Section 48C clean manufacturing and industrial retrofit tax credit

• Manufacturers and other entities need an IRS allocation for a qualifying project. DOE must recommend and rank the project and find a reasonable expectation of commercial viability. Property placed in service before the allocation award is ineligible. Being placed in service means it is ready and available for its assigned function, or depreciation has begun, whichever occurs first.
• Industrial decarbonisation covers retrofits of existing facilities. Equipment must be designed to reduce emissions by at least 20%: direct emissions across the facility, indirect fuel- or energy-related emissions across the facility, or either at a facility subunit such as a process step. Capacity-expansion costs are excluded from this route, although an eligible clean-energy manufacturing project can fall under the separate manufacturing category.
• The Round 2 manufacturing route also covers energy-intensive materials with at least a 30% reduction in lifecycle carbon intensity against an appropriate industry benchmark. Existing facilities must re-equip production lines to make these materials or expand the relevant production capacity. Projects producing property used to refine or blend non-renewable transportation fuels are excluded.
• Property used mainly outside the United States is generally excluded, subject to the exceptions in section 168(g)(4). Governmental or foreign-person use can also trigger investment-credit exclusions. Tax-exempt and government entities, including universities and public or private schools, can use the elective-pay route if they satisfy both sections 48C and 6417; this permits an eligible credit to be claimed as a tax payment.
• For the 30% rate, you and your contractors or subcontractors must pay laborers and mechanics at least the applicable local prevailing wage. Registered apprentices may receive their programme’s lower wage rate when the daily apprentice ratio is met, with the required fringe benefits. Registered apprentices must perform the required share of labor hours, comply with daily apprentice-to-journeyworker ratios, and be employed when a taxpayer, contractor or subcontractor has four or more workers. The labor-hours percentage depends on when construction began. Correction and penalty routes can preserve compliance. DOE also requires both the initial statement of intent and the final confirmation of compliance; without them, the credit is 6% and the remaining allocation is forfeited.
• The apprenticeship good-faith exception can cover the portion of a valid written apprentice request that a suitable registered programme rejects, or does not answer within five business days. Rejection because you refuse to meet the programme’s standards does not qualify. Initial requests must be made at least 45 days before the requested start; subsequent requests to the same programme need at least 14 days. Relief covers the requested period, up to 365 days (366 in a leap year); a further request is needed beyond that. Relief may also apply where no registered programme covers the facility’s location and needed occupation. Keep payroll and apprenticeship-compliance records, including requests and daily ratios.
• The same investment cannot receive Section 48C alongside credits under sections 48, 48A, 48B, 48E, 45Q or 45V. Section 45X has a separate production-facility restriction: components produced at a facility containing property whose basis was taken into account for Section 48C after 16 August 2022 are excluded from Section 45X. You also cannot claim Section 48C for a facility or property for which you have already claimed Section 45X. Other DOE grants or loans are governed by their own programme rules.
• Certification evidence must substantiate application commitments and explain significant project changes. Moving the project to a different census tract results in allocation forfeiture. After claiming, disposing of equipment or changing or reducing its qualifying use during the five-year recapture period can require repayment of some or all of the credit.

Status

geschlossen

Antragsbeginn

29. Aug. 2024

Antragsschluss

18. Okt. 2024

Beschränkungen dieser Antragsrunde

• Historical Round 2 full-application window, now closed. A Round 2 concept paper was required; an encouragement letter was not required.[^c9][^c10]

New applicants cannot use the completed Round 2 windows. That round required a concept paper followed by a full application through DOE’s 48C Portal; a discouragement letter did not prevent an organization that had submitted a concept paper from submitting the full application. Check DOE’s programme page for allocation announcements.

If you already hold an allocation, use the 48C Portal to provide certification evidence within two years of receiving the allocation letter. This includes the permits needed to start construction, evidence of application commitments and explanations of project changes. The applicant’s taxpayer identification number must match the taxpayer claiming the credit unless the IRS approves a transfer request.

After the IRS issues the certification letter, place the facility in service and notify DOE through the portal within a further two years. Missing either milestone forfeits the credit. Once the facility is placed in service and DOE notified on time, claim the credit on the federal income-tax return for that tax year. Follow Form 3468 instructions; a claim at the increased rate also requires Form 7220 for prevailing-wage and apprenticeship verification. Elective-pay or credit-transfer elections require separate IRS pre-filing registration.