Tax Facts

7887.06 / Are taxpayers claiming enhanced green energy credits required to re-port wage payments to the IRS throughout the year?

Proposals would have required taxpayers to report payroll records to the IRS on a weekly basis before claiming the enhanced green energy credits. In the preamble to the proposed regulations, the IRS declined to adopt this reporting requirement based on the fact that the requirement to pay prevailing wages only becomes binding once the tax return claiming the increased credit is filed.



Instead, taxpayers are required to establish that they paid prevailing wages at the time they file a tax return claiming the enhanced credit.

The IRS expects that taxpayers will be required to report the following information when filing their returns:
(i)  the location and type of qualified facility;

(ii)  the applicable wage determinations for the type and location of the facility;

(iii)   the wages paid (including any correction payments) and hours worked for each of the laborer or mechanic classifications engaged in the construction, alteration, or repair of the facility;

(iv)   the number of workers who received correction payments;

(v)  the wages paid and hours worked by qualified apprentices for each of the laborer or mechanic classifications engaged in the construction, alteration, or repair of the facility;

(vi)   the total labor hours for the construction, alteration, or repair of the facility by any laborer or mechanic employed by the taxpayer or any contractor or subcontractor; and

(vii)  the total credit claimed.

Taxpayers claiming the enhanced credits should keep thorough records and documentation and expect to produce that documentation on request from the IRS.

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