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The IRS has published additional guidance on the energy community bonus credit under Sections 45, 48, 45Y and 48E of the Internal Revenue Code. The new guidance updates the categories of energy communities, specifically the statistical area and coal closure categories, using both 2010 and 2020 census data for the statistical area category and adding new census tracts to the coal closure category. The energy community bonus, part of the Inflation Reduction Act, increases the value of certain tax credits by 10% for projects located in an energy community, defined by three location-based categories: the Brownfield category, the statistical area category, and the coal closure category.
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IRS Issues Updates on Energy Community Bonus Credit
On June 10, 2026, the Internal Revenue Service (IRS) issued new guidance on the energy community bonus credit as per Sections 45, 48, 45Y, and 48E of the Internal Revenue Code. This recent guidance, documented in Notice 2026-39, follows and expands upon earlier notices issued from 2023 to 2025.
The energy community bonus, established under the Inflation Reduction Act, enhances the value of credits in the aforementioned sections by 10 percent. This increase applies to projects located in energy communities, defined by three categories: Brownfield, statistical area, and coal closure categories. The new notice offers fresh insights on the statistical area and coal closure categories.
Statistical Area Category Update
Energy communities in the statistical area category are metropolitan and non-metropolitan statistical areas that meet two key conditions. First, they must have had 0.17 percent or greater direct employment in the fossil fuel sector or 25 percent or greater local tax revenues related to fossil fuel activities at any point since December 31, 2009. Second, they must have had an unemployment rate at or above the national average in the previous year.
In the latest notice, the IRS provides an updated list of counties and county equivalents that qualify as energy communities based on 2025 unemployment data. The list, included in Appendix 1 of Notice 2026-39, will be valid from June 10, 2026, until an updated list based on 2026 unemployment rates is issued by the U.S. Department of the Treasury and IRS.
Coal Closure Category Update
Energy communities in the coal closure category consist of census tracts (or adjoining census tracts) where a coal mine has closed after 1999 or a coal-fired electric generating unit was retired after 2009.
Notice 2026-39’s Appendix 2 enumerates the newly identified census tracts in the coal closure category, along with their directly adjoining census tracts. Appendix 3 lists census tracts that newly qualify based on location data corrections made after the publication of Notice 2025-31.
Projects placed in service after December 31, 2022, situated in the additional census tracts listed in Appendix 3, are eligible to claim the energy community bonus.
For more detailed insights on energy community bonus credits, refer to the publications of Holland & Knight’s Energy Tax Team, such as “IRS Issues Updates for Energy Community Bonus Tax Credit,” and other relevant articles issued from 2023 to 2025.
This article aims to deliver a general understanding of the topic. For more specific advice, it is recommended to consult with a specialist.
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