Inflation Reduction Act Tax Credit Solutions

  1. Cory Wendt

    Cory R. Wendt

    Principal

  2. Gideon Gradman

    Gideon Gradman

    Baker Tilly Capital, LLC Managing Director

  3. Tom Unke

    Thomas E. Unke

    CPA

    Principal

  4. Doug Baldessari

    Doug Baldessari

    CPA

    Principal

  5. Bryan Halpin

    Bryan Halpin

    Director

  6. Christine M. Smith

    Christine M. Smith

    Managing Director

  7. Jeff Petrell

    Jeffrey J. Petrell

    J.D., CPA, CGMA

    Principal

  8. Michelle Abel

    Michelle Abel

    J.D.

    Principal

  9. Tyler R. Inda

    Tyler R. Inda

    J.D.

    Principal

  10. Donald Bernards

    Donald N. Bernards

    CPA

    Principal

  11. David Capitano

    David Capitano

    CPA

    Principal

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, excise and production tax 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.

New IRA guidance

IRA guidance is complex, but we'll help you navigate it. 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.

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Inflation Reduction Act: Understanding the domestic content bonus requirement

During this on-demand webinar, we discuss the nuances of the domestic content bonus requirement under the Inflation Reduction Act and how to take advantage.

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Pre-filing registration portal for Inflation Reduction Act credits: A how-to guide

Registration via the IRS pre-filing registration portal is key to receiving a registration number to claim eligible IRA and CHIPS Act tax credits. Watch this video for help with the portal.

solar energy - IRA

Greenhouse Gas Reduction Fund Advisory

The GGRF is a federal grant program comprised of $27 billion through The Nation Clean Investment Fund, the Clean Communities Investment Accelerator and Solar for All. Find out how your organization can leverage this fund.

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 prevailing wage requirements for clean energy incentive programs.

  • 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 tax credits), energy-efficient commercial buildings deduction (section 179D tax credit)

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* (clean energy tax credit 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 (Inflation Reduction Act 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 federal clean energy incentives 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 qualifying advanced energy project tax 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.