In brief

What happened?

Certain energy tax credits and incentives provide for a base rate and one or more credit bonuses. The IRS and Treasury on June 18 issued final regulations on the prevailing wage and apprenticeship credit bonus.

The final regulations generally apply to qualified facilities placed in service in tax years ending after June 25, 2024, that begin construction after June 25, 2024. Taxpayers may apply the final regulations to qualified facilities placed in service in tax years ending on or before June 25, 2024, and qualified facilities placed in service in tax years ending after June 25, 2024, that began construction before June 25, 2024. Taxpayers may apply the proposed regulations to qualified facilities that began construction on or after January 29, 2023, and on or before June 25, 2024. In applying either the final or the proposed regulations, taxpayers must follow the regulations consistently and in their entirety.

Why is it relevant? 

Taxpayers that meet the requirements to pay prevailing wages to workers employed in constructing, repairing, or altering facilities and to hire workers from apprenticeship programs may be able to claim a credit five times the base rate. This credit bonus is available for credits under Sections 30C, 45, 45Q, 45V, 45Y, 45Z, 48, 48C, and 48E, and the energy efficient commercial building deduction under Section 179D.

Action to consider:

A forthcoming PwC Insight will discuss the final regulations in more detail.