News and Insights

IRS Notice Expands Energy Community Bonus Credit Amounts Under the Inflation Reduction Act

Tax Development Mar 28, 2024


On March 22, 2024, the Internal Revenue Service (IRS) issued Notice 2024-30 to clarify and expand the definition of qualifying energy communities (ECs). The energy community bonus is a 10% adder to multiple renewable energy related production tax credits (PTCs) and investment tax credits (ITCs). This notice modifies previous notices by expanding the Nameplate Capacity Attribution Rule under Section 4.02(1)(b) of Notice 2023-29 to include additional attribution property and by adding two 2017 North American Industry Classification System (NAICS) industry codes for purposes of determining the fossil fuel employment rate [as defined in Section 3.03(2) of Notice 2023-29].

There are three categories of energy communities:

  1. Brownfield sites
  2. Certain metropolitan statistical areas (MSAs) and non-metropolitan statistical areas (non-MSAs) based on unemployment rates
  3. Census tracts where a coal mine closed after 1999 or where a coal-fired electric generating unit was retired after 2009 (and directly adjoining census tracts)

Ian Boccaccio, Principal and Practice Leader of Income Tax at Ryan, states: “Don’t take ‘no’ for the answer on the energy community bonus just because the location is not on the DOE-NREL statistical census map. The IRS guidance also allows for independent location determination based upon an EPA Brownfield determination or based upon certain industry NAICS codes for a company at that location.”

Previous notices have provided generally applicable rules for determining whether a qualified facility is located in an energy community under Internal Revenue Code §§ 45 or 45Y, and under §§ 48 and 48E, whether an energy project, qualified facility, or energy storage technology is placed in service within an energy community. Those previous notices also provided that an EC project is treated as located in or placed in service within an energy community if it satisfies either the Nameplate Capacity Test under Section 4.02(1) of that notice or the Footprint Test under Section 4.02(2) of that notice.

Scott Stogsdill, Director of Energy Incentives at Ryan, points out that energy community locations are not fixed and can change over time. “The date of determination for whether an energy project is within an EC location is different for PTCs and ITCs. For PTCs, if construction started (using the 5% safe harbor) within an EC, the location will still be considered an EC throughout construction and the 10-year duration of the tax credit, even if changed later. However, for §§ 48 and 48E ITCs, the determination will always be based upon the placed-in-service date.”

Under the Nameplate Capacity Test, an EC project that has nameplate capacity is considered located in or placed in service within an energy community if 50% or more of the EC project’s nameplate capacity is in an area that qualifies as an energy community. Notice 2024-30 expands the definition of an EC project to include additional attribution property in the determination by allowing the inclusion of equipment controlled through an EC project port, owned and operated by the taxpayer.

The modification of the fossil fuel employment rate determination includes the following two additional NAICS codes:

  • 2212 - Natural Gas Distribution
  • 23712 - Oil and Gas Pipeline and Related Structures Construction

Appendix 1 to this notice, which includes the above additional qualifying codes, Appendix B to Notice 2023-29, and Appendix 1 to Notice 2023-47 together provide the full list of MSAs and non-MSAs that meet the fossil fuel employment threshold applicable to the period beginning on January 1, 2023.

Until the proposed regulations are published, taxpayers may rely on the rules described in Sections 3 through 6 of Notice 2023-29, as previously clarified by Notice 2023-45 and modified by Section 3 of this notice, for taxable years ending after April 4, 2023.

Please contact our Ryan tax professionals listed below for assistance in determining if your business qualifies for an energy community bonus credit.


Ian Boccaccio

Scott Stogsdill

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at