Page 28 - IRS Business Tax Credits Guide

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Fileid: … ions/i8835/2022/a/xml/cycle05/source
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small wind energy property expenditure (as defined in Credit Period 12:28 - 3-Feb-2023
section 25D(d)(4)) is used in determining the residential
energy efficient property credit. Credit period for facilities
• Closed-loop biomass facility placed in service after placed in service after August
October 22, 2004, the construction of which begins before Eligible electricity production 8, 2005 (years from
January 1, 2025. activity: placed-in-service date):
• Closed-loop biomass facility modified to co-fire with Wind 10
coal or other biomass (or both), placed in service before
January 1, 2025. The facility will be treated as modified Closed-loop biomass 10
before January 1, 2025, if the construction of the Open-loop biomass (including
modification begins before January 1, 2025. See section agricultural livestock waste
45(d)(2)(A)(ii). nutrient facilities) 10
• Closed-loop biomass facility that is a new unit placed in Geothermal 10
service after October 3, 2008, in connection with a facility Solar 10
described in section 45(d)(2)(A)(i), but only to the extent
of the increased amount of electricity produced at the Municipal solid waste (including
landfill gas facilities and trash
facility by reason of the new unit. combustion facilities) 10
• Open-loop biomass facility using cellulosic waste, the
construction of which begins before January 1, 2025. Qualified hydropower 10
• Open-loop biomass facility using agricultural livestock Marine and hydrokinetic 10
waste nutrients placed in service after October 22, 2004,
the construction of which begins before January 1, 2025,
and the nameplate capacity rating isn't less than 150 United States and U.S. territories include the
kilowatts. seabed and subsoil of those submarine areas that are
• Open-loop biomass facility that is a new unit placed in adjacent to the territorial waters over which the United
service after October 3, 2008, in connection with a facility States has exclusive rights according to international law.
described in section 45(d)(3)(A), but only to the extent of
the increased amount of electricity produced at the facility Who Can Take the Credit
by reason of the new unit. Generally, the owner of the facility is allowed the credit. In
• Geothermal or solar energy facility placed in service the case of closed-loop biomass facilities modified to
after 2021, the construction of which begins before co-fire with coal, other biomass, or both, and open-loop
January 1, 2025. The facility doesn't include any property biomass facilities, if the owner isn't the producer of the
described in section 48(a)(3), the basis of which is taken electricity, the lessee or the operator of the facility is
into account by you for purposes of determining the eligible for the credit.
energy credit under section 48.
• Landfill gas or trash facility using municipal solid waste Increased Credit Amount for Qualified Facilities
placed in service after October 22, 2004, the construction In the case of any qualified facility that satisfies one of the
of which begins before January 1, 2025. following requirements below, the amount of the credit
• Hydropower facility producing incremental hydroelectric determined will be equal to such amount multiplied by 5.
production attributable to efficiency improvements or • A facility with a maximum output of less than 1
additions to capacity described in section 45(c)(8)(B) megawatt (as measured in alternating current).
placed in service after August 8, 2005, that will be treated • A facility the construction of which begins prior to
as placed in service before January 1, 2025, if the January 29, 2023. See Notice 2022-61.
construction of the improvement or addition begins before • A facility which satisfies the prevailing wage and
January 1, 2025, and any other facility producing qualified apprenticeship requirements.
hydroelectric production described in section 45(c)(8)
placed in service after August 8, 2005, the construction of Wage and Apprenticeship
which begins before January 1, 2025. Requirements
• Marine and hydrokinetic renewable energy facility
placed in service after October 2, 2008, the construction
of which begins before January 1, 2025. Prevailing Wage Requirements
A qualified facility doesn't include a landfill gas facility Increased credit amounts are available for taxpayers
satisfying certain prevailing wage requirements. To meet
using municipal solid waste to produce electricity if the the prevailing wage requirements with respect to any
production from that facility is allowed as a credit under qualified facility, a taxpayer must ensure that any laborers
section 45K. and mechanics employed by the taxpayer or any
contractor or subcontractor in:
• The construction of such facility, and
• The alteration or repair of such facility (with respect to
any tax year, for any portion of such tax year that is within
the 10-year period beginning on the date the qualified
facility is originally placed in service), are paid wages at
rates not less than the prevailing rates for construction,
alteration, or repair of a similar character in the locality in

Instructions for Form 8835 (2022) -3-