The Treasury Department released guidelines detailing new wage and apprenticeship standards companies must meet to qualify for tax incentives under the Inflation Reduction Act. See Treasury Announces Guidance on Inflation Reduction Act’s Strong Labor Protections | U.S. Department of the Treasury.
The Inflation Reduction Act is a United States federal law enacted in 2022 to curb inflation by reducing the deficit, lowering prescription drug prices, and investing in domestic energy production while promoting clean energy. For more information on energy tax credits see The Inflation Reduction Act | US EPA
The Inflation Reduction Act allocated $369 billion toward addressing climate change through clean energy initiatives. Approximately $270 billion of the investment is through tax incentives.
In the recently released guidelines, the Treasury Department clarified requirements for companies to qualify for the tax incentives. Companies must pay workers the prevailing wage for their area and use apprenticeship programs. The Department of Labor determines the prevailing wage.
Companies must comply with the prevailing wage and apprenticeship requirements to receive following tax credits: the Advanced Energy Project Credit, the Alternative Fuel Refueling Property Credit, the Credit for Carbon Oxide Sequestration, the Clean Fuel Production Credit, the Credit for Production of Clean Hydrogen, the Energy Efficient Commercial Buildings Deduction, the Renewable Energy Production Tax Credit and the Renewable Energy Property Investment Tax Credit.
In addition, companies must comply with the prevailing wage requirements to receive the New Energy Efficient Home Credit and the Zero-Emission Nuclear Power Production Credit.