The Department of Treasury and Internal Revenue Service released final legislation on June 18th, 2024, for requirements regarding prevailing wage and apprenticeship (PWA). There are ten tax benefits affected by the Inflation Reduction Act:
- Alternative Fuel Refueling Property Credit
- Credit for Carbon Oxide Sequestration
- Advanced Energy Project Credit
- Investment Tax Credit (ITC)
- Clean Fuel Production Credit
- Zero-Emission Nuclear Power Production Credit
- Production Tax Credit (PTC)
- Credit for Production of Clean Hydrogen
- New Energy Efficient Home Credit (45L)
- Energy Efficient Commercial Building Deduction (179)
Taxpayers meeting the prevailing wage and apprenticeship requirements can, generally, increase the base credit or deduction amount by a five times multiplier. Alongside meeting the PWA criteria, qualifying activity must be performed by “construction, alteration or repair of certain clean energy facilities or properties, projects or equipment”. The PWA requirements apply to all labors of the taxpayer who are employed during the construction of qualifying work and are solely responsible for ensuring that the PWA requirements are satisfied.
As mandated by the Internal Revenue Service, to meet PWA taxpayers must:
- Ensure that laborers for qualifying projects are paid no less than the prevailing wage rate.
- Meet requirements related to include apprentices from registered apprenticeship programs.
- Meet recordkeeping and reporting requirements.
