Monday, May 9, 2016

USA: PTC or ITC Available if Construction Begins Before January 1, 2017 - IRS

IRS Issues Revised Start-Of-Construction Guidance For Renewable Energy Developers (Stoel Rives)

The IRS has issued highly anticipated guidance updating the “beginning of construction” requirement for the production tax credit (PTC) under Section 45 of the Internal Revenue Code and the investment tax credit (ITC) under Section 48 of the Code. Notice 2016-31 updates the IRS’s prior guidance to reflect the extension of the PTC and ITC that was enacted at the end of 2015, and also addresses a number of other issues taxpayers may encounter when determining whether they qualify for the PTC or ITC.

Notice 2016-31 addresses certain issues raised by the extension of the PTC and ITC that was enacted as part of the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”). In the case of geothermal, landfill gas, trash, marine, and hydrokinetic facilities and certain closed-loop biomass, open-loop biomass, and qualified hydropower facilities, a taxpayer is eligible to claim the PTC or ITC if construction begins before January 1, 2017, with no phase-out.

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