Internal Revenue Bulletin 2024-34 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 2024–34
August 19, 2024
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
EMPLOYEE PLANS
Rev. Proc. 2024-32, page 523.
This revenue procedure updates the procedures in Rev. Proc.
2017-55 to set forth the procedure by which the sponsor of
a defined benefit plan that is subject to the funding require-
ments of § 430 may request approval from the IRS for the
use of plan-specific substitute mortality tables in accordance
with § 430(h)(3)(C) and § 1.430(h)(3)-2. This revenue proce-
dure also specifies the date by which the use of a previously
approved substitute mortality table must be terminated in
conjunction with the replacement of the generally applicable
mortality tables specified in § 430(h)(3)(A) and § 1.430(h)
(3)-1.
T.D. 10005, page 510.
These regulations update the requirements that a plan spon-
sor of a single-employer defined benefit plan must meet to
obtain IRS approval to use mortality tables specific to the
plan in calculating present value for minimum funding pur-
poses (as a substitute for the generally applicable mortality
tables).
EXEMPT ORGANIZATIONS
Announcement 2024-31, page 533.
Revocation of IRC 501(c)(3) Organizations for failure to meet
the code section requirements. Contributions made to the
organizations by individual donors are no longer deductible
under IRC 170(b)(1)(A).
INCOME TAX
Notice 2024-60, page 515.
This notice describes the information that must be included
in a written report described in § 1.45Q-4(c)(2) (LCA Report)
and provides the procedures a taxpayer must follow to sub-
mit the LCA Report and required supporting information to
the IRS and the Department of Energy for review under §
1.45Q-4(c)(5) before any credit for carbon oxide sequestra-
tion allowed under § 45Q(a)(2)(B)(ii) or (a)(4)(B)(ii) is deter-
mined for qualified carbon oxide utilized by any taxpayer in
the manner described in § 45Q(f)(5) as implemented by §
1.45Q-4 (§ 45Q utilization credit).
Notice 2024-61, page 520.
The notice announces the inflation adjustment factor and
phase-out amount for the enhanced oil recovery credit for
taxable years beginning in the 2024 calendar year. The
format of the notice is identical to the format of previously
published notices on this issue. The notice concludes that
because the reference price for the 2023 calendar year
($76.10) exceeds $28 multiplied by the inflation adjustment
factor for the 2024 calendar year ($28 multiplied by 2.0615
= $57.72) by $18.38, the enhanced oil recovery credit for
qualified costs paid or incurred in 2024 is phased-out com-
pletely.
T.D. 9998, page 412.
The final regulations provide the rules for taxpayers satis-
fying the prevailing wage and registered apprenticeship
requirements to qualify for increased credit or deduction
amounts under the Internal Revenue Code. The final regula-
tions provide guidance regarding correction and penalty pro-
cedures that allow taxpayers who initially fail to satisfy the
prevailing wage and apprenticeship requirements to claim
the increased credit or deduction amounts. The final regula-
tions also address specific prevailing wage and apprentice-
ship recordkeeping and reporting requirements. Published:
TD 9998 [June 25, 2024].
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
August 19, 2024 Bulletin No. 2024–34

Part I
26 CFR 1.30C-3; 1.45-6 through 1.45-8; 1.45-12;
1.45L-3; 1.45Q-6; 1.45U-3; 1.45V-3; 1.45Y-3;
1.45Z-3; 1.48C-3; 1.179D-3
T.D. 9998
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Increased Amounts of
Credit or Deduction
for Satisfying Certain
Prevailing Wage and
Registered Apprenticeship
Requirements
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final rule.
SUMMARY: This document sets forth
final regulations regarding the increased
credit amounts or the increased deduction
amount available for taxpayers satisfying
prevailing wage and registered appren-
ticeship (collectively, PWA) requirements
established by the Inflation Reduction Act
of 2022. These final regulations affect
taxpayers intending to satisfy the PWA
requirements to be eligible for increased
amounts of Federal income tax credits or
an increased deduction, including those
intending to make elective payment elec-
tions for available credit amounts, and
those intending to transfer increased credit
amounts. These final regulations also
affect taxpayers intending to satisfy the
prevailing wage requirements to be eligi-
ble for increased amounts of those Fed-
eral income tax credits that do not have
associated apprenticeship requirements.
Additionally, these final regulations affect
taxpayers who initially fail to satisfy the
PWA requirements (or prevailing wage
requirements, as applicable) and subse-
quently comply with the correction and
penalty procedures in order to be deemed
to satisfy the PWA requirements (or pre-
vailing wage requirements, as applicable).
Finally, these final regulations address
specific PWA and prevailing wage record-
keeping and reporting requirements.
DATES: Effective date: These regulations
are effective August 26, 2024.
Applicability date: For date of applicabil-
ity, see §§1.30C-3(c), 1.45-6(d), 1.45-7(e),
1.45-8(h), 1.45-12(f), 1.45L-3(c), 1.45Q-
6(c), 1.45U-3(c), 1.45V-3(c), 1.45Y-3(c),
1.45Z-3(c), 1.48C-3(b), 1.179D-3(c).
FOR FURTHER INFORMATION
CONTACT: The Office of Associate
Chief Counsel (Passthroughs & Special
Industries) at (202) 317-6853 (not a toll-
free number).
SUPPLEMENTARY INFORMATION:
Background
I. Overview
This document contains final regula-
tions that amend the Income Tax Regula-
tions (26 CFR part 1) under sections 30C,
45, 45L, 45Q, 45U, 45V, 45Y, 45Z, 48C,
and 179D of the Internal Revenue Code
(Code), as enacted or amended by the
Inflation Reduction Act of 2022 (IRA),
Public Law 117-169, 136 Stat. 1818
(August 16, 2022).
