The Treasury is currently seeking input from the public about how to create regulations that will oversee the new energy tax benefits. These benefits will include a $7,500 consumer tax credit for purchasing an approved electric vehicle to incentives for manufacturers of solar panels and wind turbines.
The Treasury Department is expediting the creation of regulations that will carry out the energy tax incentives which are included in President Joe Biden’s signature climate and tax bill. These incentives are worth approximately $270 billion.
The hope is for the rule-writing process for the programs to be completed in the next few months. This means that the IRS will have to move quickly compared to its current processing time. With this in mind, the IRS and the Treasury are adding new staff members to help meet these important deadlines.
There are definitely many lingering questions from the public, car makers, and equipment manufacturers regarding how they will claim these new tax incentives. At this time, we wait anxiously for the Treasury to provide guidance on how the credit will be implemented and how individuals will qualify.
Specifically, those in the electric vehicle sector are wanting more details on how the administration plans to define a “foreign entity of concern” in situations where an investor from a country that is blacklisted has a small stake in a battery company.
Under this new law, any electric vehicle that is made with a battery component that is manufactured by a “foreign entity of concern” will be ineligible to receive this new tax credit after the new year.
Overall, this new bill will offer many benefits to citizens and manufacturers. Although there are still many questions that are up in the air, within the coming months the Treasury states we will receive answers.