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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
- May Guidance
- Treasury Guidance on IRA Programs in Hard-Hit Coal Communities
- Request for Comments on Energy Security Tax Credits for Manufacturing Under Sections 48C and 45X
- Initial Guidance Establishing Qualifying Advanced Energy Project Credit Allocation Program Under Section 48C(e)
- Qualifying Advanced Energy Project Credit (§48C) Frequently Asked Questions
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.