Mapping the future of the energy community tax credit bonus

On June 23, 2025, the IRS released Notice 2025-31, updating the energy community tax credit bonus under the Inflation Reduction Act (IRA). The notice revises eligibility criteria and refines definitions for statistical area and coal closure categories, while brownfield qualifications remain unchanged.

Leveraging updated guidance, our energy community mapping tool has been refreshed to reflect the latest eligibility criteria. The updated tool now includes:

• Updated definitions: The IRS now uses 2020 census data to define “Vintage 2” metropolitan statistical areas (MSAs) and non-metropolitan statistical areas (non-MSAs), augmenting the previous “Vintage 1” definitions based on 2010 census data. The mapping tool now supports both Vintage 1 and Vintage 2 MSAs and non-MSAs and associated counties, enabling eligibility checks under either classification. It also uses county-level qualification based on fossil fuel employment and unemployment thresholds, and includes Appendix 3 data for counties qualifying under one or both vintages, ensuring accurate visual mapping of eligible locations for the energy community bonus credit. This dual-vintage approach ensures that users can identify eligibility even if a county qualifies under only one vintage, which is sufficient for claiming the credit.
• Expanded eligibility: Newly eligible census tracts have been added under the coal closure category, based on updated data and corrections provided in Notice 2025-31.
• Clarified criteria: MSAs and non-MSAs must meet both the fossil fuel employment threshold and the unemployment thresholds under the same vintage to qualify. Additionally, the mapping tool now incorporates all coal closure census tracts from IRS Notices 2023-29, 2023-45, 2024-30, 2024-48 and 2025-31, including directly adjoining tracts that share boundaries with closed coal facilities, and also supports retroactive eligibility checks using corrected data provided in IRS Notice 2025-31 Appendix 5.

Why it matters

Our mapping tool enables users to quickly determine whether a project site may qualify for the energy community bonus credit under the IRA. It is designed to support developers, investors, and advisors navigating clean energy incentives.

The recent changes can significantly impact project eligibility and bonus credit amounts under sections 45, 45Y, 48 and 48E of the Internal Revenue Code. Use this tool to ensure you’re working with the most current data and maximizing incentives. For a deeper dive into mapping tool updates, see our previous article "IRS releases updates to energy community bonus credit rules."

Take the leap

Connect with Baker Tilly’s IRA specialists to understand these changes thoroughly and to see if your project might qualify for the energy community bonus credit.

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.