Labor Provisions for Clean Energy Tax Incentives

AGC weighs in on IRS proposal detailing prevailing wage and apprenticeship Inflation Reduction Act tax credit requirements on clean energy projects.  

AGC recently submitted comments on the Treasury Department and Internal Revenue Service’s (IRS) notice of proposed rulemaking on how to satisfy the prevailing wage and apprenticeship requirements (PWA) for enhanced tax benefits under the Inflation Reduction Act (IRA). This was the second round of guidance and request for input. Treasury and the IRS previously provided guidance on the PWA requirements in 2022, to which AGC submitted extensive feedback.

AGC believes that these unprecedented provisions require thoughtful and comprehensive analysis as the IRS comes to fully understand the complexity and challenges contractors will face meeting the requirements. While similar requirements have been tied to various federal, state, and local public works projects, for the first time ever prevailing wage and apprenticeship requirements will now be required on particular private projects.

Many of the contractors on these intended projects will have little to no experience in meeting such requirements and the challenges in meeting such requirements will vary dramatically by region and construction market. Additionally, the complexity and burden of meeting PWA requirements on current public projects results in a majority of contractors avoiding such work as a business practice entirely.

AGC recommends flexibility in compliance as the particular circumstances of each project will challenge the fulfillment and proof of fulfillment for each requirement.

For more information, contact Jim Young at [email protected] or 202-547-0133, Matt Turkstra at [email protected] or 202-547-4733, or Claiborne Guy at [email protected] or 703-837-5382.

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