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Energy Community
Tax Credit Bonus

FAQs

General Questions

Treasury/IRS determine the geographic eligibility for the energy community bonus.

Generally, the IRA defines an energy community as one of the following types of locations:

Brownfield site (as defined in 42 U.S.C. 9601(39) (A), (B), and (D)(ii)(III))

or

Metropolitan statistical area or non-metropolitan statistical area (MSA or non-MSA) with…

or

Census tract in which…

0.17% or greater direct employment related to the extraction, processing, transport, or storage of coal, oil, or natural gas at any time after Dec. 31, 2009

and

Unemployment rate at or above national average unemployment rate for the previous year

A coal mine has closed after Dec. 31, 1999,

or a census tract which is directly adjoining to such census tract

or

A coal-fired electric generating unit has been retired after Dec. 31, 2009,

or a census tract which is directly adjoining to such census tract

or

25% or greater local tax revenues related to the extraction, processing, transport, or storage of coal, oil, or natural gas at any time after Dec. 31, 2009

The following tax credits in the IRA have an energy community bonus.

Internal revenue code (IRC) section

Title

IRC section on energy community bonus

Increase in credit rate

45

Electricity produced from certain renewable resources, etc. (PTC)

45(b)(11)

10%

48

Energy credit (ITC)

48(a)(14)

Either 2 or 10 percentage points

45Y

Clean electricity production tax credit (PTC)

45Y(g)(7)

10%

48E

Clean electricity investment credit (ITC)

48E(a)(3)

Either 2 or 10 percentage points

Additionally, the qualifying advanced energy project credit under section 48C allows for a special allocation for projects located in census tracts as described in IRC 45(b)(11)(B)(iii) and that do not have any projects that previously received a section 48C credit allocation.

Location related eligibility information and a searchable mapping tool for certain types of energy communities are available in the map. The mapping tool may not be relied upon by taxpayers to substantiate a tax return position or for determining whether certain penalties apply and will not be used by the IRS for examination purposes. The mapping tool does not reflect the application of the law to a specific taxpayer’s situation, and the applicable Internal Revenue Code provisions ultimately control.

To determine eligibility, the user should locate the county and/or census tract of their project and compare the Federal Information Processing Standard (FIPS) codes of one or both of these pieces of location information to the listings in the relevant appendices. Each unique county or county-equivalent is identified with a 2-digit state FIPS code (which may include a leading zero), and a 3-digit county FIPS code (which may include up to two leading zeros); these are grouped into one 5-digit state-county FIPS code. Census tracts are identified with a 2-digit state FIPS code, a 3-digit county FIPS code, and a 6-digit tract code tract (which may include leading zeros, as well as two “trailing” zeros in the many cases in which the basic tract code has no suffix). Together, these codes form an 11-digit FIPS code unique to each census tract.

For example, the Tract 9502.02 in Nicholas County, West Virginia has the 11-digit census tract FIPS code of 54067950202:

54 – identifies West Virginia
067 – identifies Nicholas County within West Virginia
950202 – identifies tract 9502.02 within Nicholas County

Relevant appendices generally depend on placed in service dates. However, IRS Notice 2023-29 also provides a special rule for projects to base their eligibility for the energy community bonus on when construction begins.

I placed my property in service…

Eligible Fossil Fuel Employment counties that may or may not also meet the unemployment rate threshold are listed in…

Eligible Fossil Fuel Employment counties that also meet the unemployment rate threshold are listed in….

Eligible Coal Closure census tracts are listed in…

After Dec. 31, 2022, and before June 7, 2024

After June 6, 2024, and before release of the 2025 Annual Statistical Area Category and Coal Closure Category Updates*

*Annual Statistical Area Category and Coal Closure Category Updates generally will be released by the IRS in approximately May of each year.

Brownfield sites (as defined in 42 U.S.C. 9601(39) (A), (B), and (D)(ii)(III)) also qualify as energy communities.

To determine eligibility, the user should locate the 11-digit census tract Federal Information Processing Standard (FIPS) code of their project and compare that to the listings in the relevant appendices.  Census tracts are identified with a 2-digit state FIPS code (which may include a leading zero), a 3-digit county FIPS code (which may include up to two leading zeros), and a 6-digit tract code tract (which may include leading zeros, as well as two “trailing” zeros in the many cases in which the basic tract code has no suffix).  Together, these codes form an 11-digit FIPS code unique to each census tract.

For example, the Tract 9502.02 in Nicholas County, West Virginia has the 11-digit census tract FIPS code of 54067950202:

54 – identifies West Virginia
067 – identifies Nicholas County within West Virginia
950202 – identifies tract 9502.02 within Nicholas County

One method of determining the census tract of your property based on the 2020 census tract boundaries is by using the Census Geocoder.  Use this link for an address or this link for a latitude/longitude point.  Type in your address or latitude/longitude, and then follow these steps:

  • In the ​“Benchmark” drop-down menu, choose ​“Public_AR_Census2020.”
  • In the “Vintage” drop-down menu, choose “Census2020_Census2020.”
  • In the results under “Census Tracts” find the “GEOID” near the bottom of the results webpage. This is your full 11-digit census tract GEOID. In this example, the 11-digit census tract FIPS code is 11001980000.
    • Note that the 6-digit census tract FIPS code is the “TRACT CODE”. In this example, the state code is “11”, the county code is “001” and the tract code is “980000.”

