The Internal Revenue Service (IRS) released Notice 2023-38, which provides more details around domestic content requirements for taxpayers who qualify for bonus energy credit incentives. The additional tax credits are associated with investments in and the production of clean energy under Sections 45, 45Y, 48 and 48E. Dependent on the facilities and equipment used to make clean energy, the domestic content rules are fulfilled when a taxpayer verifies that a qualified facility meets two specific requirements. 

On this episode of the Industrial Manufacturing Podcast, Jason Hodell, Industrial Manufacturing Leader, and Ron Wainwright, Energy Tax Credits & Incentives Leader, discuss key Inflation Reduction Act of 2022 (IRA) provisions that will help clients maximize their tax credits.

This conversation includes:

• Energy tax credits under the IRA
• IRA’s new credits and bonus credits 
• Increase in tax credit amounts for domestic content
• Whatto look for in an energy credit provider
• New requirements to qualify for bonus energy credit incentives

Related Guidance

• Take Advantage of New Section 45L Tax Credit Opportunities Under IRA
• Form 7205: What A&E Firms Need To Know To Claim the Section 179D Tax Deduction
• Energy Savings Revolution – Section 179D for Commercial Buildings
• Notice 2022-61: Initial Guidance on Prevailing Wage and Apprenticeship Requirements for IRA Clean Energy Tax Credits

When the Inflation Reduction Act (IRA) was signed into law in August of 2022, it enhanced a number of energy credits to incentivize companies to move towards clean energy. One of the credits that was bolstered by the IRA was the 45Q carbon oxide sequestration credit (45Q) surrounding how companies dispose of or capture carbon oxide. The 45Q tax credit can be incredibly advantageous to manufacturers who understand how to take advantage of it.

Matt Brady, Industrial Industry Leader, and Ron Wainwright, Leader of the Energy Tax Credits & Incentives Group, join together on this Industrial Manufacturing podcast to cover:

• Background on Carbon Credits
• How do Carbon Credits Work?
• Carbon Credit vs. Carbon Offset
• What is the Carbon Marketplace?
• How Manufacturers Can Utilize the 45Q Tax Credit

Related Guidance:

• Deeper Dive into New Ways to Monetize Energy Credits for the Industrial Industry
• Unpacking the Complexities of the Many Tax Credits Under the CHIPS Act and the IRA of 2022
• Deep Dive into the CHIPS Act: Funding for the Industrial and Manufacturing Industry
• Deep Dive into the CHIPS Act: Advanced Manufacturing Investment Tax Credit
• CHIPS Act Provides New Federal Funding for the Industrial Manufacturing Industry

The conversation continues with Matt Brady, Cherry Bekaert’s Industrial Industry Leader, and Ron Wainwright, Strategic Tax Partner in our Tax Credits and Incentives Advisory group, as they unpack how to capitalize on industrial energy credits. Tune in for the fifth installment of Cherry Bekaert’s Deeper Dive Into New Ways to Monetize Energy Credits for the Industrial Industry regarding industry credit updates and best practices

In this podcast episode, our knowledgeable team takes a closer look at the American Manufacturing Credit and Manufacturing Production Credit within the CHIPS Act. Listen in to learn more about: 

• CHIPS Act and IRA background
• Implications to Manufacturers – Investment Tax Credit (48C) and Production Tax Credit (45X) 
• New Direct Pay Option and Eligible Credits
• Transferable Credits
• Direct Pay and Transferable Credits 

Related Guidance

• CHIPS Act Deep Dive Part 1: New Federal Funding for the Industrial Manufacturing Industry 
• CHIPS Act Deep Dive Part 2: Advanced Manufacturing Investment Tax Credit
• CHIPS Act Deep Dive Part 3: American Manufacturing Credit and Manufacturing Production Credit
• CHIPS Act Deep Dive Part 4: Unpacking the Complexities of the Many Tax Credits Under the CHIPS Act and the IRA of 2022

As we wrap up the CHIPS Act Series, we briefly cover the Inflation Reduction Act of 2022 (IRA) and credits associated with CHIPS and IRA and their many impacts on the manufacturing industry. The focus of the discussion centers on a high-level view of the New Advanced Manufacturing Credit, Section 45X – the Advanced Manufacturing Production Credit, which take effect in 2023 and will provide a tax credit for eligible components. 

