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Treasury Department Unveils New IRA Rules for Wages

The Department of the Treasury, International Service recently proposed regulations that outline the criteria for low-carbon energy project developers to access tax credits under the Inflation Reduction Act, contingent upon meeting prevailing wage and apprenticeship (PWA) requirements.

These proposed regulations impact companies seeking to meet the PWA and prevailing wage requirements for increased federal income tax credits or deductions. The proposed regulations affect the PWA requirements for the following energy tax incentives: Sections 30C, 45, 45L, 45Q, 45U, 45V, 45Y, 45Z, 48, 48C, 48E and 179D.

These new labor regulations replace an earlier, more basic version that came into effect in January.

Compliance with wage and apprenticeship standards, particularly impacting roles like construction workers and electricians, enables tax credits of up to 30% of project expenses, a fivefold increase from credits available without meeting these prerequisites.

For the energy services sector and companies looking to take advantage of these energy-related project tax credits, understanding these proposals is critical for planning and execution. If Members are interested, Energy Workforce will put together a working group to comment on the proposed regulations through its Government Affairs Committee. A public hearing on the proposed rules is scheduled for November 21 and comments close on October 30.

To engage on the proposal, contact Senior Director, Government Affairs Deidre Kohlrus.

Maria Suarez-Simmons, Senior Director Energy Policy, writes about industry-specific policies for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.


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