Further instructions to use the Census Geocoder are available via this link.

Note: Users are also encouraged to check the location of their project’s census tract using the Census’ interactive TIGERweb map via this link.  At the link:

  • Type in your address or latitude/longitude, press enter, and select your address or latitude/longitude from the drop down list.

  • On the left-hand side of the screen, click “Layers”.
  • In the menu that appears, click the plus sign to the left of “Census Tracts and Blocks.” In the resulting menu, remove the check from “2020 Census Blocks” and leave “Census Tracts” checked. Keep “Labels” checked.
  • You will see numbers on the map preceded by “CT.” CT standards for “census tract.”
    • Census tracts within a county are identified by a 4-digit basic code between 0001 and 9999 and may have a 2-digit suffix ranging from .01 to .98; for example, 6059.02.
    • For purposes of the § 48C(e) Coal Closure census tracts, you will need to ascertain the 6-digits for the census tract code. This often entails including leading zeros as well as two “trailing” zeros in the many cases.  Some examples:
      • The full 6 digits of “CT 50.02” in the map are 005002.
      • The full 6 digits of “CT 101” in the map are 010100.
      • The full 6 digits of “CT 9800” in the map are 980000.
  • Identify the census tract of your project based on the location.  You can confirm that the TIGERweb application correctly located the project through enabling the satellite view.  If the satellite view is not enabled, click on the top right hand corner button that says “Landmass”, “Terrain”, or “Satellite” until the satellite view is enabled.
  •  To ascertain the full 11 digits of the unique 11-digit census tract FIPS code (or GEOID), you will need to also know the 2-digit state FIPS code and the 3-digit county FIPS code, which can be found on this list. This presumes you know the state and county names of the location of your project.

To determine eligibility, the user should locate the 2-digit state and 3-digit county Federal Information Processing Standard (FIPS) code of their project and compare that to the listings in the relevant appendices.  Counties are identified with a 2-digit state FIPS code (which may include a leading zero), a 3-digit county FIPS code (which may include up to two leading zeros).  Together, these form a 5-digit state-county FIPS code unique to every county or county-equivalent in the U.S. and its territories.

For example, Nicholas County, West Virginia has the state-county FIPS code of 54067:

54 – identifies West Virginia
067 – identifies Nicholas County within West Virginia

FIPS codes based on county and state names:

If you know the state and county names of the location of your project, you can use this list to ascertain your 2-digit state FIPS code and the 3-digit county FIPS code.

FIPS codes using Census Geocoder:

If you do not know the name of the county and state of your project, a method of determining your county and state using 2020 county boundaries is by using the Census Geocoder. Use this link for an address or this link for a latitude/longitude point.  Type in your address or latitude/longitude, and then follow these steps:

  • In the ​“Benchmark” drop-down menu, choose ​“Public_AR_Census2020.”
  • In the “Vintage” drop-down menu, choose “Census2020_Census2020.”
  • In the results under ​“County Subdivisions” find the “STATE CODE” and the ​“COUNTY CODE.”  These are your 2-digit state FIPS code and your 3-digit county FIPS code.  In this example, the 2-digit state FIPS code is “54” and the 3-digit county FIPS code is “039.”

Further instructions to use the Census Geocoder are available via this link.

State and county locator using Census’ interactive TIGERweb map:

Note:  Users are encouraged to also check the location of their project’s state and county using the Census’ interactive TIGERweb map via this link.  At the link:

  • Type in your address or latitude/longitude, press enter, and select your address or latitude/longitude from the drop down list.

  • You may need to adjust the scale of the map to see the county boundaries, county names, and state name.
  • Identify the county and state of your project based on the location.  You can confirm that the TIGERweb application correctly located the project through enabling the satellite view.  If the satellite view is not enabled, click on the top right hand corner button that says “Landmass”, “Terrain”, or “Satellite” until the satellite view is enabled.
  • Once you know the state and county names of the location of your project, you can use this list to ascertain your 2-digit state FIPS code and the 3-digit county FIPS code.

The § 48C(e) Energy Communities Census Tracts are a subset of the areas eligible for the Energy Community tax credit bonus that applies to § 45, § 48, § 45Y, and § 48E.  Section 48C(e) Energy Communities Census Tracts are census tracts that did not have a project that received a certification and allocation of credits under § 48C prior to enactment of the Inflation Reduction Act of 2022, and:

  • in which a coal mine has closed after 1999; or
  • in which a coal-fired electric generating unit has been retired after 2009; or
  • that directly adjoin one of the above two types of tracts.

The mapping tool reflects currently available data on two types of qualifying energy communities. 

