IRS Updates Guidance on Production Tax Credit and Investment Tax Credit Eligibility (Notice 2015-25)

The IRS issued Notice 2015-25, which indicates that taxpayers are eligible for either the renewable electricity production tax credit ("PTC") or the energy investment tax credit ("ITC") with respect to a qualified facility, if construction on such facility began before a specified time.

Consistent with recently enacted legislation, the notice confirmed that a taxpayer would be eligible for the PTC or the ITC if construction on a qualified facility began before January 1, 2015 and the facility was placed in service before January 1, 2017.

In a series of prior notices (Notice 2013-29, Notice 2013-60 and Notice 2014-46), the IRS specified that a taxpayer may begin construction on a qualified facility by either "starting physical work of a significant nature" or "paying or incurring five percent or more of the total cost of facility," so long as, in either case, the taxpayer makes "continuous progress towards completion once construction has begun." Notice 2015-25 updates the timelines in the prior notices.

See: IRS Notice 2015-25.