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June 29, 2021

IRS extends safe harbor for renewable energy products in light of delays caused by COVID-19 pandemic

In Notice 2021-41, the IRS modifies prior guidance on the beginning-of-construction requirement for the production tax credit for qualified facilities (IRC Section 45) and investment tax credit for energy property (IRC Section 48). In response to delays caused by the COVID-19 pandemic, the new guidance (1) extends the continuity safe harbor for property on which construction began in 2016–2020 and (2) clarifies the methods taxpayers may use to satisfy the continuity requirement to meet the beginning-of-construction requirements under IRC Sections 45 and 48. A Tax Alert is forthcoming.