The IRA amended sections 30C, 45,
45L, 45Q, 48, 48C, and 179D to pro-
vide increased amounts of credit or an
increased deduction, as applicable, for
taxpayers who satisfy certain require-
ments and added sections 45U, 45V, 45Y,
45Z, and 48E to the Code to provide new
credits, which also contain provisions
for increased credit amounts for taxpay-
ers who satisfy certain requirements.
Increased credit amounts are available
under sections 30C, 45, 45Q, 45V, 45Y,
45Z, 48, 48C, and 48E, and an increased
deduction is available under section 179D
for taxpayers satisfying certain PWA
requirements. Increased credit amounts
are available under sections 45L and 45U
for taxpayers satisfying certain prevailing
wage requirements.
1
The IRA includes
correction and penalty provisions avail-
able in certain situations for taxpayers that
have initially failed to satisfy the PWA
requirements and are not otherwise eligi-
ble for the increased amount of credit or
deduction because they do not qualify for
an exception.
Increased amounts of credits or an
increased deduction are generally avail-
able under sections 30C, 45, 45Q, 45V,
45Y, 48, 48E and 179D with respect to
certain facilities, properties, projects,
technologies, or equipment if beginning
of construction (or beginning of instal-
lation for section 179D) of the facility,
property, project, technology, or equip-
ment, as applicable, occurs before January
29, 2023 (BOC Exception). Additionally,
the increased credit amounts generally
are available under sections 45, 45Y, 48,
and 48E with respect to certain facilities,
projects, and technologies, as applicable,
with a maximum net output (or capacity
for energy storage technology under sec-
tion 48E) of less than one megawatt (One
Megawatt Exception). Generally, if a
taxpayer satisfies the PWA requirements,
meets the BOC Exception, or meets the
One Megawatt Exception, the amount of
credit or deduction determined is equal to
the otherwise determined amount of the
underlying credit or deduction multiplied
by five.
II. PWA Provisions
A. In general
The principal PWA requirements are
set forth in section 45(b)(6), (7), and (8).
In general, section 45(b)(6) provides the
increased credit amount for taxpayers
satisfying the PWA requirements or meet-
ing one of the exceptions, section 45(b)
(7) provides the prevailing wage require-
1
The provisions in sections 45L and 45U relating to increased credit amounts do not contain apprenticeship requirements. For simplicity, where possible, the preamble to these final regula-
tions uses the acronym PWA to refer to the prevailing wage and apprenticeship requirements generally, including the prevailing wage requirements in sections 45L and 45U.
August 19, 2024 412 Bulletin No. 2024–34

ments (Prevailing Wage Requirements),
2

and section 45(b)(8) provides the appren-
ticeship requirements (Apprenticeship
Requirements).
3
In general, section 45 provides a credit
for taxpayers producing electricity from
qualified energy resources at a qualified
facility during the 10-year period begin-
ning on the date the facility was originally
placed in service, and selling that electric-
ity to unrelated persons during the taxable
year. Under section 45(a), the credit is
equal to 0.3 cents multiplied by the kilo-
watt hours of electricity: (i) produced
by the taxpayer from qualified energy
resources and at a qualified facility during
the 10-year period beginning on the date
the facility was originally placed in ser-
vice, and (ii) sold by the taxpayer to an
unrelated person during the taxable year.
Under section 45(b)(6), with respect to
a qualified facility, if a taxpayer satisfies
the PWA requirements, meets the BOC
Exception, or meets the One Megawatt
Exception, then the amount of the credit
determined under section 45(a) is multi-
plied by five.
B. Prevailing Wage Requirements
Section 45(b)(7)(A) provides that with
respect to any qualified facility, “the tax-
payer shall ensure that any laborers and
mechanics employed by the taxpayer or
any contractor or subcontractor in – (i) the
construction of such facility, and (ii) with
respect to any taxable year, for any por-
tion of such taxable year which is within
the [10-year period beginning on the date
the qualified facility was originally placed
in service], the alteration or repair of such
facility, shall be paid wages at rates not
less than the prevailing rates for construc-
tion, alteration, or repair of a similar char-
acter in the locality in which such facility
is located as most recently determined by
the Secretary of Labor, in accordance with
subchapter IV of chapter 31 of title 40,
United States Code [Davis-Bacon Act or
DBA].”
The Davis-Bacon Act, enacted in 1931,
requires the payment of minimum prevail-
ing wages determined by the Department
of Labor (DOL) for laborers and mechan-
ics working on contracts entered into
by Federal agencies and the District of
Columbia, if such contracts are in excess
of $2,000 and are for the construction,
alteration, or repair of public buildings
and public works. Section 3142 of the
DBA requires that Federal agencies enter-
ing into contracts covered by the DBA
include the requirements of the DBA in
the contract, including the requirement to
incorporate the applicable wage determi-
nations that set forth the prevailing wages
to be paid to laborers and mechanics. The
Copeland Act, 40 U.S.C. 3145, sets forth
a requirement that the contractor submit
certified weekly payroll records to the
contracting Federal agency. Congress
has included DBA requirements in other
laws, often referred to as the Davis-Bacon
Related Acts, under which Federal agen-
cies provide assistance for construction
projects through grants, loans, insurance,
and other methods. The DOL Wage and
Hour Division (WHD) administers the
DBA prevailing wage provisions.
