Section 430 specifies the minimum funding requirements that apply to single-employer plans (except for CSEC plans under § 414(y)) pursuant to § 412. Section 430(h)(2) specifies the interest rates that must be used to determine a plan’s target normal cost and funding target. Under this provision, present value is generally determined using three 24-month average interest rates (“segment rates”), each of which applies to cash flows during specified periods. To the extent provided under § 430(h)(2)(C)(iv), these segment rates are adjusted by the applicable percentage of the 25-year average segment rates for the period ending September 30 of the year preceding the calendar year in which the plan year begins.¹ However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates.

Section 1.430(h)(2)-1(d) provides rules for determining the monthly corporate bond yield curve,² and § 1.430(h)(2)-1(c) provides rules for determining the 24-month average corporate bond segment rates used to compute the target normal cost and the funding target. Consistent with the methodology specified in § 1.430(h)(2)-1(d), the monthly corporate bond yield curve derived from August 2024 data is in Table 2024-8 at the end of this notice. The spot first, second, and third segment rates for the month of August 2024 are, respectively, 4.50, 4.96, and 5.40.

The 24-month average segment rates determined under § 430(h)(2)(C)(i) through (iii) must be adjusted pursuant to § 430(h)(2)(C)(iv) to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates. Those percentages are 95% and 105% for plan years beginning in 2023, 2024 and 2025. For this purpose, any 25-year average segment rate that is less than 5% is deemed to be 5%. The 25-year average segment rates for plan years beginning in 2023 and 2024 were published in Notice 2022-40, 2022-40 I.R.B. 266 and Notice 2023-66, 2023-40 I.R.B. 992, respectively. For plan years beginning in 2025, based on the segment rates applicable for October 1999 to September 2024, the 25-year averages for the period ending September 30, 2024, of the first, second, and third segment rates are 3.27, 5.06, and 5.79 percent, respectively.

The three 24-month average corporate bond segment rates applicable for September 2024 without adjustment for the 25-year average segment rate limits are as follows:

 

The adjusted 24-month average segment rates set forth in the chart below reflect § 430(h)(2)(C)(iv) of the Code. The 24-month averages applicable for September 2024, adjusted to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates in accordance with § 430(h)(2)(C)(iv) of the Code, are as follows:

Section 431 specifies the minimum funding requirements that apply to multiemployer plans pursuant to § 412. Section 431(c)(6)(B) specifies a minimum amount for the full-funding limitation described in § 431(c)(6)(A), based on the plan’s current liability. Section 431(c)(6)(E)(ii)(I) provides that the interest rate used to calculate current liability for this purpose must be no more than 5 percent above and no more than 10 percent below the weighted average of the rates of interest on 30-year Treasury securities during the four-year period ending on the last day before the beginning of the plan year. Notice 88-73, 1988-2 C.B. 383, provides guidelines for determining the weighted average interest rate. The rate of interest on 30-year Treasury securities for August 2024 is 4.15 percent. The Service determined this rate as the average of the daily determinations of yield on the 30-year Treasury bond maturing in May 2054 determined each day through August 7, 2024 and the yield on the 30-year Treasury bond maturing in August 2054 determined each day for the balance of the month. For plan years beginning in September 2024, the weighted average of the rates of interest on 30-year Treasury securities and the permissible range of rates used to calculate current liability are as follows:

In general, the applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a 24-month average. Section 1.417(e)-1(d)(3) and Notice 2007-81 provide guidelines for determining the minimum present value segment rates. Pursuant to those guidelines, the minimum present value segment rates determined for August 2024 are as follows:

The principal author of this notice is Tom Morgan of the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). However, other personnel from the IRS participated in the development of this guidance. For further information regarding this notice, contact Mr. Morgan at 202-317-6700 or Tony Montanaro at 626-927-1475 (not toll-free numbers).

 

¹ Pursuant to § 433(h)(3)(A), the third segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount of the full funding limitation under § 433(c)(7)(C)).

² For months before February 2024, the monthly corporate bond yield curve was determined in accordance with Notice 2007-81, 2007-44 I.R.B. 899. Section 1.430(h)(2)-1(d) generally adopts the methodology for determining the monthly corporate bond yield curve under Notice 2007-81 but includes two enhancements to take into account subsequent changes in the bond market. Those enhancements are described in the preamble to TD 9986 (89 FR 2127).

Section 45 was amended by section 13101 of Public Law 117-169, 136 Stat. 1818 (August 16, 2022), commonly known as the Inflation Reduction Act of 2022 (IRA). The IRA changed the manner in which the section 45 credit amounts are calculated for any qualified facility placed in service after December 31, 2021.

As amended by the IRA, section 45(b)(6)(A) provides that, in the case of any qualified facility that satisfies the requirements of section 45(b)(6)(B), the credit amount determined under section 45(a) (determined after the application of section 45(b)(1) through (5) and without regard to section 45(b)(6)) is equal to such amount multiplied by 5. A qualified facility satisfies the requirements of section 45(b)(6)(B) if it is placed in service after December 31, 2021, and it is one of the following: (i) a facility with a maximum net output of less than 1 megawatt (as measured in alternating current); (ii) a facility the construction of which began prior to January 29, 2023, which is the date that is 60 days after the publication of the guidance with respect to the requirements of section 45(b)(7)(A) (prevailing wage requirements) and section 45(b)(8) (apprenticeship requirements);¹ or (iii) a facility that satisfies the requirements of section 45(b)(7)(A) and (8). The IRA also added bonus credit amounts with respect to qualified facilities placed in service after December 31, 2022, that meet domestic content requirements under section 45(b)(9)² or energy community requirements under section 45(b)(11).³

The IRA amended the phaseout of the section 45 credit for wind facilities under section 45(b)(5) such that it does not apply to facilities placed in service after December 31, 2021. The IRA also added a new phaseout of the section 45 credit under section 45(b)(10) in the case of qualified facilities placed in service after December 31, 2022, for taxpayers making an elective payment election under section 6417. The IRA also amended the credit amount reduction under section 45(b)(3) in the case of qualified facilities the construction of which began after August 16, 2022.

The IRA amended section 45(d)(4) to restore the section 45 credit for electricity produced in solar energy facilities in the case of qualified facilities placed in service after December 31, 2021, and the construction of which begins before January 1, 2025. Effective for facilities placed in service after December 31, 2022, the IRA (1) removed the one-half reduction of the credit amount under section 45(b)(4)(A) for qualified hydropower facilities and marine and hydrokinetic renewable energy facilities and (2) amended the definition of marine and hydrokinetic renewable energy under section 45(c)(10) and the definition of a marine and hydrokinetic renewable energy facility under section 45(d)(11). The IRA also extended certain deadlines in the definitions under section 45(d) for wind facilities, closed-loop biomass facilities, open-loop biomass facilities, geothermal facilities, landfill gas facilities, trash facilities, qualified hydropower facilities, and marine and hydrokinetic renewable energy facilities.

Section 45(a) provides that the renewable electricity production credit for any tax year is an amount equal to the product of the kilowatt hours of specified electricity produced by the taxpayer and sold to an unrelated person during the tax year multiplied by 1.5 cents (in the case of a qualified facility placed in service before January 1, 2022) or 0.3 cents (in the case of a qualified facility placed in service after December 31, 2021). This electricity must be produced from qualified energy resources and at a qualified facility during the 10-year period beginning on the date the facility was originally placed in service.

Section 45(b)(1) provides that the amount of the credit determined under section 45(a) is reduced by an amount which bears the same ratio to the amount of the credit as the amount by which the reference price for the calendar year in which the sale occurs exceeds 8 cents, bears to 3 cents. Under section 45(b)(2), the 1.5 cent (or 0.3 cent) amount in section 45(a) and the 8 cent amount in section 45(b)(1) are each adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. In the case of any qualified facility placed in service before January 1, 2022, if any amount as increased under section 45(b)(2) is not a multiple of 0.1 cent, such amount is rounded to the nearest multiple of 0.1 cent. In the case of any qualified facility placed in service after December 31, 2021, if the 0.3 cent amount as increased under section 45(b)(2) is not a multiple of 0.05 cent, such amount is rounded to the nearest multiple of 0.05 cent.

In the case of electricity produced in open-loop biomass facilities, landfill gas facilities, trash facilities, qualified hydropower facilities, and, if placed in service before January 1, 2023, marine and hydrokinetic renewable energy facilities, section 45(b)(4)(A) requires the amount in effect under section 45(a)(1) for such calendar year (determined before rounding as required by section 45(b)(2)) to be reduced by one-half. As amended by the IRA, the one-half reduction under section 45(b)(4)(A) no longer applies to qualified hydropower facilities and marine and hydrokinetic renewable energy facilities placed in service after December 31, 2022.

Section 45(b)(5) provides that in the case of any qualified wind facility placed in service before January 1, 2022, the amount of the credit determined under section 45(a) (determined after the application of section 45(b)(1), (2), and (3) and without regard to section 45(b)(5)) shall be reduced by (A) in the case of any facility the construction of which began after December 31, 2016, and before January 1, 2018, 20 percent, (B) in the case of any facility the construction of which began after December 31, 2017, and before January 1, 2019, 40 percent, (C) in the case of any facility the construction of which began after December 31, 2018, and before January 1, 2020, 60 percent, and (D) in the case of any facility the construction of which began after December 31, 2019, and before January 1, 2022, 40 percent.

Section 45(c)(1) defines qualified energy resources as wind, closed-loop biomass, open-loop biomass, geothermal energy, solar energy, municipal solid waste, qualified hydropower production, and marine and hydrokinetic renewable energy.

Section 45(d)(1) defines a qualified facility using wind to produce electricity as any facility owned by the taxpayer that is originally placed in service after December 31, 1993, and the construction of which begins before January 1, 2025. See section 45(e)(7) for rules relating to the inapplicability of the credit to electricity sold to utilities under certain contracts.

Section 45(d)(2)(A) defines a qualified facility using closed-loop biomass to produce electricity as any facility owned by the taxpayer that is originally placed in service after December 31, 1992, and the construction of which begins before January 1, 2025, or owned by the taxpayer which before January 1, 2025, is originally placed in service and modified to use closed-loop biomass to co-fire with coal, with other biomass, or with both, but only if the modification is approved under the Biomass Power for Rural Development Programs or is part of a pilot project of the Commodity Credit Corporation as described in 65 FR 63052. For purposes of section 45(d)(2)(A)(ii), a facility shall be treated as modified before January 1, 2025, if the construction of such modification begins before such date. Section 45(d)(2)(C) provides that in the case of a qualified facility described in section 45(d)(2)(A)(ii), the 10-year period referred to in section 45(a) is treated as beginning no earlier than the date of the enactment of section 45(d)(2)(C)(i) (October 22, 2004), and if the owner of such facility is not the producer of the electricity, the person eligible for the credit allowable under section 45(a) is the lessee or the operator of such facility. A qualified facility using closed-loop biomass includes a new unit placed in service after the date of the enactment of section 45(d)(2)(B) (October 3, 2008) in connection with a qualified facility using closed-loop biomass, but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.

Section 45(d)(3)(A) defines a qualified facility using open-loop biomass to produce electricity as any facility owned by the taxpayer which in the case of a facility using agricultural livestock waste nutrients, is originally placed in service after the date of the enactment of section 45(d)(3)(A)(i)(I) (October 22, 2004) and the construction of which begins before January 1, 2025, and the nameplate capacity rating of which is not less than 150 kilowatts, and in the case of any other facility, the construction of which begins before January 1, 2025. In the case of any facility described in section 45(d)(3)(A), if the owner of such facility is not the producer of the electricity, section 45(d)(3)(C) provides that the person eligible for the credit allowable under section 45(a) is the lessee or the operator of such facility. A qualified facility using open-loop biomass includes a new unit placed in service after the date of the enactment of section 45(d)(3)(B) (October 3, 2008) in connection with a qualified facility using open-loop biomass, but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.

Section 45(d)(4) defines a qualified facility using geothermal energy to produce electricity as any facility owned by the taxpayer that is originally placed in service after the date of the enactment of section 45(d)(4) (October 22, 2004) and the construction of which begins before January 1, 2025. A qualified facility using geothermal energy does not include any property described in section 48(a)(3) the basis of which is taken into account by the taxpayer for purposes of determining the energy credit under section 48.

As amended by the IRA and effective for solar energy facilities placed in service after December 31, 2021, section 45(d)(4) also defines a qualified facility using solar energy to produce electricity as any facility owned by the taxpayer that is originally placed in service after the date of the enactment of section 45(d)(4) (October 22, 2004) and the construction of which begins before January 1, 2025. A qualified facility using solar energy does not include any property described in section 48(a)(3) the basis of which is taken into account by the taxpayer for purposes of determining the energy credit under section 48.

Section 45(d)(6) defines a qualified facility using gas derived from the biodegradation of municipal solid waste to produce electricity as any facility owned by the taxpayer that is originally placed in service after the date of the enactment of section 45(d)(6) (October 22, 2004) and the construction of which begins before January 1, 2025.

Section 45(d)(7) defines a qualified facility (other than a facility described in section 45(d)(6)) that uses municipal solid waste to produce electricity as any facility owned by the taxpayer that is originally placed in service after the date of the enactment of section 45(d)(7) (October 22, 2004) and the construction of which begins before January 1, 2025. A qualified facility using municipal solid waste includes a new unit placed in service in connection with a facility placed in service on or before the date of the enactment of section 45(d)(7), but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.

Section 45(d)(9) defines a qualified facility producing qualified hydroelectric production (as described in section 45(c)(8)) as (i) any facility producing incremental hydropower production, but only to the extent of its incremental hydropower production attributable to efficiency improvements or additions to capacity described in section 45(c)(8)(B) placed in service after the date of the enactment of section 45(d)(9) (August 8, 2005) and before January 1, 2025, and (ii) any other facility placed in service after the date of the enactment of section 45(d)(9) (August 8, 2005) and the construction of which begins before January 1, 2025. Section 45(d)(9)(B) provides that, in the case of a qualified facility described in section 45(d)(9)(A), the 10-year period referred to in section 45(a) shall be treated as beginning on the date the efficiency improvements or additions to capacity are placed in service. Section 45(d)(9)(C) provides that for purposes of section 45(d)(9)(A)(i), an efficiency improvement or addition to capacity shall be treated as placed in service before January 1, 2025, if the construction of such improvement or addition begins before such date.

As amended by the IRA, section 45(d)(11) provides that, in the case of a facility producing electricity from marine and hydrokinetic renewable energy, the term “qualified facility” means any facility owned by the taxpayer which has a nameplate capacity rating of at least 150 kilowatts (or at least 25 kilowatts in the case of a facility placed in service after December 31, 2022), and is originally placed in service on or after the date of the enactment of section 45(d)(11) (October 3, 2008) and the construction of which begins before January 1, 2025.

Section 45(e)(2)(A) requires the Secretary to determine and publish in the Federal Register each calendar year the inflation adjustment factor and the reference price for such calendar year. The inflation adjustment factor and the reference price for the 2024 calendar year were published in the Federal Register at 89 FR 56924 on July 11, 2024. A correction notice was published in the Federal Register at 89 FR 76191 on September 17, 2024.

Section 45(e)(2)(B) defines the inflation adjustment factor for a calendar year as a fraction the numerator of which is the GDP implicit price deflator for the preceding calendar year and the denominator of which is the GDP implicit price deflator for the calendar year 1992. The term “GDP implicit price deflator” means the most recent revision of the implicit price deflator for the gross domestic product as computed and published by the Department of Commerce before March 15 of the calendar year.

Section 45(e)(2)(C) provides that the reference price with respect to a calendar year is the Secretary’s determination of the annual average contract price per kilowatt hour of electricity generated from the same qualified energy resource and sold in the previous year in the United States. Only contracts entered into after December 31, 1989, are taken into account.

The inflation adjustment factor for calendar year 2024 for qualified energy resources is 1.9499.

The reference price for calendar year 2024 for facilities producing electricity from wind (based upon information provided by the Department of Energy) is 3.15 cents per kilowatt hour. The reference prices for facilities producing electricity from closed-loop biomass, open-loop biomass, geothermal energy, solar energy, municipal solid waste, qualified hydropower production, and marine and hydrokinetic renewable energy have not been determined for calendar year 2024.

