Internal Revenue Code (IRC) section 30C offers tax incentives for businesses and individuals investing in alternative fuel vehicle refueling properties, such as electric vehicle (EV) charging stations, aiming to promote sustainable transportation and cleaner energy sources. The Inflation Reduction Act of 2022 (IRA) amended IRC section 30C, extending the tax credit and introducing modifications to enhance its accessibility.
The IRA expanded eligibility criteria by requiring qualified properties to be situated within designated census tracts, including New Market Tax Credit zones or non-urban areas. IRS Notice 2024-20 further clarified eligibility, broadening the scope for qualifying properties across the United States. This expansion is based on the definition of "non-urban" areas, which considers census tracts where at least 10% of blocks aren't classified as urban.
To determine eligibility, taxpayers can utilize the IRC section 30C federal tax credit mapping tool provided by the IRS. The tool categorizes eligible tracts based on color-coding, distinguishing between non-urban tracts (teal green), current New Market Tax Credit tracts (beige orange) and older NMTC tracts (light gray).
Additionally, compliance with prevailing wage and apprenticeship (PW&A) requirements is crucial for businesses seeking the full 30% tax credit. These requirements ensure that laborers receive fair compensation and that a percentage of labor hours are performed by qualified apprentices. Projects failing to meet PW&A requirements may see a reduction in the credit rate from 30% to 6%.
Documentation is essential to demonstrate compliance with PW&A requirements. For prevailing wage requirements, contractors must maintain certified payroll records for all involved laborers and mechanics, prevailing wage determinations for the applicable geographical area and contractor affidavits affirming their compliance with prevailing wage requirements.
For apprenticeship requirements, records of program participation and apprentice qualifications must be retained, and labor hour tracking is a necessity as well.
In order to begin construction exception documentation, contractors must prove that project construction began prior to the cut-off date. One element of this proof is the maintenance of any contracts, permits or progress reports that include the start date of construction.
Form 8911 is filed to claim the IRC section 30C credit which details expenditure records and verifies property eligibility. For business/investment properties, compliance with PW&A requirements must be documented. Part I of the form captures the total cost of refueling property, while Parts II and III calculate the credit for business/investment and personal use, respectively.
Overall, IRC section 30C and its amendments aim to encourage investment in alternative fuel vehicle refueling infrastructure, supporting the transition to cleaner transportation and reducing carbon emissions. By expanding eligibility and providing tax incentives, the government seeks to facilitate the development of a more sustainable and accessible refueling infrastructure nationwide. Compliance with PW&A requirements ensures that tax credits are allocated responsibly, benefiting both businesses and the environment.
For a more in-depth breakdown of the regulation, including further details surrounding section 30C documentation, compliance and requirements, review the IRS website. And to discuss how Baker Tilly can assist your organization with understanding section 30C tax credits and maximizing the available benefits of the IRA, contact us today.
IRS Notice 2024-20 provides guidance regarding the section 30C alternative fuel refueling tax credit. The definitions provided greatly expand the physical locations within the U.S. where alternative fuel refueling property can be credit-eligible.
Autel Energy, an international company providing electric vehicle (EV) products and services, engaged Baker Tilly to assist in locating its first U.S. production facility as part of the EV movement being pushed by the federal government to create a nationwide network of electric vehicle charging stations.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.