C. Correction and penalty related
to failure to satisfy Prevailing Wage
Requirements
Under section 45(b)(7)(B) of the Code,
a taxpayer who is not eligible for the BOC
Exception or the One Megawatt Exception
and fails to satisfy the Prevailing Wage
Requirements under section 45(b)(7)(A), is
deemed to have satisfied those requirements
if the taxpayer makes a correction payment
to any laborer or mechanic who was paid
wages at a rate below the required prevail-
ing rate for any period during any year of
the construction, alteration, or repair of the
qualified facility and pays a penalty to the
Internal Revenue Service (IRS).
Under section 45(b)(7)(B)(i)(I), the
amount of the correction payment is the
sum of: (i) the difference between the
amount of wages paid to the laborer or
mechanic during the period and the amount
of wages required to be paid to the laborer
or mechanic during that period in order to
meet the Prevailing Wage Requirements;
and (ii) interest on the amount under (i) at
the underpayment rate established under
section 6621 (determined by substituting
six percentage points for three percentage
points in section 6621(a)(2)) for the appli-
cable period.
Under section 45(b)(7)(B)(i)(II), the
amount of the penalty is $5,000 multi-
plied by the total number of laborers and
mechanics who were paid wages at a rate
below the prevailing wage rate described
in section 45(b)(7)(A) for any period
during the year. Deficiency procedures do
not apply with respect to the assessment or
collection of this penalty pursuant to sec-
tion 45(b)(7)(B)(ii).
Under section 45(b)(7)(B)(iii), if the
IRS determines that the failure to sat-
isfy the Prevailing Wage Requirements
is due to “intentional disregard” of those
requirements, then the correction payment
to the laborer or mechanic is three times
the amount that would otherwise be deter-
mined under section 45(b)(7)(B)(i)(I), and
$10,000 is substituted for $5,000 in calcu-
lating the penalty under section 45(b)(7)
(B)(i)(II).
Section 45(b)(7)(B)(iv) provides that
once the IRS makes a final determination
that a taxpayer has failed to satisfy the
Prevailing Wage Requirements, the tax-
payer must make the correction and pen-
alty payments within 180 days after the
final determination to be eligible for the
increased credit amount. If the taxpayer
does not make the required correction and
penalty payments, and therefore is not
allowed the increased credit amount, no
penalty is assessed under section 45(b)(7)
(B).
D. Apprenticeship Requirements
Under section 45(b)(8), with respect to
the construction of any qualified facility,
2
The Prevailing Wage Requirements in sections 30C(g), 45L(g), 45Q(h), 45U(d), 45V(e), 48(a)(10), 48C(e), and 179D(b) are similar to the requirements provided under section 45(b)
(7). Sections 30C, 45L, 48C, and 179D, however, do not require the payment of wages at rates not less than the prevailing rates after construction, re-equipping, expansion, establishment,
or installation, as applicable, ends. Sections 45Y(g)(9) and 45Z(f)(6)(A) adopt by cross-reference the Prevailing Wage Requirements under section 45(b)(7). Section 48E(d)(3) adopts by
cross-reference the Prevailing Wage Requirements under section 48(a)(10). Section 48(a)(10)(C) provides for a special 5-year recapture rule that applies for purposes of the Prevailing Wage
Requirements with respect to sections 48 and 48E.
3
Sections 30C(g)(3), 45Q(h)(4), 45V(e)(4), 45Y(g)(10), 45Z(f)(7), 48(a)(11), 48C(e)(6), 48E(d)(4), and 179D(b)(5) cross-reference the Apprenticeship Requirements in section 45(b)(8).
Sections 45L and 45U do not have Apprenticeship Requirements.
Bulletin No. 2024–34 413 August 19, 2024

August 19, 2024 414 Bulletin No. 2024–34
taxpayers must satisfy the Apprentice-
ship Requirements. The Apprenticeship
Requirements impose rules regarding
labor hours, apprentice-to-journeyworker
ratios, and participation by qualified
apprentices.
1. Labor Hours Requirement
Section 45(b)(8)(A)(i) provides that
“[t]axpayers shall ensure that, with respect
to construction of any qualified facility,
not less than the applicable percentage of
the total labor hours of the construction,
alteration, or repair work (including such
work performed by any contractor or sub-
contractor) with respect to such facility
shall, subject to [section 45(b)(8)(B)],
be performed by qualified apprentices”
(Labor Hours Requirement). For pur-
poses of the Labor Hours Requirement,
section 45(b)(8)(A)(ii) provides that the
applicable percentage is: (i) in the case
of a qualified facility the construction of
which begins before January 1, 2023, 10
percent, (ii) in the case of a qualified facil-
ity the construction of which begins after
December 31, 2022, and before January
1, 2024, 12.5 percent, and (iii) in the case
of a qualified facility the construction of
which begins after December 31, 2023, 15
percent.
Section 45(b)(8)(E)(i) defines “labor
hours” as the total number of hours
devoted to the performance of construc-
tion, alteration, or repair work by any indi-
vidual employed by the taxpayer or by any
contractor or subcontractor, and excluding
any hours worked by foremen, superin-
tendents, owners, or persons employed in
a bona fide executive, administrative, or
professional capacity (within the meaning
of those terms in part 541 of title 29, Code
of Federal Regulations). Section 45(b)(8)
(E)(ii) defines “qualified apprentice” as
“an individual who is employed by the
taxpayer or by any contractor or subcon-
tractor and who is participating in a regis-
tered apprenticeship program, as defined
in section 3131(e)(3)(B).” Section 3131(e)
(3)(B) defines a “registered apprenticeship
program” as an apprenticeship program
registered under the Act of August 16,
1937 (commonly known as the National
Apprenticeship Act, 50 Stat. 664, chapter
663, 29 U.S.C. 50 et seq.) that meets the
standards of subpart A of part 29 and part
30 of title 29 of the Code of Federal Reg-
ulations.
