The Treasury Department has released guidance similar to the reforms suggested by SMACNA over recent months to qualify for the most generous tax incentives as part of the Inflation Reduction Act. SMACNA strongly advocated in the legislative arena for these workforce skill enhancements during the debate on the infrastructure and IRA tax packages. This landmark regulatory guidance includes SMACNA-endorsed labor and apprenticeship standards that building owners and contracting firms must meet to qualify for greatly enhanced clean energy and climate tax incentives.
Under the law and now the regulatory guidance, these prevailing wage and apprenticeship requirements apply to qualifying facilities, projects, property, or equipment for which construction begins 60 days or more after Treasury publishes guidance. These requirements will apply to qualifying facilities, projects, property, or equipment for which construction begins on or after January 29, 2023.
To maximize many of the available clean energy and climate tax incentives, firms need to pay workers a “prevailing wage” and employ a certain number of apprentices from registered apprenticeship programs. In the guidance announced today, the Treasury Department provided greater clarity for these provisions.
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 the 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
Take a moment to review SMACNA’s resources regarding the Inflation Reduction Act. Click here to review Treasury’s new guidance.
