Last week, the Treasury released Notice 2022-61 (the “Notice”) with additional guidance on the “prevailing wage and apprenticeship” requirements tied to many of the new or updated tax incentives in the Inflation Reduction Act.
Two important takeaways: 1. While we did receive some new information on how the wage and apprenticeship requirements will work (more on that below), this additional guidance is pretty sparse and some key questions are still left unanswered. The Notice did say that further guidance would be forthcoming, possibly as proposed regulations, so we know that more is on the way.
2. The Notice made clear that the “60-day clock” to begin construction is now ticking. Many of the tax credits in the Inflation Reduction Act to which the prevailing wage and apprenticeship requirements apply allow a project to claim a higher credit amount even without satisfying the wage and apprenticeship requirements, but only if those projects “begin construction” before 60 days post-release of clarifying guidance. The Notice serves as that guidance, so any project that begins construction on or after January 29, 2023 will have to satisfy the wage and apprenticeship requirements to be eligible for the higher credit amount.
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Authored by Jessica Millett.
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