  • First, the map shows the census tracts that have had coal mine closures since 1999, or coal-fired electric generating unit retirements since 2009, and census tracts directly adjoining to such census tracts.
  • Second, the map shows the MSAs and non-MSAS that have met the 0.17% or greater direct employment related to extraction, processing, transport, or storage of coal, oil, or natural gas and have an employment rate at or above the national average unemployment rate for the previous year.

Note that brownfield sites are not shown on this map.

Yes.  Areas in all U.S. territories may qualify as energy communities, and the areas in U.S. territories that qualify as energy communities based on the coal closure and MSA/non-MSA categories have been mapped.

Data Questions

Census tracts are those delineated in the 2020 Census, as described in 83 FR 56277.  The shapefiles used to characterize census tract and therefore place mines within them are 2020 TIGER/Line Geodatabases as defined by the U.S. Census Bureau.

A coal mine is identified for purposes of the Energy Community Coal Closure census tracts if it is or has been in the Department of Labor’s Mine Safety and Health Administration’s (MSHA’s) “Mines” data set after Dec. 31, 1999.

Mines for the energy community bonus are those with a type of “Surface” or “Underground.” A mine will be identified as “closed” if after Dec. 31, 1999, it has ever been listed in MSHA’s Mines dataset as having a status of “Abandoned” or “Abandoned and Sealed.” The definition of “mine status” can be found on pages 3-4 of the Instructions for Completing the Mine Information Form (MSHA 2000-209).

Location information for coal mine closures is evaluated for accuracy prior to granting the ability to confer eligibility to the census tract in which the mine resides. Closed coal mines listed in the MSHA Mines dataset are excluded from conferring eligibility for the “energy communities” designation if they have irregular location information. This includes closed coal mines with listed latitude and longitude coordinates that do not place the mines in the listed county and state, and mines with latitude and longitude coordinates that only extend to the tenths place.

The relevant appendices (IRS Notice 2023-29 Appendix C, IRS Notice 2023-47 Appendix 3, and IRS Notice 2024-48 Appendix 2) show the census tracts that have had coal mine closures since 1999 (with accurate location information) and census tracts directly adjoining such census tracts. IRS Notice 2023-29 Appendix C reflects MSHA Mines data as of Feb. 7, 2023. For this original listing of Coal Closure census tracts, prior versions of MSHA’s Mines dataset were also used. IRS Notice 2023-47 Appendix 3 reflects MSHA Mines data as of May 1, 2023. IRS Notice 2024-48 Appendix 2 reflects MSHA’s Mines as of April 1, 2024. Note that the “Tract Type” in these appendices may change over time with the addition of new data.

An electric generating unit is identified according to its presence in the Department of Energy’s (DOE’s) U.S. Energy Information Administration (EIA) Electric Generator Inventory data from Form EIA-860, supplemented with Monthly Electric Generator Inventory from Form EIA-860M. Data from Forms EIA-860 and EIA-860M provide listings of retirements. An electric generating unit is considered a retired coal-fired electric generating unit if it is classified as retired at any time since December 31, 2009, and at the time of being listed as retired is characterized as a coal-fired electric generating unit.

Location information for coal-fired generating unit retirements is evaluated for accuracy prior to granting the ability to confer eligibility to the census tract in which the mine resides. Retired coal-fired generating units listed in Forms EIA-860 and EIA-860M are excluded from conferring eligibility for the “energy communities” designation if they have irregular location information. This includes coal-fired generating unit retirements with listed latitude and longitude coordinates that do not place the unit in the listed county and state, and units with latitude and longitude coordinates that only extend to the tenths place.

The relevant appendices (IRS Notice 2023-29 Appendix C, IRS Notice 2023-47 Appendix 3, and IRS Notice 2024-48 Appendix 2) show designated Coal Closure census tracts, informed by data from Forms EIA-860 and EIA-860M with accurate location information. IRS Notice 2023-29 Appendix C reflect data available as of Feb. 7, 2023. IRS Notice 2023-47 Appendix 3 reflects data available as of May 1, 2023. IRS Notice 2024-48 Appendix 2 reflects data available as of Apr. 1, 2024. Note that the “Tract Type” in these appendices may change over time with the addition of new data.

An electric generating unit is characterized as “coal-fired” based on the available data for past years. For years 2016 to 2024, coal-fired electric generating units are those listed in EIA Form 860M or EIA Form 860 data as having a “Technology” of “Conventional Steam Coal” or “Coal Integrated Gasification Combined Cycle.” For years 2010 to 2015, coal-fired electric generating units are those listed in EIA Form 860 data as having a primary fuel source code of anthracite coal, bituminous coal, lignite coal, refined coal, coal-derived synthesis gas, subbituminous coal, and waste/other coal.

No.  An electric generating unit must be coal-fired when it is retired to be considered a retired coal-fired electric generating unit.  An electric generating unit is a retired coal-fired electric generating unit if it (1) appears in the retirements listing of any monthly release of the dataset from Form-860M since December 31, 2009, or any annual release of the dataset from Form-860 since December 31, 2009, (2) the month and year of retirement occur after December 31, 2009, and (3) for years 2014 through the most recent monthly listing, it is listed as having a “Technology” of “Conventional Steam Coal” or “Coal Integrated Gasification Combined Cycle” in the retirement listing, or for years 2010 through 2013, it is listed as having a primary fuel of one of the following in the retirement listing: anthracite coal, bituminous coal, lignite coal, coal-derived synthesis gas, subbituminous coal, waste/other coal (including anthracite culm, bituminous gob, fine coal, lignite waste, and waste coal), or refined coal.

