Tax reform, including renewable energy tax incentives, are currently a hot area for debate in Congress. Many of the most important tax incentives relating to renewable energy sources, including the Production Tax Credit and the Investment Tax Credit, expired at the end of 2013 or are about to expire. On December 3, 2014, the House of Representatives overwhelmingly approved a $41.6 billion tax extenders bill (Tax Increase Prevention Act of 2014 (H.R. 5771)) that will likely become law as both President Obama and the Senate Finance Committee have apparently indicated their reluctant approval of the short-term extension (one-year) of over 50 expired tax provisions (including the PTC) retroactive and through December 31, 2014. Although it could have been better, this is likely welcome news for certain taxpayers, including those wondering whether their facility or plant properly qualified for the PTC (or ITC if elected) as of December 31, 2013 (the prior deadline for eligibility). Nevertheless, a one-year extension through 2014 is less than what the Senate was seeking (i.e., a 2-year extension through 2015) and not a long-term solution by way of comprehensive tax reform as previously proposed by all of the political parties. This Alert will: (i) provide a primer on the PTC and ITC; (ii) provide a summary of the most recent IRS guidance regarding the eligibility for the PTC and ITC; and (iii) briefly address a few of the better known legislative proposals currently before Congress and their position as it relates to renewable energy tax credits, including notably the PTC and ITC.
Posted on: Wed, 10 Dec 2014 17:51:58 +0000