Treasury Releases Guidance on New Energy Tax Credit Labor Provisions

The Treasury Department on Nov. 29 released initial guidance in IRS Notice 2022-61 regarding the Inflation Reduction Act’s labor requirements that apply to some of the energy tax incentives.

To claim the full credit amount for certain incentives, taxpayers are required to pay workers the “prevailing wage,” and in other cases, also hire a certain number of registered apprentices.

The prevailing wage and apprenticeship requirements apply to the Section 45 Production Tax Credit, the Section 48 Investment Tax Credit, and the Section 179D Energy Efficient Commercial Buildings Deduction, among others.

The prevailing wage requirements also apply to the Section 45L New Energy Efficient Home Tax Credit.

The Department of Labor separately issued two Frequently Asked Question (FAQ) documents to help taxpayers comply with these requirements: One on prevailing wage and the other on apprenticeships.

Learn more about the Inflation Reduction Act.