Access coal mine data through the Department of Labor’s Mine Safety and Health Administration (MSHA) “Mines” data set.

For validation purposes, review the following:

  • Does the mine appear in the Mines dataset?
      ο  If not, contact MSHA at mshadata@dol.gov.
      ο  If yes, next check the location information.
        -  Do the latitude and longitude listed place the mine in the county and state listed?
        -  Do the latitude and longitude listed extend beyond the tenth decimal place (for example, format XXX.XXXXXX)?
        -  If the answer to either of these is no, then contact MSHA at mshadata@dol.gov.
  • What information should I provide to MSHA when I contact the Agency?
      ο   Name and contact information of the person or entity submitting the recommended change
      ο   Mine ID (if known)
      ο   Operating Company Name (if known)
      ο   Mine Name (if known)
      ο   County and state where the mine is or was located
      ο   Street address of the mine (if known)
      ο   Current latitude and longitude of mine in the Mine Data Retrieval System (MDRS) (if known)
      ο   Recommended latitude and longitude of mine (make certain there are 6 digits to the right of the decimal point)

  • If MSHA considers the suggested correction valid, then the Agency will update the Mines dataset accordingly.
  • See below for timing of updates to the IRS census tract listing and the DOE map based on any data corrections from MSHA.

First, check to see if there is an issue with the location data for the coal-fired generating electric unit: 

  • Coal-fired electric generating unit data comes from the Department of Energy’s (DOE’s) U.S. Energy Information Administration (EIA) Electric Generator Inventory data from Form EIA-860, and the Monthly Electric Generator Inventory from EIA-860M.
  • Does the coal-fired electric generating unit appear in the EIA Form 860 or EIA Form 860M data?
      ο  If not, contact EIA via InfoElectric@eia.gov.
      ο 
    If yes, next check the location information.
        -  Do the latitude and longitude listed map the mine to the county and state listed?
        -  Do the latitude and longitude listed extend beyond the tenth decimal place?
        -  If the answer to either of these is no, then contact EIA via InfoElectric@eia.gov.
  • What information should I provide to EIA when I contact them?
      ο  Name and contact information of the person or entity submitting the recommended change
      ο  Plant ID and Generator ID (if known)
      ο  Operating Company Name (if known)
      ο  Plant Name (if known)
      ο  County and state where the unit is located
      ο  Street address of the unit (if known)
      ο  Current latitude and longitude of unit in the EIA Form 860 or EIA Form 860M data (if known)
      ο  Recommended latitude and longitude of unit (make sure there are at least 4 digits to the right of the decimal point)

  • If EIA considers the correction valid, then it will update the EIA Form 860 and/or EIA Form 860M data accordingly.
  • See below for timing of updates to the IRS census tract listing and the DOE map based on any corrected data from EIA.

Census tracts shapefiles from the U.S. Census Bureau are used to identify adjoining census tracts.  Census tracts are considered directly adjoining if their boundaries touch at any single point.  There are many cases where multiple census tracts meet at a single point. If a closure occurred in one of the census tracts, the other census tracts sharing the single point would be considered directly adjoining.   

Figure 1 shows an example of census tracts with their 6-digit identifiers.  All of these census tracts are considered directly adjoining to census tract 009102.

Fig. 1:  Example of adjoining census tracts

Source:  Treasury Office of Tax Analysis.

 

Census tract boundaries may follow rivers or other waterways.  However, these waterways do not prevent census tracts from being directly adjoining.  Census tract boundaries may incorporate waterways by either extending into waterways or by wholly covering a waterway within a census tract. 

Figure 2 shows one example of how a waterway may interact with census tracts.  This shows census tract 007100 (denoted without the floating zeroes as “71”) having a border in the river.  Census tract 007601 (denoted here as 76.01) also has a border in the river.  Census tracts 007100 and 007601 are directly adjoining to each other.  Additionally, Census tracts 006804 (denoted 68.04) and 007601 are also directly adjoining to each other.

Fig. 2:  Waterways in census tracts

Source:  https://www.census.gov/geographies/reference-maps/2020/geo/2020pl-maps/2020-census-tract.html

MSAs are groups of counties or county-equivalents.  They are grouped according to standards determined by the Office of Management and Budget (OMB).  These standards are updated every 10 years in accordance with the decennial census of the United States.  For this initial release of MSAs that may qualify as energy communities, Treasury/IRS will use the MSA delineations provided by OMB in its April 18, 2018 bulletin (Bulletin No. 18-03).  These delineations reflect the OMB Standards for Delineating Core Based Statistical Areas published in 75 FR 37245 for the 2010 Decennial Census.  These delineations cover the United States, the District of Columbia, and Puerto Rico.  The OMB Bulletin No. 18-03 delineations were chosen, rather than a later update, to be consistent with the delineations of non-MSAs described below.

