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The IRS has issued further guidance on the energy community bonus credit under Sections 45, 48, 45Y, and 48E of the Internal Revenue Code. Notice 2026-39, released on June 10, 2026, provides updated guidelines on the Statistical Area and Coal Closure categories of Energy Communities but not the Brownfield category. The Notice also gives an updated list of qualifying counties for the Statistical Area category and identifies more census tracts eligible for the Coal Closure category.
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The IRS Shares Additional Information Concerning Energy Community Bonus Credit
On June 10, 2026, the Internal Revenue Service (IRS) issued extra guidance for the energy community bonus credit under Sections 45, 48, 45Y, and 48E of the Internal Revenue Code, via Notice 2026-39. This recent guidance supplements prior directives as per Notices 2023-29 (as clarified by Notice 2023-45), Notice 2023-47, Notice 2024-30, Notice 2024-48, and Notice 2025-31. This novel guidance is structured with three appendices: Appendix 1, Appendix 2, and Appendix 3.
New Developments in Energy Community Categories
The Inflation Reduction Act enabled provision of an energy community bonus. This bonus generally boosts the value of credits detailed in Sections 45, 48, 45Y, and 48E by 10%. However, it’s important to note that the bonus amount diminishes if the prevailing wage and apprenticeship stipulations aren’t satisfied. These bonuses apply to the projects located in an energy community. The energy community bonus credit accounts for three location-based categories: Brownfield category, statistical area category, and coal closure category. You can see further clarification in Holland & Knight’s earlier alert: “IRS Energy Community Bonus Guidance Provides Welcome Clarity“, dated April 7, 2023.
Notice 2026-39 furnishes updated instructions concerning the statistical area and coal closure categories, but not for the Brownfield category. It also lists freshly updated counties and county-equivalents that fall under the statistical area category, as per the 2025 unemployment data using the 2010 and 2020 decennial census delineations, and identifies new census tracts eligible for the coal closure category.
The Statistical Area Category
Energy communities within this category are metropolitan statistical areas (MSAs) or non-metropolitan statistical areas (non-MSAs) that satisfy both of the following conditions:
- Have (or at any point after Dec. 31, 2009, had) 0.17% or more direct employment (termed as fossil fuel employment), or at least 25% of local tax revenues linked to the extraction, processing, transport, or storage of coal, oil, or natural gas
- Had an unemployment rate equal to or higher than the national average unemployment rate for the preceding year
Appendix 1 of Notice 2026-39 lists out counties and county-equivalents recognized as energy communities as they meet the fossil fuel employment threshold and have an unemployment rate equal to or exceeding the national average rate for the 2025 calendar year. The counties’ energy community status comes into effect as of June 10, 2026, and continues until the IRS and the U.S. Department of the Treasury release an updated list based on the 2026 unemployment rates.
The Coal Closure Category
Energy communities under the coal closure category are census tracts (or adjoining census tracts) where a coal mine closed post-1999 or a coal-fired electric generating unit retired after 2009.
Appendix 2 of Notice 2026-39 details fresh census tracts that fall in the coal closure category, as per coal mine closures or coal-fired electric generating unit retirements. Appendix 3 lists the census tracts from Appendix 2 that newly qualify as coal closure tracts, based on location data corrections published since Notice 2025-31. Consequently, projects initiated after December 31, 2022 in these additional census tracts are eligible to claim the energy community bonus.
Other Useful Insights from Holland & Knight’s Energy Tax Team:
- “IRS Energy Community Bonus Guidance Provides Welcome Clarity“, April 7, 2023
- “IRS Issues Updated Energy Community Bonus Guidance“, June 20, 2023
- “IRS Updates and Expands Energy Community Bonus Tax Credit Guidance“, March 27, 2024
- “IRS Updated Energy Community Bonus Tax Credit Guidance“, June 11, 2024
- “IRS Issues Updates for Energy Community Bonus Tax Credit“, June 25, 2025
The details shared in this news update are aimed to educate the readers and should not be used as the sole source of information when analyzing and resolving a legal issue. Remember that the laws are different in each jurisdiction, and they keep changing. Also, the relationship between attorney-client is not created by receiving this information. Consult your Holland & Knight representative, the authors of this news update, or other legal counsel for specific fact situations.
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