What is the Section 48/48E Investment Tax Credit (ITC)?

The Section 48/48E ITC incentivizes investment in renewable energy projects. It provides a tax credit for up to 30% of the cost of eligible energy property, promoting clean energy adoption and greenhouse gas reduction. The credit applies to various renewable energy technologies like solar, wind, and energy storage.

What is Covered by the 48/48E Tax Credit?

The Section 48/48E ITC applies to a range of renewable energy properties, including:

• Solar Energy Property: Includes solar electric generation equipment, solar thermal property, and electrochromic glass.
• Fuel Cell Property: Systems converting chemical energy into electricity.
• Small Wind Energy Property: Wind turbines under 100 kW capacity.
• Geothermal Energy Property: Systems harnessing geothermal energy.
• Microturbine Property, Combined Heat and Power (CHP) Systems, and Waste Energy Recovery Property.
• Energy Storage Property: Includes battery storage used in conjunction with renewable energy projects.

Bonus Credits:

• Domestic Content Bonus: Additional 10% credit if the project uses U.S.-sourced steel, iron, or manufactured products.
• Energy Community Bonus: Additional 10% for projects located in former fossil fuel employment zones.
• Low-Income Community Bonus: 10-20% additional credit for solar and wind facilities in low-income areas

How to Qualify for the Section 48/48E Tax Credit?

• Eligible Property: The property must fall into one of the eligible categories.
• Placed in Service: The property must be placed in service during the tax year for which the credit is claimed.

Labor Requirements for Bonus Credit

• Prevailing Wage: Projects must pay prevailing wages to laborers and mechanics employed by contractors and subcontractors during construction.
• Apprenticeship: A certain percentage of the project’s labor force must be apprentices. Projects below 1 MW are exempt from prevailing wage requirements.

How Much Can You Receive from the 48/48E ITC?

• Base Credit Amount: The base credit rate is 6% of the investment.
• Bonus Credit Rate: Projects that comply with labor requirements (Prevailing Wage and Apprenticeship) are eligible for a 30% tax credit.

Additional Bonus Credits:

• Domestic Content Bonus: An extra 10% credit for projects that meet domestic content requirements.
• Energy Community Bonus: An additional 10% credit for projects located in energy communities (e.g., former coal communities).
• Low-Income Communities Bonus: An additional 10-20% credit for small-scale solar or wind projects located in low-income communities or benefiting low-income households.

How to Claim the Section 48/48E ITC?

• Tax Form: File Form 3468, “Investment Credit,” with the IRS.
• Documentation: Maintain records, including receipts, labor certifications, and manufacturer certifications, to substantiate your claim.

Why Choose Giraffe Financial for Your IRA Tax Credit Needs?

**Giraffe Is Like Hitting the ‘Easy-Button’ to get your tax credits**

Giraffe Financial provides a full-service solution for taking advantage of the 30C tax credit. Giraffe simplifies the process while ensuring eligible tax credits are maximized and taken advantage of. Here’s how we help:

• Eligibility: Giraffe will confirm your project site is eligible for the tax credit depending on when the system is placed in service, when costs were incurred, and which census tract it’s in (the DOE map isn’t reliable, but we will cross reference the latest IRS rulemaking). Giraffe knows all the nuances of eligibility and can help you understand if you qualify for any exceptions that might enable you to qualify as eligible.
• Prevailing Wage and Apprenticeship (PWA): To maximize the value of your tax credits, it’s paramount to ensure that the installation of the equipment is done adhering to IRS regulations regarding PWA. Giraffe will work with you and your installer to clarify the rules so that everyone understands and so that contracts are adapted to embed appropriate legal language that requires the collection of documentation needed to substantiate PWA claims and capture the full 30% tax credit.
• Tax Credit Calculations: Giraffe and our team of CPAs  will work with you to collect all cost data you have, review it to determine eligibility for tax credits, and optimally calculate your tax credit. We’re experts at coaching you to understand how the tax basis that credits are calculated off are calculated, and we’ll ensure you get the most credit possible based on inclusion of all relevant costs.
• Compliance and Recordkeeping: Giraffe workflows guide clients through submission of all supporting documentation through our secure online portal. We review all information provided including proof of ownership, relevant permits, invoices, payroll and apprentice records etc. We use this documentation to build an audit-memo for you and maintain records on your behalf via your online account.
• Pre-filing Registration: If you plan on pursuing the Direct Pay or Transfer provisions under the IRA, then at least 120 days prior to submitting your annual tax return you must submit a pre-filing registration to the IRS. You can do so yourself following this 73 page Pre-filing User Guide, or, by working with Giraffe we will create an account and manage the entire pre-filing process on your behalf.
• Transfers: If you want to transfer your tax credits for cash then Giraffe will manage the entire process for you. We’ll aggregate your credits with others to attract better pricing via economies of scale, we’ll market your credits to find a buyer that will pay the best price, prepare a data room ensuring you have all desired documentation appropriately organized, provide all required legal documentation and coach you through the process, and critically we’ll structure insurance for your projects so that buyers will be willing to purchase them. Note that other tax credit transfer marketplaces simply broker the transaction by matching sellers with buyers whereas Giraffe manages the entire process on your behalf of structuring, negotiating, and insuring the credits.