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Proposed guidance released for construction projects eligible for clean energy tax credits

New sections 45Y and 48E guidance now available

On May 29, 2024, Treasury released a notice of proposed rulemaking and notice of public hearing for section 45Y and section 48E clean energy tax credits (collectively, clean electricity tax credit), which were established through the Inflation Reduction Act. The proposed regulations for sections 45Y and 48E are applicable for clean electricity projects placed in service after Dec. 31, 2024.

The proposed regulations also provide detailed guidance on various topics, including how to calculate greenhouse gas emissions, a detailed description of metering devices and related parties, examples of integral components for qualified facilities, and detailed guidance and comment requests on combustion and gasification (C&G) facility. A number of other topics are discussed in the proposed regulations, including the coordination with other credits, combined heat and power (CHP) properties and recapture events. With this proposed guidance, investors and developers will have more certainty, which will facilitate the growth of clean electricity projects in the U.S.

The public hearing on these proposed regulations is scheduled for Aug. 12-13, 2024. By Aug. 2, 2024, written or electronic comments on the proposed regulations will be accepted.

Check back soon for additional information and key takeaways from the guidance.

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Inflation Reduction Act Tax Credit Solutions

The Inflation Reduction Act (IRA) includes the largest clean energy incentive effort in U.S. history. Find out how your organization can leverage IRA tax credits to save as much as 50% or more on qualifying project costs.

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.

Robert Moczulewski
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