Listen in as Matt Brady, our Industrial Manufacturing Industry Leader, and Ron Wainwright, a Partner in our Tax Credits and Incentives Advisory practice, unpack the fourth and final installment of Cherry Bekaert’s Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act podcast series. 

Wainwright also covers the advanced energy project credit, which falls under Section 48C, an investment credit with a base credit of 6%, with a potential increase up to 30% if the qualifying wage requirements are met. 

Given the intricacies of the legislation and tax credits and provisions, our industry advisors plan to expand the series to address how industrial manufacturers can find new ways to monetize energy credits, dive into the 45Q credit around carbon oxide sequestrated and examine the “Technology Neutral” credits that may impact the industry.

See our previous podcasts in this series that you may have missed:

• CHIPS Act Deep Dive Part 1: New Federal Funding for the Industrial Manufacturing Industry 
• CHIPS Act Deep Dive Part 2: Advanced Manufacturing Investment Tax Credit
• CHIPS Act Deep Dive Part 3: American Manufacturing Credit and Manufacturing Production Credit

Part III: Digital Solutions for Recession Preparedness 

While manufacturers continue to battle inflation, increased interest rates, workforce shortages and supply chain challenges, it is becoming increasingly evident that leaders must also review their strategic and financial plans to ensure they are prepared for this recession risk. Join Joe Haehner, Industrial Manufacturing Partner, in this podcast series as he explores a variety of strategies manufactures can implement now to proactively rein in costs while simultaneously reinvesting in growth. 

In Part III of this series, Jim Holman, Director of Digital Advisory Services, provides insight into key process optimizations manufacturers can utilize to reduce operating costs, lower margins and subsequently increase revenue. In addition, he reviews best practices for partnering with vendors and suppliers, and he analyzes inventory sampling strategies to maximize labor utilization. 

We invite you to tune in to all podcasts in this series: 

Part I: Industry Economic Outlook – Chad Moutray, Chief Economist | National Association of Manufacturers

Part II: Identify and Implement Technology and Business Process Improvements – Steve Holliday, Director, Digital Advisory Services | Cherry Bekaert

Part II: Identify and Implement Technology and Business Process Improvements

While manufacturers continue to battle inflation, increased interest rates, workforce shortages and supply chain challenges, it is becoming increasingly evident that leaders must also review their strategic and financial plans to ensure they are prepared for this recession risk. Join Joe Haehner, Industrial Manufacturing Partner, in this podcast series as he explores a variety of strategies manufactures can implement now to proactively rein in costs while simultaneously reinvesting in growth. 

In Part II of this series, Steve Holliday, Director of Digital Advisory Services, provides insight into analyses manufacturers can utilize to understand the changing economic conditions and details helpful tools to both track areas of concern and trigger action. In addition, he will review best practices to prioritize cost opportunities and focus to the removal of costs

We invite you to tune in to all podcasts in this series: 

Part I: Industry Economic Outlook – Chad Moutray, Chief Economist | National Association of Manufacturers

Part III: Digital Solutions for Recession Preparedness – Jim Holman, Director, Digital Advisory Services | Cherry Bekaert 

Join Matt Brady, our Industrial Industry Leader, and Ron Wainwright, a Strategic Tax Partner in our Tax Credits and Incentives Advisory group, for the third installment of Cherry Bekaert’s Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act podcast series. 

In this podcast, our knowledgeable team take a closer look at the American Manufacturing Credit and Manufacturing Production Credit within the CHIPS Act.