4
The DOL Office of Apprentice-
ship (OA) administers provisions under
the National Apprenticeship Act related to
registered apprenticeship programs.
2. Ratio Requirement
Under section 45(b)(8)(B), the Labor
Hours Requirement is subject to any appli-
cable requirements for apprentice-to-jour-
neyworker ratios of the DOL or the appli-
cable State apprenticeship agency (Ratio
Requirement).
3. Participation Requirement
Under section 45(b)(8)(C), each tax-
payer, contractor, or subcontractor who
employs four or more individuals to per-
form construction, alteration, or repair
work with respect to the construction of
a qualified facility must employ one or
more qualified apprentices to perform
such work (Participation Requirement).
E. Exceptions to Apprenticeship
Requirements
1. In General
Under section 45(b)(8)(D)(i), a tax-
payer is not treated as failing to satisfy
the Apprenticeship Requirements if: (i)
the taxpayer satisfies the requirements
described in section 45(b)(8)(D)(ii) (Good
Faith Effort Exception), or (ii) in the case
of any failure by the taxpayer to satisfy
the Labor Hours Requirement under sec-
tion 45(b)(8)(A) and the Participation
Requirement under section 45(b)(8)(C),
the taxpayer makes a penalty payment to
the IRS (Apprenticeship Cure Provision).
2. Good Faith Effort Exception
Under the Good Faith Effort Excep-
tion provided by section 45(b)(8)(D)(ii),
a taxpayer is deemed to have satisfied
the Apprenticeship Requirements with
respect to a qualified facility if the tax-
payer has requested qualified apprentices
from a registered apprenticeship program,
and (i) such request has been denied, pro-
vided that such denial is not the result
of a refusal by the taxpayer or any con-
tractors or subcontractors engaged in the
performance of construction, alteration,
or repair work with respect to such quali-
fied facility to comply with the established
standards and requirements of the regis-
tered apprenticeship program, or (ii) the
registered apprenticeship program fails to
respond to such request within five busi-
ness days after the date on which such reg-
istered apprenticeship program received
such request.
3. Apprenticeship Cure Provision
Under section 45(b)(8)(D)(i)(II), if
the Good Faith Effort Exception does not
apply, then the taxpayer will not be treated
as failing to satisfy the Labor Hours
Requirement or the Participation Require-
ment if the taxpayer makes a penalty pay-
ment to the IRS in an amount equal to
the product of $50 multiplied by the total
labor hours for which the Labor Hours
Requirement or the Participation Require-
ment was not satisfied with respect to the
construction, alteration, or repair work on
the qualified facility. Under section 45(b)
(8)(D)(iii), if the IRS determines that the
failure was due to intentional disregard
of the Labor Hours Requirement or Par-
ticipation Requirement, then the penalty
amount increases to $500 multiplied by
the total labor hours for which the Labor
Hours Requirement or Participation
Requirement was not satisfied.
III. Other Increased Credit Amount
Provisions
A. Beginning of Construction Exception
Under the BOC Exception in sec-
tion 45(b)(6)(B)(ii), a qualified facility the
construction of which began prior to the
date that is 60 days after the IRS publishes
guidance with respect to the requirements
4
Effective November 25, 2022, 29 CFR part 29 is no longer divided into subparts A and B because subpart B (Industry Recognized Apprenticeship Programs) was rescinded in a final rule
published on September 26, 2022 (87 FR 58269). On January 17, 2024, the DOL released a notice of proposed rulemaking that would once again place apprenticeship standards in subpart
A of part 29. See 89 FR 3118.

Bulletin No. 2024–34 415 August 19, 2024
of section 45(b)(7)(A) and (8) is a facility
eligible for the increased credit amount in
section 45(b)(6). On November 30, 2022,
the Department of the Treasury (Trea-
sury Department) and the IRS published
Notice 2022-61 in the Federal Register
(87 FR 73580, corrected in 87 FR 75141
(Dec. 7, 2022)), providing guidance with
respect to the PWA requirements in sec-
tion 45(b)(7) and (8), including initial
guidance for determining the beginning
of construction under section 45 and other
credits and the beginning of installation
under section 179D. Therefore, if a tax-
payer began construction or installation of
a facility
5
before January 29, 2023, then
the taxpayer is eligible for the increased
amount of credit or deduction without sat-
isfying the PWA requirements, provided
the taxpayer is otherwise eligible for the
credit or deduction. Similar exceptions
apply under sections 30C, 45Q, 45V, 45Y,
48, 48E, and 179D.
For purposes of determining when
construction or installation begins, Notice
2022-61 incorporates by reference the
notices issued under sections 45,
6
45Q,
7

and 48
8
(collectively, IRS Notices). The
IRS Notices describe two methods of
establishing that construction of a facility
has begun: (i) starting physical work of a
significant nature (Physical Work Test),
and (ii) paying or incurring five percent or
more of the total cost of the facility (Five
Percent Safe Harbor).
The IRS Notices provide that for pur-
poses of the Physical Work Test and Five
Percent Safe Harbor, taxpayers must
demonstrate either continuous construc-
tion or continuous efforts (Continuity
Requirement) regardless of whether the
Physical Work Test or the Five Percent
Safe Harbor was used to establish the
beginning of construction. Whether a tax-
payer meets the Continuity Requirement
under either test is determined by the rele-
vant facts and circumstances.