Because the 2024 reference price for electricity produced from wind (3.15 cents per kilowatt hour) does not exceed 8 cents multiplied by the inflation adjustment factor (1.9499), the phaseout of the credit provided in section 45(b)(1) does not apply to such electricity sold during calendar year 2024. However, section 45(b)(5) provides an additional phaseout of the credit for wind facilities placed in service before January 1, 2022, and the construction of which began after December 31, 2016. For electricity produced from closed-loop biomass, open-loop biomass, geothermal energy, solar energy, municipal solid waste, qualified hydropower production, and marine and hydrokinetic renewable energy, the phaseout of the credit provided in section 45(b)(1) does not apply to such electricity sold during calendar year 2024.

As required by section 45(b)(2), the 1.5 cent amount provided in section 45(a)(1) is adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. If any amount as increased under section 45(b)(2) is not a multiple of 0.1 cent, such amount is rounded to the nearest multiple of 0.1 cent. In the case of electricity produced in open-loop biomass facilities, landfill gas facilities, trash facilities, qualified hydropower facilities, and marine and hydrokinetic renewable energy facilities, section 45(b)(4)(A) requires the amount in effect under section 45(a)(1) for such calendar year (before rounding to the nearest 0.1 cent as required by section 45(b)(2)) to be reduced by one-half.⁴

Under the calculation required by section 45(b)(2), the credit for renewable electricity production for calendar year 2024 determined under section 45(a) is 2.9 cents per kilowatt hour on the sale of electricity produced in any qualified facility placed in service before January 1, 2022, from the qualified energy resources of wind, closed-loop biomass, and geothermal energy, and 1.5 cents per kilowatt hour on the sale of electricity produced in any qualified facility placed in service before January 1, 2022, from the qualified energy resources of open-loop biomass, landfill gas, trash, qualified hydropower, and marine and hydrokinetic renewable energy.

As required by section 45(b)(2), the 0.3 cent amount provided in section 45(a)(1) is adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. If the 0.3 cent amount as adjusted for inflation is not a multiple of 0.05 cent, the amount is rounded to the nearest multiple of 0.05 cent. In the case of electricity produced in open-loop biomass facilities, landfill gas facilities, trash facilities, qualified hydropower facilities, and marine and hydrokinetic renewable energy facilities, section 45(b)(4)(A) requires the amount in effect under section 45(a)(1) for such calendar year (determined before rounding as required by section 45(b)(2)) to be reduced by one-half.

Under the calculation required by section 45(b)(2), the credit for renewable electricity production for calendar year 2024 determined under section 45(a) is 0.6 cents per kilowatt hour on the sale of electricity produced in any qualified facility placed in service after December 31, 2021, from the qualified energy resources of wind, closed-loop biomass, geothermal energy, and solar energy, and 0.3 cents per kilowatt hour on the sale of electricity produced in any qualified facility placed in service after December 31, 2021, from the qualified energy resources of open-loop biomass, landfill gas and trash. The credit for renewable electricity production for calendar year 2024 determined under section 45(a) is also 0.3 cents per kilowatt hour on the sale of electricity produced in any qualified facility placed in service after December 31, 2021, and before January 1, 2023, from the qualified energy resources of qualified hydropower and marine and hydrokinetic renewable energy.

The one-half reduction under section 45(b)(4)(A) no longer applies to qualified hydropower facilities and marine and hydrokinetic renewable energy facilities placed in service after December 31, 2022. Accordingly, under the calculation required by section 45(b)(2), the credit for renewable electricity production for calendar year 2024 determined under section 45(a) is 0.6 cents per kilowatt hour on the sale of electricity produced in any qualified facility placed in service after December 31, 2022, from the qualified energy resources of qualified hydropower and marine and hydrokinetic renewable energy.

The principal author of this notice is Charles Hyde of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this notice contact Mr. Hyde at (202) 317-6853 (not a toll-free number).

¹ See §§ 1.45-6, 1.45-7, 1.45-8, and 1.45-12 of the Income Tax Regulations for additional information regarding the requirements of section 45(b)(6)(B).

² See Notice 2023-38, 2023-22 I.R.B. 872 (May 12, 2023) and Notice 2024-41, IR-2024-140 (May 16, 2024), corrected at IR 2024-147 (May 24, 2024), for additional information regarding the domestic content bonus credit.

³ See Notice 2024-30, 2024-16 I.R.B. 878 (April 15, 2024), for additional information regarding the energy community bonus credit.

⁴ As amended by the IRA and discussed later in this notice, the one-half reduction under section 45(b)(4)(A) no longer applies to qualified hydropower facilities and marine and hydrokinetic renewable energy facilities placed in service after December 31, 2022.

.01 The purpose of this revenue procedure is to state the requirements of the Internal Revenue Service (IRS) and the Social Security Administration (SSA) regarding the preparation and use of substitute forms for Form W-2c, Corrected Wage and Tax Statement, and Form W-3c, Transmittal of Corrected Wage and Tax Statements.

.02 The official IRS Form W-2c is a six-part form and the official IRS Form W-3c is a one-part form. Red-ink substitute forms that completely conform to the specifications contained in this document may be privately printed without the prior approval of the IRS or the SSA. Only the substitute black-and-white Form W-2c (Copy A) and substitute black-and-white Form W-3c need to be submitted to the SSA for approval.

Note. Both paper substitute forms filed with the SSA, and those furnished to employees, that do not totally conform to these specifications are not acceptable. Forms W-2c (Copy A) and Forms W-3c that do not conform may be returned. In addition, penalties may be assessed by the IRS.

.03 Substitute red-ink forms should not be submitted to either the IRS or the SSA for specific approval. If you are uncertain of any specification and want clarification, do the following.

.04 Any questions about the red-ink Form W-2c (Copy A) and Form W-3c should be emailed to substituteforms@irs.gov. Please enter “Substitute Forms” on the subject line. Or send your questions to:

Internal Revenue Service

Attn: Substitute Forms Program

C:DC:TS:CAR:MP:P:TP:TP

ATSC

4800 Buford Highway

Mail Stop 061-N

Chamblee, GA 30341

Note. Do not send completed forms to the Substitute Forms Program via email or mail as they are unable to process those forms. Any examples/samples of substitute forms sent to the Substitute Forms Program should not contain taxpayer information.

Any questions about the substitute black-and-white Form W-2c (Copy A) and W-3c should be emailed to copy.a.forms@ssa.gov or sent to:

Social Security Administration

Direct Operations Center

Attn: Substitute Black-and-White Copy A Forms, Room 341

1150 E. Mountain Drive

Wilkes-Barre, PA 18702-7997

Do not email or mail completed Forms W-2c (Copy A) to the SSA Substitute Black-and-White Copy A Forms address as they are unable to process those forms. Submitters should use the address shown on the Form W-3c.

Note. You should receive a response from either the IRS or the SSA within 30 days.

.05 Forms W-2c and envelopes containing Forms W-2c that include logos, slogans, and advertisements (including advertisements for tax preparation software) may be considered as suspicious or altered Forms W-2c (also known as questionable Forms W-2c). An employee may not recognize the importance of the employee copy for tax reporting purposes due to the use of logos, slogans, and advertisements. Thus, the IRS has determined that logos, slogans, and advertising will not be allowed on Copy A of Forms W-2c, Forms W-3c, or any employee copies reporting wages, or on an envelope or enclosed in an envelope containing any of those documents, with the following exceptions:

The IRS e-file logo on the IRS official employee copies may be included, but it is not required, on any of the substitute form copies.

The information return and employee copies must clearly identify the employer’s name associated with its employer identification number (EIN).

Forms W-2c and W-3c are subject to annual review and possible change. This revenue procedure may be revised to state other requirements of the IRS and the SSA regarding the preparation and use of substitute forms for Form W-2c and Form W-3c for corrections to be made at a future date. If you have comments about the prohibition against including slogans, advertising, and logos on information returns and employee copies, email or send your comments to: substituteforms@irs.gov or Internal Revenue Service, Attn: Substitute Forms Program, C:DC:TS:CAR:MP:P:TP:TP, ATSC, 4800 Buford Highway, Mail Stop 061-N, Chamblee, GA 30341.

.06 The Internal Revenue Service/Technical Service Operation (IRS/TSO) maintains a centralized customer service call site to answer questions related to information returns (Forms W-2, W-3, W-2c, W-3c, 1099 series, 1096, etc.). You can reach the call site at 866-455-7438 (toll free) or 304-263-8700 (not a toll-free number). Deaf or hard-of-hearing customers may call any of our toll-free numbers using their choice of relay service. Questions regarding the filing of information returns can be emailed to fire@irs.gov. When you send emails concerning specific file information, include the company name and the electronic file name or Transmitter Control Code (TCC). Do not include tax identification numbers (TINs) or attachments in email correspondence because electronic mail is not secure.

File paper or electronic Forms W-2c (Copy A) with the SSA. The IRS/TSO does not process Forms W-2c (Copy A).

.07 The following form instructions and publications provide more detailed filing procedures for certain information returns.

.01 OMB Number. The June 2024 revisions of Forms W-2c and W-3c have a new OMB Number: 1545-0029. This number is the same as that for the 2025 and later Forms W-2 (including territorial Forms W-2), W-3, W-3SS, and various revisions of other employment tax forms.

.02 Changes to IRS customer service information. The Internal Revenue Service/Information Returns Branch (IRS/IRB) is now known as the Internal Revenue Service/Technical Service Operation (IRS/TSO). The phone numbers for the call site have not changed. However, the address for email inquiries has changed to ire@irs.gov. See Section 1.1.06 above for more information.

.03 IRS address change. Inquiries about the red-ink Form W-2c (Copy A) and Form W-3c should be sent to the IRS at: Internal Revenue Service, Attn: Substitute Forms Program, C:DC:TS:CAR:MP:P:TP:TP, ATSC, 4800 Buford Highway, Mail Stop 061-N, Chamblee, GA 30341.

.04 Identifying number 44444. We clarified Section 1.6.05 to add that the identifying number “44444” and “For Official Use Only” text are not required to be included on employee copies of substitute Forms W-2c.

.05 Exhibits. All of the exhibits in this publication were updated for the June 2024 revisions of those forms.

.06 Editorial changes. We made editorial changes throughout, including to update references. Redundancies were eliminated as much as possible.

.01 If an employer was required to electronically file the original Form W-2, they must electronically file any Form W-2c correcting that form. If the original Form W-2 was permitted to be filed on paper and was filed on paper, then the employer must file any Form W-2c correcting that form on paper. See Regulations section 301.6011-2(c)(4)(ii) for more information. SSA publication EFW2C, Specifications for Filing Forms W-2c Electronically, contains specifications and procedures for filing Forms W-2c. Employers are cautioned to obtain the most recent revision of EFW2C (and supplements) due to any subsequent changes in specifications and procedures. Instead of the EFW2C upload format, the employer can use SSA’s online fill-in forms to create, save, print, and submit up to 25 Forms W-2c at a time to the SSA. For more information, go to SSA.gov/employer/.

.02 You may obtain a copy of the EFW2C by accessing the SSA website at SSA.gov/employer/EFW2&EFW2C.

.03 Electronic filers do not file a paper Form W-3c. See the SSA publication EFW2C for guidance on transmitting Form W-2c (Copy A) information to the SSA electronically.

.04 Employers who do not comply with the electronic filing requirements for Form W-2c (Copy A) and who are not granted a waiver by the IRS may be subject to penalties. Employers who file Form W-2c information with the SSA electronically must not send the same data to the SSA on paper Forms W-2c (Copy A). Any duplicate reporting may subject filers to unnecessary contacts by the SSA or the IRS.

.01 The official IRS-printed red dropout ink Form W-2c (Copy A) and W-3c and their exact substitutes are referred to as red-ink in this revenue procedure. Employers may file substitute Forms W-2c (Copy A) and W-3c with the SSA. The substitute forms must be exact replicas of the official IRS forms with respect to layout and content because they will be read by scanner equipment. Even the slightest deviation can result in incorrect scanning, and may affect money amounts reported for employees.

.02 Color and paper quality for Form W-2c (Copy A) (cut sheets and continuous pin-fed forms) and Form W-3c must be white 100% bleached chemical wood, optical character recognition (OCR) bond. The contractor must initiate or have a quality control program to assure OCR ink density.

 

Note. Reclaimed fiber in any percentage is permitted, provided the requirements of this standard are met.

.03 All printing of substitute Forms W-2c (Copy A) and W-3c must be in Flint J-6983 red OCR dropout ink except as specified below. The following must be printed in nonreflective black ink:

.04 The vertical and horizontal spacing on Forms W-2c and W-3c must meet specifications. See Exhibits A and B.

.05 The official red-ink Form W-3c and Form W-2c (Copy A) are 7.50 inches wide. Employers filing Forms W-2c (Copy A) with the SSA on paper must also file a Form W-3c. One Form W-2c (Copy A) or Form W-3c is contained on a standard-size, 8.5 x 11-inch page.

.06 The top, left, and right margins for the Form W-2c (Copy A) and Form W-3c are 0.50 inches (1/2 inch). All margins must be free of printing except for the words “DO NOT CUT, FOLD, OR STAPLE THIS FORM” on red-ink Form W-2c (Copy A) and “DO NOT CUT, FOLD, OR STAPLE” on red-ink Form W-3c.

.07 The identifying numbers are “44444” for Form W-2c and “55555” for Form W-3c. No printing should appear anywhere near the identifying numbers.

Note. The identifying number must be printed in nonreflective black ink in OCR-A font of 10 characters per inch.

.08 Continuous pin-fed Forms W-2c (Copy A) must be separated into 11-inch deep pages. The pin-fed strips must be removed when Forms W-2c (Copy A) are filed with the SSA.

.09 Box 12 of Form W-2c (Copy A) contains four entry boxes – 12a, 12b, 12c, and 12d. Do not make more than one entry per box. Enter your first code in box 12a (for example, enter Code D in box 12a, not 12d, if it is your first entry). If more than four items need to be reported in box 12, use a second Form W-2c to report the additional items (see Multiple forms in the most recent General Instructions for Forms W-2 and W-3). Do not report the same federal tax data to the SSA on more than one Form W-2c (Copy A). However, repeat the identifying information (employee’s name, address, and SSN; employer’s name, address, and EIN) on each additional form.

.10 The checkboxes in box 13 of Form W-2c (Copy A) must be 0.14 inches each. Each space before the first checkbox is 0.20 inches; each space between the first checkbox and second checkbox should be 0.36 inches; each space between the second and third checkboxes should be 0.44 inches; and each space between the third checkbox to the margin of box 13 should be 0.48 inches. The checkboxes in box c of Form W-3c must also be 0.14 inches.

Note. More than 50% of an applicable checkbox must be covered by an “X.”

.11 All substitute Forms W-2c (Copy A) and W-3c in the red-ink format must have the form number and form title printed on the bottom face of each form using type identical or a close approximation to that of the official IRS form. The red-ink substitute must have the form producer’s (not the form filer’s) EIN entered in red in place of the Cat. No. (directly to the left of “Department of the Treasury” on Form W-2c (Copy A) and at the bottom on Form W-3c).

.12 The words “For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions.” must be printed on all Forms W-2c (Copy A) and Forms W-3c.

.13 The Office of Management and Budget (OMB) Number must be printed on substitute Forms W-3c and W-2c (Copy A) (on each ply) in the same location as on the official IRS forms.

.14 All substitute Forms W-3c must include the instructions that are printed on the same sheet below the official IRS form.

.15 The appropriate SSA filing address information must be printed on the front of Form W-3c below the body of the form as shown below.

If you use the U.S. Postal Service, send this entire page with Copy A of Form W-2c to:

Social Security Administration

Direct Operations Center

P.O. Box 3333

Wilkes-Barre, PA 18767-3333

Note: If you use an IRS-approved private delivery service to file, replace “P.O. Box 3333” with “Attn: W-2c Process, 1150 E. Mountain Dr.” in the address and change the ZIP code to “18702-7997.” Go to www.IRS.gov/PDS for a list of IRS-approved private delivery services.

.16 The back of substitute Form W-2c (Copy A) and Form W-3c must be free of all printing.

.17 All copies must be clearly legible. Fading must be minimized to assure legibility.

.18 Chemical transfer paper is permitted for Form W-2c (Copy A) only if the following standards are met:

.19 The Government Printing Office (GPO) symbol and the Catalog Number (Cat. No.) must be deleted from substitute Form W-2c (Copy A) and Form W-3c.

.20 The sequence for assembling the copies of Form W-2c is as follows.

