DWT tax partner, Pamela Charles explains:
The American Taxpayer Relief Act of 2012, which was passed by Congress to avoid the "fiscal cliff," extends certain federal income tax benefits for renewable energy projects, including:
- Extending the production tax credit (PTC) for wind projects by one year and changing from a "placed in service" to a "begun construction" deadline. Now, to qualify for the PTC, the construction of qualifying wind facilities must begin before January 1, 2014.
- Changing the PTC deadline for other renewable energy projects – closed-loop biomass, open-loop biomass, geothermal, landfill gas, trash, qualified hydropower, and marine and hydrokinetic – from a “placed in service” to a "begun construction" deadline. Now, to qualify for the PTC, construction of qualifying facilities (or of qualifying modifications, improvements or additions to facilities) must begin before January 1, 2014.
- Extending the ability to elect the investment tax credit (ITC) in lieu of the PTC to include any qualified facility (wind, closed-loop biomass, open-loop biomass, geothermal, landfill gas, trash, qualified hydropower, or marine and hydrokinetic facility) the construction of which begins before January 1, 2014.
- Extending by one year the ability to claim 50% bonus depreciation for certain qualifying property that isplaced in service before January 1, 2014.