Workers on the roof of a construction project - ira prevailing wage and apprenticeship

On June 18, 2024, Treasury released the final regulations regarding the IRA prevailing wage and apprenticeship (PW&A) requirements which were established through the Inflation Reduction Act (IRA) [1]. These rules will affect taxpayers intending to qualify for increased amounts of credit or deduction for satisfying PW&A. We anticipate the rules will be effective on Aug. 24, 2024 (60 days after publication in the Federal Register).

The final regulations are generally consistent with the proposed regulations published on Aug. 30, 2023. Some updates or reiterations are addressed in the final regulations, such as:

  • Defining dates that impact the wage determination in effect and timing for supplemental wage and additional classification requests
  • Clarifying that the apprentice ratios and wages of the geographic area take precedence over apprenticeship program a different geographic area
  • Detailing the facts and circumstances that will determine taxpayer intentional disregard
  • Exempting tribal members performing the work of laborer or mechanic from prevailing wage on projects owned fully or jointly by tribal entity
  • Excepting taxpayers from PW&A requirements for any activity prior to Jan. 29, 2023
  • Updating the Good Faith Effort procedures for contractors that need to request qualified apprentices to meet the apprenticeship participation requirement
  • Providing transition relief to the taxpayers that started construction before Jan. 29, 2023 and for activities that are considered construction, alteration or repair of qualified facility that occurred prior to Jan. 29, 2023, taxpayers are except from the prevailing wage requirements

These final regulations provide taxpayers with the necessary clarity and certainty to support the growth and compliance of qualified projects under the IRA.

Check back soon for additional information related to the final regulations.

Take action

Don’t let the fear of complexity around PW&A guidance in the IRA deter you from getting started today. We’ve developed an end-to-end solution for contractors and credit seekers that establishes, monitors and documents compliance with prevailing wage, apprenticeship and penalty requirements.

Maximize your IRA tax credits by complying with the PW&A requirements. Contact a PW&A specialist.

nature wind climate change

Why Inflation Reduction Act (IRA) is not the same as Davis-Bacon

IRA prevailing wage and apprenticeship requirements can significantly enhance the value of tax credits for qualifying energy projects, a five times multiplier. However, unlike Davis-Bacon, compliance is complex and challenging to verify.

Construction project leaders review the construction contracting process

Navigate prevailing wage and apprenticeship guidance to earn 5x enhanced IRA credit value

Discover how proactive management of prevailing wage and apprenticeship guidance can maximize tax credits and minimize penalties. Explore Baker Tilly’s solution for claiming IRA credits.

contractor installing solar panel

Streamlining Inflation Reduction Act prevailing wage and apprenticeship compliance

Explore how the Inflation Reduction Act prevailing wage and apprenticeship compliance differs from Davis-Bacon regulations, discover strategies to maximize tax credit potential and navigate compliance complexities for contractors and project owners.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.

Laura Cataldo
Government building
Next up

It's PCORI fee season, but you already knew that ... right?