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- Tax Credit
IRA Statuatory Location:
13701
Tax Code Location:
26 U.S. Code § 45Y
New or Modified Provision:
New
Eligible Recipients:
Zero GHG electricity generators
Tribal Eligibility:
Yes
Bureau/Office
Funded by:
U.S. Department of Treasury
Description
Provides a technology-neutral tax credit for production of clean electricity. Replaces the production tax credit for electricity generated from renewable sources (extended in Section 13101 through 2024).
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:
Credit reduced for tax-exempt bonds with similar rules as section 45(b)(3). Cannot claim both the §48E ITC and the § 45Y PTC for the same facility.
Energy Community Bonus:
Yes
Relevant Announcements
- U.S. Department of the Treasury Releases List of Qualifying Technologies for Clean Electricity Credits
- Rev. Proc. 2025-14
- U.S. Department of the Treasury Releases Final Rules for Technology-Neutral Clean Electricity Credits
- Section 45Y Clean Electricity Production Credit and Section 48E Clean Electricity Investment Credit
- Request for Comments on Certain Energy Generation Incentives Notice 2022-49
- Notice Prevailing Wage and Apprenticeship Initial Guidance Under Section 45(b)(6)(B)(ii) and Other Substantially Similar Provisions
- Prevailing Wage and the Inflation Reduction Act
- Inflation Reduction Act Apprenticeship Resources
Related Resources
Additional information is available on the Resources page.Key Details
Period of Availability
Facilities placed in service after 12/31/24. Phase-out starts the later of (a) 2032 or (b) when U.S. greenhouse gas emissions from electricity are 25% of 2022 emissions or lower.
Tax Mechanism:
Production tax credit
Base Credit Amount:
0.3 cents/kWh, inflation adjusted
Bonus Credit Amount:
Credit is increased by 5 times for projects meeting prevailing wage and registered apprenticeship requirements. Initial guidance on the labor provisions is available here. Credit is increased by 10% for projects meeting certain domestic content requirements for steel, iron, and manufactured products. Credit is increased by 10% if located in an energy community.