Treasury, IRS Release Guidance on Section 45V Hydrogen Production Tax Credit: Can the Agencies Balance Economic Practicality and Environmental Responsibility?
Highlights
• On Dec. 22, 2023, the Treasury Department and the IRS released long-awaited proposed regulations for eligibility and implementation of the Section 45V hydrogen production tax credit
• Comments on the proposed rule are due by Feb. 26, 2024, and a public hearing has been scheduled for March 25, 2024
• Refinements will likely be needed to achieve the critical balance that aligns the economic viability and cost-effectiveness of hydrogen production with environmental preservation, and to fill gaps to ensure that the guidance is complete and that all stakeholders understand the requirements to qualify for the Section 45V tax credit
On Dec. 22, 2023, well after the deadline established by Congress, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) released their notice of proposed rulemaking on eligibility for the clean hydrogen production tax credit (NPRM) that was created by Section 13204 of the Inflation Reduction Act (IRA) and added to the Internal Revenue Code as Section 45V. The same rule also includes guidance on Section 48(a)(15) elections to treat clean hydrogen production facilities as energy property.
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