The IRS Notices also provide for a
Continuity Safe Harbor under which a tax-
payer will be deemed to satisfy the Con-
tinuity Requirement provided a qualified
facility is placed in service no more than
four calendar years after the calendar year
during which construction of the qualified
facility began for purposes of sections 45
and 48, and no more than six calendar
years after the calendar year during which
construction of the qualified facility or
carbon capture equipment began for pur-
poses of section 45Q. For purposes of the
Continuity Safe Harbor, certain offshore
projects and projects built on Federal land
under sections 45 and 48 satisfy the Con-
tinuity Requirement if such a project is
placed into service no more than ten cal-
endar years after the calendar year during
which construction of the project began.
Until the Treasury Department and the
IRS issue further guidance on determining
when construction or installation begins,
taxpayers may continue to rely on the
guidance provided in Notice 2022-61 and
the IRS Notices. Specifically, to determine
when construction begins for purposes of
sections 30C, 45V, 45Y, and 48E, princi-
ples similar to those under Notice 2013-29
regarding the Physical Work Test and Five
Percent Safe Harbor apply, and taxpayers
satisfying either test will be considered to
have begun construction. In addition, prin-
ciples similar to those provided in the IRS
Notices regarding the Continuity Require-
ment for purposes of sections 30C, 45V,
45Y, and 48E apply. Whether a taxpayer
meets the Continuity Requirement under
either test is determined by the relevant
facts and circumstances. Similar princi-
ples to those under section 3 of Notice
2016-31 regarding the Continuity Safe
Harbor also apply for purposes of sec-
tions 30C, 45V, 45Y, and 48E. Taxpayers
may rely on the Continuity Safe Harbor
with respect to those sections, provided
the facility is placed in service no more
than four calendar years after the calendar
year during which construction began.
For purposes of section 179D, installa-
tion of energy efficient commercial build-
ing property, energy efficient building
retrofit property, or property installed pur-
suant to a qualified retrofit plan has begun
if a taxpayer generally satisfies principles
similar to the Physical Work Test and the
Five Percent Safe Harbor described in sec-
tion 2.02 of Notice 2022-61 regarding the
beginning of construction under Notice
2013-29. The relevant facts and circum-
stances will ultimately determine whether
a taxpayer has begun installation.
For purposes of sections 45, 45Q,
and 48, the IRS Notices will continue to
apply under each respective Code section,
including application of the Physical Work
Test and Five Percent Safe Harbor, and the
rules regarding the Continuity Require-
ment and Continuity Safe Harbors.
B. One Megawatt Exception
Under the One Megawatt Exception in
section 45(b)(6)(B)(i), a qualified facil-
ity that has a maximum net output of
less than one megawatt (as measured in
alternating current) is a facility eligible
for the increased credit amount. Similar
exceptions apply for a qualified facility
with a maximum net output of less than
one megawatt (as measured in alternating
current) under sections 45Y(a)(2)(B)(i)
and 48E(a)(2)(A)(ii)(I); an energy project
with a maximum net output of less than
one megawatt of electrical (as measured
in alternating current) or thermal energy
under section 48(a)(9)(B)(i); and energy
storage technology with a capacity of less
than one megawatt under section 48E(a)
(2)(B)(ii)(I).
IV. Prior Guidance
On October 24, 2022, the Treasury
Department and the IRS published Notice
2022-51, 2022-43 I.R.B. 331, requesting
comments on aspects of the increased
amounts of credit and deduction enacted
or amended by the IRA, including the
PWA provisions. On November 30,
2022, the Treasury Department and the
IRS published Notice 2022-61. Notice
2022-61 provided guidance on the PWA
5
Notice 2022-61 defines facility as qualified facility, property, project, or equipment.
6
Notice 2013–29, 2013–20 I.R.B. 1085; clarified by Notice 2013–60, 2013–44 I.R.B. 431; clarified and modified by Notice 2014–46, 2014–36 I.R.B. 520; updated by Notice 2015–25,
2015–13 I.R.B. 814; clarified and modified by Notice 2016–31, 2016–23 I.R.B. 1025; updated, clarified, and modified by Notice 2017–04, 2017–4 I.R.B. 541; Notice 2018–59, 2018–28
I.R.B. 196; modified by Notice 2019–43, 2019–31 I.R.B. 487; modified by Notice 2020–41, 2020–25 I.R.B. 954; clarified and modified by Notice 2021–5, 2021–3 I.R.B. 479; clarified and
modified by Notice 2021–41, 2021–29 I.R.B. 17.
7
Notice 2020–12, 2020–11 I.R.B. 495.
8
Notice 2018–59; modified by Notice 2019–43; modified by Notice 2020–41; clarified and modified by Notice 2021–5; clarified and modified by Notice 2021–41.

August 19, 2024 416 Bulletin No. 2024–34
requirements that generally apply under
sections 30C, 45, 45L, 45Q, 45U, 45V,
45Y, 45Z, 48, 48C, 48E, and 179D. Addi-
tionally, as discussed in Section III.A. of
this Background, Notice 2022-61 estab-
lished the 60-day period described in
sections 30C(g)(1)(C)(i), 45(b)(6)(B)(ii),
45Q(h)(2), 45V(e)(2)(A)(i), 45Y(a)(2)
(B)(ii), 48(a)(9)(B)(ii), 48E(a)(2)(A)(ii)
(II) and (a)(2)(B)(ii)(II), and 179D(b)(3)
(B)(i) for purposes of the BOC Excep-
tion. Finally, Notice 2022-61 provided
guidance for determining the beginning of
construction under sections 30C, 45, 45Q,
45V, 45Y, 48, and 48E, and the beginning
of installation under section 179D.
On August 30, 2023, the Treasury
Department and the IRS published a notice
of proposed rulemaking and a notice of
public hearing (REG-100908-23) in the
Federal Register (88 FR 60018), cor-
rected in 88 FR 73807 (Oct. 27, 2023),
and 89 FR 25550 (April 11, 2024), pro-
viding guidance on the PWA requirements
under sections 30C, 45, 45L, 45Q, 45U,
45V, 45Y, 45Z, 48, 48C, 48E, and 179D
(Proposed Regulations). The provisions of
the Proposed Regulations are explained in
greater detail in the preamble to the Pro-
posed Regulations.