.01 The SSA-approved substitute black-and-white Forms W-2c (Copy A) and W-3c are referred to as substitute black-and-white Form W-2c (Copy A) and W-3c. Specifications for the substitute black-and-white Form W-2c (Copy A) and W-3c are similar to the red-ink forms (Section 1.4) except for the items that follow (see Exhibits C and D). You may contact the SSA via email at copy.a.forms@ssa.gov for more information.

Note. Exhibits are samples only and may not show the required typeface and/or font. Exhibits must not be downloaded to meet tax obligations.

Note. Although substitute Copy 1 of Form W-2c can be printed in black instead of the red dropout ink, it should conform as closely as possible to Copy A of the official IRS form in content, format, and layout in order to satisfy state and local reporting requirements.

.02 The dimensions for the substitute black-and-white Forms W-2c (Copy A) and W-3c are as follows. See Exhibits C and D.

.03 You must submit samples of your black-and-white substitute Forms W-2c (Copy A) and W-3c to the SSA. Only black-and-white substitute Forms W-2c (Copy A) and W-3c will be accepted for approval by the SSA. All checkboxes on the dummy-data substitute black-and-white Form W-3c must be electronically checked in box c (Kind of Payer, Kind of Employer, and Third-party sick pay). Questions regarding other forms (that is, red-ink Forms W-2, W-2c, W-3, W-3c, 1099 series, 1096, etc.) must be directed to the IRS. Also, see IRS Publications 1141 and 1179.

.04 You will be required to send one set of blank and one set of dummy-data substitute black-and-white Form W-2c (Copy A) and W-3c for approval. Sample data entries should be filled in to the maximum length for each box entry, preferably using numeric data or alpha data, depending upon the type required to be entered. Include in your submission the name, telephone number, fax number, and email address of a contact person who can answer questions regarding your sample forms.

.05 To receive approval, you may first contact the SSA at copy.a.forms@ssa.gov to obtain a template and further instructions. You can either submit your sample substitute black-and-white Forms W-2c (Copy A) and Forms W-3c in a PDF version electronically for approval to the copy.a.forms@ssa.gov mailbox or send your paper sample substitute black-and-white Forms W-2c (Copy A) and Forms W-3c to:

Social Security Administration

Direct Operations Center

Attn: Substitute Black-and-White Copy A Forms, Room 341

1150 E. Mountain Drive

Wilkes-Barre, PA 18702-7997

Send your sample forms via private mail carrier or certified mail in order to verify their receipt. You can expect approval (or disapproval) by the SSA within 30 days of receipt of your sample forms.

Do not mail completed Forms W-2c (Copy A) and W-3c to the Substitute Black-and-White Forms (Copy A) address. Submitters should use the address shown on the Form W-3c.

.06 Vendor codes from the National Association of Computerized Tax Processors (NACTP) are required by those companies producing the W-2 family of forms as part of a product for resale to be used by multiple employers and payroll professionals. Employers developing Forms W-2c or W-3c to be used only for their individual company require a vendor code issued by the SSA.

.07 The 4-digit vendor code preceded by four zeros and a slash (0000/9876) must be preprinted on the sample black-and-white substitute Forms W-2c and W-3c. Forms not containing a vendor code will be rejected and will not be submitted for testing or approval. If you have a valid vendor code provided to you through the NACTP, you should use that code. If you do not have a valid vendor code, contact the SSA at copy.a.forms@ssa.gov to obtain an SSA-issued code. (Additional information on vendor codes may be obtained from the SSA or the NACTP via email at president@nactp.org.)

.08 If you use forms produced by a vendor and have questions concerning approval, do not send the forms to the SSA for approval. Instead, you may contact the software vendor to obtain a copy of SSA’s dated approval notice supplied to that vendor.

Note. Rules in Section 1.6 apply only to employee copies of Form W-2c (Copies B, C, and 2). Printers are cautioned that the paper filers who send Forms W-2c (Copy A) to the SSA must follow the requirements in Sections 1.4 and/or 1.5 above.

.01 All employers (including those who file electronically) must furnish employees with at least two copies of Form W-2c (three or more for employees required to file a state, city, or local income tax return). Employee copies do not require approval as long as these requirements are followed.

.02 Chemical transfer paper for employee copies must be clearly legible, have the capability to be photocopied, and not fade to such a degree as to preclude legibility and the ability to photocopy.

.03 The paper for all copies must be white and printed in black ink. The substitute Copy B (or its equal), which employees are instructed to attach to their federal income tax returns, as well as all other copies furnished to employees, should be at least 9-pound paper (basis 17 x 22-500). See Section 1.4.02.

.04 Type must be substantially identical in size and shape to that on the official form.

.05 Substitute forms for employees need to contain only the payment boxes and captions that are applicable. These boxes, box numbers, and box titles must, when applicable, match the IRS-printed form. In all cases, the employee name, address, and SSN, as well as the employer name, address, and EIN, must be present. The identifying number “44444” and “For Official Use Only” text on the IRS-printed Form W-2c employee copies (Copies B, C, and 2) are not required to be included on employee copies of substitute Forms W-2c.

.06 The dimensions of the boxes on these copies (Copies B, C, and 2), but not Copy A, may be adjusted to allow space for conveying additional information. This may permit the employer to eliminate other statements or notices that would otherwise be furnished to employees.

.07 The maximum allowable dimensions for employee copies of Form W-2c are no more than 11.00 inches deep by 8.50 inches wide. The minimum allowable dimensions for employee copies of Form W-2c are 2.67 inches deep by 4.25 inches wide.

Note. These maximum and minimum size specifications are subject to future change.

.08 Either horizontal or vertical format is permitted for substitute employee copies of Forms W-2c. That is, the width of the form may be either greater or less than the depth of the form.

.09 All copies of Form W-2c must clearly and prominently display the form number and the form title together in one area of the form. It is recommended (but not required) that this be located on the bottom left of Form W-2c. The reference to the “Department of the Treasury – Internal Revenue Service” must be on all copies of Form W-2c. It is recommended (but not required) that this be located on the bottom right of Form W-2c.

.10 If the substitute Forms W-2c are not labeled as to the disposition of the copies, then written notification must be provided to each employee as specified below.

If the substitute Forms W-2c are labeled, the forms must contain the applicable description as stated on the official form.

.11 Instructions similar to those on the back of Form W-2c (Copy C) of the official form must be provided to each employee.

.01 Privately printed substitute Forms W-2c are not required to contain a copy to be retained by employers (Copy D). However, employers must retain copies of the Forms W-2c (Copy A) filed with the SSA or have the ability to reconstruct the data for at least 4 years. Employers must be able to generate a facsimile of Form W-2c (Copy A), in case of loss.

.02 If Copy D is provided for the employer, instructions contained on the back of Copy D of the official form must appear on the back of the substitute form. If Copy D is not provided, these instructions must be furnished to the employer on a separate statement.

.03 Only originals or compliant substitute copies of Forms W-2c (Copy A) and Forms W-3c may be filed with the SSA. Carbon copies and photocopies are unacceptable.

.04 Employers should type or machine-print entries on plain paper forms whenever possible and provide good quality data entries by using a high quality type face, inserting data in the middle of blocks that are well separated from other printing and guidelines, and taking any other measures that will guarantee clear, sharp images.

.05 Because employers must file a machine-scannable Form W-2c, they should meet the following requirements.

.06 The employer must also provide employee copies of Forms W-2c (Copies B, C, and 2) that are legible and able to be photocopied (by the employee).

.07 When Forms W-2c or W-3c are typed, black ink must be used with no script type, inverted font, italics, or dual-case alpha characters.

.08 Forms W-2c (Copy A) require decimal entries for wage data. Do not print dollar signs with money amounts on Forms W-2c (Copy A) and Form W-3c.

.09 The filer’s employer identification number (EIN) must be entered in box (b) of Form W-2c and box (e) of Form W-3c.

.10 The employer’s name, address, EIN, and state ID number may be preprinted.

.11 Employers must not truncate the employee’s SSN on Copy A of Forms W-2c. See the General Instructions for Forms W-2 and W-3 for more information.

.01 The Paperwork Reduction Act (the Act) of 1995 (Public Law 104-13) requires the following.

.02 This information must be provided to any users of official or substitute IRS forms or instructions.

.03 The OMB requirements for substitute IRS Form W-2c and Form W-3c are the following.

.04 Any substitute Form W-3c and Form W-2c (Copy A only) must state “For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions.” If no instructions are provided to users of your forms, you must furnish them with the exact text of the Privacy Act and Paperwork Reduction Act Notice in the General Instructions for Forms W-2 and W-3.

.01 You can order official IRS Forms W-2c, Forms W-3c, and the General Instructions for Forms W-2 and W-3 (Including Forms W-2AS, W-2CM, W-2GU, W-2VI, W-3SS, W-2c, and W-3c) online at IRS.gov/OrderForms.

Only contact the IRS, not the SSA, for forms.

.02 Copies of Form W-2c (Copy A) and Form W-3c downloaded from IRS.gov cannot be used for filing with the SSA. These copies of Forms W-2c and W-3c are for information purposes only.

.01 Revenue Procedure 2023-39, 2023-52 I.R.B. dated December 26, 2023 (reprinted as Publication 1223, Revised 12-2023), is superseded.

Exhibits A through D provide the general measurements for Forms W-2c and W-3c as discussed in this revenue procedure. Exhibits are samples only and may not show the required typeface and/or font. Exhibits must not be downloaded to meet tax obligations. Certain exhibits show a 0000/ in the location designated for your vendor code. See Section 1.5.01, item 11, and Section 1.5.06 for more information.

Exhibit A — Form W-2c (Copy A) (Red-Ink) 06-2024

Exhibit B — Form W-3c (Red-Ink) 06-2024

Exhibit C — Form W-2c (Copy A) (Substitute Laser/ Black-and-White) 06-2024

Exhibit D — Form W-3c (Substitute Laser/Black-and-White) 06-2024

Authority

This document contains proposed amendments to the Income Tax Regulations (26 CFR part 1) under sections 30C, 48, 48E, 6417, and 6418 of the Internal Revenue Code (Code) issued by the Secretary of the Treasury or her delegate (Secretary) under the authority granted under sections 30C(e)(5), (g)(4), and (h), 45(b)(12), 48(a)(16), 48E(i), 6417(h), 6418(g) and (h), and 7805(a) of the Code (proposed regulations).

Section 30C includes three specific delegations of regulatory authority. First, 30C(h) provides a general grant of regulatory authority for section 30C as a whole, stating, “[t]he Secretary shall prescribe such regulations as necessary to carry out the provisions of this section.” Second, section 30C(g)(4) provides a specific delegation of authority related to the prevailing wage and registered apprenticeship (PWA) requirements: “The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance that provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.” Third, section 30C(e)(5) provides a specific delegation of authority by cross-reference to provide recapture rules similar to those under former section 179A (described in part III.A. of the Background section and part IV.A. of the Explanation of Provisions section) as authorized by former section 179A(e)(4).

Sections 45(b)(12) and 48(a)(16) provide specific delegations of authority with respect to the requirements of section 45(b), including the PWA requirements of section 45(b)(7) and (8) that sections 48(a)(10) and (11) and 48E(d)(3) and (4) refer to, each stating, “[t]he Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.” Section 48E(i) provides a specific delegation of authority with respect to the requirements of section 48E, including the PWA requirements of section 48E(d)(3) and (4), stating, that “[n]ot later than January 1, 2025, the Secretary shall issue guidance regarding implementation of this section.”

Sections 6417(h) and 6418(h) provide specific delegations of authority with respect to the elective payment election rules of section 6417 and the transfer of certain credits under section 6418, each stating, in part, that “[t]he Secretary shall issue such regulations or other guidance as may be necessary to carry out the purposes of this section...” Finally, section 7805(a) authorizes the Secretary to prescribe all needful rules and regulations for the enforcement of the Code.

Notice 2007-43, 2007-22 I.R.B. 1318, is withdrawn.

Except as otherwise provided, these regulations are proposed to apply to property placed in service in taxable years ending after the date of publication of the Treasury Decision adopting these rules as final rules in the Federal Register.

Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the ADDRESSES heading.

The Treasury Department and the IRS request comments on all aspects of the proposed regulations. Any comments submitted will be made available at https://www.regulations.gov or upon request.

A public hearing will be scheduled if requested in writing by any person who timely submits electronic or written comments. Requests for a public hearing are also encouraged to be made electronically. If a public hearing is scheduled, notice of the date and time for the public hearing will be published in the Federal Register.

The IRS Revenue Procedures, Notices, and other guidance cited in this preamble are published in the Internal Revenue Bulletin and is available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC, 20402, or by visiting the IRS website at https://www.irs.gov.

The principal author of the proposed regulations is the Office of Associate Chief Counsel (Passthroughs & Special Industries). However, other personnel from the Treasury Department and the IRS participated in the development of the proposed regulations.

Income taxes, Reporting and recordkeeping requirements.

Accordingly, the Treasury Department and the IRS propose to amend 26 CFR part 1 as follows:

Paragraph 1. The authority citation for part 1 is amended by:

1. Adding entries for §§1.30C-1 and 1.30C-2 in numerical order;

2. Revising the entry for §1.30C-3; and

3. Adding entries for §§1.30C-4, 1.48-9(e)(10), and 1.48E-2(g)(6) in numerical order.

The additions and revisions read in part as follows:

Authority: 26 U.S.C. 7805 * * *

* * * * *

Section 1.30C-1 also issued under 26 U.S.C. 30C(h).

Section 1.30C-2 also issued under 26 U.S.C. 30C(h).

Section 1.30C-3 also issued under 26 U.S.C. 30C(g)(4) and (h).

Section 1.30C-4 also issued under 26 U.S.C. 30C(e)(5) and (h).

* * * * *

Section 1.48-9(e)(10) also issued under 26 U.S.C. 48(a)(16).

* * * * *

Section 1.48E-2(g)(6) also issued under 26 U.S.C. 48E(i).

* * * * *

Par. 2. Sections 1.30C-0 through 1.30C-2 are added to read as follows:

* * * * *

1.30C-0 Table of contents.

1.30C-1 Credit for alternative fuel vehicle refueling property; Definitions.

1.30C-2 General rules.

* * * * *

This section lists the captions contained in §§1.30C-1 through 1.30C-4.

§1.30C-1 Credit for alternative fuel vehicle refueling property; Definitions.

(a) In general.

(b) Definitions.

(1) 30C property.

(i) Applicable property.

(ii) Property integral to refueling property or recharging property.

(iii) Other requirements.

(2) 45Z transportation fuel.

(3) Building and structural components.

(4) Census block.

(5) Charger.

(6) Charging port.

(7) Clean burning fuel.

(8) Connector.

(9) Conventional fuel.

(10) Conventional refueling property.

(11) Electric vehicle.

(12) Fuel dispenser.

(13) Fuel tank.

(14) Functionally interdependent.

(15) Integral part.

(16) Located at the point.

(i) Refueling property.

(ii) Recharging property.

(17) Motor vehicle.

(i) In general.

(ii) 2 or 3-wheeled motor vehicle.

(18) Original use.

(19) Population census tract.

(20) Qualified alternative fuel.

(21) Qualifying biodiesel mixture.

(22) Section 30C credit.

(23) Section 30C regulations.

(24) Statutory references.

(i) Chapter 1.

(ii) Code.

(25) Storage property.

(i) In general.

(ii) Qualified alternative fuel storage property.

(iii) Electrical energy storage property.

(c) Applicability date.

§1.30C-2 General rules.

(a) Amount of credit.

(1) In general.

(2) Applicable percentages.

(i) Property of a character subject to an allowance for depreciation.

(ii) Projects meeting the prevailing wage and apprenticeship requirements.

(iii) Property not subject to an allowance for depreciation.

(3) Apportionment of section 30C credit between business and personal use.

(i) Business use portion.

(ii) Personal use portion.

(4) Dollar-amount limitations.

(i) In general.

(ii) Apportioned-use property.

(b) 30C property rules.

(1) Single item of 30C property.

(2) Associated property.

(3) Calculating the section 30C credit.

(4) Special rule for bidirectional charging equipment.

(5) Property for the refueling of certain two- and three-wheeled motor vehicles.

(6) Placed in service.

(i) Depreciable property.

(ii) Non-depreciable property.

(c) Eligible census tracts.

(1) Geographic requirement.

(2) Low-income community census tract.

(i) In general.

(ii) Modification for high migration rural counties.

(3) Non-urban census tract.

