On Mar. 22, US IRS issued guidance on energy tax credit program.
US IRS issued Notice 2024-30 to expand certain rules for determining what an energy community is for production, investment tax credits per Inflation Reduction Act (IRA).
Also added five FAQ to IRS energy community FAQ regarding brownfield sites.
Released Appendix 1, identifying Metropolitan Statistical Areas (MSAs) and Appendix 2 that identifies additional MSAs and non-MSAs that qualify as energy communities.
Addresses several issues raised by stakeholders on Apr. 2023 guidance, see #168590.
IRA Background
Under the IRA, there are three ways an area can qualify as an energy community.
First is coal closures, a census tract or directly adjoining census tract where a coal mine closed after 1999 or a coal-fired electric generating unit was retired after 2009.
The bonus is also available to areas that have significant employment or local tax revenues from fossil fuels and higher than average unemployment (statistical areas).
To qualify for bonus, a metropolitan statistical area (MSA) or non-metropolitan statistical area (non-MSA) must have/recently had at least 0.17% direct employment.
Or at least 25% local tax revenues related to the extraction, processing, transport, or storage of coal, oil, natural gas, and unemployment rate at or above national average.
Also brownfield sites, which are properties contaminated by hazardous materials.
Rule Expansion
Developers can receive a bonus of up to 10 percentage points on top of Investment Tax Credit (ITC) and increase of 10 percentage points for Production Tax Credit (PTC)
Energy community bonus is available to projects in historical energy communities.
Adds two NAICS codes, 2212 (Natural Gas Distribution) and 23712 (Oil and Gas Pipeline and Related Structures Construction), to definition of fossil fuel employment.
The notice also includes appendices listing additional MSAs and non-MSAs that qualify as energy communities for 2023 after including the two additional NAICS codes.
Lists those that may qualify for future years, depending on local unemployment rates.
Also permits offshore wind facilities to attribute nameplate to additional property.
Namely, to supervisory control and data acquisition system (SCADA) equipment that are owned by the owner of the offshore wind project and are located in eligible ports.
Regulators
US IRS; US Treasury
Entity Types
Corp
Reference
US IRS: PR IR-2024-77, Nt 2024-30, FAQ, Info, 3/22/2024; US Treasury: PR, 3/22/2024; IRA; ESG;
