Qualifying Advanced Energy Project Credit Program under Section 48C
Published on by Lauren Huster, Mary Benintendi, in Tax Services
The IRS announced that beginning May 28, 2024, it will begin accepting applications for the next $6 billion of qualifying investments in the advanced energy project credit program under section 48C(e). The program established a total of $10 billion in tax credits to be allocated, with the first $4 billion in allocations concluding in March of 2024. For round two, the IRS anticipates allocating $6 billion of Section 48C credits. The United States Treasury Department will evaluate any section 48C credits remaining at the end of round two to determine if another round is needed.
To be considered for the Section 48C credit, a taxpayer will need to do the following:
- Submit an application containing concept papers to the IRS through the Qualified Advanced Energy Project Credit Program Applicant Portal.
- The application must be submitted no later than 50 calendar days after the Department of Energy begins the acceptance period for the taxpayer’s application.
The IRS will make all round two allocation decisions no later than January 15, 2025.
The applications must show a project that does one of the following:
- Re-equips expands, or establishes an industrial or manufacturing facility to produce:
- Property designed to be used to produce energy from the sun, water, wind, geothermal deposits,
- Fuel cells, microturbines, or energy storage systems and components,
- Electric grid modernization equipment or components,
- Property designed to capture, remove, use, or sequester carbon oxide emissions, equipment designed to refine, electrolyze, or blend any fuel, chemical, or product that is renewable, or low-carbon and low-emission,
- Property designed to produce energy conservation technologies, light-, medium-, or heavy-duty electric or fuel cell vehicles, as well as technologies, components, or materials for such vehicles, and associated charging or refueling infrastructure, or;
- Hybrid vehicles with a gross vehicle weight rating of not less than 14,000 pounds, as well as technologies, components, or materials for such vehicles, or other advanced energy properties designed to reduce greenhouse gas emissions as may be determined by the Secretary.
- Re-equips an industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20% through the installation of:
- Low or zero-carbon process heat systems,
- Carbon capture, transport, utilization, and storage systems,
- Energy efficiency and reduction in waste from industrial processes, or;
- Any other industrial technology designed to reduce greenhouse gas emissions.
- Re-equips, expands or establishes an industrial facility for the processing, refining, or recycling of critical materials.
Benefits of Section 48C Credits:
The 48C tax credit corresponds to 30% of the qualified investment made within a tax year for an approved advanced energy project. Some of these credits may even be transferred for cash.
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If you’re looking for ways to maximize the 48C credit and would like to know if your project qualifies, the Barnes Dennig tax pros are here to help! Contact us for a free consultation.