(4) Determination of eligibility of specific census tracts.

(d) Reduction in basis.

(e) Examples.

(1) Example 1.

(i) Facts.

(ii) Analysis.

(A) 30C property.

(B) Calculation of the credit.

(2) Example 2.

(i) Facts.

(ii) Analysis.

(3) Example 3.

(i) Facts.

(ii) Analysis.

(4) Example 4.

(i) Facts.

(ii) Analysis.

(A) 30C property.

(B) Calculation of the credit.

(5) Example 5.

(i) Facts.

(ii) Analysis.

(A) 30C property.

(B) Calculation of the credit.

(6) Example 6.

(i) Facts.

(ii) Analysis.

(7) Example 7.

(i) Facts.

(ii) Analysis.

(A) 30C property.

(B) Calculation of the credit.

(8) Example 8.

(i) Facts.

(ii) Analysis.

(9) Example 9.

(i) Facts.

(ii) Analysis.

(A) 30C property.

(B) Calculation of the credit.

(10) Example 10.

(i) Facts.

(ii) Analysis.

(A) 30C property.

(B) Calculation of the credit.

(11) Example 11.

(i) Facts.

(ii) Analysis.

(12) Example 12.

(i) Facts.

(ii) Analysis.

(A) 30C property.

(B) Calculation of the credit.

(13) Example 13.

(i) Facts.

(ii) Analysis.

(A) 30C property.

(B) Calculation of the credit.

(14) Example 14.

(i) Facts.

(ii) Analysis.

(A) 30C property.

(B) Calculation of the credit.

(15) Example 15.

(i) Facts.

(ii) Analysis.

(f) Claim requirements.

(g) Applicability date.

§1.30C-3 Rules relating to the increased credit amount for prevailing wage and apprenticeship.

(a) In general.

(b) 30C project requirements.

(1) In general.

(2) Determination of a project.

(3) Related taxpayers.

(i) Definition.

(ii) Related taxpayer rule.

(c) Coordination with 30C(e)(2) and §1.30C-4(c).

(d) Examples.

(1) Example 1.

(i) Facts.

(ii) Analysis.

(2) Example 2.

(i) Facts.

(ii) Analysis.

(e) Applicability date.

§1.30C-4 Special rules.

(a) No credit allowable in certain circumstance.

(1) Property used outside the United States.

(2) Property placed in service in a United States territory.

(3) Section 179.

(b) Recapture.

(1) In general.

(2) Recapture event.

(3) Property placed in service in a location that ceases to be in a qualified census tract.

(4) Recapture amount.

(i) In general.

(ii) Special rule for apportioned-use property.

(5) Basis adjustment.

(c) Property used by a tax-exempt or governmental entity.

(1) In general.

(2) Interaction with section 6417.

(d) Dual-use property.

(1) Dual use property used for dispensing or storing qualified alternative fuel and conventional fuel.

(2) Qualified alternative fuel storage.

(3) Dual use property used to store or transmit electricity for charging a motor vehicle and for other purposes.

(4) Example.

(i) Facts.

(ii) Analysis.

(e) Applicability date.

(a) In general. The section 30C regulations (as defined in paragraph (b)(23) of this section) apply for purposes of determining the availability and amount of any credit that is allowed to a taxpayer by section 30C(a) of the Code (as defined in paragraph (b)(24)(ii) of this section) with respect to any 30C property (as defined in paragraph (b)(1) of this section) placed in service by the taxpayer during the taxable year. Paragraph (b) of this section provides definitions of terms for purposes of applying section 30C and the section 30C regulations. See §1.30C-2 for general rules for determining the amount of the allowed section 30C credit. See §1.30C-3 for rules relating to the increased section 30C credit amount for satisfying prevailing wage and apprenticeship requirements. See §1.30C-4 for special rules.

(b) Definitions. The definitions in this section apply for purposes of section 30C and the section 30C regulations.

(1) 30C property. 30C property is any applicable property described in paragraph (b)(1)(i) or (ii) of this section that also meets the requirements of paragraph (b)(1)(iii) of this section.

(i) Applicable property. Applicable property is any property (other than real property and a building and its structural components) that is comprised of components that are functionally interdependent—

(A) For the storage or dispensing of a qualified alternative fuel into the fuel tank of a motor vehicle propelled by such fuel, but only if the storage or dispensing of the fuel is located at the point where such fuel is delivered into the fuel tank of the motor vehicle (refueling property); or

(B) For the recharging of motor vehicles propelled by electricity, but only if the property is located at the point where the motor vehicles are recharged (recharging property).

(ii) Property integral to refueling property or recharging property. If applicable, the term applicable property also includes property the purpose of which is described in paragraph (b)(1)(i)(A) or (B) of this section that is an integral part of refueling property or recharging property.

(iii) Other requirements. To be 30C property, any applicable property must also meet the following requirements—

(A) The property is of a character subject to an allowance for depreciation, or installed on property that is used as the principal residence of the taxpayer (within the meaning of section 121 of the Code);

(B) The original use of the property begins with the taxpayer; and

(C) The property is placed in service (as defined in §1.30C-2(b)(6)) in an eligible census tract as described in §1.30C-2(c).

(2) 45Z transportation fuel. 45Z transportation fuel means any transportation fuel (as defined in section 45Z(d)(5) of the Code) produced after December 31, 2024.

(3) Building and structural components. Building and structural components has the same meaning as in §1.48-1(e).

(4) Census block. Census block means the smallest geographic area for which the Census Bureau collects and tabulates decennial census data.

(5) Charger. Charger means a device with one or more charging ports and connectors for charging electric vehicles.

(6) Charging port. Charging port means the system within a charger that charges one motor vehicle. A charging port may have multiple connectors, but it can provide power at the port’s rated electrical output to charge only one motor vehicle through one connector at a time.

(7) Clean burning fuel. Clean burning fuel means—

(i) Any qualified alternative fuel; or

(ii) Electricity.

(8) Connector. Connector means the device that attaches an electric vehicle to a charging port to transfer electricity.

(9) Conventional fuel. Conventional fuel means any fuel that is not a clean burning fuel. Conventional fuel includes diesel fuel that is not in a qualifying biodiesel mixture and gasoline.

(10) Conventional refueling property. Conventional refueling property means property that is used to dispense or store only conventional fuel.

(11) Electric vehicle. Electric vehicle means a motor vehicle that is either partially or fully powered by electric power received from an external power source.

(12) Fuel dispenser. Fuel dispenser means, in the case of refueling property, the unit through which fuel is dispensed into the fuel tank of a motor vehicle, if such unit is capable of fueling at or above the dispenser’s minimum rate of fueling and has at least one hose and nozzle, and optionally a meter, valve, controller, and enclosure.

(13) Fuel tank. Fuel tank means, in the case of a motor vehicle propelled by qualified alternative fuel, the tank that supplies fuel to the propulsion engine of the motor vehicle or, in the case of a fuel cell electric vehicle, the tank that supplies fuel to the fuel cell of the motor vehicle.

(14) Functionally interdependent. Components are functionally interdependent if the placing in service of each component is dependent upon the placing in service of each of the other components in order to refuel or recharge a motor vehicle.

(15) Integral part. Property is an integral part of a refueling or recharging property if it is used directly in the intended function of the refueling property or recharging property and is essential to the completeness of the intended function, meets all of the requirements for 30C property described in paragraph (b)(1)(iii) of this section, is owned by the taxpayer that owns the refueling property or recharging property, and is specifically designed to be integrated with the refueling property or recharging property with which it is associated.

(16) Located at the point—(i) Refueling property. For purposes of determining whether property is considered refueling property, and therefore 30C property, located at the point means the point where fuel is delivered into the fuel tank of the motor vehicle. Property will be considered located at the point where fuel is delivered into the fuel tank of the motor vehicle if such property is located at the same or immediately adjacent physical address as such fuel delivery point.

(ii) Recharging property. For purposes of determining whether property is considered recharging property, and therefore 30C property, located at the point means the point where the motor vehicles are recharged. Property will be considered located at the point where the motor vehicles are recharged if it is located at the same or immediately adjacent physical address as such recharging point. Property that is a component of a motor vehicle and is necessary for the propulsion of that vehicle is considered part of the vehicle rather than recharging property and is therefore not 30C property.

(17) Motor vehicle—(i) In general. Motor vehicle means any vehicle that has at least 4 wheels and is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails).

(ii) 2- or 3-wheeled motor vehicle. For purposes of §1.30C-2(c)(5), motor vehicle also includes any vehicle that has 2 or 3 wheels, is manufactured primarily for use on public streets, roads, or highways (not including a vehicle operated exclusively on a rail or rails), and is propelled by electricity.

(18) Original use. Original use has the same meaning as in §1.48-2(b)(7).

(19) Population census tract. Population census tract means the small-area geographic divisions of a county or statistically equivalent entity defined for the tabulation and presentation of data from the decennial census and selected other statistical programs, as defined by the U.S. Bureau of the Census (Census Bureau). Population census tracts are comprised of census blocks. The Census Bureau assigns to each population census tract a unique 11-digit census tract Geographic Identifier (GEOID). An 11-digit census tract GEOID is a GEOID (a numeric identifier associated with a geographic area) defined by the Census Bureau and comprised of a 2-digit State GEOID, 3-digit county GEOID, and 6-digit census tract GEOID. The 11-digit census tract GEOID provides a unique identifier for each population census tract in the United States, including tracts in the U.S. territories. The 11-digit census tract GEOIDs may vary for any individual latitude/longitude point based on different census tract boundary delineation dates over time.

(20) Qualified alternative fuel. Qualified alternative fuel is a fuel meeting one of the following conditions—

(i) At least 85 percent of its volume consists of one or more of the following: ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen;

(ii) It is a qualifying biodiesel mixture; or

(iii) It is 45Z transportation fuel.

(21) Qualifying biodiesel mixture. Qualifying biodiesel mixture means a mixture of biodiesel (as defined in section 40A(d)(1) of the Code) and diesel fuel (as defined in section 4083(a)(3) of the Code) if such mixture contains at least 20 percent biodiesel. For this purpose, any kerosene in a mixture—

(i) Is disregarded in determining whether the mixture is a mixture of biodiesel and diesel fuel; and

(ii) Is taken into account in determining whether the mixture contains at least 20 percent biodiesel.

(22) Section 30C credit. The term section 30C credit means the credit allowed by section 30C(a) to a taxpayer to claim against the tax imposed by chapter 1 (as defined in paragraph (b)(24)(i) of this section) of an amount equal to a percentage of the cost of 30C property placed in service by the taxpayer during the taxable year, subject to limitations described in section 30C(b) and the section 30C regulations.

(23) Section 30C regulations. The term section 30C regulations means this section and §§1.30C–2 through 1.30C-4.

(24) Statutory references—(i) Chapter 1. The term chapter 1 means chapter 1 of the Code.

(ii) Code. The term Code means the Internal Revenue Code.

(25) Storage property—(i) In general. Storage property means qualified alternative fuel storage property and electrical energy storage property.

(ii) Qualified alternative fuel storage property. Qualified alternative fuel storage property means property used for the storage of qualified alternative fuel, but only if such storage property is located at the point where the motor vehicles are refueled. For example, in the case of hydrogen energy storage property, such property may include but is not limited to a hydrogen compressor and associated storage tank and an underground storage facility and associated compressors.

(iii) Electrical energy storage property. Electrical energy storage property means property that receives, stores, and delivers energy for conversion to electricity, but only if such storage property is located at the point where the motor vehicles are recharged. For example, electrical energy storage property may include but is not limited to rechargeable electrochemical batteries of all types (such as lithium ion, vanadium flow, sodium sulfur, and lead-acid).

(c) Applicability date. This section applies to property placed in service in taxable years ending after [date of publication of final regulations in the Federal Register].

(a) Amount of credit—(1) In general. Section 30C(a) of the Code allows a taxpayer to claim as a credit against the tax imposed by chapter 1 an amount equal to a percentage of the cost of 30C property placed in service by the taxpayer during the taxable year, subject to certain dollar-amount limitations described in section 30C(b) and paragraph (a)(4) of this section.

(2) Applicable percentages—(i) Property of a character subject to an allowance for depreciation. In the case of property of a character subject to an allowance for depreciation, the section 30C credit is an amount equal to 6 percent of the cost of any 30C property placed in service by the taxpayer during the taxable year. For 30C property placed in service by certain tax-exempt organizations and governmental units described in section 50(b)(3) and (4) of the Code, see sections 30C(e)(2) and 6417(d)(2) of the Code and §1.6417-2(c).

(ii) Projects meeting the prevailing wage and apprenticeship (PWA) requirements. In the case of any 30C project (as described in §1.30C-3(b)(2)) that satisfies the prevailing wage and registered apprenticeship requirements of section 30C(g) and §1.30C-3 (PWA requirements), the section 30C credit for the cost of any 30C property in such project placed in service by the taxpayer during the taxable year is multiplied by 5.

(iii) Property not subject to an allowance for depreciation. In the case of property of a character not subject to an allowance for depreciation, the section 30C credit is an amount equal to 30 percent of the cost of any 30C property placed in service by the taxpayer during the taxable year provided that such property is installed on property that is used as the taxpayer’s principal residence (within the meaning of section 121 of the Code).

(3) Apportionment of section 30C credit between business and personal use. In the case of depreciable 30C property installed at the taxpayer’s principal residence, the business use of which is more than 50 percent of a taxpayer’s total use of the property for the taxable year in which the property is placed in service, the taxpayer’s section 30C credit for that taxable year with respect to that 30C property is treated as a general business credit under section 30C(d)(1) and paragraph (a)(2)(i) of this section (and not allowed under section 30C(a) or paragraph (a)(2)(iii) of this section). If the business use of such 30C property is 50 percent or less of a taxpayer’s total use of the property for the taxable year in which the property is placed in service (apportioned-use property), the taxpayer’s section 30C credit for that taxable year with respect to that property must be apportioned as provided in paragraphs (a)(3)(i) and (ii) of this section:

(i) Business use portion. The portion of the section 30C credit corresponding to the percentage of the taxpayer’s business use of the 30C property is treated as a general business credit under section 30C(d)(1) and paragraph (a)(2)(i) of this section (and not allowed under section 30C(a) or paragraph (a)(2)(iii) of this section).

(ii) Personal use portion. The portion of the section 30C credit corresponding to the percentage of the taxpayer’s personal use of the 30C property is treated as a section 30C credit allowed under section 30C(a) pursuant to section 30C(d)(2) and paragraph (a)(2)(iii) of this section.

(4) Dollar-amount limitations—(i) In general. The section 30C credit allowed with respect to any single item of 30C property placed in service by the taxpayer during the taxable year cannot exceed—

(A) $100,000 in the case of any such item of property of a character subject to an allowance for depreciation; and

(B) $1,000 in any other case.

(ii) Apportioned-use property. In the case of apportioned-use property described in paragraph (a)(3) of this section, the dollar-amount limitation must be apportioned in the same manner as the taxpayer’s section 30C credit. For example, in the case of 30C property the business use of which is 40 percent of a taxpayer’s total use of the property for the taxable year in which the property is placed in service: the portion treated as a general business credit under section 30C(d)(1) cannot exceed $40,000 ($100,000 multiplied by 40 percent), and the portion treated as a section 30C credit allowed under section 30C(a) cannot exceed $600 ($1,000 multiplied by 60 percent).

(b) 30C property rules—(1) Single item of 30C property. A taxpayer may claim the section 30C credit with respect to 30C property if the taxpayer places in service at least one single item of 30C property as described in paragraph (b)(6) of this section, any other components associated with the item that are functionally interdependent, and, if applicable, any integral part property associated with the item. For purposes of calculating the section 30C credit, a single item of 30C property is–

(i) Each charging port for recharging property;

(ii) Each fuel dispenser for refueling property; or

(iii) Each storage property (for this purpose, a storage system comprised of multiple storage tanks, such as a cascade system, is treated as a single storage property).

(2) Associated property. If functionally interdependent property and, if applicable, integral part property that is a part of the 30C property is placed in service by a taxpayer in a taxable year and is associated with one or more single items of 30C property (associated property), then such associated property must be allocated as follows:

(i) If associated property is directly attributable and traceable to a single item of 30C property, then the cost of such associated property is allocated to such single item of 30C property.

(ii) If associated property is directly attributable and traceable to more than one single item of 30C property, then the cost of such associated property is allocated to such single item of 30C property based on the cost of each single item of 30C property. The total cost of such associated property divided among the 30C properties cannot exceed 100 percent of the cost of such associated property.

