Tax

Read about guidance released by the IRS on the Low-Income Community Adder and the newly established allocation program to make the adder available.

Read about a new IRS reference standard for energy efficient commercial building property for purposes of the deduction under Section 179D of the Internal Revenue Code, which takes effect on January 1.

Read about new IRS reporting requirements, issued in Revenue Procedure 2022-42, for manufacturers and sellers of new or previously owned clean vehicles or qualified new commercial clean vehicles eligible for tax credits under Internal Revenue Code Sections 30D, 25E, or 45W, respectively.

On November 3, 2022, the U.S. Department of the Treasury (Treasury) and Internal Revenue Service (IRS) released three Notices requesting public comments by December 3, 2022, on certain additional aspects of the clean energy tax incentives included in the Inflation Reduction Act of 2022 (IRA). Treasury and the IRS previously released six Notices, on October 5, 2022, requesting public comments by November 4 on certain other aspects of the energy tax incentives, which are described in our alert. The Treasury and the IRS will consider written comments submitted after December 3 if such consideration will not delay the issuance of guidance. 

On October, 5, 2022, the U.S. Department of Treasury and Internal Revenue Service published six Notices requesting public comments by November 4, 2022 on certain of the clean energy tax incentives included in the Inflation Reduction Act of 2022.  However, the IRS and Treasury will consider written comments received after November 4 that do not delay the relevant guidance.  Input from industry stakeholders is important to help inform next steps for the IRS and Treasury and shape how these clean energy tax incentives are accessed in practice.

Read about new guidance from the IRS, Revenue Procedure 2022-19, which describes simplified procedures that allow S corporations to resolve frequently encountered missteps, often without requesting a time-consuming and costly private letter ruling.

Read about the Biden-Harris administration’s announcement of $7 billion in funding to create regional clean hydrogen hubs (“H2Hubs”)

In this webinar, Anne Levin-Nussbaum, a Member in our Energy & Sustainability and Tax Practices and her colleagues at ML Strategies discuss the energy tax provisions, review the Act’s new direct funding opportunities and offer insights regarding the implementation of such funding programs.

When President Biden’s signature Build Back Better Act faltered last year, many viewed the effort to be a failure. However, negotiations continued before Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV) announced the package in late July. Nearly half of the $737 billion in revenue will be invested in clean energy and includes many direct funding opportunities in the form of grants, loans, and rebates focused on climate, energy, and energy efficiency. 

Read about the Inflation Reduction Act of 2022 enacted August 16, 2022, which extends and expands existing tax credits and adds several new energy tax credits to encourage the production of electricity using clean energy and the reduction of carbon emissions.

Read Mintz’s summary of important tax provisions included in the recently announced Inflation Reduction Act of 2022. If it is signed into law, the Act will establish a 15% corporate minimum tax; modify the carried interest rule; and expand, extend, and add new energy tax credits.

Read about the U.S. House Ways and Means Committee’s proposed tax legislation intended to partially fund the $3.5 trillion Build Back Better Act to fund Democratic priorities.

Late on December 21, 2020, the Senate debated and approved a COVID-19 relief package and omnibus spending bill for 2021 that included, deep in its 5,500-plus pages, tax extenders for a selection of renewables tax credits, including a one-year extension for the wind production tax credit ("ITC") and a two-year extension for the solar investment tax credit ("ITC"), as well as a five-year extension for offshore wind projects taking the ITC. The bill, which was earlier approved by the House, is expected to be signed by President Trump later this week.

On October 2, 2020, the Internal Revenue Service released final regulations providing guidance for Section 529A “qualified ABLE programs” established by states under the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014 (the “ABLE Act”) to provide tax-favored savings and investment accounts for individuals with disabilities.  Building on proposed regulations issued in 2015 and 2019 and several prior IRS notices as to how the final regulations would resolve specific issues under the ABLE Act, the final regulations clearly seek to avoid, within statutory constraints, imposing major administrative burdens on ABLE programs. Nonetheless, several key provisions contain ambiguities or raise concerns.  As indicated by prior IRS guidance, the regulations provide a transition period of at least two years for ABLE programs operating in good faith to implement provisions applicable to such programs, and thus an opportunity for the IRS address such ambiguities and concerns through notices or other guidance prior to their full implementation.

This article summarizes the most recent pandemic-era proposals for wind, solar, and carbon capture federal tax incentives and attempts to discern potential trends for the future.

Read about IRS and Treasury Department proposed regulations addressing the application of Section 1061 of the U.S. Internal Revenue Code of 1986, as amended.

In February 2020, the IRS issued Notice 2020-12, which provides long-awaited guidance on when a “qualified facility” or carbon capture equipment, in each case within the meaning of section 45Q, is considered to have “begun construction.” This question is of paramount significance because section 45Q allows a carbon capture credit for carbon oxide that is captured using carbon capture equipment that is originally placed in service at a qualified facility, and a qualified facility means an industrial or direct air capture facility, the construction of which began before January 1, 2024.