To determine boundaries of non-MSAs, Treasury/IRS primarily follow the May 2023 Metropolitan and Nonmetropolitan Area Definitions (May 2023 OEWS Metropolitan and Nonmetropolitan Area Definitions (bls.gov)) published by the Occupational Employment and Wages Statistics division of the Bureau of Labor Statistics (BLS).  The BLS works in conjunction with individual states and Puerto Rico to determine nonmetropolitan area definitions.  MSAs are first delineated, and then counties outside of MSAs are grouped together as nonmetropolitan areas.1

For each of the Island Territories of American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands, the whole territory is grouped as one non-MSA.

See IRS Notice 2023-29Appendix A, for a full listing of MSAs and non-MSAs defined for the purposes of the energy community bonus.

1Treasury/IRS non-MSA delineations differ from the BLS provided definitions in the New England states by strictly following county boundaries for MSA and non-MSA boundaries.  For MSAs, these boundaries directly follow OMB Bulletin No. 18-03.  The non-MSAs in these New England states delineated in IRS Notice 2023-29 include the counties in a BLS defined nonmetropolitan area that have no portion in an MSA.

Direct employment related to the extraction, processing, transport, or storage of coal, oil, or natural gas, termed fossil fuel employment (FFE), is estimated using employment in the following industries, according to their 2017 North American Industry Classification System (NAICS) codes:

NAICS codes included in fossil fuel employment

NAICS codeDescription
211Oil and Gas Extraction
2121Coal Mining
213111Drilling Oil and Gas Wells
213112Support Activities for Oil and Gas Operations
213113Support Activities for Coal Mining
2212Natural Gas Distribution
23712Oil and Gas Pipeline and Related Structures Construction
32411Petroleum Refineries
4861Pipeline Transportation of Crude Oil
4862Pipeline Transportation of Natural Gas

The FFE rate is determined as the number of people employed in the above NAICS codes as listed in the County Files of the County Business Patterns (CBP) published annually by the Census Bureau, divided by the total number of people employed in that area. CBP data include information on Puerto Rico and the other U.S. territories in the County Equivalents for Puerto Rico and Island Areas File. The FFE and total employment for each county in the MSA/non-MSA is aggregated to determine whether the MSA/non-MSA meets the FFE threshold of 0.17 percent.

Treasury/IRS calculates the FFE rate for each year the CBP dataset is available beginning with data for 2010. If a MSA or non-MSA meets the 0.17 percent threshold in 2010 or later years, it retains this status.

The list of NAICS codes was updated from the original list in IRS Notice 2023-29 to include NAICS codes 2212 and 23712 with the release of IRS Notice 2024-30.

For IRS Notice 2023-29, Appendix B, the latest available CBP data was for calendar year 2020 (released in April 2022). For IRS Notice 2023-47 Appendix 1 and Appendix 2, IRS Notice 2024-30, Appendix 1 and Appendix 2, and IRS Notice 2024-48, Appendix 1, the latest available CBP data is calendar year 2021 (released in April 2023).

When looking at past years, the groupings of counties into MSAs and non-MSAs are held fixed to those described in Appendix A of IRS Notice 2023-29. For example, suppose Callahan, Jones, and Taylor counties are listed in Appendix A as comprising MSA 10180. Therefore, when calculating the FFE rate for MSA 10180 for each year from 2010 to 2020, it is always considered to be comprised of Callahan, Jones, and Taylor counties.

The 2017 NAICS codes used to describe direct employment related to the extraction, processing, transport, or storage of coal, oil, or natural gas are the same as the 2012 and 2007 NAICS codes.  As such, any of the 2007, 2012, or 2017 NAICS codes listings could have been used for these specific NAICS codes.

For the 2010-2017 CBP data, the Census Bureau provided a range of employment values when the point value of the cell was not provided out of confidentiality or data quality concerns.  A cell in this case is the employment level for a county and industry sector pairing.  Treasury used a value for the suppressed cell within the range of values provided in the CBP documentation.  Generally, this value was chosen to be the midpoint between the lower bound and the midpoint of the lower and upper bounds of employment values for a cell for which a point value is not available.  The midpoint between the lower and upper bounds was not used because that generally led to aggregated industry employment in the county file to be above the employment reported for those same industries in the national CBP file.

An adjustment for the total level of employment for the county is only made when the total employment level provided in the CBP data (as indicated by a null NAICS code) was suppressed for a particular county and a range of values was provided.  The same adjustment procedure of using the midpoint between the lower bound and the midpoint of the lower and upper bound was used for these cases as well.

No. The MSAs and non-MSAs currently shaded pink on the map have only met the FFE threshold of 0.17 percent. The MSAs and non-MSAs currently shaded purple on the map have met both the FFE threshold of 0.17 percent and the higher-than-the-national-average unemployment rate threshold. See the answers to FAQ #19 and FAQ #22 for further detail regarding the determination of the unemployment rate threshold.