(3) Calculating the section 30C credit. The section 30C credit for each single item of 30C property is the lesser of the tentative section 30C credit for that single item or the dollar-amount limitations in paragraph (a)(4) of this section for that single item. The tentative section 30C credit for each single item of 30C property equals:

(i) The applicable percentage; multiplied by

(ii) The sum of—

(A) The cost of the single item of 30C property;

(B) The cost of associated property that is directly attributable and traceable to the single item of 30C property (as described in paragraph (b)(2)(i) of this section); and

(C) The cost of the ratable share of associated property (as described in paragraph (b)(2)(ii) of this section).

(4) Special rule for bidirectional charging equipment. Property will not fail to be treated as 30C property solely because such property is capable of charging the battery of a motor vehicle propelled by electricity and allows discharging electricity from such battery to an electric load external to such motor vehicle.

(5) Property for the refueling of certain two- and three-wheeled motor vehicles. 30C property also includes property of a character subject to an allowance for depreciation that is for the recharging of a motor vehicle described in §1.30C-1(b)(17)(ii).

(6) Placed in service—(i) Depreciable property. 30C property that is depreciable property is considered placed in service in the earlier of the following taxable years:

(A) The taxable year in which, under the taxpayer’s depreciation practice, the period for depreciation with respect to such property begins; or

(B) The taxable year in which such property is placed in a condition or state of readiness and availability for a specifically assigned function, whether in a trade or business or in the production of income.

(ii) Non-depreciable property. 30C property that is non-depreciable property is considered placed in service when it is installed at the principal residence of the taxpayer and is operational.

(c) Eligible census tracts—(1) Geographic requirement. To qualify for the section 30C credit, 30C property must be placed in service in an eligible census tract. Eligible census tracts include any population census tract that qualifies as a low-income community census tract or that is a non-urban census tract.

(2) Low-income community census tract—(i) In general. A population census tract is an eligible low-income community census tract for purposes of the section 30C credit if the population census tract meets the requirements of section 45D(e)(1) of the Code (relating to the new markets tax credit), which requires that the poverty rate for such tract is at least 20 percent, or in the case of a tract not located within a metropolitan area, the median family income for such tract does not exceed 80 percent of statewide median family income, or in the case of a tract located within a metropolitan area, the median family income for such tract does not exceed 80 percent of the greater of statewide median family income or the metropolitan area median family income.

(ii) Modification for high migration rural counties. In the case of a census tract located within a high migration rural county, as defined under section 45D(e)(5) of the Code, such census tract is a low-income community if the median family income for such tract does not exceed 85 percent of statewide median family income.

(3) Non-urban census tract. For purposes of the section 30C credit, a non-urban census tract is any population census tract in which at least 10 percent of the census blocks are not designated as urban areas by the Census Bureau.

(4) Determination of eligibility of specific census tracts. The Internal Revenue Service (IRS) will periodically publish lists of specific census tracts that meet the criteria in paragraph (c)(1) of this section along with instructions on how taxpayers may determine their census tract identifying numbers in the Federal Register or Internal Revenue Bulletin (see §601.601 of this chapter).

(d) Reduction in basis. The basis of any property for which a credit is allowable under section 30C(a) must be reduced by the amount of the credit so allowed (determined without regard to section 30C(d)).

(e) Examples. The following examples illustrate the rules of this section.

(1) Example 1—(i) Facts. A installs a free-standing garage at A’s principal residence, which costs $25,000. A installs electric vehicle supply equipment (EVSE), which costs $1,500 and consists of an AC Level 2 charger, charging port, and connector. A also installs a wall mount to support the charging port, which costs $500. The wall mount is specifically designed to be integrated with the EVSE. Finally, A adds a new electric panel and installs conduit/wiring, which together costs $1,000, to connect the charging port to the electrical service line. The new electric panel and conduit/wiring are used exclusively to service the charging port and are required to make the charging port operational. All property is owned by A and is not subject to an allowance for depreciation. All costs include labor costs. The property is placed in service at the time it is installed. A’s principal residence is located in an eligible census tract as described in paragraph (c) of this section.

(ii) Analysis—(A) 30C property. The charger, charging port, connector, wall mount, electric panel, and conduit/wiring are 30C property under §1.30C-1(b)(1). The charger, connector, and conduit/wiring are functionally interdependent with the charging port (and all of these properties together constitute recharging property under §1.30C-1(b)(1)(i)(B)). The electric panel and wall mount are an integral part of the recharging property under §1.30C-1(b)(1)(ii) and (b)(15). The charger, charging port, connector, wall mount, electrical panel, and conduit/wiring meet the other requirements of §1.30C-1(b)(1)(iii) because the property is installed at A’s principal residence, the original use of the property begins with A, and the property is placed in service (as defined in paragraph (b)(6) of this section) in an eligible census tract as described in paragraph (c) of this section. The garage is not 30C property because any building or its structural components are excluded from the definition of 30C property under §1.30C-1(b)(1)(i), and therefore cannot qualify as functionally interdependent with the charging port nor as an integral part of the recharging property.

(B) Calculation of the credit. Under paragraph (b)(1)(i) of this section, the charging port is the item of 30C property for purposes of calculating the credit. Further, under paragraph (b)(2) of this section, the charger (excluding the charging port), connector, wall mount, electrical panel, and conduit/wiring are all directly attributable and traceable associated property with respect to the charging port. Under paragraph (b)(3) of this section, the tentative section 30C credit is the sum of the cost of a single item of 30C property (charging port) and the cost of directly attributable and traceable associated property, multiplied by the applicable percentage (30%). Here, the cost of the charging port is included in the cost of the EVSE (with the charger and connector), and because the charger includes only a single port, the entire $1,500 is taken into account as either the item of 30C property or as directly attributable and traceable associated property. Thus, the tentative section 30C credit under paragraph (b)(3) of this section is $3,000 ($1,500 for the charger + $500 for the wall mount + $1,000 for the panel and wiring) multiplied by the applicable percentage (30%), which equals $900. Because $900 is less than the $1,000 limit in paragraph (a)(4)(i)(B) of this section, the final section 30C credit is also $900.

(2) Example 2—(i) Facts. The facts are the same as paragraph (e)(1) of this section (Example 1), except that the total cost of all directly attributable and traceable associated property other than the charger (excluding the charging port) is $3,500.

(ii) Analysis. Under paragraph (b)(3) of this section, the tentative section 30C credit is the sum of the cost of a single item of 30C property (charging port) and the cost of directly attributable and traceable associated property, multiplied by the applicable percentage (30%). As in paragraph (e)(1) of this section (Example 1), the cost of the charging port is included in the cost of the EVSE (with the charger and connector), and because the charger includes only a single port, the entire $1,500 is taken into account as either the item of 30C property or as directly attributable and traceable associated property. Thus, the tentative section 30C credit under paragraph (b)(3) of this section is $5,000 ($1,500 for the charger + $3,500 for all directly attributable and traceable associated property) multiplied by the applicable percentage (30%), which equals $1,500. Because $1,500 is greater than the $1,000 limit in paragraph (a)(4)(i)(B) of this section, the final section 30C credit is $1,000.

(3) Example 3—(i) Facts. The facts are the same as paragraph (e)(2) of this section (Example 2), except that A operates a delivery service and installs the EVSE at her personal residence that she uses to charge both her personal vehicle and her delivery vehicle. Her business use of the EVSE is 40%. The PWA requirements are not satisfied.

(ii) Analysis. (A) As in paragraph (e)(2) of this section (Example 2), the cost of the charging port is included in the cost of the EVSE (with the charger and connector), and because the charger includes only a single port, the entire $1,500 is taken into account as either the item of 30C property or as directly attributable and traceable associated property. Under paragraph (a)(3) of this section, the 30C property is apportioned-use property. As a result, under paragraph (a)(4)(ii) of this section, the dollar-amount limitation must be apportioned in the same manner as the taxpayer’s section 30C credit.

(B) Under paragraph (b)(3) of this section, the tentative section 30C credit for the personal use portion of the 30C property is the sum of the cost of a single item of 30C property (charging port) and the cost of directly attributable and traceable associated property, multiplied by the personal use portion (60%), and then multiplied by the applicable percentage (30%). The tentative section 30C credit under paragraph (b)(3) of this section is $5,000 ($1,500 for the charger + $3,500 for all directly attributable and traceable associated property) multiplied by the personal use portion (60%), and then multiplied by the applicable percentage (30%), which equals $900. Because $900 is greater than the $600 limit in paragraph (a)(4)(ii) of this section ($1,000 × 60%), the final section 30C credit for the personal use portion is $600.

(C) Under paragraph (b)(3) of this section, the tentative section 30C credit for the business use portion of the 30C property is the sum of the cost of a single item of 30C property (charging port) and the cost of directly attributable and traceable associated property, multiplied by the business-use portion (40%), and then multiplied by the applicable percentage (6%). The tentative section 30C credit under paragraph (b)(3) of this section is $5,000 ($1,500 for the charger + $3,500 for all directly attributable and traceable associated property) multiplied by the business-use portion (40%), and then multiplied by the applicable percentage (6%), which equals $120. Because $120 is less than the $40,000 limit in paragraph (a)(4)(ii) of this section ($100,000 × 40%), the final section 30C credit for the business-use portion is $120.

(4) Example 4—(i) Facts. B is a business entity that owns a fleet of medium-duty electric delivery vans. To recharge its electric delivery vans, B installs several properties at the same physical address in the same taxable year. First, B installs 20 direct current fast chargers (DCFCs), that have 2 charging ports each for a total of 40 charging ports. Each DCFC costs $30,000. B also installs a pedestal to support each DCFC, which cost $1,000 each. B additionally installs an electric panel and conduit/wiring, which together cost $50,000, to connect the DCFCs to the electrical service line. Finally, B installs a smart charge management system for $25,000, which is used to control the amount of power dispensed by the DCFCs to meet B’s charging needs and prevent equipment overloads. The electric panel and conduit/wiring are used exclusively to service the DCFCs and are necessary to install to make each charging port operational. All property is owned by B. All costs include labor costs. Each of the above properties is property of a character subject to depreciation and is placed in service at the time it is installed. The physical address where B installs these properties is located in an eligible census tract as described in paragraph (c) of this section.

(ii) Analysis—(A) 30C property. The DCFCs, pedestals, electric panel, conduit/wiring, and the smart charge management system all constitute 30C property under §1.30C-1(b)(1). Each DCFC and each pedestal is functionally interdependent with the respective charging ports with which they are associated and the conduit/wiring property is functionally interdependent with the entire class of charging ports (and these properties together constitute recharging property under §1.30C-1(b)(1)(i)(B)) and the electric panel and the smart charge management system constitute integral parts of the entire class of charging ports under §1.30C-1(b)(1)(ii) and (b)(15). The DCFCs, pedestals, the electrical panel, conduit/wiring, and the smart charge management system all meet the other requirements of §1.30C-1(b)(1)(iii) because the properties are each subject to an allowance for depreciation, the original use of the properties begins with B, and the properties are placed in service (as described in paragraph (b)(6) of this section) in an eligible census tract as described in paragraph (c) of this section.

(B) Calculation of the credit. (1) Under paragraph (b)(1)(i) of this section, each charging port constitutes a separate item of 30C property for purposes of calculating the credit. Additionally, under paragraph (b)(2)(i) of this section, each charger (excluding its respective ports) and each pedestal, electrical panel, and the conduit/wiring are all associated property that is directly attributable to and traceable with respect to their respective charging ports. Further, the electric panel, the conduit/wiring, and the smart charge management system are associated property directly attributable and traceable to more than one single item of 30C property, as described in paragraph (b)(2)(ii) of this section, because they are not directly attributable and traceable to any single charging port.

(2) Under paragraph (b)(3) of this section, B’s tentative section 30C credit for each single item of 30C property (each charging port) is the sum of the cost of that single item of 30C property (each charging port), the cost of directly attributable and traceable associated property, and the ratable share of the cost of other associated property multiplied by the applicable percentage as described in paragraph (a)(2) of this section (6% or 30%, depending on whether the PWA requirements are satisfied).

(3) Because each DCFC charger costs $30,000 and each has 2 charging ports, the cost of each port is $15,000 ($30,000 ÷ 2). Additionally, because each pedestal supports a charger with 2 ports and costs $1,000, the cost attributable to each port is $500 ($1,000 ÷ 2). The costs of the electric panel and the conduit/wiring are allocated ratably based on the cost per charging port ($50,000 ÷ 40 = $1,250). Similarly, the cost of the smart charge management system is also allocated ratably based on the cost per charging port ($25,000 ÷ 40 = $625).

(4) B should therefore calculate a separate section 30C credit for each single item of 30C property (that is, each of the 40 charging ports) by adding the cost of the charging port ($15,000) to the cost ($500) of directly attributable and traceable associated property (respective pedestal) and to the ratable shares ($1250 + $625) of the two functionally interdependent and integral part properties (panel, including its conduit/wiring, and the smart charge management system). The sum of these costs is $17,375 for each charging port.

(5) If B does not meet the PWA requirements, B’s tentative section 30C credit for each charging port is $17,375 multiplied by the applicable percentage (6% under paragraph (b)(3)(i) of this section), which equals $1,042.50. Because $1,042.50 is less than the $100,000 credit limit for depreciable property under paragraph (a)(4)(i)(A) of this section, the final section 30C credit for each charging port is also $1,042.50. B’s total section 30C credit is $41,700, the sum of the section 30C credit for each charging port that B placed in service ($1,042.50 × 40) in the taxable year.

(6) If B meets the PWA requirements, B’s tentative section 30C credit for each charging port is $17,375 multiplied by the increased applicable percentage (30%) under paragraph (b)(3)(i) of this section, which equals $5,212.50. Because $5,212.50 is less than the $100,000 credit limit for depreciable property under paragraph (a)(4)(i)(A) of this section, the final section 30C credit for each charging port is also $5,212.50. B’s total section 30C credit is $208,500, the sum of the section 30C credit for each charging port that B placed in service ($5,212.50 × 40) during the taxable year. The fact that this total credit exceeds the $100,000 limit is not relevant because section 30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the $100,000 limit applies on a per-item basis and not as an aggregate limit.

(5) Example 5—(i) Facts. The facts are the same as paragraph (e)(4) of this section (Example 4), except that B places in service the electric panel, conduit/wiring, smart charge management system, and 10 DCFCs in Year 1. In Year 2, B then installs and places in service the other 10 DCFCs.

(ii) Analysis—(A) 30C property. Under paragraph (a) of this section, the amount of the credit, generally, is determined based on a percentage of the cost of 30C property placed in service, as defined under paragraph (b)(6) of this section, by a taxpayer during a taxable year. In this example, B has placed in service 10 DCFCs, and certain integral part property and property that is functionally interdependent to all 20 DCFCs in one tax year, while placing in service 10 more DCFCs in a different tax year. B will, therefore, include the electric panel, conduit/wiring, smart charge management system, and 10 pedestals and 20 ports (that is, the 10 DCFCs placed in service in year 1) in calculating the Year 1 section 30C credit. In Year 2, B will only include in calculating B’s total section 30C credit, the 10 pedestals and 20 ports installed in year 2.

(B) Calculation of the credit. (1) For year 1 the cost of each DCFC charger is still $30,000 and the cost of each port is still $15,000. Additionally, the cost for the pedestals attributable to each port is still $500. The costs of the electric panel and the conduit/wiring are allocated ratably based on the cost per charging port placed in service in the same taxable year ($50,000 ÷ 20 = $2,500). Similarly, the cost of the smart charge management system is also allocated ratably based on the cost per charging port placed in service in the same taxable year ($25,000 ÷ 20 = $1,250). The cost for each single item in Year 1 includes the cost of each port ($15,000), the ratable share of the cost of the pedestal ($500), the ratable share of the cost of the electric panel and conduit/wiring ($2,500) and the ratable share of the cost of the smart charge management system ($1,250). The sum of these costs for a single item of 30C property in year 1 is $19,250. If B did not meet the PWA requirements, B’s tentative section 30C credit for each charging port is $19,250 multiplied by the 6% applicable rate, which equals $1,155 per single item of 30C property for Year 1. In total, B’s section 30C credit for Year 1 would be $ 23,100 ($1,155 × 20). If B does meet the PWA requirements, B’s tentative section 30C credit for each port is $5,775, which is the $19,250 cost per single item multiplied by the 30% applicable rate. In total, if B meets the PWA requirements, B’s section 30C credit for Year 1 would be $115,500 ($5,775 × 20). The fact that this total credit exceeds the $100,000 limit is not relevant because section 30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the $100,000 limit applies on a per-item basis and not as an aggregate limit.

