KPMG report: Domestic content bonus credit guidance under Notice 2023-38

IRS intends to issue proposed regulations consistent with the guidance in the notice

IRS intends to issue proposed regulations consistent with the guidance in the notice

The IRS on May 12, 2023, released Notice 2023-38 [PDF 180 KB], providing much awaited guidance on how taxpayers can meet the domestic content requirement and increase their investment or production tax credit amount (ITC or PTC) under sections 45, 45Y, 48, and 48E. To this end, the notice also provides a safe harbor regarding the classification of certain components in representative types of qualified facilities, energy projects, or energy storage technologies. The notice provides favorable treatment for projects containing used property. And finally, the notice provides guidance relating to certification and recordkeeping requirements. 

The IRS intends to issue proposed regulations consistent with the guidance in the notice. According to the notice, such proposed regulations will apply for tax years ending after May 12, 2023. Taxpayers may rely on the guidance in the notice for any qualified facility, energy project, or energy storage technology that begins construction before the date that is 90 days after the date of publication of the forthcoming proposed regulations in the federal register.

Read a May 2023 report [PDF 199 KB] prepared by KPMG LLP that discusses the domestic content bonus credit guidance under Notice 2023-38.

 

 

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