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Proposed Stimulus Bill Would Extend Renewable and Clean Energy Tax Credits

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The text of the proposed stimulus bill released today includes a “Taxpayer Certainty and Disaster Tax Relief Act of 2020,” which contains significant extensions of renewable and clean energy tax credits. Approval of the bill by the House and Senate is expected to occur as early as tonight. Among the various credits extended are the following:

Solar. The bill would extend the phaseout of the section 48 investment tax credit for solar energy property by two years. A credit rate of 26% would apply to facilities the construction of which began in 2021 or 2022, and a credit rate of 22% would apply to facilities the construction of which began in 2023.  In all cases, construction would have to be completed before 2026. A credit rate of 10% would apply to any facility that begins construction after 2023 or that is completed after 2025. The bill would provide a similar extension of the section 25D solar tax credit for homeowners (26% credit for property placed in service in 2021 or 2022, 22% credit for property placed in service in 2023, and no credit for property placed in service after 2023).

Fuel Cells. The bill would extend the phaseout of the section 48 investment tax credit for fuel cell property by two years.  A credit rate of 26% would apply to facilities the construction of which began in 2021 or 2022, and a credit rate of 22% would apply to facilities the construction of which began in 2023.  In all cases, construction would have to be completed before 2026.  

Wind. The bill would extend by one year (to January 1, 2022) the deadline for beginning construction of a wind facility eligible for the production tax credit under section 45, subject to the same 40% reduction applicable to facilities the construction of which began in 2020.

Carbon Capture.  The bill would extend by two years (to January 1, 2026) the deadline for beginning construction of a carbon capture facility eligible for the credit under section 45Q.

 

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