(2) For Year 2, the cost of each port would still be $15,000 and the cost for the pedestals attributable to each port is still $500. The integral part property was already placed in service in Year 1, and therefore, the cost associated with that property is not allocated to the Year 2 property. Therefore, in Year 2, if B does not meet the PWA requirements, B’s section 30C credit for each single item is $930 ($15,500 × 6%), and the amount of B’s total Year 2 section 30C credit is $18,600 ($930 × 20). If B meets the PWA requirements, B’s section 30C credit for each single item is $4,650 ($15,500 × 30%), and B’s total Year 2 section 30C credit is $93,000 ($4,650 × 20).

(6) Example 6—(i) Facts. The facts are the same as paragraph (e)(4) of this section (Example 4), except that B begins construction and incurs $100,000 of costs related to the installation of the chargers in Year 1, but no property is placed in service until Year 2.

(ii) Analysis. There is no section 30C credit for Year 1 because no 30C property has been placed in service. The 30C property is placed in service in Year 2. In Year 2, the section 30C credit is the same as the Year 1 credit in paragraph (e)(4) of this section (Example 4).

(7) Example 7—(i) Facts. The facts are the same as paragraph (e)(4) of this section (Example 4), except that instead of installing 20 DCFCs, B installs 10 DCFCs, with 2 charging ports each, and 10 AC Level 2 chargers (AC chargers), also with 2 charging ports each. Each AC Level 2 charger costs $10,000. Each DCFC charger still costs $30,000. B also installs a pedestal to support each AC charger, which costs $1,000 each.

(ii) Analysis—(A) 30C property. The analysis for the DCFCs pedestals, electric panel, conduit/wiring, and smart charge management system is the same as in Example 4 of this paragraph (e). Additionally, the AC chargers also constitute 30C property under §1.30C-1(b)(1). Each AC charger and each pedestal is functionally interdependent with the respective charging ports with which they are associated (and these properties together constitute recharging property under §1.30C-1(b)(1)(i)(B)) and the electric panel, the conduit/wiring property, and the smart charge management system constitute integral parts of all of the DCFC ports and AC charger charging ports under §1.30C-1(b)(1)(ii) and (b)(15). The AC chargers also meet the other requirements of §1.30C-1(b)(1)(iii) because they are subject to an allowance for depreciation, the original use of the properties begins with B, and are placed in service (as defined in paragraph (b)(6) of this section) in an eligible census tract as described in paragraph (c) of this section.

(B) Calculation of the credit. (1) Under paragraph (b)(1)(i) of this section, each of the 20 DCFC charging ports and each of the 20 AC charger charging ports constitutes a separate item of 30C property for purposes of calculating the credit. Additionally, under paragraph (b)(2)(i) of this section, each charger (excluding its respective ports) and each pedestal, electrical panel, and the conduit/wiring are all associated property that is directly attributable to and traceable associated property with respect to their respective charging ports. Further, the electric panel, the conduit/wiring, and the smart charge management system are associated property directly attributable and traceable to more than one single item of 30C property, as described in paragraph (b)(2)(ii) of this section, because they are not directly attributable and traceable to any single charging port.

(2) Under paragraph (b)(3) of this section, B’s tentative section 30C credit for each single item of 30C property (each charging port) is the sum of the cost of that single item of 30C property (each charging port), the cost of directly attributable and traceable associated property, and the ratable share of the cost of other associated property multiplied by the applicable percentage as described in paragraph (a)(2) of this section (6% or 30%, depending on whether the PWA requirements are satisfied).

(3) B should therefore calculate a separate section 30C credit for each single item of 30C property (that is, each of the 20 DCFC charging ports and each of the 20 AC charger charging ports). Because each of the 10 DCFCs costs $30,000 and each has 2 charging ports, the cost of each DCFC port is $15,000 ($30,000 ÷ 2). Similarly, because each of the 10 AC chargers costs $10,000 and each has 2 charging ports, the cost of each AC charger charging port is $5,000 ($10,000 ÷ 2). To calculate the credit, B should add the cost of the charging port ($15,000 for the DCFC ports and $5,000 for the AC charger charging ports) to the allocable costs of the associated properties. Because each pedestal costs $1,000 and supports a single charger that has 2 ports, the cost attributable to each port (both the DCFC and AC charger charging ports) is $500 ($1,000 ÷ 2). With respect to the properties whose costs are not directly attributable and traceable to any single port, B must allocate their costs according to each port’s ratable share of B’s total cost for the 40 ports. Because the 20 DCFC ports cost a total of $300,000 (20 × $15,000) and the 20 AC charger charging ports cost only $100,000 in total (20 × $5,000), B should allocate 75% of these costs to the 20 DCFC ports and 25% of these costs to the AC charger charging ports. Therefore, $1,875 (($50,000 × 75%) ÷ 20) of the cost of the electric panel and conduit/wiring is attributable to each of the 20 DCFC charging ports, and $625 (($50,000 × 25%) ÷ 20) is attributable to each of the 20 AC charger ports. Similarly, the cost of the smart charge management system is allocated in the same ratio, with $937.50 (($25,000) × 75%) ÷ 20) allocated to each DCFC port, and $312.50 (($25,000 × 25%) ÷ 20) to each AC charger charging port.

(4) Accordingly, If B does not meet the PWA requirements, B’s tentative section 30C credit for each DCFC port is $18,312.50 ($15,000 + $500 + $1875 + $937.50) multiplied by the 6% applicable rate, which equals $1,098.75, and the section 30C credit for each AC charger charging port is $6,437.50 ($5,000 + $500 + $625 + $312.50) multiplied by the 6% applicable rate, which equals $386.25. Because both $1,098.75 and $386.25 are less than the $100,000 credit limit for depreciable property under paragraph (a)(4)(i)(A) of this section, the final section 30C credit for each DCFC port is also $1,098.75, and the final section 30C credit for each AC charger charging port is also $386.25. B’s total section 30C credit is $29,700 ($21,975 + $7,725), the sum of the section 30C credit for each charging port that B placed in service ($1,098.75 × 20) + ($386.25 × 20) in the taxable year.

(5) If B meets the PWA requirements, B’s tentative section 30C credit for each DCFC port is $18,312.50 multiplied by the increased applicable percentage (30%) under paragraph (b)(3)(i) of this section, which equals $5,493.75, and its tentative section 30C credit for each AC charger charging port is $6,437.50 multiplied by 30%, or $1,931.25. Because both $5,493.75 and $1,931.25 are less than the $100,000 credit limit for depreciable property under paragraph (a)(4)(i)(A) of this section, the final section 30C credit for each DCFC port is also $5,493.75 and the final section 30C credit for each AC charger charging port is also $1,931.25. B’s total section 30C credit is $148,500, the sum of the section 30C credit for the 20 DCFC ports that B placed in service ($5,493.75 × 20 = $109,875) plus the sum of the section 30C credit for the 20 AC charger charging ports that B placed in service ($1,931.25 × 20 = $38,625) during the taxable year. The fact that this total credit exceeds the $100,000 limit is not relevant because section 30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the $100,000 limit applies on a per-item basis and not as an aggregate limit.

(8) Example 8—(i) Facts. The facts are the same as paragraph (e)(4) of this section (Example 4), except that B spends $100,000 improving the land (for example, grading the land, installing a drainage system, and installing a paved surface). B also spends $15,000 on fees related to permitting improvements to the land. Finally, B spends $5,000 on “EV parking only” signs and striping on the pavement needed for the EV to access the charger.

(ii) Analysis. The costs for improving the land, associated permitting fees, and signs and striping are not 30C property because such costs are not functionally interdependent with the chargers or an integral part of the chargers. See §1.30C-1(b)(14) and (15). Therefore, the costs that B incurred to improve the land, to add the signage, and to stripe the pavement would not change the amount of the section 30C credit that B may claim.

(9) Example 9—(i) Facts. The facts are the same as paragraph (e)(4) of this section (Example 4), except that B also installs and places in service a battery energy storage system as a backup source of electricity during power outages and to moderate electricity pricing. The battery energy storage system receives, stores, and delivers energy for conversion to electricity, and is located on the same or immediately adjacent physical address as the chargers and charging ports. The battery storage system is only used to support the chargers and does not provide electricity for any other purpose. The battery energy storage system costs $20,000.

(ii) Analysis—(A) 30C property. The battery energy storage system constitutes 30C property under §1.30C-1(b)(1)(i)(B) because it is for the recharging of motor vehicles, (specifically, it is an electrical energy storage property described in §1.30C-1(25)(iii)), and it is located at the point where motor vehicles are recharged under §1.30C-1(b)(16)(ii) because its located on the same or immediately adjacent physical address as B’s chargers.

(B) Calculation of the credit. (1) The battery energy storage system is a single item of 30C property under paragraph (b)(1)(iii) of this section, and it constitutes a separate single item of 30C property from B’s charging ports and the properties associated with the charging ports. Therefore, B should calculate the section 30C credit for the battery storage system separately from its credit arising from its costs for these other properties. B also should not allocate the cost of the battery energy storge system among the charging ports.

(2) Accordingly, if B does not meet the PWA requirements, B’s tentative section 30C credit for the battery energy storage system is $1,200 ($20,000 × 6%). Because this $1,200 amount is less than the $100,000 credit limit for depreciable property under paragraph (a)(4)(i)(A) of this section, the final section 30C credit for the battery energy storage system is also $1,200. If B meets the PWA requirements, B’s tentative section 30C credit for the battery energy storage system is $6,000 ($20,000 × 30%). Because this $6,000 amount is less than the $100,000 credit limit for depreciable property under paragraph (a)(4)(i)(A) of this section, the final section 30C credit for the battery energy storage system is also $6,000. It would not be relevant if B claimed $100,000 or more in section 30C credits for other items of 30C property because section 30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the $100,000 limit applies on a per-item basis and not as an aggregate limit.

(3) If B claims a section 30C credit for the battery energy storage system, this would render such storage property to be primarily used in the transportation of goods or individuals and not for the production of electricity. As a result, the property would not satisfy the requirements under section 48 or 48E.

(10) Example 10—(i) Facts. The facts are the same as paragraph (e)(4) of this section (Example 4), except that B participates in a local electric company incentive program. The electric company installs the electric panel, conduit/wiring, and load management system, for which the electric company retains ownership.

(ii) Analysis—(A) 30C property. The DCFCs, pedestals, electric panel, conduit/wiring, and the smart charge management system all constitute 30C property, as explained in the analysis under paragraph (e)(4) of this section (Example 4). However, B does not own the electric panel, conduit/wiring, and load management system, and, as a result, may not include the cost of that property in calculating B’s section 30C credit. B would only calculate the credit based on the 30C property the taxpayer owns, which is the DCFCs and pedestals. The electric company that owns the electric panel, conduit/wiring, and load management system cannot claim a section 30C credit for such property because it does not own the charging ports and therefore does not own a single item of 30C property, which is necessary to claim a section 30C credit. See paragraph (b)(1) of this section.

(B) Calculation of the credit. (1) Under paragraph (b)(3) of this section, B’s tentative section 30C credit for each single item of 30C property (each charging port) is the sum of the cost of that single item of 30C property (each charging port), the cost of directly attributable and traceable associated property, and the ratable share of the cost of other associated property multiplied by the applicable percentage as described in paragraph (a)(2) of this section (6% or 30%, depending on whether the PWA requirements are satisfied).

(2) To calculate the credit for each single item of 30C property (each of the 40 charging ports) B would add the cost of each charging port ($15,000 ($30,000 ÷ 2)) to the cost ($500 ($1,000 ÷ 2)) of directly attributable and traceable associated property (that is, the respective pedestal). The sum of these costs is $15,500 for each charging port. If B does not meet the PWA requirements, B’s tentative section 30C credit for each charging port is $15,500 multiplied by the applicable percentage (6% under paragraph (b)(3)(i)) of this section), which equals $930 per single item. Because this $930 amount is less than the $100,000 credit limit for depreciable property under paragraph (a)(4)(i)(A) of this section, the final section 30C credit for each charging port is $930. The total section 30C credit for B, if B does not meet the PWA requirements is $37,200 ($930 × 40).

(3) If B meets the PWA requirements, B’s tentative section 30C credit for each charging port is $15,500 multiplied by the increased applicable percentage (30%), which equals $4,650 per single item. B’s total section 30C credit, in this example, is $186,000 ($4,650 × 40). The fact that this total credit exceeds the $100,000 limit is not relevant because section 30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the $100,000 limit applies on a per-item basis and not as an aggregate limit.

(11) Example 11—(i) Facts. The facts are the same as paragraph (e)(4) of this section (Example 4), except that B engages with a local utility company providing charging services that installs the 30C property described in paragraph (e)(4) (Example 4) at the same physical address in the same taxable year at the utility company’s expense, for which the utility company retains ownership.

(ii) Analysis. As the owner of the 30C property, the local utility company, and not B, would be eligible for a section 30C credit for such property, assuming all other statutory and regulatory requirements are met. The remainder of the analysis is the same as set forth in paragraph (e)(4) of this section (Example 4).

(12) Example 12—(i) Facts. C owns a gasoline station. C decides to add retail hydrogen fueling capability to its existing gasoline station to facilitate the refueling of hydrogen fuel cell vehicles. C installs a bulk hydrogen storage tank ($900,000), cryogenic pumps ($5,000,000), evaporators associated with bulk storage ($700,000), cascade storage system ($1,300,000), electrical supply equipment used only for the hydrogen equipment ($150,000), a high-conductivity concrete pad (necessary to prevent static discharge during fueling), firewalls, and piping (collectively, $550,000) and two hydrogen dispensers ($160,000 each) which include the dispensing control valves, connection hoses, hydrogen meters, and nozzles. All property is owned by C and is located at the point of refueling, meaning it is at the same or immediately adjacent physical address. All costs include labor costs. The property is property of a character subject to depreciation. All property is placed in service in the year it is installed, in an eligible census tract as described in paragraph (c) of this section.

(ii) Analysis—(A) 30C property. The bulk hydrogen storage tank, cryogenic pumps, evaporators, cascade storage system, electrical supply equipment, high-conductivity concrete pad, firewalls, piping, and two hydrogen dispensers are 30C property under §1.30C-1(b)(1). The cryogenic pumps and electrical supply equipment are functionally interdependent with the cascade high-pressure storage tank under §1.30C-1(b)(1)(i)(A) and (b)(14). The high-conductivity concrete pad, firewalls, and piping are functionally interdependent property with the dispensers, also under §1.30C-1(b)(1)(i)(A) and (b)(14). Collectively, this property is refueling property under §1.30C-1(b)(1)(i)(A). The evaporators are an integral part associated with the bulk hydrogen storage tank under §1.30C-1(b)(1)(i)(B) and (b)(15). The hydrogen storage system, cryogenic pumps, evaporators, cascade storage system, electrical supply equipment, high-conductivity concrete pad, firewalls, piping, and two hydrogen fuel dispensers meet the other requirements of §1.30C-1(b)(1)(iii) because the properties are each subject to an allowance for depreciation, the original use of the properties begins with C, and the properties are placed in service in an eligible census tract as described in paragraph (c) of this section.

(B) Calculation of the credit. (1) The bulk hydrogen storage tank system and the cascade high-pressure storage system are each qualified alternative fuel storage property and each is a single item of 30C property under §1.30C-1(b)(1) and paragraph (b)(1) of this section. Although the cascade high-pressure storage system is comprised of multiple storage tanks, the system is treated as a single item of alternative fuel storage property. The dispensers are each single items of 30C property pursuant to §1.30C-1(b)(1) and paragraph (b)(1) of this section.

(2) Under paragraph (b)(3) of this section, the tentative section 30C credit for the bulk hydrogen storage tank is the sum of the cost of the bulk hydrogen storage tank plus the cost of the evaporators (that is, the only associated property that is directly attributable and traceable to the bulk hydrogen storage tank), multiplied by the applicable percentage (6% or 30%, depending on whether the PWA requirements are satisfied) pursuant to section 30C(a). Therefore, the tentative section 30C credit for the bulk hydrogen storage tank is $96,000 (($900,000 + $700,000) × 6%) if the PWA requirements are not met, or $480,000 (($900,000 + $700,000) × 30%) if the PWA requirements are met. Under paragraph (b)(3) of this section, the section 30C credit for the bulk hydrogen storage tank, after applying the $100,000 limitation in paragraph (a)(4)(i)(A) of this section, is $96,000 if the PWA requirements are not met, or $100,000 if the PWA requirements are met.

