This Week (October 7 - 11)

Congress: Congress is out of session until after the November 5 elections. The House and Senate are scheduled to return on November 12

Upcoming is the deadline for public comments to the House Ways & Means Committee Tax Teams, on October 15.

Last Week (September 30 - October 4)

VP debate: Congress is out until after the elections, but the presidential race continues. During the October 1 vice-presidential debate in New York City, Republican candidate Sen. JD Vance (R-OH) and Democratic candidate Gov. Tim Walz (D-MN) touched on many topics, including tax, in a notably genial tone. Gov. Walz said the Harris-Walz plan involves "making sure tax cuts go to the middle class, $6,000 child tax credit. … And then getting businesses off the ground. The law, as it stands right now, is a $5,000 tax credit for small business, increasing that to $50,000." Contrast that with the 2017 Trump tax cuts, Walz said, "that predominantly went to the top class. What happened there was an $8 trillion increase in the national debt, the largest ever. Now he's proposing a 20% consumption, or sales, tax on everything we bring in … Kamala Harris has said, to do the things she wants to do, we'll just ask the wealthiest to pay their fair share."

Asked how the Trump tax plan, estimated by some to cost $5.8 trillion, would be paid for, Vance said Harris has driven up food and housing costs and made middle-class life unaffordable for many Americans. "Now, Tim admirably admits that they want to undo the Trump tax cuts. But if you look at what was so different about Donald Trump's tax cuts, even from previous Republican tax cut plans, is that a lot of those resources went to giving more take-home pay to middle-class and working-class Americans," he said. "It was passed in 2017, and you saw an American economic boom unlike we've seen in a generation in this country."

Vance faulted 40 years of experts recommending shipping US manufacturing overseas to get cheaper goods and the US industrial base off to other countries to make the middle class stronger. "They were wrong about the idea that if we made America less self-reliant, less productive in our own nation that, it would somehow make us better off. And they were wrong about it," he said. "And for the first time in a generation Donald Trump had the wisdom and the courage to say … 'We're not doing it anymore. We're bringing American manufacturing back, we're unleashing American energy, we're going to make more of our own stuff."

Walz said, "I'm a union guy on this. I'm not a guy who wanted to ship things overseas. Much of what the senator said right there, I'm in agreement with him on this. I watched it happen, too. I watched it [happening] to my communities." He faulted, in part, "companies that were willing to ship it over. And we saw people profit — folks that are venture capitalists, in some cases, putting money into companies that were overseas. We're in agreement that we bring those home. The issue is Donald Trump is talking about it. Kamala Harris has a record: 250,000 more manufacturing jobs just out of the IRA."

Tax-health combination: Following the debate, Senator Tom Cotton (R-AK), who is running to become Senate Republican Conference chair in the next Congress, the third-ranking position, said Republicans could incorporate health system changes in a reconciliation bill addressing the end-of-2025 expiring TCJA provisions next year. If Republicans sweep in the elections, they will be able to "make health care more affordable, more tailored and more personalized than the one-size-fits-all option," referring to the Affordable Care Act (ACA), Cotton said, according to NBC News. "We'll have an opportunity next year, when it comes time to extend the Trump tax cuts, to adopt new policies that again will make health care more affordable and more personalized," he said. "Because a lot of health care in this country does go through our tax code."

Budget reconciliation: The latest Washington Council EY "DC Dynamics" podcast is "Episode 20: Budget Reconciliation Basics."

CAMT Alert: An EY Alert on proposed corporate alternative minimum tax (CAMT) regulations is posted here.

IRA Phase 4: Acting Assistant Treasury Secretary for Tax Policy Aviva Aron-Dine October 1 announced plans for Phase Four implementation of the IRA's clean energy provisions, including finalizing by the end of the Administration:

• rules for the technology-neutral IRC Section 45Y Clean Electricity Production Credit and IRC Section 48E Clean Electricity Investment Credit
• guidance on the existing IRC Section 48 Investment Tax Credit (ITC)
• rules on the IRC Section 45V Clean Hydrogen Production Credit (by the end of the year)
• rules for the IRC Section 45X Advanced Manufacturing Production Credit
• regulations that expand the reach of the Low-Income Communities Bonus Credit Program to additional clean energy technologies beyond wind and solar

IRA guidance tracker: This list describes select IRS guidance related to the Inflation Reduction Act (IRA).

