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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
- https://www.irs.gov/pub/irs-drop/n-22-49.pdf
- https://www.federalregister.gov/documents/2022/11/30/2022-26108/prevailing-wage-and-apprenticeship-initial-guidance-under-section-45b6bii-and-other-substantially
- https://www.dol.gov/agencies/whd/IRA
- https://www.apprenticeship.gov/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.