On November 22, 2023, the Treasury
Department and the IRS published a notice
of proposed rulemaking and a notice of
public hearing (REG- 132569-17) in the
Federal Register (88 FR 82188), provid-
ing guidance under section 48. Among
other matters, the proposed regulations
under section 48 (Section 48 Proposed
Regulations) withdrew and reproposed
the regulations in §1.48-13 regarding the
PWA requirements under section 48, the
One Megawatt Exception under section
48(a)(9)(B)(i), and the recapture rules
under section 48(a)(10)(C) related to the
Prevailing Wage Requirements. These
final regulations do not include final
regulations under section 48. Addition-
ally, because proposed §1.48E-3 would
have incorporated the rules of proposed
§1.48-13 by cross-reference, these final
regulations do not include final regula-
tions under section 48E. The Treasury
Department and the IRS intend to issue
final regulations with respect to the PWA
Requirements in proposed §1.48-13 and
proposed §1.48E-3 in future Treasury
decisions.
The Proposed Regulations provided
that taxpayers may rely on proposed
§1.48E-3 with respect to construction of
a qualified facility on or after January 29,
2023, and on or before the date proposed
§1.48E-3 publishes as a final regulation
in the Federal Register, provided, that
beginning after the date that is 60 days
after August 29, 2023, taxpayers follow
the proposed regulations in their entirety
and in a consistent manner. The Section
48 Proposed Regulations similarly pro-
vided that taxpayers may rely on proposed
§1.48-13 with respect to construction
of a property or project beginning on or
after January 29, 2023, and on or before
the date proposed §1.48-13 publishes
as a final regulation in the Federal Reg-
ister, provided, that beginning after the
date that is 60 days after August 29, 2023,
taxpayers follow proposed §1.48-13 in its
entirety and in a consistent manner. These
final regulations do not change the reli-
ance provided with respect to proposed
§1.48-13 and proposed §1.48E-3.
Comments received regarding the spe-
cific PWA requirements under sections
48 and 48E, the One Megawatt Excep-
tion under sections 48 and 48E, and the
recapture rules contained in section 48(a)
(10)(C), all whether in response to the
Proposed Regulations or the Section 48
Proposed Regulations, will be addressed
in the future Treasury decision adopting
those rules as final regulations. Other
comments on the PWA requirements
(including comments that referenced sec-
tion 48 or section 48E, but addressed the
PWA requirements more generally) were
considered in the drafting of these final
regulations and are discussed herein.
On June 3, 2024, the Treasury Depart-
ment and the IRS published a notice of
proposed rulemaking and a notice of
public hearing (REG-119283-23) in the
Federal Register (89 FR 47792), propos-
ing guidance under sections 45Y and 48E
(Section 45Y/48E Proposed Regulations).
In the Section 45Y/48E Proposed Regu-
lations, the Treasury Department and the
IRS requested comments on the proposed
definition of a qualified facility with a
maximum net output of less than one
megawatt (as measured in alternating cur-
rent) for purposes of the One Megawatt
Exception under section 45Y(a)(2)(B)(i).
All comments received pertaining to the
One Megawatt Exception under section
45Y(a)(2)(B)(i), whether in response to
the Proposed Regulations or the Section
45Y/48E Proposed Regulations, will be
addressed in future guidance under sec-
tion 45Y finalizing those rules. General
PWA comments that were received in
response to the Proposed Regulations and
that referenced section 45Y are discussed
throughout this Summary of Comments
and Explanation of Revisions because
they were considered in the drafting of
these final regulations.
Summary of Comments and
Explanation of Revisions
This Summary of Comments and
Explanation of Revisions summarizes the
Proposed Regulations, all the substan-
tive comments submitted in response to
the Proposed Regulations, and revisions
adopted by these final regulations. The
Treasury Department and the IRS received
342 written comments in response to the
Proposed Regulations. The comments are
available for public inspection at https://
www.regulations.gov or upon request.
After full consideration of the comments
received, these final regulations adopt
the Proposed Regulations with modifi-
cations in response to such comments as
described in this Summary of Comments
and Explanation of Revisions.
Most comments addressed the PWA
requirements in general, without identi-
fying a specific Code section. These com-
ments are primarily addressed in Sections
I. through VIII. of this Summary of Com-
ments and Explanation of Revisions, and
revisions that have been made in response
to these comments are also typically
described in general terms, or by reference
to section 45, which sets forth the principal
PWA requirements. Thus, the terms qual-
ified facility and facility as used in Sec-
tions I. through VIII. of this Summary of
Comments and Explanation of Revisions
generally includes qualified equipment,
qualified residence, qualified project, and
qualified property for purposes of sections
30C, 45, 45L, 45Q, 45U, 45V, 45Y, 45Z,
48C, and 179D, as applicable. References
to an increased credit amount in Sec-
tions I. through VIII. of this Summary of
Comments and Explanation of Revisions
include the increased deduction amount

Bulletin No. 2024–34 417 August 19, 2024
available under section 179D, as appli-
cable. Comments specifically addressing
the PWA requirements in sections 30C,
45L, 45Q, 45U, 45V, 45Y, 45Z, 48C, and
179D are described in Section IX. of this
Summary of Comments and Explanation
of Revisions.
