Morgan Lewis Reports on IRS and Treasury’s Credit Transfer Guidance to Boost Sales of Clean Tech Industry Tax Credits for IRA.

IRS and Treasury Release Regulations on Transfer of Clean Technology Industry Federal Income tax credits

The Internal Revenue Service (IRS) and US Department of the Treasury (Treasury) have released temporary regulations and proposed regulations relating to the transfer of certain clean technology industry federal income tax credits pursuant to Section 6418 of the Internal Revenue Code of 1986. The regulations were enacted under the inflation reduction act of 2022.

The Transferability Guidance

The transferability guidance comprises both temporary and proposed regulations and provides information on the transfer of certain clean technology industry federal income tax credits. The regulations aim to assist taxpayers in claiming a credit for investment in qualified clean energy projects.

The temporary regulations provide guidance for taxpayers on the transfer of the credits, including the allocation of credits among partners in a partnership. The proposed regulations provide guidance on the definition of a qualified facility, the allowance of a credit for investment in qualified clean energy projects, and the recapture of the credit.

Section 6418 of the Internal Revenue Code of 1986

Section 6418 of the Internal Revenue Code of 1986 was enacted under the inflation reduction act of 2022. The provision aims to encourage investment in qualified clean energy projects by allowing taxpayers to claim a credit for such investments.

The credit is available for qualified clean energy projects that have been placed in service after December 31, 2022. The credit is equal to a percentage of the eligible basis of the project, with the percentage varying based on the type of project.

Full Publication

For more information on the transfer of certain clean technology industry federal income tax credits pursuant to Section 6418 of the Internal Revenue Code of 1986, please refer to the full publication by the IRS and Treasury.

In conclusion, the IRS and Treasury have released temporary regulations and proposed regulations relating to the transfer of certain clean technology industry federal income tax credits. The regulations aim to provide guidance to taxpayers on claiming a credit for investment in qualified clean energy projects. The regulations will assist taxpayers in the allocation of credits among partners in a partnership and provide guidance on the definition of a qualified facility, the allowance of a credit for investment in qualified clean energy projects, and the recapture of the credit.

Original Story at www.jdsupra.com – 2023-06-26 17:50:15