CAMT

• September 12, 2024 — Proposed regulations (REG-112129-23) on the application of the 15% corporate alternative minimum tax (CAMT) on the adjusted financial statement income (AFSI) of large corporations generally incorporating interim guidance previously issued by Treasury and the IRS in notices over the past two years
• Penalty relief (Notice 2024-66) for corporations that fail to pay estimated taxes with respect to CAMT liabilities for tax years that begin after December 31, 2023, and before January 1, 2025

Stock buyback excise tax

• April 9, 2024 — Proposed regulations (REG-115710-22) that, among other things, would impose the excise tax on many ordinary course intercompany funding transactions, including distributions, between US subsidiaries and a foreign parent unless the taxpayer can assert the transactions did not have a principal purpose of funding a stock buyback by the foreign parent
• June 28, 2024 — Final regulations (TD 10002) regarding the reporting and payment of the excise tax on repurchases of corporate stock

Domestic Content Bonus

• May 16, 2024 — Notice 2024-41 expands list of Applicable Projects to include hydropower

EVs

• May 3, 2024 — Final rules (TD 9995) on clean vehicle credits under IRC Sections 25E and 30D, transfer of credits, critical minerals and battery components, and foreign entities of concern

Sustainable Aviation Fuel

• April 30, 2024 — Notice 2024-37 provides guidance and safe harbors using the 40BSAF-GREET 2024 model

Transferability

• April 25, 2024 — Final regulations (TD 9993) describing rules and definitions for the transfer of eligible credits in a taxable year, including specific rules for partnerships and S corporations

Direct pay

• March 5, 2024 — Final regulations (TD 9988) include rules for the elective payment of credit amounts, including definitions and special rules applicable to partnerships and S corporations and regarding repayment of excessive payments

IRC Section 30C Alternative Fuel Vehicle Refueling Property Credit

• September 18, 2024 — Proposed regulations (REG-118269-23) on credit up to 30% for installing alternative fuel vehicle refueling property, such as chargers and hydrogen refueling property

IRC Section 45Q carbon sequestration credit

• July 24 — Notice 2024-60 provides initial guidance, describing information that must be included in a written report known as the lifecycle analysis (LCA) report and provides the procedures a taxpayer must follow to submit the report along with required supporting information to the IRS and the Department of Energy for review

IRC Section 45V clean hydrogen credit

• December 22, 2023 — Proposed regulations (REG-117631-23) include definitions of key terms in the statute, including lifecycle greenhouse gas emissions, qualified clean hydrogen, and qualified clean hydrogen production facility

IRC Section 45X Advanced Manufacturing Production Credit

• December 14, 2023 — Proposed regulations (REG-107423-23) clarifying definitions and confirm credit amounts for eligible components, including solar and wind energy components, inverters

IRC Sections 45Y, 48E clean electricity credits

• May 29, 2024 — Proposed regulations (REG-119283-23) on greenhouse gas emission rates

IRC Section 45Z Clean Fuel Production Credit

• May 31, 2024 — Notice 2024-49 on registration requirements

Low-income Communities Bonus Credit

• August 10, 2023 — Final regulations (TD 9979) and Revenue Procedure 2023-27 provide guidance necessary to implement the Program, including, in relevant part, information an applicant must submit, the application review process, and the manner of obtaining an allocation

Advanced Energy Project Credit

• February 13, 2023 — Notice 2023-18, first allocation round (Round 1), which began on May 31, 2023, $4 billion of qualifying advanced energy project credits
• April 29, 2024 — Notice 2024-36 for owners of clean energy manufacturing and recycling projects, greenhouse gas emission reduction projects and critical material projects, announcing the second round of credit allocations for the program to allocate the remaining $6 billion credits
• May 22, 2024 — IR-2024-144 announced that the DOE Qualified Advanced Energy Project Credit Program Applicant Portal (IRC Section 48C Portal) is open for any applicants to register for a new round of allocations

IRC Section 48 ITC

• November 17, 2023 — Proposed regulations (REG-132569-17) update types of energy property eligible for the energy credit, requirements and rules generally applicable to energy property

IRC Section 45L Energy Efficient Home Credit

• September 27, 2023 — Notice 2023-65 addresses: person eligible for the credit, determining the applicable credit amount, energy saving, certification and substantiation requirements

Wage and apprenticeship

• June 18, 2024 — Final regulations (TD 9998) providing employers and workers with more clarity on what's required for recordkeeping, and employers to adopt worker-centric practices like project labor agreements

Energy Community Bonus Credit

• June 15, 2023 — Notice 2023-45, guidance for purposes of the production tax credit (PTC) under IRC Sections 45 and 45Y and the investment tax credit (ITC) under IRC Sections 48 and 48E for electricity facilities
• June 7, 2024 — Notice 2024-48 publishes lists of information that taxpayers may use to determine whether they meet certain requirements under the Statistical Area Category or the Coal Closure Category as described for purposes of qualifying for energy community bonus credit amounts or rates under IRC Sections 45, 45Y, 48, and 48E

IRC Section 45J Nuclear Credit

• March 9, 2023 — Notice 2023-24 provides guidance for computing credit, amount of unutilized NMCL, apply for and allocating unutilized NMCL, and transfer to "eligible project partner"

CHIPS Act IRC Section 48D Advanced Manufacturing Investment Credit

• March 21, 2023 — Proposed regulations (REG-120653-22) address the eligibility requirements, including defining what constitutes an eligible taxpayer, qualified property and an advanced manufacturing facility
• March 5, 2024 — Final regulations (TD 9989) on direct pay