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Energy Tax Credits – Final Regulations on Transferability and Guidance on Domestic Content

May 23, 2024

Via: JD Supra

The Treasury Department and IRS recently issued final regulations on the transfer of certain credits to implement the transferability provisions of the Inflation Reduction Act (IRA), which take effect on July 1, 2024. Moreover, on May 16, 2024, the IRS published Notice 2024-41, which provided additional guidance on the domestic content requirement for bonus credit amounts.

Background: IRA Tax Credits for Renewable Energy Industry

As discussed in this Pierce Atwood alert, the IRA brought welcome news to the renewable energy industry. The IRA significantly altered the energy tax credit regime, including extensions and expansions of the investment tax credit (ITC) under Section 48 and the production tax credit (PTC) under Section 45, which also include 10% bonus credit amounts for projects that meet the domestic content requirement and other certain conditions. The ITC and PTC apply to projects beginning construction before January 1, 2025.

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