Clean energy project prevailing wage rate and apprenticeship requirements issued

By Martha Waggoner

In Notice 2022-61, published Wednesday in the Federal Register, taxpayers received guidance from the IRS on how to satisfy the prevailing wage rate and apprenticeship requirements added in the Inflation Reduction Act, P.L. 117-169, to certain clean energy credit and deduction provisions. An increased credit amount is available to taxpayers (generally builders, developers, and owners of clean energy facilities) that satisfy these requirements for Secs. 30C, 45, 45Q, 45V, 45Y, 45Z, 48, 48C, and 48E, and an increased deduction if they satisfy the requirements for Sec. 179D.

A taxpayer satisfies the prevailing wage rate requirements if the taxpayer:

  • Satisfies the prevailing wage rate requirements with respect to any laborer or mechanic employed in the construction, alteration, or repair of a facility, property, project, or equipment by the taxpayer or any contractor or subcontractor of the taxpayer; and
  • The taxpayer maintains and preserves sufficient records, including books of account or records for work performed by contractors or subcontractors of the taxpayer, to establish that such laborers and mechanics were paid wages not less than such prevailing rates.

The determination of the prevailing wage rate is generally made by the secretary of Labor.

A taxpayer satisfies the apprenticeship requirements if the taxpayer:

  • Satisfies the apprenticeship labor hour requirements, subject to any applicable apprenticeship ratio requirements;
  • Satisfies the apprenticeship participation requirements; and
  • Complies with certain recordkeeping requirements including maintaining books of account or records for contractors or subcontractors of the taxpayer, as applicable, in sufficient form to establish that the requirements have been satisfied.

The notice also describes when a taxpayer has satisfied the "good faith effort" exception to the apprenticeship requirement.

The notice provides guidance for determining the "beginning of construction" for purposes of Secs. 30C, 45V, 45Y, and 48E (and "installation" for purposes of the Sec. 179D deduction for the cost of energy-efficient commercial building property placed in service during the tax year).

The publication of Notice 2022-61 begins the 60-day period in which taxpayers must begin construction of a facility (or installation of property under Sec. 179D) to receive the enhanced tax benefits without satisfying the prevailing wage and apprenticeship requirements as described in the notice. Thus, the requirements will apply only to facilities on which construction began, or certain property the installation of which began, on or after Jan. 30, 2023.

And stay tuned for more: Treasury and the IRS say in the notice that they will likely issue proposed regulations and other guidance regarding prevailing wages and apprenticeships.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at

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