Inflation Reduction Act (IRA) Implementation Resources
The GFOA Federal Liaison Center will monitor program implementation and update resources as needed in the sections below. PLEASE NOTE: The new programs are generally still at various stages of agency development; we will strive to post updates when available.
Resources from the White House
Resources from the Internal Revenue Service (IRS)
Links to access the resources/guidance | Notes |
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Proposed Guidance on the elective pay (aka direct pay) option for certain clean energy tax credits |
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Proposed Guidance on the transferability of certain clean energy tax credits |
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Temporary regulation for electronic pre-filing registration requirement (for elective pay and transferring of credits) | More information about pre-filing registration is anticipated by late 2023 |
IRS Inflation Reduction Act Strategic Operating Plan: FY2023-2031 | Part IV of the report includes a case study on the energy security and clean energy provisions of the IRA. |
Guidance on the Qualifying Advanced Energy Project Credit | The guidance includes definitions, descriptions of qualifying advanced energy projects, and a description of the application process. |
Guidance on eligibility requirement for energy communities for the bonus credit program under IRA | |
Initial Guidance Establishing the Program to Allocate Environmental Justice Solar and Wind Capacity Limitation under Section 48(e) |
Click here for ongoing updates and the latest information from the Internal Revenue Service (IRS) and its implementation of the IRA.
Upcoming/Current Funding Opportunities
Program Name | Eligible Uses | Type of Funding and Eligible Applicants | Notice of Funding Opportunity (NOFO) Information |
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Environmental & Climate Justice Thriving Communities Block Grant | A new program created by the IRA that provides funding for financial and technical assistance to carry out environmental and climate justice activities to benefit underserved and overburdened communities. | TBD |
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This first-of-its-kind program will provide competitive grants to mobilize financing and leverage private capital for clean energy and climate projects that reduce greenhouse gas emissions with an emphasis on projects that benefit low-income and disadvantaged communities. | $7 billion in competitive grants will be available to States, municipalities, Tribal governments, and nonprofit eligible recipients as defined in the law. |
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IRA Overview
On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law. Although the final version signed into law was a smaller, pared down version of what was initially proposed as the Administration's Build Back Better Act, the IRA still provided significant investments in three areas - climate and energy, healthcare, and tax reform.
Climate and Energy Provisions
The IRA expands, extends and establishes new tax incentives to advance the development and deployment of clean energy. Further, the IRA extends these incentives to entities that generally do not benefit from income tax credits, such as state, local, and Tribal governments and other tax-exempt entities. The law does this through a direct-pay mechanism so that these entities may be able to directly access many of the incentives.
The direct-pay option, allows public entities to be able to apply for and receive a refund equal to the amount of the credit rather than receiving a tax credit like a typical individual taxpayer. The U.S. Treasury is expected to publish guidance on the direct pay election process in the near future. Click here to read the GFOA Comments to Treasury as they prepare guidance on these provisions. In order to claim the full direct pay amount available, certain apprenticeship and prevailing wage requirements must be met. The requirements will apply to qualifying facilities, projects, property or equipment that begins construction on or after January 29, 2023. Follow the links below for additional information on these particular requirements:
Available Credits
Funding Opportunities
In addition to the credits discussed previously, the IRA also provides a number of funding opportunities to support the deployment of commercially-available and innovative clean energy technologies, as well as some new programs to help cut air pollution, including greenhouse gases, with a particular focus on the communities that carry a disproportionate pollution burden.
Healthcare Provisions
- Caps the annual out-of-pocket costs of prescription drugs for Medicare beneficiaries at $2,000
- Provides free vaccines for Medicare beneficiaries
- Extends Affordable Care Act (ACA) premium subsidies to 2025
Tax Reform Provisions
- $80 billion to enhance Internal Revenue Service taxpayer services, operations and enforcement
- 15 percent alternative minimum tax for corporations earning more than $1 billion annually (except those owned by private equity), and includes a 1 percent excise tax on stock buybacks