Cost recovery for qualified clean energy facilities, property and technology

 

Certain qualified clean energy facilities, property and technology placed in service after 2024 may be classified as 5-year property via the modified accelerated cost recovery system (MACRS) under Provision 13703 of the Inflation Reduction Act of 2022.

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Who qualifies

Owners of qualified facilities, property and energy storage technology placed into service after December 31, 2024, may be eligible for the 5-year MACRS depreciation deduction.

Qualified facilities, property and energy storage technology

The following property may qualify when placed in service after December 31, 2024:

  • Qualified facility as defined in 26 U.S. Code Section 45Y(b)(1)(A)
  • Qualified property as defined in 26 U.S. Code Section 48E(b)(2), which is a qualified investment as defined in 26 U.S. Code Section 48E(b)(1)
  • Energy storage technology as defined in 26 U.S. Code Section 48E(c)(2)

Amount of deduction

Under Internal Revenue Code Section 168(e)(3)(B), qualified facilities, qualified property and energy storage technology are considered 5-year property. These types of property are recoverable under the MACRS.

How to claim the deduction

The deduction is claimed on  Form 4562, Depreciation and Amortization .

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