The podcast covers the following areas:

• Background on the CHIPS Act
• What funding is in the CHIPS Act?
• CHIPS for America Fund 
• Department of Commerce Programs/Funding and Other Programs
• What does this mean for the U.S. with semiconductor manufacturing?
• Department of Commerce Programs/Funding and Other Programs

Stay tuned for Cherry Bekaert’s next CHIPS Act podcast that dives deeper into the American Manufacturing Credit and Manufacturing Production Credit.

See our previous podcasts in this series that you may have missed:

• CHIPS Act Deep Dive Part 1: New Federal Funding for the Industrial Manufacturing Industry 
• CHIPS Act Deep Dive Part 2: Advanced Manufacturing Investment Tax Credit

Matt Brady, our Industrial Industry Leader, and Ron Wainwright, a Strategic Tax Partner in our Tax Credits and Incentives Advisory group, are continuing their conversation on the benefits of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act for the industrial industry.

This podcast will be highlighting the various funding programs that are now established and available for manufacturers producing semiconductors to take advantage of and how they are able to do so.

The podcast covers the following topics:

• Background on the CHIPS Act
• New Advanced Manufacturing Investment Tax Credit (AMITC)
• AMITC Eligibility and Requirements
• AMITC and Qualified Property 
• How to Incentivize Semiconductor Production in the U.S.

Stay tuned for Cherry Bekaert’s next CHIPS Act podcasts that will dive deeper into CHIPS funding and Manufacturing Production Credit and the Advanced Manufacturing Credit.

See our previous podcasts in this series that you may have missed:

CHIPS Act Deep Dive Part 1: New Federal Funding for the Industrial Manufacturing Industry 

The Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act was recently signed into law as part of the CHIPS and Science Act of 2022. The bill provides manufactures greater incentives to produce semiconductors (e.g., chips) domestically in the U.S. 

Join Matt Brady, our Industrial Industry Leader, and Ron Wainwright, a Strategic Tax Partner in our Tax Credits and Incentives Advisory group, as they explore the benefits the industrial industry is able to take advantage of through this new legislation.

The podcast covers:

• Background on the CHIPS Act
• Importance of Semiconductors in the Industrial Industry
• What is the CHIPS Act and Tax Policy
• Overview of the New Advanced Manufacturing Credit

Stay tuned for Cherry Bekaert’s future podcasts that dive deeper into the Advanced Manufacturing Credit, funding in the CHIPS Act, and the American Manufacturing Credit and Manufacturing Product Credit.

Part I: Industry Economic Outlook 

Over half of manufacturing leaders say inflationary pressures are making a recession more likely within the next year, according to a survey released in June by the National Association of Manufacturers. According to the survey report, “while a recession is not inevitable—and we continue to forecast growth for 2022 and 2023—the risk of a downturn has increased significantly.” While manufacturers continue to battle inflation, increased interest rates, workforce shortages and supply chain challenges, it is becoming increasingly evident that leaders must also review their strategic and financial plans to ensure they are prepared for this recession risk. 

Join Joe Haehner, Industrial Manufacturing Partner, in this podcast series as he explores a variety of strategies manufactures can implement now to proactively rein in costs while simultaneously reinvesting in growth. 

Chad Moutray, Chief Economist for the National Association of Manufacturers, joins us for Part I to provide insight into the current economic landscape, discuss employment growth and wages, outline the biggest challenges for manufacturers and offer an outlook on inflation. 

We invite you to tune in to our upcoming podcasts in this series: 

• Part II: Identify and Implement Technology and Business Process Improvements – Steve Holliday, Director, Digital Advisory Services | Cherry Bekaert 
• Part III: Digital Solutions for Recession Preparedness –  Jim Holman, Director, Digital Advisory Services | Cherry Bekaert  

Sources: 

NAM Manufacturers’ Outlook Survey, Second Quarter 2022