Comments summarizing the statute or
the Proposed Regulations, recommending
statutory revisions, and addressing issues
that are outside the scope of this rulemak-
ing (such as revising other Federal regula-
tions and recommending changes to IRS
forms) are generally not addressed in this
Summary of Comments and Explanation
of Revisions or adopted in these final
regulations. Some commenters requested
additional time to submit comments. The
Proposed Regulations required all com-
ments to be received by October 30, 2023;
however, comments received by April 25,
2024, were considered in drafting these
final regulations. In addition to addressing
the comments received in response to the
Proposed Regulations, the final regula-
tions also include non-substantive gram-
matical and stylistic changes to the Pro-
posed Regulations.
I. Pre-Filing Activities
A. Applicability of the Davis-Bacon Act
in general
9
Under section 45(b)(7)(A), the
increased credit amount provided by sec-
tion 45(b)(6) is available with respect to a
qualified facility if, among other require-
ments, a taxpayer ensures that laborers
and mechanics are, “paid wages at rates
not less than the prevailing rates for con-
struction, alteration, or repair of a similar
character in the locality in which such
facility is located as most recently deter-
mined by the Secretary of Labor, in accor-
dance with” the DBA. As explained in the
preamble to the Proposed Regulations,
the phrase “in accordance with” means
“in agreement or harmony with; in con-
formity to; according to.”
10
In interpret-
ing the “in accordance with” language,
the preamble to the Proposed Regulations
explained that the Treasury Department
and the IRS proposed to incorporate those
requirements of the DBA that are relevant
for the purposes of section 45(b)(7)(A)
and the intent of the IRA, and that are nec-
essary for, and consistent with, sound tax
administration.
Under the DBA, the DOL determines
the wage rates that are “prevailing” for
each classification of covered laborers and
mechanics in the geographic area in which
work is to be performed and publishes
general wage determinations providing
that information to the public. Under the
DBA, Federal contracting agencies follow
specified procedures for incorporating
DBA requirements and wage determina-
tions into covered contracts. Pursuant to
the Copeland Act, contractors are required
to submit certified weekly payroll records
to the contracting agency. Under the
DBA regulations, the contracting agency
and the DOL WHD have responsibil-
ity to ensure compliance with prevailing
wage requirements by engaging in peri-
odic audits or investigations of contracts,
including examination of payroll data.
The Proposed Regulations would have
largely adopted DBA guidance relating
to applicable wage rates and wage deter-
minations and the meaning of pertinent
terms such as “laborer” and “mechanic”;
“construction, alteration, or repair”;
“wages”; and “employed.” The Proposed
Regulations would not have incorpo-
rated the DBA (or Copeland Act) guid-
ance regarding provisions required to be
included in contracts, those provisions
related to the reporting of certified weekly
payroll records by contractors to contract-
ing agencies, and the various enforcement
processes that are available to the DOL
and the contracting agencies to address
DBA noncompliance.
As explained in the preamble to the
Proposed Regulations, this approach was
intended to reflect the substantive differ-
ences between the DBA and the Code.
Under the DBA, a contractor is required
to pay prevailing wages as a condition of
a Federal contract award. Under section
45, although the requirement to ensure the
payment of wages at rates not less than
the prevailing rates is generally triggered
when construction of a facility begins, that
requirement becomes legally binding only
if a tax return claiming the increased credit
amount is filed. The Code does not require
taxpayers who do not seek an increased
credit amount under section 45(b)(6) to
ensure the payment of prevailing wages at
the beginning of construction, alteration,
or repair of a facility. Furthermore, under
the correction and penalty provisions in
section 45(b)(7)(B)(i)(I) and 45(b)(7)(B)
(i)(II), taxpayers may remedy prior fail-
ures to pay wages at rates not less than
the prevailing rates, even after a return is
filed, and still be eligible for the increased
credit amount. In addition, a taxpayer
that satisfies the BOC Exception or the
One Megawatt Exception, if applicable,
may generally claim the increased credit
amount regardless of whether laborers and
mechanics were paid prevailing wages.
Several commenters suggested that the
final regulations should incorporate addi-
tional requirements from the DBA, instead
of limiting the incorporation to those that
the Treasury Department and the IRS
determine are relevant for purposes of
claiming the increased credit amount and
that are necessary for, and consistent with,
sound tax administration. Some com-
menters asserted that not incorporating all
elements of the DBA framework was arbi-
trary and capricious and contrary to the
statute. Some commenters alleged that the
Proposed Regulations failed to adequately
address the increased chance of improperly
claimed credits by relying too heavily on
post-filing enforcement. One commenter
stated that post-filing enforcement by the
IRS does not guarantee workers’ rights,
including notice of entitlement to the pre-
vailing wage, a complaint procedure to
report noncompliance, protections against
retaliation, or a requirement that workers
be guaranteed any wage by an enforceable
contract. The commenters also stated that
the reliance on post-filing compliance was
9
All references to the DBA regulations throughout this Summary of Comments and Explanation of Revisions include updates to the DBA regulations published in a final rule on August 23,
2023 (88 FR 57526).
10
In accordance with, Oxford English Dictionary, https://www.oed.com/search/dictionary/?scope=Entries&q=in+accordance+with (last visited Aug. 8, 2023); see Accordance, Merri-
am-Webster’s Collegiate Dictionary (11th ed. 2006) (meaning agreement, conformity).

August 19, 2024 418 Bulletin No. 2024–34
inconsistent with the DBA and would lead
to fraud, noncompliance, and evasion of
the tax rules. At least one commenter sug-
gested that incorporating all of the DBA
requirements is necessary to more gen-
erally address issues of fraud in the con-
struction industry. One commenter opined
that although the IRA differed from tra-
ditional Davis-Bacon Related Acts that
expressly adopt the DOL’s existing imple-
mentation framework and confer primary
enforcement authority upon the DOL, this
was because the IRA was enacted through
reconciliation. The commenter stated that
this should not impact the implementation
of the prevailing wage provisions.
