IR-2023-69, April 4, 2023
WASHINGTON — The Internal Revenue Service today issued Notice 2023-29PDF that describes certain rules that the IRS intends to include in forthcoming proposed regulations for determining what constitutes an energy community for the production and investment tax credits.
The Inflation Reduction Act allows for increased credit amounts if certain requirements pertaining to energy communities are satisfied. There are three categories of energy communities: brownfield sites, certain metropolitan statistical areas and non-metropolitan statistical areas based on unemployment rates (MSA/non-MSA), and census tracts where a coal mine closed after 1999 or where a coal-fired electric generating unit was retired after 2009 (and directly adjoining census tracts).
The increased credit amount available for meeting the requirements of the energy community provisions is generally 10% for the production tax credit and up to 10 percentage points for the investment tax credit.
More information can be found on the Inflation Reduction Act of 2022 page on IRS.gov.