Inflation Reduction Act guide for manufacturers
Find out how your organization can leverage IRA tax credits to save as much as 50% or more on qualifying project costs.
Inflation Reduction Act guide for manufacturers
What is the Inflation Reduction Act?
The Inflation Reduction Act (IRA) of 2022 includes the largest clean energy incentive effort in U.S. history. Manufacturers can leverage IRA tax credits to save as much as 50% or more on qualifying project costs.
Is the manufacturing industry impacted by IRA?
Yes. There are significant opportunities for manufacturers. Your business may be eligible for IRA tax credits if it:
- Has capital expenditures in infrastructure
- Is building or plans to build something energy-related
- Manufactures “qualifying energy property”
Explore the available credits.
Save up to 30% qualified expenses
Energy investment credit
The Investment Tax Credit (ITC) Section 48 allows project owners or investors to be eligible for federal business energy investment tax credits for installing designated renewable energy generation equipment placed in service during the period 2006 through 2024.
Save $1/gallon used
Biodiesel and renewable diesel fuels credit
The 2022 IRA extends the credits for biodiesel fuels and creates new credits for sustainable aviation fuel and the production of clean hydrogen.
Save up to $7,500
Electric vehicle or plug-in hybrid electric vehicle credit
The regulation outlines a three-step process for manufacturers to determine whether the makeup of a vehicle battery’s critical minerals satisfy the percentage requirements
Saving varies based on fuel/production type
Renewable electricity, refined coal and Indian coal production credit
Taxpayers can receive a “bonus” amount of the investment tax credit under section 48, in connection with qualified solar and wind facilities that are either placed in service in a low-income community or meet other specifications.
Save up to $1.88/square foot
Energy-efficient commercial building credit
The residential clean energy credit extends to 2032 and increases the energy efficient commercial building deduction.
Saving varies based on eligible components
Advanced manufacturing production credits
Section 48C Advanced Energy Credit, includes $10 billion in new 30% investment tax credits and broadens what is deemed to be eligible energy property a company can invest in to earn the credit.
Take the leap.
How to get started
Baker Tilly specializes in guiding manufacturing leaders through the process of evaluating eligibility for IRA tax credits and, if eligible, we can help you maximize and protect the value of the energy tax credits.
45X production tax credit
The 45X tax credit can be claimed by manufacturers who produce and sell certain qualifying components for use in advanced energy projects. The majority of qualifying components fall into the following categories.
- Solar energy components
- Wind energy components
- Inverters
- Battery components
- Processing of critical minerals
If you are interested in learning more about the opportunities regarding this credit,
