Energy credit prevailing wage and apprenticeship rules

The package includes proposed regulations (REG-100908-23) with details on satisfying the requirements to get up to five times the amount of federal income tax credits for eligible projects; frequently asked questions; and Publication 5855, Prevailing Wage & Registered Apprenticeship Overview, wh...

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Bibliographic Details
Published in:The Tax Adviser 2024-01, Vol.55 (1), p.8-12
Main Authors: Matlock, Greg, Bernier, Michael, Chai, Christine, Murphy, Brian, Naumoff, Paul, Honnatti, Akshay, Camerucci, David
Format: Magazinearticle
Language:English
Subjects:
Alternative energy sources
Apprenticeship
Construction
Electricity
Energy industry
Energy tax credits
Fines & penalties
Human resource management
Inflation Reduction Act 2022-US
Labor contracts
Laws, regulations and rules
Manual workers
Production management
Tax credits
Tax deductions
Tax increases
Tax penalties
Tax returns
Taxation
Taxpayers
Wages
Wages & salaries
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Summary:The package includes proposed regulations (REG-100908-23) with details on satisfying the requirements to get up to five times the amount of federal income tax credits for eligible projects; frequently asked questions; and Publication 5855, Prevailing Wage & Registered Apprenticeship Overview, which summarizes the requirements. General requirements The Inflation Reduction Act allowed an increased tax credit or deduction for taxpayers satisfying certain prevailing wage and apprenticeship requirements for the construction, installation, alteration, or repair of a qualified facility, qualified property, qualified project, or qualified equipment. According to the proposed regulations, the request should include information about the project, location, which labor classifications are needed, and any other pertinent information. Taxpayers that failed to pay the prevailing wage must: * Pay the workers the difference between what they were paid and what they were supposed to be paid (three times the difference if the failure is found to result from intentional disregard), plus interest (at the federal short-term rate plus 6 percentage points); and * Pay the IRS a penalty of $5,000 for each worker who was not paid at the prevailing wage rate in the year ($10,000 if the failure is due to intentional disregard); the penalty might be waived if the taxpayer (1) makes a correction payment on the earlier of 30 days after becoming aware of the error or the date on which the credit is claimed and certain other requirements are met, or (2) has a qualifying project labor agreement in place.
ISSN:0039-9957