Internal Revenue Service Releases Proposed Regulations for Prevailing Wage and Apprenticeship Requirements for Increased Credit Percentage

The Internal Revenue Service released proposed regulations, Frequently Asked Questions, and Publication 5855 to provide guidelines on the prevailing wage and apprenticeship requirements for obtaining the increased credit for most clean energy incentives created and expanded by the Inflation Reduction Act (IRA).

Generally, to qualify for the clean energy incentives in the IRA, laborers employed in the construction or repair of such projects must be paid no less than applicable prevailing wage rates, and apprentices from registered programs must be employed for a stated number of hours. A general wage determination follows wage rates established by the Department of Labor for a specific geographic area.

By following the guidelines established for prevailing wages and apprenticeships, taxpayers may be eligible to increase the credit available by five times the rate provided by the IRA. The credits eligible for the increased rates are the following:

• 45 – Production Tax Credit for Electricity from Renewables
• 45Y – Clean Electricity Production Tax Credit
• 48 – Investment Tax Credit for Energy Property
• 48E – Clean Energy Investment Tax Credit
• 45Q – Credit for Carbon Oxide Sequestration
• 45U – Zero-Emission Nuclear Power Production Credit
• 48C – Advanced Energy Project Credit
• 30C – Alternative Fuel Vehicle Refueling Property Credit
• 45V – Clean Hydrogen Production Tax Credit
• 45Z – Clean Fuel Production Credit
• 45L – New Energy Efficient Homes Credit
• 179D – Energy Efficient Commercial Buildings Deduction

Please contact our Ryan tax professionals to determine how these changes can apply to your business.

TECHNICAL INFORMATION CONTACTS:

Ian Boccaccio
Principal
Ryan
469.399.4545
ian.boccaccio@ryan.com

Scott Stogsdill
Director
Ryan
469.399.4496
scott.stogsdill@ryan.com

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.