JD Supra | December 5, 2022
On Nov. 29, the Treasury Department (Treasury) and the Internal Revenue Service (IRS) published Notice 2022-61, Prevailing Wage and Apprenticeship Initial Guidance under Section 45(b)(6)(B)(ii) and Other Substantially Similar Provisions (Notice). The Notice provides initial guidance on the prevailing wage and apprenticeship requirements taxpayers must satisfy to qualify for increased energy credits or deduction amounts enacted in the Inflation Reduction Act (IRA) (P.L. 117-169).
The prevailing wage and apprenticeship requirements apply to the following tax incentives:
- Advanced Energy Project Credit (§ 48C)
- Alternative Fuel Refueling Property Credit (§ 30C)
- Credit for Carbon Oxide Sequestration (§ 45Q)
- Clean Fuel Production Credit (§ 45Z)
- Credit for Production of Clean Hydrogen (§ 45V)
- Renewable Energy Production Tax Credit (§ 45, § 45Y)
- Renewable Energy Investment Tax Credit (§ 48, § 48E)
- Energy Efficient Commercial Buildings Deduction (§ 179D)
The prevailing wage requirements also apply to the following tax incentives:
- New Energy Efficient Home Credit (§ 45L)
- Zero-Emission Nuclear Power Production Credit (§ 45U)
Under the statute, prevailing wage and apprenticeship requirements apply to qualifying facilities that begin construction 60 days or more after the Treasury and IRS publish guidance. This Notice starts the clock on the statutory 60-day period, meaning the requirements will be in effect for facilities that begin construction on or after Jan. 29, 2023. For facilities the construction of which begins prior to that date, the increased credit amount applies without regard to these labor requirements.
