Stating Tech-Neutral Clean Electricity Production and Investment Tax Credits Under the Inflation Reduction Act

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TL/DR –

On May 29, 2024, the U.S. Department of the Treasury and the Internal Revenue Service issued Proposed Regulations for clean electricity production and investment tax credits under Sections 45Y and 48E of the Internal Revenue Code. These “Tech-Neutral Credits” are central to the Biden Administration’s energy incentives in the Inflation Reduction Act of 2022 and are crucial for the continued development of clean renewable energy resources in the U.S. over the next decade. The Tech-Neutral Credits will replace the legacy production tax credits (PTC) and investment tax credits (ITC) under Code Sections 45 and 48 that will sunset starting in 2025.


U.S. Government Releases Proposed Regulations for Clean Energy Tax Credits

On May 29, 2024, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued Proposed Regulations concerning the clean electricity production tax credits (Tech-Neutral PTC) and clean electricity investment tax credits (Tech-Neutral ITC). Collectively referred to as the “Tech-Neutral Credits”, these regulations fall under Sections 45Y and 48E of the Internal Revenue Code of 1986.

The Tech-Neutral Credits are the heart of the Biden Administration’s energy incentives in the Inflation Reduction Act of 2022. They are expected to significantly impact the growth of clean renewable energy in the U.S. in the following decade.

These Tech-Neutral Credits will replace the outgoing production tax credits (PTC) and investment tax credits (ITC) under Code Sections 45 and 48, which commence sunset in 2025. The regulations and requirements for claiming these new tax credits are discussed in a comprehensive white paper.

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