MSAs and non-MSAs that have met the FFE threshold for any year since 2009 and have an employment rate at or above the national average unemployment rate for the previous year qualify as energy communities under the IRA.

The unemployment rate for MSAs/non-MSAs is determined using the calendar year Local Area Unemployment Statistics (LAUS) for counties (Tables and Maps: U.S. Bureau of Labor Statistics (bls.gov)). The LAUS reports the total number of individuals in the labor force and the total number unemployed by county. These amounts are then summed across counties within an MSA/non-MSA to determine the total labor force and number of unemployed individuals for the MSA/non-MSA. The unemployment rate is calculated by dividing the number of unemployed individuals within the MSA/non-MSA by the total labor force, multiplying by 100, and then truncating to the hundredths place.

The national unemployment rate for determining energy community bonus eligibility is calculated using the same data as the unemployment rate for each MSA and non-MSA (the LAUS). The county number of individuals in the labor force and unemployed are summed across all counties in every state and the District of Columbia to determine the national labor force and national number of unemployed individuals. The numbers of unemployed individuals and labor force participants for the U.S. territories are not included in the calculation of the national unemployment rate. The number of unemployed individuals is divided by the number of individuals in the labor force, multiplied by 100, and then truncated to the hundredths place.

The unemployment rate for each MSA/non-MSA that met the FFE threshold is then compared to the national unemployment rate. Those MSAs/non-MSAs that met the FFE threshold and have an unemployment rate for the previous year that is at or above the national average unemployment rate are listed as energy communities.

Note that the method for calculating the national employment rate for the energy community bonus may differ from other calculations of the national unemployment rate. Other methods rely on different data sources and different methodologies. Treasury/IRS utilize the method described above to apply a consistent method using the same underlying data to calculate both the MSA/non-MSA and the national unemployment rates.

LAUS data for the prior year are generally released in April of the next calendar year (e.g., the 2023 annual data was released in April 2024). When the unemployment rates are released for future years, Treasury/IRS will then update the listing of MSA/non-MSAs that have passed both the 0.17 percent FFE threshold and the higher-than-the-national-average unemployment rate threshold.

The 0.17% direct employment threshold for metropolitan statistical areas (MSAs) and non-metropolitan statistical areas (non-MSAs) is set by statute.  See, e.g., section 45(b)(11)(B)(ii) of the Internal Revenue Code. 

The MSAs and non-MSAs listed in Appendix B to Notice 2023-29 have met the 0.17% or greater direct fossil fuel employment requirement in one or more years after 2009.  MSAs and non-MSAs that meet this criterion will remain on this list. New MSAs and non-MSAs that meet this criterion in later years will be added to this list, for example, see Appendix 1 to Notice 2023-47. To qualify as an energy community, the MSAs and non-MSAs listed in Appendix B to Notice 2023-29 and Appendix 1 to Notice 2023-47 must also have an unemployment rate that is at or above the national average unemployment rate for the previous year (see FAQ #23 for more information). 

MSAs and non-MSAs must meet two thresholds to qualify as energy communities. The MSAs and non-MSAs must have had (1) for at least one year after 2009, 0.17 percent or greater direct employment related to extraction, processing, transport, or storage of coal, oil, or natural gas (the fossil fuel employment (FFE) threshold), and (2) an unemployment rate for the prior year that is equal to or greater than the national average unemployment rate for the prior year.

MSAs/non-MSAs that meet the 2023 unemployment rate requirement and the FFE requirement are listed in IRS Notice 2024-48 Appendix 1 and qualify as energy communities as of June 7, 2024. These MSAs/non-MSAs will maintain energy community status until the 2025 IRS release of the Annual Statistical Area Category and Coal Closure Category Updates for the energy community bonus (reflecting unemployment rates from 2024). The IRS guidance that determines the MSAs and non-MSAs that are energy communities based on future years’ unemployment rates will be released in approximately May of each year.

Yes. An MSA or non-MSA that has had 0.17 percent or greater direct employment at any time after December 31, 2009, or 25 percent or greater local tax revenues related to the extraction, processing, transport, or storage of coal, oil, or natural gas may qualify as an energy community if its unemployment rate for the previous year is at or above the national average. Because an MSA’s or non-MSA’s status as an energy community depends on its unemployment rate for the previous year, an MSA or non-MSA that qualifies as an energy community in one period might not qualify as an energy community in a later period if its unemployment rate for the previous year falls below the national average. The list of MSAs and non-MSAs that qualify as an energy community for the period beginning on the June 7, 2024, and ending on the date of release of the 2025 Annual Statistical Area Category and Coal Closure Category Updates, may be found at Notice 2024-48 Appendix 2.

The map and community listings will be updated with the following timing:

Treasury/IRS anticipate that in approximately May of each subsequent year until the energy community bonus expires:

  • The map will be updated according to any new MSAs/non-MSAs that have achieved the 0.17 percent or greater direct employment related to the extraction, processing, transport, or storage of coal, oil, or natural gas.
  • The map will be updated according to the updated annual unemployment rates for MSAs and non-MSAs. Because an MSA’s or non-MSA’s status as an energy community depends on its unemployment rate for the previous year, an MSA or non-MSA that qualifies as an energy community in one period might not qualify as an energy community in a later period if its unemployment rate for the previous year falls below the national average.
  • The map will reflect the census tracts and directly adjoining census tracts of any newly identified closed coal mines and/or retired coal-fired electric generating units.

