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Treasury & IRS Issues Guidance on Wage and Apprenticeship Requirements for Enhanced Tax Benefits

December 12, 2022

The Treasury Department (Treasury) and Internal Revenue Service (IRS) have released Notice 2022-61 which provides taxpayers with information on how to satisfy the prevailing wage and apprenticeship requirements for enhanced tax benefits under the Inflation Reduction Act (IRA).

When created, the IRA devised several new standards and revised tax incentives to promote clean energy projects. Among the incentives, Congress required that taxpayers meet prevailing wage and apprenticeship standards in constructing a project to foster job growth in the energy section. This Notice helps establish the initial guidance needed for implementing the IRA.

The Notice guides how taxpayers, such as contractors, builders, developers, and owners of clean energy facilities, receive the deduction amounts or increased tax credits by satisfying the wage and apprenticeship requirements. The guidance includes examples of what constitutes a prevailing wage and the determination of qualified apprenticeships.

This Notice also serves as the published guidance establishing the 60 days described in those provisions of the Code concerning prevailing wage and apprenticeship requirements. This Notice affects construction or installation, which begins on or after January 30, 2023.

This is a link to the Notice;  The Treasury and the IRS anticipate issuing other guidance and proposed regulations concerning the prevailing wage and apprenticeship requirements.