Tax Update Blog

Treasury Issues Guidance on Inflation Reduction Act’s Labor Standards

November 29, 2022 | Blog
By Jay Heflin

The Treasury Department on November 29th released initial guidance on labor standards that were included in the Inflation Reduction Act. These standards are what taxpayers must meet to fully qualify for tax incentives that are included in the legislation.

Many of the tax credits in the Inflation Reduction Act are tiered on meeting “prevailing wage” rules and “apprenticeship requirements.”

Today’s guidance provides the specifics needed so developers and investors can comply with the rules to take full advantage of the tax credits.

Below are the tax credits that are affected by these requirements, according to the Treasury Department:

Both the prevailing wage and apprenticeship requirements apply to the following tax incentives:

  • Advanced Energy Project Credit
  • Alternative Fuel Refueling Property Credit
  • Credit for Carbon Oxide Sequestration
  • Clean Fuel Production Credit
  • Credit for Production of Clean Hydrogen
  • Energy Efficient Commercial Buildings Deduction
  • Renewable Energy Production Tax Credit
  • Renewable Energy Property Investment Tax Credit

The prevailing wage requirements also apply to the following tax incentives:

  • New Energy Efficient Home Credit
  • Zero-Emission Nuclear Power Production Credit

 The guidance will appear in tomorrow's Federal Register. A link to it is here.

Stay informed!

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