Treasury releases 2022 year-end guidance timeline

TAX ALERT | December 21, 2022

Authored by RSM US LLP

Executive summary: Treasury to release clean-energy incentive guidance 

The U.S. Department of the Treasury recently announced the timing of some future Inflation Reduction Act (IRA) clean energy incentive guidance. Treasury’s recent press release indicates that by the end of the year they intend to release guidance related to several provisions within the IRA. 

Treasury releases 2022 year-end guidance timeline

Treasury on Dec. 19, 2022, issued a press release providing its intended timeline for the release of awaited guidance for implementation of the Inflation Reduction Act. Guidance for energy-related incentives is included in the timeline. Prior to the end of the year, Treasury intends to release the following: 

• Preliminary guidance related to the corporate alternative minimum tax (CAMT)
• Guidance related to the excise tax on stock buybacks 
• The anticipated direction of critical mineral and battery component requirements for determining the amount of the new clean vehicle credit for certain vehicles
• FAQs for consumers regarding the tax credit for energy efficient home improvement projects and residential energy property 

In March 2023, Treasury plans to release a notice of proposed rulemaking (NPRM) for critical minerals and battery component requirements. Until that proposed guidance is released, the critical minerals and battery components requirements are not effectuated. Treasury also confirmed its intent to release additional guidance for buyers and manufacturers of clean vehicles. 

This month, Treasury also released the Inflation Reduction Act Guidebook to the IRA’s clean energy provisions.  This comprehensive document sets forth explanations of the tax incentives and other programs related to clean energy.  

Specifically, it provides an overview of the clean energy, climate mitigation and resilience, agriculture and conservation-related tax incentives and investment programs in the IRA, including who is eligible to apply for funding and for what activities. Treasury will publish new developments to keep stakeholders and potential beneficiaries of these programs up to date on the latest deadlines and details.

Washington National Tax takeaways 

One of the most frequently asked questions from businesses is when will guidance on the IRA be issued? The Treasury press release begins to answer this question by setting forth an initial timeline of the top IRA priorities.  

Since the IRA was signed into law, Treasury has worked to write the necessary rules to implement the IRA. Guidance has steadily been released in the last five months of 2022. Secretary Janet Yellen and Deputy Secretary Wally Adeyemo solicited input from the public and key stakeholders. Treasury is still in the process of working through thousands of public comments from various stakeholders in both the private and public sectors. 

To date, Treasury has released guidance on the following topics:

• Aug. 16, 2022: Initial information on electric vehicle tax credit
• Sep. 13, 2022: Guidance on one-time claims for alternative fuel and biodiesel credits
• Oct. 5, 2022: Six notices seeking public comment on monetization elections, prevailing wage and apprenticeship requirements and incentives for clean vehicles; manufacturing of components used in renewable energy projects; energy efficient commercial buildings; and projects that generate electricity from renewable resources
• Nov. 3, 2022: Three additional notices seeking public comment on credits for clean fuels, commercial clean vehicles and alternative fuel vehicle refueling property and carbon oxide sequestration
• Nov. 29, 2022: Guidance establishing rules for prevailing wage and apprenticeship requirements
• Dec. 12, 2022: Guidance setting forth initial procedures for clean vehicle manufacturers
• Dec. 19, 2022: Guidance on sustainable aviation fuel incentives

Treasury is working to determine potential issues taxpayers may have when claiming and substantiating various energy-related incentives. Several items of anticipated energy-related guidance were not included in Treasury’s year-end timeline. Guidance yet to be issued ranges from definitions and clarifications to procedures to the establishment of programs for the qualifying advanced energy project credit and the allocation of capacity limitations for environmental justice solar and wind projects. 

The issuance of additional guidance in early 2023 is anticipated due to effective dates for incentives and statutory requirements that guidance on certain topics be issued not later than 180 days after the enactment of the IRA.  Additionally, it is expected that guidance on the monetization provisions for the energy incentives (the so-called direct pay provision and the transferability provision) is also a priority.  

In order to prevent invalid claims for various incentives, claimants must watch for forthcoming guidance from the Treasury at the end of 2022 and in the new year. Eligible claimants should consult with their tax advisor on the various energy incentives to ensure compliance with the provisions.