Inflation Reduction Act Tax Credit Solutions

  1. Tom Unke

    Thomas E. Unke

    CPA

    Partner

  2. Cory Wendt

    Cory R. Wendt

    Principal

  3. David Capitano

    David Capitano

    CPA

    Partner

  4. Gideon Gradman

    Gideon Gradman

    Baker Tilly Capital, LLC Managing Director

  5. Jeff Petrell

    Jeffrey J. Petrell

    J.D., CPA, CGMA

    Partner

  6. Michelle Abel

    Michelle Abel

    J.D.

    Principal

  7. Tyler R. Inda

    Tyler R. Inda

    J.D.

    Principal

  8. Bryan Halpin

    Bryan Halpin

    Director

Maximize tax credits. Save on project costs. Create community impact.

The IRA requirements are everchanging and only a limited number of tax credits are offered. Lean on our specialists to help your organization effectively position your project to maximize and receive eligible Inflation Reduction Act tax credits.

What is the Inflation Reduction Act?

The Inflation Reduction Act of 2022 includes the largest energy incentive effort in U.S. history. It builds on the energy initiatives included in the American Reinvestment Recovery Act of 2009, generating opportunities for organizations across various industries to receive tax credits for implementing clean energy solutions.

The IRA includes more than 70 investment, production and excise credits designed to facilitate the transition to cleaner energy production, promote advanced manufacturing, encourage the adoption of clean vehicles (CVs) and reduce greenhouse gas emissions through the use of alternative fuels and energy efficient technologies. Additionally, significant enhancements have been made to the U.S. Department of Agriculture (USDA) and Department of Energy (DOE) loan programs.

IRA services

The IRA is complicated, and guidance and compliance requirements continue to be released. Baker Tilly’s energy, tax and industry specialists can help your organization understand the complexities and how to effectively position your project to receive and maximize eligible credits.

  • Provide technical expertise to help organizations understand the credits and identify potential steps to take to secure the credits
  • Determine project eligibility and develop enterprise strategies to leverage IRA opportunities
  • Manage development projects to maximize available credits (e.g., prevailing wage and apprenticeship, domestic content requirements)
  • Help ensure compliance with requirements
  • Advise on how IRA credits align with other aspects of an organization’s capital stack
  • Generate workpaper files to support investment tax credit claims
  • Provide funding support and tax credit monetization or transfer

New IRA guidance

IRA guidance is everchanging, and we'll keep you informed. Our specialists do a deep dive into proposed, final and updates to IRA regulation. Our insights and key takeaways can help your organization maximize and receive eligible credits and remain compliant.

Explore the IRA regulatory guidance and check back here for continued updates.

An overview of the recent amendments to section 30D

The IRS has made significant changes to the tax credit program for electric vehicles under IRC section 30D, including broadening the eligibility criteria.

IRC section 30C and the path to sustainable transportation

IRC section 30C provides a tax credit for investing in alternative fuel vehicle refueling property. The IRA extended the credit and made modifications, including expanded eligibility.

Understanding IRS sections 25C and 25D for energy-efficient home improvements and residential clean energy credits

There are tax-saving benefits available to homeowners through IRC sections 25C and 25D, which offer credits for energy-efficient home improvements and clean energy installations.

IRS releases final regulations for section 6418

The IRS has provided comprehensive guidance on the transfer of tax credits under section 6418, outlining eligibility criteria, transfer procedures and compliance measures.

Explore the available credits

There are more than 70 available tax credits within the IRA to facilitate the clean energy transition. What is your organization eligible for? Get started with an IRA specialist.

Professional shares results on tablet

Baker Tilly Launches End-to-End Compliance Solution for Prevailing Wage & Apprenticeship Requirements in the Inflation Reduction Act

New IRA PW&A compliance portal streamlines payroll and apprentice tracking, aiding clean energy projects.

IRA FAQ

The Inflation Reduction Act includes four broad areas of credits. Many of these credits start with a base amount and can be increased by a factor of five if a project pays prevailing wages and employs apprentices. More details are found in the overview. Baker Tilly advisors are available to help address your project’s specific needs and requirements.

  • Clean energy production and investment: Production tax credit (current section 45 and new section 45Y), investment tax credit (current section 48 and new section 48E clean electricity investment credit)
  • Advanced manufacturing: Advanced energy project credit (section 48C), advanced manufacturing production credit (section 45X)
  • Electric vehicles and alternative fuels: Clean vehicle credit (section 30D), previously owned clean vehicles (section 25E), new credit for qualified commercial clean vehicles (section 45W), alternative fuel vehicle refueling property (section 30C), biodiesel and renewable diesel used as fuel credit (section 40A), alcohol fuel, biodiesel and alternative fuel mixtures credit (section 6426), new sustainable aviation fuel credit (section 40B), new clean fuel production credit (section 45Z)
  • Energy efficiency: Nonbusiness energy property credit (section 25C), residential clean energy credit (section 25D), new energy-efficient home credit (section 45L), energy-efficient commercial buildings deduction (section 179D)

The IRA provides for a direct offset to federal tax liability in the form of a tax credit. These credits represent a financial offset for an organization’s qualified construction or production costs, making the economics of many projects work better than they would have without the credits. Most credits are good through 2032, the longest U.S. “energy policy” time frame ever.

Three ways credits bring value to projects:

  • Owner(s) can simply use the tax credit against their own tax liability, in most case back three-year and forward 22 years.
  • If owner(s) doesn’t have tax liability or taxable income, they can now sell certain credits to another taxpayer* (Transferability).
  • Tax – exempt owners can receive a “direct payment” in the form of cash payment from the IRS. These include state and local governments, not-for-profits, tribes and others (Direct Pay) for certain credits.

Essentially, the IRA Act is enabling all entities to utilize this legislation regardless of tax status.

*passive activity rules can apply

There are many types of funding opportunities under the IRA. The below provides an overview of the existing and new tax credits. Qualifying Energy Property projects has a broad definition and can include but is not limited to the following project types:

Existing credits with enhanced features are available in the following areas:

  • Biomass
  • Carbon capture utilization and storage
  • Combined heat and power (CHP)
  • Geothermal heating and cooling
  • Low carbon fuels (biodiesel, ethanol, renewable diesel, renewable natural gas, propane)
  • Waste to energy recycling
  • Wind, solar, hydro electric

New credits are available for the following:

  • Clean hydrogen
  • Clean transportation fuels
  • Electric vehicles (EVs) and EV infrastructure
  • Energy efficiency construction
  • Energy equipment and component manufacturing
  • Energy storage (batteries)
  • Qualifying biogas
  • Solar production tax credit (PTC)
  • Sustainable aviation fuels
  • Zero emission nuclear

Connect with IRA leaders

Baker Tilly energy and tax specialists can help your organization navigate The Inflation Reduction Act tax credits and guide you along the steps to secure the maximum eligible credits. We leverage industry specialization to help evaluate your projects that involve energy efficiency, renewable energy or other eligible components under the IRA – prior, current or future projects.