New IRS geographic guidance for 30C property credits

 

The IRS has issued new guidance (Notice 2024-20) defining the geographic locations where taxpayers can receive tax credits under Section 30C for installing electric vehicle chargers and other alternative fuel refueling property.

 

The Inflation Reduction Act increased the cap on the 30% credit from $30,000 per location to $100,000 per item of property, but added new restrictions. Taxpayers must meet prevailing wage and apprenticeship requirements for labor during construction of the property, and the credits are only available to for property placed in service in specific census tracts.

 

The credit is only available for property placed in service in census tracts that qualify as low-income communities for the new markets tax credits (NMTC) or census tracts designated as non-urban by the Census Bureau. These definitions present challenges because the Census Bureau does not currently identify urban areas by tract, focusing on smaller unit census blocks, and the definition of NMTC includes targeted populations, areas not within census tracts and low-population census tracts.

 

Notice 2024-20 provides transitional guidance that allows taxpayer to rely on an expansive definition of qualifying census tracts. For property placed in service before 2025, taxpayers can use either the 2011-2015 NMTC tracts with the 2015 census tract boundaries (Appendix A) or the 2016-2020 NMTC tracts and 2020 non-urban census tracts, both with the 2020 census tract boundaries (Appendix B). The IRS defined a 2020 non-urban census tract as any tract in which at least 10% of the census blocks are not designated as urban areas. The notice also includes links to mapping tools to determine the census tract of a specific location.

 

The IRS concluded that in could not include NMTC communities in areas not within a census tract, but requested comments on potentially adding targeted populations and low-population tracts under the NMTC community definition.

 

 

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