IRS Allows More Time to Construct Renewable Energy Projects - IRS Notice 2015-25

IRS Allows More Time to Construct Renewable Energy Projects - IRS Notice 2015-25

March 11, 2015

The Internal Revenue Service formally extended the continuous work presumption today through the end of 2016 for renewable energy projects that had to be under construction by December 2014 to qualify for federal tax credits.

The IRS had indicated some time ago that it would extend the presumption, but that the only open issue was whether the extension would apply to all projects or solely to projects that began construction in 2014. The extension applies to all projects.

The extension is in IRS Notice 2015-25.

Wind, geothermal, biomass, landfill gas, incremental hydroelectric and ocean energy projects had to be under construction by December 2014 to qualify production tax credits on the electricity output or a 30% investment tax credit. It is not enough merely to have started construction in time; the developer must also show there was continuous work on the project after construction started. The IRS said in late 2013 that it would assume any project that is placed in service by December 2015 met the continuous work requirement without requiring the developer to prove it. Today's action extends the presumption through the end of 2016.

by Keith Martin, in Washington