30-Day Initial Application Window for Low-Income Communities Bonus Credit Fast Approaching

November 7, 2023

On Oct. 19, 2023, the Department of Energy began accepting applications for all categories of the Low-Income Communities Bonus Credit Program for small-scale wind and solar projects.

The submission portal’s launch is the realization of the Treasury Department/IRS’s final rules and guidance, which were released in August and addressed the Section 48(e) bonus tax credit for facilities deployed in specified low-income communities or residential developments. This bonus must be affirmatively granted and has a limited capacity for grants that will be refreshed annually, and therefore early applications can be key for receiving awards. Fortunately, the guidance provides a 30-day window during which all applications submitted will be treated as if they were submitted on day one of the program year. The last day of this 30-day window is Nov. 15, 2023.

Although this bonus credit will be available annually for the next 10 years, this specific application is the only means for taxpayers to take advantage of the current year’s allocation of tax credit capacity. For a detailed explanation of this program, see our prior McGuireWoods client alert.