IRS and Treasury Provide Further Guidance for Qualifying Advanced Energy Project Credit.

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IRS and Treasury Provide Further Guidance for Qualifying Advanced Energy Project Credit.

Updated regulations outline an application process and technical guidance for the qualifying advanced energy project credit program under section 48C of the Internal Revenue Code.

The IRS and Treasury Department have issued updated regulations for the qualifying advanced energy project credit program under section 48C of the Internal Revenue Code. This program offers tax incentives for clean energy manufacturing, recycling, industrial decarbonization, and critical materials processing.

A Notice issued earlier allocated $10 billion in credits. The focus is on projects in communities with closed coal mines or retired coal-fired power plants. The initial funding round includes $4 billion, with a portion reserved for designated coal communities.

Eligible projects must be in service before receiving an allocation under the program. Allocation letters for approved projects are expected to be issued around March 31, 2024.

The recently issued Notice provides updates and clarifications to the qualifying advanced energy projects definition and application process. It includes clearer definitions, examples, technical review criteria, and application requirements.

The guidance outlines the process for submitting concept papers and joint applications, criteria for evaluating project merit, disclosure requirements, and ineligibility of property placed in service before receiving an allocation.

Additionally, the notice introduces information on the energy community’s census tracts and provides a list of these tracts.

Taxpayers interested in the program must submit concept papers, with favorable papers leading to full application submissions. The deadline for concept paper submissions is July 31, 2023.

To assist taxpayers, the Treasury Department offers resources like a mapping tool and an upcoming informational webinar accessible through the Energy Department’s webpage.

The qualifying advanced energy project credit program promotes clean energy initiatives and encourages investments in renewable energy and environmental sustainability. It provides tax incentives to drive innovation and support the growth of advanced energy projects nationwide.

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