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June 16, 2023

IRS updates guidance on energy communities for bonus IRC Section 45 and 48 credits

  • Notice 2023-45 updates an earlier notice on upcoming energy community rules to clarify requirements for brownfields.
  • Notice 2023-47 gives information on how to determine if project areas qualify as statistical areas or coal closure census tracts, along with appendices listing these areas.

In Notice 2023-45, the IRS updated earlier guidance on defining "energy communities" for purposes of the increased production tax credits (PTCs) under IRC Sections 45 and 45Y and investment tax credits (ITCs) under IRC Sections 48 and 48E. The earlier notice (Notice 2023-29, Tax Alert 2023-0675) described what the IRS intends to include in proposed rules on energy communities. Taxpayers with qualifying projects located in energy communities can get up to a 10% increase in either credit. Notice 2023-29 defined energy communities to include brownfields, statistical areas and coal closure census tracts.

In Notice 2023-47, the IRS explained how to determine if project areas qualify as statistical areas or coal closure census tracts. The notice includes two appendices with lists of statistical areas (Appendix 1, Appendix 2) and one with a list of coal closure census tracts (Appendix 3).

The IRS also posted FAQs about energy communities, including how areas may qualify, how to determine if a project is in an energy community and detail on brownfield sites.

According to Notice 2023-29, the rules will apply to tax years ending after April 4, 2023. Taxpayers can rely on both notices until the proposed rules are issued.


Notice 2023-29 defines a brownfield site as one that may be contaminated by pollutants, as defined by IRC Section 9601, and certain mine-scarred land. Notice 2023-29 provides a safe harbor for brownfield sites that (1) were previously assessed as meeting the definition under IRC Section 9601(39)(A); or (2) meet certain American Society for Testing and Materials Phase I environmental assessment guidelines.

For a taxpayer to meet the safe harbor, Notice 2023-45 clarifies that the Phase I assessment of the brownfield must identify the presence or potential presence of a hazardous substance as defined under 42 USC. Section 9601(14) (hazardous substance), or a pollutant or contaminant as defined under 42 USC. Section 9601(33) (pollutant or contaminant).

Beginning of construction

Under Notice 2023-29, if a qualifying project is in an energy community on the date it begins construction, then it keeps that status for the duration of the IRC Section 45 credit period or the IRC Section 48 placed-in-service date, even if the location subsequently falls out of the energy community definition.

Notice 2023-45 modified, in accordance with an earlier online update, the beginning of construction rule to clarify that it applies to taxpayers that begin construction on or after Jan. 1, 2023.


Notice 2023-45 clarifies the requirements for meeting the brownfield site definition, which may require taxpayers to review any determinations made around qualification under Notice 2023-29. The added clarity should give taxpayers more certainty around qualifying for the bonus credit for brownfield sites.


Contact Information
For additional information concerning this Alert, please contact:
National Tax
   • Greg Matlock, Americas Energy Transition and Renewable Energy Leader (
   • Dorian Hunt (
Americas Power & Utilities Tax Group
   • Brian Murphy, Americas Power & Utilities Tax Leader (
   • Mike Reno (
Tax Credit Investment Advisory Services
   • Michael Bernier (
Credits and incentives and sustainability
   • Paul Naumoff (
   • Akshay Honnatti (
   • David Camerucci (

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor