The US Senate right this moment handed a package deal of tax extenders as a part of the year-end appropriations act that the US House of Representatives handed on December 17, 2019. President Trump is predicted to signal the laws earlier than the tip of the day tomorrow to keep away from a authorities shutdown. The bundle features a one-year extension of the manufacturing tax credit score (PTC) below part 45 for wind and different applied sciences. It additionally contains the restricted extension of different vitality tax incentives that had been set to run out and a retroactive extension for some credit that had already expired in 2018. A lot of the credit will now expire at the finish of 2020, organizing the prospect of a broader tax extenders deals throughout the lame-duck session after the 2020 election. The invoice additionally included a one-year extension via 2020 of the brand new markets tax credit score under Section 45D at $5 billion.
Many vitality tax credit and incentives are scheduled to run out or start to section out on the finish of 2019 or have already expired. The Further Consolidated Appropriations Act will prolong the expiration date to the tip of 2020 for a lot of credit. The bundle didn’t embrace an extension or growth of the Investment Tax Credit (ITC), disappointing the solar trade. The extenders bundle additionally didn’t embody the proposed enlargement of the ITC for power storage expertise or the extension of power credit for offshore wind services.
The PTC supplies a credit score for every kilowatt-hour of power manufacturing for certified renewable power amenities. The PTC expired for non-wind technologies at the end of 2017, whereas a decreased credit score of 40% was obtainable for wind amenities by way of the top of 2019, expiring for years 2020 and past. As we reported beforehand in House Passes PTC, NMTC Extension, below the tax extenders package deal, tasks that start building in the year 2019 are eligible for the 40% credit score, and tasks that start development in 2020 might be eligible for a 60% credit score. This probably leaves taxpayers in an irritating place to the extent they already took steps to start development on a wind challenge in 2019 to reap the benefits of the 40% credit score in anticipation of its expiration on the finish of 2019. Taxpayers looking for the elevated 60% PTC for wind initiatives will want cautious planning to make sure any work completed in 2019 doesn’t connect to the 2020 mission, thus dropping the credit score to 40%.