IRC section 30C and the path to sustainable transportation

Internal Revenue Code (IRC) section 30C offers tax incentives for businesses and individuals investing in alternative fuel vehicle refueling properties, such as electric vehicle (EV) charging stations, aiming to promote sustainable transportation and cleaner energy sources. The Inflation Reduction Act of 2022 (IRA) amended IRC section 30C, extending the tax credit and introducing modifications to enhance its accessibility.

The IRA expanded eligibility criteria by requiring qualified properties to be situated within designated census tracts, including New Market Tax Credit zones or non-urban areas. IRS Notice 2024-20 further clarified eligibility, broadening the scope for qualifying properties across the United States. This expansion is based on the definition of "non-urban" areas, which considers census tracts where at least 10% of blocks aren't classified as urban.

To determine eligibility, taxpayers can utilize the IRC section 30C federal tax credit mapping tool provided by the IRS. The tool categorizes eligible tracts based on color-coding, distinguishing between non-urban tracts (teal green), current New Market Tax Credit tracts (beige orange) and older NMTC tracts (light gray).

Additionally, compliance with prevailing wage and apprenticeship (PW&A) requirements is crucial for businesses seeking the full 30% tax credit. These requirements ensure that laborers receive fair compensation and that a percentage of labor hours are performed by qualified apprentices. Projects failing to meet PW&A requirements may see a reduction in the credit rate from 30% to 6%.

Documentation is essential to demonstrate compliance with PW&A requirements. For prevailing wage requirements, contractors must maintain certified payroll records for all involved laborers and mechanics, prevailing wage determinations for the applicable geographical area and contractor affidavits affirming their compliance with prevailing wage requirements.

For apprenticeship requirements, records of program participation and apprentice qualifications must be retained, and labor hour tracking is a necessity as well.