IRS Proposes Guidance for Solar Manufacturing Production Credit

A snapshot taken by Kenny Eliason can be viewed on Unsplash. The U.S. Department of the Treasury and the Internal Revenue Service have proposed regulations to clarify the Inflation Reduction Act’s established credit for the producing and selling of qualified components, such as components for solar and wind energy, inverters, appropriate battery components and certain precious minerals. The regulations would apply to taxpayers who want to take advantage of the credit. It also contains regulations for the production and sale of the applicable components to individuals not connected, as well as special rules that relate to transactions between related people. The new regulations suggest that taxpayers can choose to act like sales to related individuals were made to those who are not related, which is referred to as the “related person election”. Sandberg believes that today’s regulations are a huge step for America’s producers and that they are necessary in order to make pledges to construct factories a reality. He says, “This guidance is an essential move forward for US makers when they are attempting to make stated plants a certainty. By establishing and enlarging supply networks for creating clean energy systems domestically, the US will enhance its energy stability, construct decent-paying American jobs, and cause a rise in the country’s economy. Details regarding the Inflation Reduction Act of 2022 are accessible on IRS.gov.