Energy Community
Tax Credit Bonus

As defined in the Inflation Reduction Act (IRA), the Energy Community Tax Credit Bonus applies a bonus of up to 10% (for production tax credits) or 10 percentage points (for investment tax credits) for projects, facilities, and technologies located in energy communities. Increased credit amounts or rates are available to taxpayers that satisfy certain energy community requirements under Section 45, 48, 45Y, or 48E of the Internal Revenue Code. The IRA defines energy communities as:

1. A “brownfield site” (as defined in certain subparagraphs of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA))
2. A “metropolitan statistical area” or “non-metropolitan statistical area” that has (or had at any time after 2009)
   • 0.17% or greater direct employment or 25% or greater local tax revenues related to the extraction, processing, transport, or storage of coal, oil, or natural gas; and
   • has an unemployment rate at or above the national average unemployment rate for the previous year
3. A census tract (or directly adjoining census tract)
   • in which a coal mine has closed after 1999; or
   • in which a coal-fired electric generating unit has been retired after 2009

For additional information, see Treasury Notice 2023-29, Appendix A, Appendix B, and Appendix C, IRS Notice 2023-45, and IRS Notice 2023-47, Appendix 1, Appendix 2, and Appendix 3.

The mapping tool below reflects currently available data on two types of energy communities. First, the map shows energy communities that are census tracts and that have had coal mine closures after December 31, 1999 or coal-fired electric generating unit retirements after December 31, 2009, and tracts that are directly adjoining. Second, the map shows the metropolitan statistical areas (MSAs) and non-metropolitan statistical areas (non-MSAs) that are energy communities for 2023. These MSAs and non-MSAs have had for at least one year since 2009, 0.17% or greater direct employment related to extraction, processing, transport, or storage of coal, oil, or natural gas (the fossil fuel employment (FFE) threshold) and have an unemployment rate for 2022 that is equal to or greater than the national average unemployment rate for 2022. These MSAs and non-MSAs that meet the 2022 unemployment rate requirement are energy communities as of January 1, 2023 and will maintain that status until the unemployment rates for 2023 become available and a new list of energy communities is provided. The guidance that determines the MSAs and non-MSAs that are energy communities based on 2023 unemployment rates will likely be released in May 2024. In addition, the map shows MSAs and non-MSAs that only meet the FFE threshold. These MSAs and non-MSAs are not energy communities for 2023 because they do not meet the unemployment rate requirement; however, these areas could become energy communities in a future year if the unemployment requirement is also met. Note that brownfields are not shown on this map.