(3) Under paragraph (b)(3) of this section, the costs taken into account in calculating the tentative section 30C credit for the cascade high-pressure storage system include the costs of any associated property that is directly attributable and traceable to the cascade high-pressure storage system, or a ratable share of the costs if the associated property if it is directly attributable and traceable to more than one item of property. The functionally interdependent property associated with the cascade high-pressure storage tank (that is, the cryogenic pumps and electrical supply equipment) is directly attributable and traceable to the cascade high-pressure storage system and no other item of property. Therefore, the tentative section 30C credit for the cascade high-pressure storage system is the sum of the costs of the cascade storage system and cryogenic pumps, and electrical supply equipment ($1,300,000 + $5,000,000 + $150,000), multiplied by the applicable percentage (6% or 30%, depending on whether the PWA requirements are satisfied). Therefore, the tentative section 30C credit for the cascade high-pressure storage system is $387,000 (($1,300,000 + $5,000,000 + $150,000) × 6%) if the PWA requirements are not met, or $1,935,000 (($1,300,000 + $5,000,000 + $150,000) × 30%) if the PWA requirements are met. Under paragraph (b)(3) of this section, the section 30C credit for the cascade high-pressure storage system, after applying the $100,000 limitation in paragraph (a)(4)(i)(A) of this section, is $100,000 if the PWA requirements are not met, or $100,000 if the PWA requirements are met.

(4) The high-conductivity concrete pad, firewalls, and piping are functionally interdependent with the fuel dispensers; thus, the high-conductivity concrete pad, firewalls, and piping are associated property under paragraph (b)(2) of this section with respect to the dispensers. Because the high-conductivity concrete pad, firewalls, and piping are directly attributable and traceable to both fuel dispensers and no other single item of 30C property, half of the costs are allocated to each dispenser under paragraph (b)(2)(ii) of this section. Therefore, under paragraph (b)(3) of this section, the tentative section 30C credit for each fuel dispenser is the sum of the cost of each the hydrogen dispenser and half the cost of the high-conductivity concrete pad, firewalls, and piping are multiplied by the applicable percentage (6% or 30%, depending on whether the PWA requirements are satisfied). Therefore, the tentative section 30C credit for each fuel dispenser is $26,100 ($160,000 + ($550,000 ÷ 2) × 6%) if the PWA requirements are not met, or $130,500 (($160,000 + ($550,000 ÷ 2)) × 30%) if the PWA requirements are met. Under paragraph (b)(3) of this section, the final section 30C credit for each fuel dispenser, after applying the $100,000 limitation in paragraph (a)(4)(i)(A) of this section, is $26,100 if the PWA requirements are not met, or $100,000 if the PWA requirements are met.

(5) If C does not meet the PWA requirements, C’s total section 30C credit for the year is $96,000 for the bulk hydrogen storage tank, plus $100,000 for the cascade high-pressure storage tank, plus $26,100 for each fuel dispenser, for a total of $248,200. If C meets the PWA requirements, C’s total section 30C credit for the year is $100,000 for the bulk hydrogen storage tank, plus $100,000 for the cascade high-pressure storage tank, plus $100,000 for each fuel dispenser, for a total of $400,000. The fact that this total credit exceeds the $100,000 limit is not relevant because section 30C(b)(1) and paragraph (a)(4)(i)(A) of this section provide that the $100,000 limit applies on a per-item basis and is not an aggregate limit.

(13) Example 13—(i) Facts. G installs a time-fuel compressed natural gas (CNG) station to refuel its fleet of heavy-duty CNG trucks at a central lot near its warehouse. The station has 10 fuel dispensers. From the existing utility gas meter, G installs a gas line, dryer, filter, and gas compressor, which costs $300,000. The gas compressor flows to buffer storage, which costs $100,000. The buffer storage flows through a temperature compensation unit, which costs $50,000, before flowing through to the dispensers, which dispense the CNG. Each fuel dispenser is capable of fueling at or above the dispenser’s minimum rate of fueling, and has one hose and nozzle, which costs $10,000 per fuel dispenser. All property is owned by G and is located at the point of refueling, meaning it is on the same or immediately adjacent physical address. All costs include labor costs. The address where G installs these properties is located in an eligible census tract as described in paragraph (c) of this section.

(ii) Analysis—(A) 30C property. The gas line, dryer, filter, gas compressor, buffer storage, temperature compensation unit, and fuel dispensers are 30C property pursuant to §1.30C-1(b)(1) and paragraph (b)(1) of this section. The gas line, dryer, filter, gas compressor, and temperature compensation unit are functionally interdependent with the dispensers pursuant to §1.30C-1(b)(14). Together, these items of property constitute refueling property under §1.30C-1(b)(1)(i)(A). Each fuel dispenser, the gas line, dryer, filter, gas compressor, buffer storage, and temperature compensation unit, all meet the other requirements of §1.30C-1(b)(1)(iii) because the properties are each subject to an allowance for depreciation, the original use of the properties begins with G, and the properties are placed in service (as described in paragraph (b)(6) of this section) in an eligible census tract as described in paragraph (c) of this section.

(B) Calculation of the credit. (1) Each fuel dispenser is a single item of 30C property pursuant to paragraph (b)(1)(ii) of this section and §1.30C-1(b)(12). The gas line, dryer, filter, gas compressor, and temperature compensation unit are each associated property pursuant to paragraph (b)(2) of this section, and their cost is allocated ratably to each dispenser (($300,000 + $50,000) ÷ 10 = $35,000). The buffer storage is a single item of 30C property pursuant to §1.30C-1(b)(1) and paragraph (b)(1) of this section.

(2) If G does not meet the PWA requirements, under paragraph (b)(3)(i) of this section, the tentative section 30C credit for each fuel dispenser is the sum of the cost of that single item of 30C property (that is, the fuel dispenser) ($10,000) and the ratable share of the cost of other associated property ($35,000) multiplied by the applicable percentage (6%), or $2,700, (($10,000 + $35,000) × 6% = $2,700). The tentative section 30C credit for the cost of the buffer storage is the cost of the buffer storage multiplied by the applicable percentage (6%) or $6,000 ($100,000 × 6% = $6,000). Under paragraph (b)(3) of this section, after applying the $100,000 limitation in paragraph (a)(4)(i)(A) of this section, if the PWA requirements are not met, the final section 30C credit for each fuel dispenser is $2,700 and the final section 30C credit for the buffer storage is $6,000. The total section 30C credit is $33,000 (($2,700 × 10) + $6,000)).

(3) If G meets the PWA requirements, the tentative section 30C credit under paragraph (b)(3) of this section for each dispenser is $13,500, (($10,000 + $35,000) × 30% = $13,500). The tentative section 30C credit for the buffer storage is $30,000 ($100,000 × 30% = $30,000). Under paragraph (b)(3) of this section, after applying the $100,000 limitation in paragraph (a)(4)(i)(A) of this section, if the PWA requirements are met, the final section 30C credit for each fuel dispenser is $13,500 and the final section 30C credit for the buffer storage is $30,000. The total section 30C credit is $165,000 (($13,500 × 10) + $30,000)). The fact that this total credit exceeds the $100,000 limit is not relevant because the $100,000 limit applies on a per-item basis and is not an aggregate limit.

(14) Example 14—(i) Facts. The facts are the same as paragraph (e)(13) of this section (Example 13), except that G also installs a local utility line ($400,000) and gas utility meter ($5,000) to service its CNG refueling station. The portion of cost of the local utility line on the same or immediately adjacent physical address as the CNG dispensers is $100,000. The gas utility meter is also on the same or immediately adjacent physical address as the CNG dispensers. All property is owned by G. All costs include labor costs. Each of the above properties is property of a character subject to depreciation and is placed in service at the time it is installed. The physical address where G installs a portion of the local utility line and gas utility meter is located in an eligible census tract as described in paragraph (c) of this section.

(ii) Analysis—(A) 30C property. The portion of the local utility line that is on the same or immediately adjacent physical address as the CNG dispensers and gas utility meter are 30C property pursuant to §§1.30C-1(b)(1) and paragraph (b)(1) of this section. The portion of the local utility line that is on the same or immediately adjacent physical address as the CNG dispensers is located at the point of refueling under §1.30-1(b)(16). (The remaining portion is not located at the point of refueling and is therefore not 30C property.) The gas meter is also located at the point of refueling under §1.30-1(b)(16) because it is on the same or immediately adjacent physical address as the CNG dispensers. Further, the portion of the local utility line that is on the same or immediately adjacent physical address as the CNG dispensers and the gas meter constitute integral part property with respect to the fuel dispensers under §1.30C-1(b)(15). Together with the gas line, dryer, filter, gas compressor, and temperature compensation unit, the utility line and the gas meter are refueling property under §1.30C-1(b)(1)(i)(A).

(B) Calculation of the credit. (1) Each fuel dispenser is a single item of 30C property pursuant to paragraph (b)(1)(ii) of this section and §1.30C-1(b)(12). The local utility line and gas utility meter are each associated property pursuant to paragraph (b)(2) of this section. Their costs are allocated ratably to each dispenser (($100,000 + $5,000) ÷ 10 = $10,500) under paragraph (b)(2)(ii) of this section.

(2) If G does not meet the PWA requirements, under paragraph (b)(3) of this section, the tentative section 30C credit for each fuel dispenser is the sum of the dispenser, the ratable cost of the gas line, dryer, filter, the gas compressor and temperature compensation unit, and the ratable share of the local utility line and gas utility meter, multiplied by the applicable percentage (6%), or $3,330, (($10,000 + $35,000 + $10,500) × 6% = $3,330). The tentative section 30C credit for the cost of the buffer storage is $6,000 ($100,000 × 6% = $6,000). Under paragraph (b)(3) of this section, after applying the $100,000 limitation in paragraph (a)(4)(i)(A) of this section, if the PWA requirements are not met, the final section 30C credit for each fuel dispenser is $3,330 and the final section 30C credit for the buffer storage is $6,000. The total section 30C credit is $39,330 (($3,330 × 10) + $6,000)).

(3) If G meets the PWA requirements, the tentative section 30C credit for each dispenser is $16,650, (($10,000 + $35,000 + $10,500) × 30% = $16,650). The tentative section 30C credit for the cost of the buffer storage is $30,000 ($100,000 × 30% = $30,000). Under paragraph (b)(3) of this section, after applying the $100,000 limitation in paragraph (a)(4)(i)(A) of this section, if the PWA requirements are met, the final section 30C credit for each fuel dispenser is $16,650 and the final section 30C credit for the buffer storage is $30,000. The total section 30C credit is $196,500 (($16,650 × 10) + $30,000)). The fact that this total credit exceeds the $100,000 limit is not relevant because the $100,000 limit applies on a per-item basis and is not an aggregate limit.

(15) Example 15—(i) Facts. W installs a refueling station that is used to refuel forklift trucks with qualified alternative fuel.

(ii) Analysis. The refueling station is not 30C property under §1.30C-1(b)(1) and paragraph (b)(1) of this section. Section 1.30C-1(b)(1)(i)(A) requires that 30C property must be used to store or dispense qualified alternative fuel at the point where the fuel is dispensed into the fuel tank of a “motor vehicle.” Although a forklift truck occasionally may be operated on public roads, it is manufactured primarily for hauling loads in factories, warehouses, and other similar settings, and not for use on public streets, roads, and highways. Therefore, a forklift truck is not a “motor vehicle” for purposes of the section 30C credit under §1.30C-1(b)(17).

(f) Claim requirements. A taxpayer claiming the section 30C credit must attach a Form 8911, Alternative Fuel Vehicle Refueling Property Credit, or any successor form required by the IRS, completed in accordance with the form instructions, and file it with the return on which the section 30C credit is claimed.

(g) Applicability date. This section applies to property placed in service in taxable years ending after [date of publication of final regulations in the Federal Register].

Par. 3. Section 1.30C-3 is revised to read as follows:

(a) In general. If any qualified alternative fuel vehicle refueling project (as defined by section 30C(g)(1)(B)) (30C project) placed in service during the taxable year satisfies the requirements in paragraph (b) of this section, the credit determined under section 30C(a) for any 30C property of a character subject to an allowance for depreciation that is part of such 30C project is multiplied by five.

(b) 30C project requirements—(1) In general. A 30C project satisfies the requirements of this paragraph (b) if it is one of the following—

(i) A project the construction of which began prior to January 29, 2023; or

(ii) A project that meets the prevailing wage requirements of section 45(b)(7) of the Code and §1.45–7, the apprenticeship requirements of section 45(b)(8) and §1.45–8, and the recordkeeping and reporting requirements of §1.45-12, all with respect to the construction of any 30C property within the meaning of section 30C and the section 30C regulations before such 30C property is placed in service.

(2) Determination of a project. Multiple 30C properties will be treated as a single 30C project if the items of property are constructed and operated on a contiguous piece of land, owned by a single taxpayer (subject to the related taxpayer rule provided in paragraph (b)(3) of this section), placed in service in a single taxable year, and one or more of the following factors is present:

(i) The properties are described in one or more common environmental or other regulatory permits;

(ii) The properties are constructed pursuant to a single master construction contract; or

(iii) The construction of the properties is financed pursuant to the same loan agreement.

(3) Related taxpayers—(i) Definition. For purposes of this section, the term related taxpayers means members of a group of trades or businesses that are under common control (as defined in §1.52-1(b)).

(ii) Related taxpayer rule. For purposes of this section, related taxpayers are treated as one taxpayer in determining whether multiple properties are treated as a 30C project with respect to which a section 30C credit may be determined.

(c) Coordination with 30C(e)(2) and §1.30C-4(c). If a person who sells 30C property, the use of which is described in section 50(b)(3) or (4) and which is not subject to a lease, is treated as the taxpayer that placed such property in service under section 30C(e)(2), such person will be treated as the taxpayer responsible for satisfying the recordkeeping and reporting requirements of §1.45-12.

(d) Examples. The following examples illustrate the rules of this section.

(1) Example 1—(i) Facts. D owns and operates electric charging stations. In Year 1, D places in service five chargers, each with one charging port, on Parcel 1. In the same year, D also places in service three chargers, each with one charging port, on Parcel 2. Parcel 1 and Parcel 2 are a mile apart from each other. D submits a single environmental permit covering both charging stations and obtains financing pursuant to the same loan agreement. D meets the requirements of section 30C(g) and this section (that is, the PWA requirements) for the chargers installed on Parcel 1 but does not meet the PWA requirements for the chargers installed on Parcel 2. The chargers installed on Parcel 1 and Parcel 2 are depreciable property and meet all other requirements to be 30C property.

(ii) Analysis. Under paragraph (b)(2) of this section, the chargers placed in service on Parcel 1 are treated as a separate 30C project from the chargers placed in service on Parcel 2 because the properties are not on contiguous piece of land. Therefore, under §1.30C-2(a)(2)(ii), D is eligible for a credit of 30 percent of the cost of the five chargers placed in service on Parcel 1, but only 6 percent of the cost of the three chargers placed in service on Parcel 2 under §1.30C-2(a)(2)(i).

(2) Example 2—(i) Facts. The facts are the same as paragraph (d)(1) of this section (Example 1), except that Parcel 1 and Parcel 2 are contiguous pieces of land.

(ii) Analysis. Under paragraph (b)(2) of this section, the chargers installed on Parcel 1 and Parcel 2 are treated as a single 30C project because they are constructed on a contiguous piece of land, are owned, and operated by a single taxpayer, placed in service by a single taxpayer in a single year, described in a common environmental permit, and financed pursuant to the same loan agreement. Therefore, because D did not meet the PWA requirements with respect to the chargers placed in service in parcel 2, D is eligible for only the 6 percent credit for both the parcel 1 and parcel 2 property under §1.30C-2(a)(2)(i).

(e) Applicability date. This section applies to property placed in service in taxable years ending after [date of publication of final regulations in the Federal Register].

Par. 4. Section 1.30C-4 is added to read as follows:

(a) No credit allowable in certain circumstance—(1) Property used outside the United States. Except as provided in paragraph (a)(2) of this section, pursuant to sections 30C(e)(3) and 50(b)(1) of the Code, no section 30C credit is allowable with respect to any property placed in service for use predominantly outside the United States.

