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- Tax Credit
IRA Statuatory Location:
13501
Tax Code Location:
26 U.S. Code § 48C
New or Modified Provision:
Modified and extended. 48C had been enacted in 2009 but was fully allocated after the 2nd allocation round in 2013. The Inflation Reduction Act provides $10 billion of allocations, directs a minimum share to energy communities, and expands eligibility to new types of projects.
Eligible Recipients:
A project that (1) re-equips, expands, or establishes an industrial or manufacturing facility for the production or recycling of a range of clean energy equipment and vehicles; (2) re-equips an industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20 percent; or (3) re-equips, expands, or establishes an industrial facility for the processing, refining, or recycling of critical materials.
Tribal Eligibility:
Yes
Bureau/Office
Funded by:
U.S Department of Treasury and U.S Department of Energy
Description
Provides a tax credit for investments in advanced energy projects, as defined in 26 USC § 48C(c)(1). A project that (1) re-equips, expands, or establishes an industrial or manufacturing facility for the production or recycling of a range of clean energy equipment and vehicles; (2) re-equips an industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20 percent; or (3) re-equips, expands, or establishes an industrial facility for the processing, refining, or recycling of critical materials.
Direct Pay Eligibility:
Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops.
Transferability:
Yes
Stackability:
Cannot claim 45X credit for property produced at facilities that received the 48C credit.
Energy Community Bonus:
No
Relevant Announcements
Related Resources
Key Details
Period of Availability
The credit is available when the application and certification process begins and ends when credits are fully allocated.
Tax Mechanism:
Allocated investment credit. 48C provides $10 billion of allocations, at least $4 billion of which must be allocated in energy communities.
Base Credit Amount:
6% of taxpayer's qualifying investment
Bonus Credit Amount:
Businesses can claim a 30% credit for projects meeting prevailing wage and registered apprenticeship requirements. Initial guidance on the labor provisions is available here.