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Production Tax Credit for Electricity from Renewables – 26 U.S. Code § 45
- Tax Credit
IRA Statuatory Location:
13101
Tax Code Location:
26 U.S. Code § 45
New or Modified Provision:
Modified and extended. Extended for projects beinning construction before 1/1/25. Modified to tie the value of the credit to meeting prevailing wage and registered apprenticeship requirements.
Eligible Recipients:
Wind; Biomass; Geothermal; Solar; Small Irrigation; Municipal Solid waste; Hydropower; Marine; Hydrokinetic
Tribal Eligibility:
Yes
Bureau/Office
Funded by:
U.S. Department of Treasury
Description
Provides a tax credit for production of electricity from renewables
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).
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
Projects beginning construction before 1/1/25.
Tax Mechanism:
Production tax credit
Base Credit Amount:
$0.03/kW, 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 up to 10 percentage points for projects meeting certain domestic content requirements for steel, iron, and manufactured products. Credit is increased by up to 10 percentage points if located in an energy community.