(2) Property placed in service in a United States territory. Pursuant to sections 30C(e)(3), 50(b)(1) and 168(g)(4)(G) of the Code, paragraph (a)(1) of this section does not apply to 30C property that is owned by a domestic corporation or by a United States citizen (other than a citizen entitled to the benefits of section 931 or 933 of the Code) and that is used predominantly in a territory of the United States by such a corporation or such a citizen, or by a corporation created or organized in, or under the law of, a territory of the United States.

(3) Section 179. No section 30C credit is allowable with respect to the portion of the cost of any property taken into account under section 179 of the Code.

(b) Recapture—(1) In general. The rules in this paragraph (b) provide for recapturing the benefit of any allowable section 30C credit with respect to any property that ceases to be property eligible for such credit. If a recapture event occurs with respect to a taxpayer’s 30C property, the taxpayer must include the recapture amount in taxable income under chapter 1 of the Code for the taxable year in which the recapture event occurs (recapture year).

(2) Recapture event. A recapture event occurs if, within three years of the property being placed in service–

(i) The taxpayer claiming the section 30C credit modifies the property such that the property no longer qualifies as 30C property;

(ii) Unless the property is subject to section 6417(d)(2)(B) of the Code, the depreciable property (other than apportioned-use property) ceases to be used predominantly in a trade or business (that is, 50 percent or more of the use of the 30C property in a taxable year is for use other than in a trade or business);

(iii) For apportioned-use property, the 30C property completely ceases to be used in a trade or business, but continues to be used for personal use; or

(iv) The taxpayer claiming the section 30C credit sells or disposes of the 30C property and the taxpayer knows or has reason to know that the property will be used in a manner described in paragraph (b)(2)(i) or (ii) of this section. Any other sale or disposition (including a disposition by reason of an accident or other casualty) of 30C property is not a recapture event.

(3) Property placed in service in a location that ceases to be in a qualified census tract. 30C property is not subject to the recapture provisions of this paragraph (b) solely because it is placed in service in a location that subsequently ceases to be in a qualified census tract.

(4) Recapture amount—(i) In general. The recapture amount is generally equal to the benefit of the section 30C credit allowable multiplied by a fraction, the numerator of which is three minus the number of years prior to, but not including, the recapture year, and the denominator of which is three.

(ii) Special rule for apportioned-use property. For purposes of the calculation described in paragraph (b)(4)(i) of this section with respect to apportioned-use property, the benefit of the section 30C credit is equal to the difference between the credit claimed by the taxpayer and the credit that would have been allowed if the apportioned-use property were used solely for personal use under §1.30C-2(a)(2)(iii) (as limited by §1.30C-2(a)(4)(i)(B)).

(5) Basis adjustment. As of the first day of the recapture year, the basis of the 30C property is increased by the recapture amount. For 30C property that is of a character that is subject to an allowance for depreciation, including property subject to section 6417(d)(2)(B), this increase in basis is recoverable over its remaining recovery period beginning as of the first day of the taxable year in which the recapture event occurs.

(c) Property used by a tax-exempt or governmental entity—(1) In general. Except as provided in paragraph (c)(2) of this section, if a person sells 30C property, the use of which is described in section 50(b)(3) or (4) (generally, property used by certain tax-exempt organizations, governmental entities, or foreign persons or entities), such person or entity purchasing the property uses the property as described in section 50(b)(3) or (4), the property is not subject to a lease, and the seller clearly discloses to the person or entity using such property in a document the amount of any credit allowable under section 30C(a) with respect to such property (determined without regard to section 30C(d)) and that the seller intends to claim such credit, then the seller is treated as the taxpayer that placed such property in service. For purposes of section 30C(d), property to which this paragraph (c)(1) applies will be treated as of a character subject to an allowance for depreciation.

(2) Interaction with section 6417. If the person or entity using 30C property in a manner that would otherwise be considered as described in section 50(b)(3) or (4) notifies the seller in writing of an intent to make an elective payment election pursuant to section 6417(a) with respect to the section 30C credit, then the use of the 30C property is treated as not being described in section 50(b)(3) or (4) for purposes of paragraph (c)(1) of this section. As a result, paragraph (c)(1) will not apply, meaning that the seller will not be treated as having placed the 30C property in service and cannot claim any credit allowable under section 30C(a) with respect to such property. The section 30C credit will only be allowed to one taxpayer for the same 30C property.

(d) Dual-use property—(1) Dual use property used for dispensing or storing qualified alternative fuel and conventional fuel. In the case of dual-use property that is used to store and/or dispense both qualified alternative fuel and conventional fuel, the cost of the dual-use property is taken into account in computing a taxpayer’s section 30C credit only to the extent such cost exceeds the cost of an equivalent conventional refueling property. For purposes of this paragraph (d)(1), equivalent conventional refueling property is conventional refueling property that is not used to store and/or dispense qualified alternative fuel but is otherwise comparable to the dual-use property and can store and/or dispense the same amount of conventional fuel as the dual-use property.

(2) Qualified alternative fuel storage. In the case of dual-use property that is used both to store qualified alternative fuel that is dispensed into the fuel tanks of motor vehicles at the location of the storage facility and to store fuel that is transported to other locations, the cost of the dual-use property is taken into account in computing a taxpayer’s section 30C credit only to the extent such cost exceeds the cost of a storage facility that is equivalent to the dual-use property except that it is used for the sole purpose of storing qualified alternative fuel that is transported to other locations and can store the same amount of qualified alternative fuel as the dual-use property stores for transport to other locations.

(3) Dual use property used to store or transmit electricity for charging a motor vehicle and for other purposes. In the case of dual-use property that is used to store or transmit electricity both to charge a motor vehicle and for purposes other than charging a motor vehicle, the cost of the dual-use property is taken into account in computing the section 30C credit only to the extent such cost exceeds the cost of equivalent property used for purposes other than charging a motor vehicle.

(4) Example—(i) Facts. X, a qualified alternative fuel wholesaler and retailer, owns and operates retail qualified alternative fuel filling stations. X maintains a regional hub where it stores qualified alternative fuel that it transports to its retail filling stations, using tanker trucks, for sale to customers. In 2024, X places in service a new storage tank to store qualified alternative fuel and a new fuel dispenser at its regional hub. X uses the new fuel dispenser to fill the fuel tanks of its tanker trucks (meaning it uses the fuel to power the tanker trucks in addition to transporting the fuel to retail locations). Because the amount of fuel used to power the tanker trucks is minimal compared to the fuel transported to the retail locations, the storage tank has the same capacity as the tank that would have been used for the sole purpose of storing the qualified alternative fuel that is supplied to X’s customers. X’s regional hub is in a non-urban area census tract as described in §1.30C-2(c)(3).

(ii) Analysis. The storage tank and dispenser are 30C property within the meaning of §1.30C-1(b)(1). Specifically, they are refueling property within the meaning of §1.30C-1(b)(1)(i)(A) because they are used to store and dispense qualified alternative fuel into the fuel tanks of X’s fuel tanker trucks. Additionally, the storage tank and dispenser meet the other requirements under §1.30C-1(b)(1)(iii) because they are of a character subject to an allowance for depreciation (because X uses them in its trade or business), the original use of the property began with X, and X placed the property in service in an eligible census tract. However, the storage tank is dual-use property described in paragraph (d)(2) of this section because it is used both to store qualified alternative fuel that is dispensed into the fuel tanks of motor vehicles at the location of the storage facility (that is, the fuel used to power the tanker trucks) and to store fuel that is transported to other locations. Under paragraph (d)(2), the cost of the storage tank is taken into account in computing the section 30C credit only to the extent that cost exceeds the cost of the storage tank that would have been used for the sole purpose of storing the qualified alternative fuel that is transported to X’s retail filling stations. Because no increase in the capacity of the storage tank is needed, none of the storage tank’s cost is taken into account in computing the amount of the section 30C credit.

(e) Applicability date. This section applies to property placed in service in taxable years ending after [date of publication of final regulations in the Federal Register].

Par. 5. Section 1.48-9, as proposed to be revised at 88 FR 82188 (November 22, 2023), is further amended by adding paragraph (e)(10)(vi) to read as follows:

* * * * *

(e) * * *

(10) * * *

(vi) Property primarily used in the transportation of goods or individuals and not for the production of electricity. Energy storage property is primarily used in the transportation of goods or individuals and not for the production of electricity, and therefore is not energy storage technology eligible for the section 48 credit, if a credit is claimed under section 30C for such property.

* * * * *

Par. 6. Section 1.48E-0, as proposed to be added at 89 FR 47792 (June 3, 2024), is further amended by adding an entry for §1.48E-2(g)(6)(iv), in numerical order, to read as follows:

* * * * *

§1.48E-2 Qualified investments in qualified facilities and EST for purposes of section 48E.

* * * * *

(g) * * *

(6) * * *

(iv) Property primarily used in the transportation of goods or individuals and not for the production of electricity.

* * * * *

Par. 7. Section 1.48E-2, as proposed to be added at 89 FR 47792 (June 3, 2024), is further amended by adding paragraph (g)(6)(iv) to read as follows:

* * * * *

(g) * * *

(6) * * *

(iv) Property primarily used in the transportation of goods or individuals and not for the production of electricity. Energy storage property is primarily used in the transportation of goods or individuals and not for the production of electricity, and therefore is not EST eligible for the section 48E credit, if a credit is claimed under section 30C for such property.

* * * * *

Par. 8. Section 1.6417-0 is amended by revising the entry for §1.6417-6(e) to read as follows:

* * * * *

§1.6417-6 Special rules.

* * * * *

(e) Applicability dates.

Par. 9. Section 1.6417-6 is amended by:

1. Adding two sentences to the end of paragraph (b)(1).

2. Revising paragraph (e).

The addition and revision read as follows:

* * * * *

(b) * * *

(1) * * * For purposes of this paragraph (b)(1), if an applicable credit is subject to section 50, then section 50 applies without regard to section 50(b)(3) and (b)(4)(A)(i). If another provision of the Code contains a basis reduction and/or recapture provision outside of section 50 that impacts the available credit (such as sections 30C(e), 45Q(f)(4), and 48(a)(10)), then the rules of that provision of the Code and the regulations issued under that provision of the Code apply, except that any applicable credit continues to be determined without regard to section 50(b)(3) and (4)(A)(i) and by treating any property with respect to which such credit is determined as used in a trade or business of the applicable entity, consistent with section 6417(d)(2) and §1.6417-2(c).

* * * * *

(e) Applicability dates—(1) In general. Except as provided in paragraph (e)(2) of this section, this section applies to taxable years ending on or after March 11, 2024. For taxable years ending before March 11, 2024, taxpayers, however, may choose to apply the rules of §§1.6417-1 through 1.6417-4 and this section, provided the taxpayers apply the rules in their entirety and in a consistent manner.

(2) Paragraph (b)(1). The second and third sentences of paragraph (b)(1) of this section apply to property placed in service in taxable years ending after [date of publication of final regulations in the Federal Register].

Par. 10. Section 1.6418-0 is amended under the heading §1.6418-5 by:

1. Redesignating the entries for (g) through (j) as (h) through (k);

2. Adding new entry (g); and

3. Revising newly redesignated entry (k).

The addition and revision read as follows:

* * * * *

§1.6418-5 Special rules.

* * * * *

(g) Notification and impact of recapture under section 30C(e)(5).

* * * * *

(k) Applicability dates.

Par. 11. Section 1.6418-5 is amended by:

1. Revising paragraph (c).

2. Redesignating paragraphs (g) through (j) as paragraphs (h) through (k), respectively.

3. Adding new paragraph (g).

4. Revising newly redesignated paragraph (k).

The revision and addition read as follows:

* * * * *

(c) Basis reduction rules—(1) Section 50(c) basis reduction. In the case of any transfer election under §1.6418-2 or §1.6418-3 with respect to any specified credit portion described in §1.6418-1(c)(2)(ix) through (xi), section 50(c) will apply to the applicable investment credit property (as defined in section 50(a)(6)(A)) as if such credit was allowed to the eligible taxpayer.

(2) Section 30C(e)(1) basis reduction. In the case of any transfer election under §1.6418-2 or §1.6418-3 with respect to any specified credit portion described in §1.6418-1(c)(2)(i), section 30C(e)(1) will apply to the 30C property as defined in §1.30C-1(b)(1) as if such credit was allowed to the eligible taxpayer.

* * * * *

(g) Notification and impact of recapture under section 30C(e)(5)—(1) In general. In the case of any election under §1.6418-2 or §1.6418-3 with respect to any specified credit portion described in §1.6418-1(c)(2)(i), if, during any taxable year, a recapture event as described in §1.30C-4(b)(2) occurs with respect to a 30C property as defined in §1.30C-1(b)(1) within three years of being placed in service, such eligible taxpayer and the transferee taxpayer must follow the notification process in paragraph (g)(2) of this section with recapture impacting the transferee taxpayer as described in paragraph (g)(3) of this section.

(2) Notification requirements. The notification requirements for the eligible taxpayer and the transferee taxpayer are the same as for an eligible taxpayer and transferee taxpayer that must report notice of the occurrence of a recapture event and notice of the recapture amount as described in paragraphs (d)(2)(i) and (ii) of this section, respectively, except that the recapture amount that must be computed is defined in §1.30C-4(b)(4).

(3) Impact of recapture—(i) Section 30C(e)(5) recapture event. The transferee taxpayer is responsible for any amount of tax increase under section 30C(e)(5) and §1.30C-4(b)(4) upon the occurrence of a recapture event under §1.30C-4(b), provided that if an eligible taxpayer retains any amount of an eligible credit determined with respect to 30C property directly held by the eligible taxpayer, the amount of the tax increase under section 30C(e)(5) and §1.30C-4(b)(4) that the eligible taxpayer is responsible for is equal to the recapture amount multiplied by a fraction, the numerator of which is the total credit amount that the eligible taxpayer retained, and the denominator of which is the total credit amount determined for the eligible credit property. The amount of the tax increase under section 30C(e)(5) that the transferee taxpayer is responsible for is equal to the recapture amount multiplied by a fraction, the numerator of which is the specified credit portion transferred to the transferee taxpayer, and the denominator of which is the total credit amount determined for the eligible credit property.

(ii) Impact of section 30C(e)(5) recapture event on basis of 30C property held by eligible taxpayer. The eligible taxpayer must increase the basis of the 30C property as defined in §1.30C-1(b)(1) (as of the first day of the taxable year in which the recapture event occurs) by an amount equal to the recapture amount provided to the eligible taxpayer by the transferee taxpayer under paragraph (g)(2) of this section and the recapture amount on any credit amounts retained by the eligible taxpayer in accordance with section 30C(e)(5) and §1.30C-4(b).

* * * * *

(k) Applicability date—(1) In general. Except as provided in paragraph (k)(2) of this section, this section applies to taxable years ending on or after April 30, 2024. For taxable years ending before April 30, 2024, taxpayers, however, may choose to apply the rules of this section and §§1.6418-1 through 1.6418-3 provided the taxpayers apply the rules in their entirety and in a consistent manner.

(2) Paragraphs (c)(2) and (g). Paragraphs (c)(2) and (g) of this section apply to property placed in service in taxable years ending after [date of publication of final regulations in the Federal Register].

Douglas W. O’Donnell, Deputy Commissioner.

(Filed by the Office of the Federal Register September 18, 2024, 8:45 a.m., and published in the issue of the Federal Register for September 19, 2024, 89 FR 76759)

^<?> On November 30, 2022, the Treasury Department and the IRS published Notice 2022-61 in the Federal Register (87 FR 73580, corrected in 87 FR 75141 (Dec. 7, 2022)), providing guidance with respect to the PWA requirements in section 45(b)(7) and (8), including initial guidance for determining the beginning of construction under section 45 and other credits and the beginning of installation under section 179D. The final PWA regulations published in the Federal Register (89 FR 53184) (part III of the Background section) provide further detail on the BOC Exception.

² On November 22, 2023, the Treasury Department and the IRS published in the Federal Register (88 FR 82188) the proposed rule “Definition of Energy Property and Rules Applicable to the Energy Credit” under section 48 (section 48 proposed regulations).

³ Section 50(b) provides that no credit “shall be determined under this subpart” for certain property. Section 50(b) is in subpart E of part IV of subchapter A of chapter 1. Section 30C is in subpart B of part IV of subchapter A of chapter 1.