IRS begins accepting wind and solar bonus credit applications

The IRS opened an online portal on Oct. 19 and began accepting applications for taxpayers seeking a bonus credit for wind and solar projects that are built in certain geographic locations or benefit specific low-income populations.

The bonus credits offer taxpayers an increased credit rate of either 10% or 20% for solar or wind projects under 5 megawatts in connection with certain low-income communities. But taxpayers must apply to be awarded part of a limited allocation of credits across four categories. There are a variety of criteria to qualify depending on the category. See our prior story for more information.

The initial application period will be 30 days. If the allocations are not exhausted in the first application period, the IRS and DOE will continue to accept applications on a rolling basis over subsequent 30-day periods.

Applications received within the initial 30-day period will all be treated as being received on the same day and time. The DOE will review the applications and recommend projects eligible for the bonus credits to the IRS. The IRS will then award an applicant with an allocation or reject the application. If any categories are oversubscribed, the IRS will hold a lottery to determine which projects receive funding.

Taxpayers who are potentially eligible for a bonus credit should submit their application in the first 30-day window if possible because the allocations are limited.

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Dustin Stamper is a managing director in Grant Thornton’s Washington National Tax Office and leads the tax legislative affairs practice for the firm.

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