Treasury & IRS Finalize Guidance and Labor Provisions for Clean Energy Tax Incentives

The Department of the Treasury and the Internal Revenue Service issued final regulations on the prevailing wage and apprenticeship (PWA) requirements related to increased credit or deduction amounts for certain clean energy incentives, enacted as a part of the Inflation Reduction Act (IRA).

The IRA provides increased credit or deduction amounts for taxpayers who satisfy certain PWA requirements regarding the construction, alteration or repair of certain clean energy facilities or properties, projects or equipment. By satisfying the PWA requirements, taxpayers can generally increase the base amount of the credit or deduction by five times.

The Inflation Reduction Act was intended to spur construction of energy projects and will impact the industry for years to come. Today’s final rules on the PWA mandates comes nearly two years after it was signed into law and AGC welcomes the further clarity provided by Treasury. AGC’s concerns are punctuated by the over-incentivization of the usage of PLAs that could prohibit large swaths of industry from fairly competing for IRA projects, while giving preferential treatment to others. Additionally, increased focus on enforcement and compliance planned by Treasury could lead to project owners and developers placing further liability upon contractors for loss of credit or penalties.

Treasury statement with additional resources can be found here and AGC resources are in development.

For more information, contact Jim Young at or 202-547-0133, Matt Turkstra at or 202-547-4733, or Claiborne Guy at or 703-837-5382.

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