The shapefiles for the data layers can be found on the EDX resource page here:  https://edx.netl.doe.gov/dataset/ira-energy-community-data-layers.

Timing and Location Questions

No, the special rule in IRS Notice 2023-29 applies only to projects that begin construction on or after January 1, 2023.

No, the special rule in IRS Notice 2023-29 applies only to projects that begin construction on or after January 1, 2023.

A project is treated as “located in” or “placed in service within” an energy community if 50% or more of the project’s nameplate capacity is located in an area that qualifies as an energy community (Nameplate Capacity Test).  This determination is made by dividing the nameplate capacity of the project’s energy-generating units located in an energy community by the total nameplate capacity of all the energy-generating units of the project.  For projects with offshore energy generation units, if none of the project’s energy-generating units are in a census tract, MSA, or non-MSA, then the Nameplate Capacity Attribution Rule is applied by attributing all the nameplate capacity of such project to the land-based power conditioning equipment that conditions energy generated by the project for transmission, distribution, or use and that is closest to the point of interconnection.

For a project that does not have a nameplate capacity, if 50% or more of its square footage is in an area that qualifies as an energy community, the project is located in or placed in service within an energy community (Footprint Test).  This determination is made by dividing the square footage of the project that is located in an energy community by the total square footage of the project.

Offshore wind and other offshore energy technology projects eligible for the Production or Investment Tax Credit (45/48) can qualify for the bonus in one of two ways:

  • Offshore renewable energy projects with nameplate capacity in census tracts, MSAs, or non-MSAs (i.e., in state waters) can qualify if more than 50% of the project’s nameplate capacity is in an area that qualifies as an energy community, or
  • Offshore renewable energy projects on the Outer Continental Shelf with no nameplate capacity in census tracts, MSAs or non-MSAs can qualify if the land-based power conditioning equipment that conditions energy generated by the project, such as an onshore substation, that is closest to the point of interconnection is in an area that qualifies as an energy community.

For the production tax credits under sections 45 or 45Y, whether the project is “located in” an energy community is determined separately for each taxable year of the project’s 10-year credit period.  A project is treated as located in an energy community during a taxable year if it is located in an energy community during any part of the taxable year.

For the investment tax credits under sections 48 or 48E, whether the project is placed in service within an energy community is determined on the placed-in-service date.

If a taxpayer begins construction of the project on or after January 1, 2023, in a location that qualifies as an energy community as of the beginning of construction date, with respect to that project, such location will continue to be considered an energy community for the duration of the ten-year credit period for sections 45 and 45Y or on the placed-in-service date for sections 48 and 48E.

In general, a taxpayer may establish the beginning of construction of a project by starting physical work of a significant nature or by paying or incurring five percent or more of the total cost of the facility.  The IRS has issued notices that provide guidance for determining the beginning of construction. See Notice 2013-29, Notice 2013-60, Notice 2014-46, Notice 2015-25, Notice 2016-31, Notice 2017-04, Notice 2018-59, Notice 2020-41, Notice 2021-5, and Notice 2021-41, and Notice 2022-61.

In general, you place property in service when it is ready and available for a specific use. The IRS has provided general guidance for taxpayers to determine when a property is placed in service in Publication 946 (How to Depreciate Property).

Determining Brownfield Status

For purposes of the energy community bonus credit, a brownfield site is defined in 42 U.S.C. § 9601(39)(A) as real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant (as defined under 42 U.S.C. § 9601), and includes certain mine-scarred land (as defined in 42 U.S.C. § 9601(39)(D)(ii)(III)).  A brownfield site does not include the categories of property described in 42 U.S.C. § 9601(39)(B).

For purposes of the energy community bonus credit, including the brownfield site safe harbor described in section 5 of IRS Notice 2023-29, a brownfield site is delineated according to the boundaries of the entire parcel of real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.  A brownfield site is not limited to only the portion of a parcel of real property that has or may have a hazardous substance, pollutant, or contaminant that complicates redevelopment.

The main difference between the definition of a brownfield site for purposes of the energy community bonus credit and for determining eligibility for federal Brownfield funding is that the energy community bonus credit applies a more limited definition.

For purposes of the energy community bonus credit, a brownfield site is limited to sites that are described in 42 U.S.C. 9601(39)(A), (B), and (D)(ii)(III), which is a subset of the sites that may qualify for federal Brownfield funding.  Section 9601(39)(C) and (D) of Title 42 of the United States Code includes categories of sites that are eligible for federal Brownfield funding but do not meet the definition of a brownfield site for purposes of the energy community bonus credit.  Please see Brownfields | US EPA and https://www.epa.gov/sites/default/files/2018-10/documents/web-content-info-on-site-eligibility.pdf for more information.

