visit the IRS Inflation Reduction Act of 2022 webpage.
FAQs
Which Clean Energy Credits are affected by phaseouts and exceptions according to Notice 2024-09?
The outlined phaseouts and exceptions impact significant credits, including the Renewable Electricity Production Credit, Clean Electricity Production Credit, Energy Credit, and Clean Electricity Investment Credit.
Who is subject to the rules outlined in Notice 2024-09, and what is the Domestic Content Requirement?
Applicable entities, such as tax-exempt organizations, state and local governments, and others, are subject to these rules. The Domestic Content Requirement specifies that projects generating 1+ megawatts of electricity need to meet certain criteria unless a statutory exception applies.
How can stakeholders contribute feedback on Notice 2024-09, and what are the focus areas for comments?
Stakeholders can submit comments online through the Federal eRulemaking Portal or by mail to the IRS. The comment period focuses on the expected impact on qualified facilities, factors defining construction costs, and documentation requirements, with a deadline for written comments until Feb. 26, 2024. For more information, visit the IRS Inflation Reduction Act of 2022 webpage.
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