The Department of the Treasury and the IRS unveil a crucial notice outlining procedures for claiming statutory exceptions to phaseouts for elective payment projects commencing construction in 2024.
The Treasury Department and the IRS are gearing up to introduce forthcoming regulations, addressing the implementation of statutorily-required exceptions to phaseouts outlined in Internal Revenue Code sections
These phaseouts impact credits under Code sections 45, 45Y, 48, or 48E, pertaining to property placed in service by Applicable Entities making elective payment elections under § 6417, provided the property fails to meet domestic content requirements.
In cases where Statutory Elective Payment Phaseouts are applicable, elective payment amounts received by Applicable Entities are subject to reduction, emphasizing the importance of compliance with domestic content requirements.
The notice introduces transitional procedures for taxpayers, enabling them to claim statutory exceptions to the application of Statutory Elective Payment Phaseouts.
To qualify for exceptions, construction of Applicable Credit Property (e.g., qualified facilities, energy projects, or qualified investments) must commence before January 1, 2025.
The IRS will accept an attestation from Applicable Entities as evidence that statutory exceptions are met for Applicable Credit Property beginning construction before 2025.
– Additionally, stakeholders are invited to provide comments, shaping the development of forthcoming proposed regulations for projects commencing on or after January 1, 2025.