COR2409. IRA Energy Credit - Opportunities and Challenges for Contractors

The Inflation Reduction Act (IRA) created game-changing opportunities for many projects to capitalize on the largest energy investment in U.S. history through tax credits. Complying with prevailing wage and apprenticeship (PW&A) under IRA can significantly enhance credit value by five times and, therefore, many project owners are asking contractors to comply. It took nearly two years for the PW&A requirement final rule, leaving many contractors in a state of flux as project owners are pushing penalties and/or loss of credit to contractors. Yet, this is also a perfect opportunity to take advantage of the $270 billion of tax credits and incentives in the longest-running U.S. energy policy. Unfortunately, being “in accordance with” the Davis-Bacon Act, while not a covered act, has created significant confusion for both credit seekers and contractors. This is tax credit compliance for the IRS and there are record-keeping requirements for an extended period. Baker Tilly will review fundamentals of the IRA base and adder credits, including domestic content, energy community, and prevailing wage. This session will review the final PW&A rule, explain recordkeeping, and provide recommendations on how contractors can help their projects comply.

Learning Objectives:

• Analyze the significance of the IRA’s creation of opportunities for energy projects through tax credits.
• Determine the compliance requirements of the IRA prevailing wage and apprenticeship (PW&A) requirement final rule.
• Identify the IRS’s record-keeping requirements related to tax credit compliance and maintaining records to defend under IRS audit.