IRS Releases Renewable Energy Tax Credit Guidance Regarding Beginning of Construction Standard
April 16, 2013
BY MICHAEL D. HAUN & SEAN C. HONEYWILL
The IRS has released guidance regarding the "begin construction" standard for production tax credit and investment tax credit purposes for facilities generating energy from wind, closed- and open-loop biomass, geothermal, landfill gas, trash, qualified hydropower and marine and hydrokinetic sources. While the guidance generally mirrors prior guidance applicable to determining when construction began for purposes of the 1603 cash grant program, a new "continuous efforts" standard applies when a taxpayer attempts to begin construction by incurring 5% or more of the total costs of a facility.