Internal Revenue Service
Note: Information on the IRS's climate-related regulations under the Inflation Reduction Act is available at IRATracker.org.
Energy
The IRS is authorized to promulgate regulations related to energy (e.g., renewable energy infrastructure, energy efficiency) under multiple sections of the Internal Revenue Code. For example, section 48C of the Internal Revenue Code, first enacted by the American Recovery and Reinvestment Act of 2009, provides an allocated credit for qualified investments in qualifying advanced energy projects. The Inflation Reduction Act of 2022 also included energy-related tax credits, which can be found at the IRATracker.org.
Biden Administration (2021-2024)
On November 20, 2024, the U.S. Department of the Treasury and the IRS released final regulations that modify existing regulations to allow certain unincorporated organizations that are owned in whole or in part by applicable entities to be excluded from the application of partnership tax rules. 89 Fed. Reg. 91,552 (Nov. 20, 2024). These regulations affect unincorporated organizations and their members, including tax-exempt organizations, the District of Columbia, State and local governments, Indian Tribal governments, Alaska Native Corporations, the Tennessee Valley Authority, rural electric cooperatives, and certain agencies and instrumentalities.
- Final Rule, 89 Fed. Reg. 91,552 (Nov. 20, 2024)
- Proposed Rule, 89 Fed. Reg. 17,613 (Mar. 11, 2024)
On April 29, 2024, the U.S. Department of the Treasury, the U.S. Department of Energy, and the IRS released additional guidance on the expanded Qualifying Advanced Energy Project Tax Credit (§ 48C) program under § 48C of the Internal Revenue Code. Treasury and the IRS also released a notice providing additional information about the second allocation round under the program.
- Notice 2024-36 (2024)
- Notice 2023-18 (2023)
On September 27, 2023, the U.S. Department of the Treasury and the IRS today released guidance on the Section 45L New Energy Efficient Home Credit. The guidance addresses: (i) the person that is eligible for the credit, (ii) determining the applicable amount of the credit, (iii) energy saving requirements, (iv) certification requirements, and (v) substantiation requirements.
- Notice 2023-65 (2023)
Motor Vehicles
The IRS is authorized to promulgate regulations related to motor vehicles under multiple sections of the Internal Revenue Code. For example, section 30C, first enacted by the Energy Policy Act of 2005, provides a tax credit for the cost of qualified alternative fuel vehicle refueling property. Section 30D, first enacted by the Energy Improvement and Extension Act of 2008, provides a tax credit for purchasing and placing in service new qualified plug-in electric drive motor vehicles. The Inflation Reduction Act of 2022 also included a number of clean vehicle-related tax credits, which can be found at the IRATracker.org.
Biden Administration (2021-2024)
On January 19, 2024, the U.S. Department of the Treasury and the IRS released guidance to provide clarity on eligibility for incentives to install electric vehicle charging stations and other alternative fuel refueling stations. The Department of Energy also released a mapping tool today to help households, businesses, or other organizations considering those investments to find out whether they may be eligible for the tax credit.
- Notice 2024-20 (2024)
On November 1, 2023, U.S. Department of the Treasury and the IRS began allowing car dealers to register for the IRS Energy Credits Online portal. As of January 1, 2024, registered car dealers were able to offer vehicle tax credits at point of sale.
On October 10, 2023, the U.S. Department of the Treasury and the IRS released guidance on registration requirements and mechanics of credit transfer to car dealerships offering the Section 25E and 30D vehicle credits at point of sale.
- Proposed Rule, 88 Fed. Reg. 70,310 (Oct. 10, 2023)
On December 29, 2022, the IRS released a notice of intent to propose regulations on the tax credit for new clean vehicles and A notice on the “incremental cost” of vehicles eligible for the commercial clean vehicle tax credit.
- Notice 2023-9 (2023)
- Notice 2023-1 (2023)
Carbon Capture & Sequestration
Section 45Q of the Internal Revenue Code authorizes tax credits for qualified carbon dioxide and carbon oxide sequestration by the taxpayer.
Biden Administration (2021-2024)
On July 24, 2024, the IRS issued Notice 2024-60, which provides guidance on the procedures to claim a section 45Q tax credit for utilization of carbon oxide.
First Trump Administration (2017-2020)
On January 15, 2021, the IRS published a final rule to implement the carbon oxide sequestration tax credit under section 45Q of the Internal Revenue Code. 86 Fed. Reg. 4,728 (Jan. 15, 2021).
- Correction to Final Rule, 86 Fed. Reg. 16,530 (Mar. 30, 2021)
- Final Rule, 86 Fed. Reg. 4,728 (Jan. 15, 2021)
- Proposed Rule, 85 Fed. Reg. 34,050 (June 2, 2020)
In March 2020, the IRS issued Notice 2020-12, which provides guidance to help businesses determine when construction has begun on a qualified facility or on carbon capture equipment that may be eligible for the carbon capture credit.
In March 2020, the IRS issued Revenue Procedure 2020-12, which creates a safe harbor for the allocation rules for carbon capture partnerships, simplifying the application of carbon capture credit rules to partnerships able to claim the credit.
In February 2018, the IRS issued Notice 2019-32 requesting comments from taxpayers regarding the changes to the carbon capture credit in the new Bipartisan Budget Agreement.
Obama Administration (2009-2016)
On March 23, 2011, the IRS issued Notice 2011-25 to modify the guidance in Notice 2009-83.
On October 8, 2009, the IRS issued Notice 2009-83 with interim guidance on the carbon dioxide sequestration tax credit.
CHIPS Act
The IRS is authorized to promulgate regulations related to the Advanced Manufacturing Investment Credit under section 48D of the Internal Revenue Code, which was added by the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act of 2022 and the Inflation Reduction Act (IRA) of 2022.
Biden Administration (2021-2024)
On March 11, 2024, the Department of the Treasury and the IRS published a final rule to allow taxpayers seeking to utilize the elective payment option to more quickly gain the benefits of the section 48D Advanced Manufacturing Investment Credit (CHIPS ITC), which was established by the CHIPS Act of 2022. 89 Fed. Reg. 17,596 (Mar. 11, 2024). The rule was initially proposed on June 21, 2023, along with temporary regulations. 88 Fed. Reg. 40,123 (June 21, 2023); 88 Fed. Reg. 40,086 (June 21, 2023).
- Final Rule, 89 Fed. Reg. 17,596 (Mar. 11, 2024)
- Proposed Rule, 88 Fed. Reg. 40,123 (June 21, 2023)
- Temporary Rule, 88 Fed. Reg. 40,086 (June 21, 2023)
On October 23, 2024, the Department of the Treasury and the IRS published a final rule for the Advanced Manufacturing Investment Credit (CHIPS ITC) established by the CHIPS Act of 2022. The regulations address the credit's eligibility requirements, an election that eligible taxpayers may make to be treated as making a payment of tax (including an overpayment of tax), or for an eligible partnership or S corporation to receive an elective payment, instead of claiming a credit, and a special 10-year credit recapture rule that applies if there is a significant transaction involving the material expansion of semiconductor manufacturing capacity in a foreign country of concern.
- Final Rule, 89 Fed. Reg. 84,732 (Oct. 23, 2024)
- Proposed Rule, 88 Fed. Reg. 17,451 (Mar. 23, 2023)