No, the brownfield definition for purposes of the energy community bonus credit does not include sites with only petroleum contamination. 

There is not a single registry, website, or map of all brownfield sites.  Potential site lists may be found under the category of Brownfields Properties on the EPA’s Cleanups in My Community webpage, which lists the locations of sites assessed with federal Brownfield funding.  Similar webpages may be maintained by states, territories, or for federally recognized Indian tribes.  However, not all properties that qualify as brownfield sites eligible for federal Brownfield funding are included in the definition of brownfield site for purposes of the energy community bonus credit.

No, a comprehensive map of sites that meet the definition of a brownfield for purposes of the energy community bonus credit is not available.

EPA’s Brownfields Program provides direct funding for brownfields site assessment, cleanup, revolving loans, environmental job training, technical assistance, training, and research.  Additional information is available online at the EPA Brownfield website: https://www.epa.gov/brownfields/types-epa-brownfield-grant-funding

Brownfield site stakeholders may contact EPA regional Brownfield representatives who are available to assist with cleanup and redevelopment efforts at brownfield sites.  These representatives serve as a valuable resource for Brownfield stakeholders by providing support and guidance on applicable laws, regulations, and policies, and technical assistance associated with the selection of technologies.  An EPA contact list is available online: https://www.epa.gov/brownfields/brownfields-contacts-epa-regional-offices

EPA’s RE-Powering America's Land Initiative (“RE-Powering”) provides information about existing renewable energy projects, future site locations, and state-based programs to encourage renewable energy projects on landfills, brownfields, mines, and other contaminated lands.  

For more information available online about state programs, program impacts, steps to select and design successful programs, and program implementation tips, please visit:

The brownfield site safe harbor provided in section 5 of IRS Notice 2023-29 offers taxpayers certainty in determining whether a site meets the definition of a brownfield site for purposes of the energy community bonus credit.  Under this safe harbor, the IRS will accept that a site meets the definition of a brownfield site under 42 U.S.C. § 9601(39)(A) if it satisfies at least one of the conditions described in section 5.02 of IRS Notice 2023-29 (see FAQ #42 for more detail) and the site is not described in 42 U.S.C. § 9601(39)(B). 

A site qualifies for the brownfield site safe harbor if it meets any one of the following three conditions and it is not described in one of the exclusions provided in 42 U.S.C. § 9601(39)(B):

(1) The site was previously assessed through federal, state, territory, or federally recognized Indian tribal brownfield resources as meeting the definition of a brownfield site under 42 U.S.C. § 9601(39)(A);

(2) A Phase II Assessment has been completed with respect to the site and such Phase II Assessment confirms the presence on the site of a hazardous substance as defined under 42 U.S.C. § 9601(14), or a pollutant or contaminant as defined under 42 U.S.C. § 9601(33); or

(3) For projects with a nameplate capacity of not greater than 5MW (AC), a Phase I Assessment has been completed with respect to the site and such Phase I Assessment identifies the presence or potential presence on the site of a hazardous substance, or a pollutant or contaminant.

A site qualifies for this safe harbor provision if a federal, state, territory, or federally recognized Indian tribal program that supports the evaluation of potential contamination at sites by collecting and reviewing existing information has determined that the site qualifies as a brownfield site under the definition in 42 U.S.C. § 9601(39)(A) and is not excluded under 42 U.S.C. § 9601(39)(B).

A12. No. For purposes of the Energy Community Bonus Credit, a Brownfield site does not include the categories of property described in 42 U.S.C. § 9601(39)(B), the first of which excludes a facility that is the subject of a planned or ongoing removal action under 42 U.S.C. subchapter I. When the site is no longer subject to the Superfund removal action, the property may be considered a Brownfield site, provided that it meets all of the other requirements for a Brownfield site under § 45(b)(11)(B)(i).

No. For purposes of the Energy Community Bonus Credit, a Brownfield site does not include the categories of property described in 42 U.S.C. § 9601(39)(B), the second of which excludes a facility that is listed on the National Priorities List (Superfund) or is proposed for listing. If the property is delisted from the National Priorities List, it is no longer subject to this exclusion and may be considered a Brownfield site, provided that it meets all of the other requirements for a Brownfield site under § 45(b)(11)(B)(i).

Generally no; a landfill subject to such closure requirements generally would be considered a “land disposal unit” excluded from the definition of a Brownfield site under 42 U.S.C. § 9601(39)(B)(vi).

Generally no; a landfill that is undertaking an RCRA Corrective Action cleanup generally would be excluded from the definition of a Brownfield site under 42 U.S.C. § 9601(39)(B)(v).

Yes. Mine-scarred land may qualify as a Brownfield site for purposes of the Energy Community Bonus Credit. In order to qualify, such land must be real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. 42 U.S.C. § 9601(39)(A). However, mine-scarred land that falls under any of the exceptions found in 42 U.S.C. § 9601(39)(B) does not qualify as a Brownfield site for purposes of the Energy Community Bonus Credit, even if it otherwise meets the definition in 42 U.S.C. § 9601(39)(A).

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