IRS expands communities eligible for IRA energy credit bonuses


The IRS has issued guidance (Notice 2024-30) expanding eligibility criteria to determine whether an energy project qualifies as being located in an “energy community” and thus eligible for a 10% bonus credit under the investment and production tax credits.


Under the Inflation Reduction Act, projects located in energy communities are generally eligible for an additional 10% investment tax credit (ITC) under Section 48 or a 10% increase in the rate for the production tax credit (PTC) under Section 45. There are three separate categories of qualifying energy communities:

  • “Brownfield” sites, which involve prior pollution or contaminants
  • "Statistical areas” meeting energy activity thresholds with unemployment above national averages
  • Census tracts (and adjoining census tracts) where a coal mine or coal-fired electrical plant has closed

Notice 2024-30 expands eligibility for energy communities with two changes to previous guidance:

  • Offshore wind projects with generation equipment outside a census tract or statistical area can use the location of supervisory control and data acquisition equipment to determine whether they qualify, rather than solely the location of conditioning equipment.
  • The IRS added two new industry classifications to its definition of energy employment, expanding the number of statistical areas meeting the requisite employment thresholds to qualify.

The IRS offers a mapping tool to determine whether a project is in a qualifying energy community, but it does not cover brownfield sites. For more information on energy communities, see our prior alert



Tax professional standards statement

This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “§,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.


More tax hot topics