The Department of the Treasury and the Internal Revenue Service issued proposed regulations under the Inflation Reduction Act for owners of qualified clean electricity facilities and energy storage technology that may want to claim relevant tax credits.

The Inflation Reduction Act of 2022 established the clean electricity production credit and the clean electricity investment credit; taxpayers may be eligible for a credit on electricity produced from a qualified clean electricity facility or may be eligible for a credit for a qualified investment in a qualified clean electricity facility or energy storage technology.

The proposed regulations provide guidance for these types of facilities placed in service after 2024 and invite comments from the public on the proposed regulations.

The proposed regulations provide guidance on several topics including the following:

• Calculating the amount of the credits;
• Defining qualified facilities and energy storage technology and describing property included in a qualified facility and energy storage technology and property that is an integral part of a qualified facility and energy storage technology;
• Defining metering devices;
• Defining related and unrelated persons;
• Explaining rules of general application – such as rules related to the expansion of a facility;
• Explaining rules regarding recapture;
• Defining greenhouse gas emissions and emission rates as well as the effects of carbon capture; and
• Listing certain qualified facilities that have a qualifying greenhouse gas emissions rate and explaining the path other facilities can take to obtain a provisional emissions rate.

The proposed regulations explain how the public may send comments to the IRS as well as information on the public hearing.

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Source: IRS