Claiming Tax Credits for Clean Energy Under Inflation Reduction Act

TL/DR –

The U.S. Department of the Treasury and the Internal Revenue Service released Proposed Regulations on clean electricity production and investment tax credits, known as Tech-Neutral Credits, on May 29, 2024. These credits are key to the Biden Administration’s energy incentives in the Inflation Reduction Act of 2022 and will play an important role in developing clean renewable energy resources in the U.S. over the next decade. A white paper discussing the rules and requirements for claiming these credits, which will replace the legacy production tax credits and investment tax credits beginning in 2025, was authored by a team of eight experts.

US Treasury and IRS Release Regulations on Clean Energy Tax Credits

The much-awaited Proposed Regulations by the U.S. Department of the Treasury and the Internal Revenue Service were released on May 29, 2024. These regulations concern clean electricity production tax credits and clean electricity investment tax credits under Sections 45Y (“Tech-Neutral PTC”) and 48E (“Tech-Neutral ITC”) of the Internal Revenue Code of 1986, collectively termed as “Tech-Neutral Credits”.

The Tech-Neutral Credits are vital to the Biden Administration’s energy incentives within the Inflation Reduction Act of 2022. These credits will be instrumental for the ongoing development of clean renewable energy resources in the United States in the upcoming decade.

This comprehensive white paper, written by multiple authors, delves into the rules and requirements for claiming the Tech-Neutral Credits. The Tech-Neutral Credits are set to replace the existing production tax credits (PTC) and investment tax credits (ITC) governed by Code Sections 45 and 48 starting from 2025.

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