Although several commenters sup-
ported a more expansive incorporation of
the DBA, many other commenters stated
that the Proposed Regulations took the
correct approach regarding incorporation
of the DBA. One commenter suggested
that given the unique challenges of apply-
ing a system arising in Federal contracting
to the IRA’s tax credit regime, Congress
did not limit the Treasury Department and
the IRS to adopting the DBA requirements
and enforcement scheme word-for-word
and without modification. Many com-
menters acknowledged the need for the
Treasury Department and the IRS to take
a reasonable approach to interpret a Code
provision that references a Federal law
applicable to Federal contracts.
These final regulations do not alter the
general approach taken in the Proposed
Regulations of incorporating DBA guid-
ance for purposes of the PWA require-
ments only if it is relevant for the purposes
of section 45(b)(7)(A) and the intent of
the IRA, and necessary for, and consistent
with, sound tax administration. The Trea-
sury Department and the IRS recognize
the importance of ensuring compliance
with the statute such that workers benefit
from the payment of prevailing wages on
projects for which the increased amount
of credit is claimed and find that the gen-
eral approach in the Proposed Regulations
promotes that goal within the constraints
of the statute and in furtherance of sound
tax administration. Consistent with this
framework, the final regulations encour-
age taxpayers to adopt certain practices
for ensuring compliance in the interest of
fulfilling statutory intent and furthering
sound tax administration.
The Treasury Department and the IRS
disagree with the assertion that the Pro-
posed Regulations were arbitrary and
capricious. This Summary of Comments
and Explanation of Revisions reiterates
and expands upon the rationale for apply-
ing the DBA provisions that are relevant
for purposes of claiming the increased
tax credit and consistent with sound tax
administration. If Congress intended for
the same DBA requirements to apply
under the IRA, it would have so provided.
The Treasury Department and the IRS are
required to implement statutory language
as enacted, regardless of the procedure
under which the legislation was passed
(for example, reconciliation). As enacted,
the statute does not indicate that the regu-
lations setting forth the PWA requirements
must mirror the DBA in every instance.
As noted in the preamble to the Proposed
Regulations, “in accordance with” means
“in agreement or harmony with; in con-
formity to; according to.” This does not
require exact duplication or incorporation.
The differences in statutory language and
context reflect the very significant differ-
ences between the administration of the
wage provisions of Federal contracts and
the administration of the tax system, and
the statute provides flexibility for the IRS
to incorporate the requirements from the
DBA that are appropriate for tax adminis-
tration purposes.
The IRS’s authority to determine a tax-
payer’s compliance with the PWA require-
ments generally arises after the taxpayer
files a claim for the increased tax credit.
Because taxpayers may choose not to
claim the increased credit amount, the
IRS cannot determine a taxpayer’s com-
pliance or engage in enforcement activi-
ties before the taxpayer files a tax return
claiming the increased credit amount.
Imposing pre-filing requirements through
regulations would not be a reasonable
interpretation of the statutory language
and would not permit the IRS to enforce
the PWA requirements in advance of fil-
ing. Many of the DBA requirements (for
example, certified weekly payroll, public
notice of wage classifications and wage
rates, required contract provisions) are
either statutorily required under the DBA
(or a related act) or designed to apply to all
Federal construction contracts with cer-
tainty at the time of contract award (that
is, in advance of work being performed).
Those same pre-filing requirements are
not prescribed in the Code.
As acknowledged by many comment-
ers, the Treasury Department and the IRS
need to take a reasonable approach to
interpret a Code provision that references
a Federal law applicable to Federal con-
tracts (a system that applies with certainty
in the case of a Federal contracting agency
that solicits bids for a contract) in the con-
text of Federal taxes (a system designed to
function with a compliance and enforce-
ment framework that follows only after
the filing of tax returns).
Many commenters recognized that the
PWA requirements are not binding until
the tax return claiming the credit is filed,
yet they still requested that the IRS impose
several additional reporting, notice, and
other requirements in advance of filing
for the credit. As the requirement to pay
prevailing wages does not become bind-
ing until a taxpayer files a claim for the
increased amount of credit, and the IRS
has a well-established record of effective
post-filing enforcement, the final regu-
lations do not adopt these requests. The
Treasury Department and the IRS have
also determined that imposing additional
pre-filing requirements on taxpayers
could discourage taxpayers from seeking
the increased amount of credit available
under the IRA, resulting in fewer workers
receiving prevailing wages. The Treasury
Department and the IRS will not impose
pre-filing requirements that unnecessar-
ily raise compliance costs, especially for
small businesses, and provide no mean-
ingful benefit to the IRS in administering
the tax system.
In reviewing the public comments,
the Treasury Department and the IRS
have decided to adopt key aspects of
the Proposed Regulations and have also
determined that certain changes to the
Proposed Regulations would be appropri-
ate to support compliance with the PWA
requirements, and to encourage taxpayers
to adopt certain practices. The Treasury
Department and the IRS have made these
determinations after consultation with the
DOL WHD and OA. Those changes are
discussed throughout this Summary of
Comments and Explanation of Revisions.
Accordingly, as discussed in Section
VII.D.3. of this Summary of Comments

Bulletin No. 2024–34 419 August 19, 2024
and Explanation of Revisions, in cases in
which it is necessary for and consistent
with sound tax administration, these final
regulations expand on the factors demon-
strating intentional disregard to reflect the
value of these practices. These additional
factors incorporate the spirit and rationale
of commenters’ suggestions by address-
ing whether a taxpayer has (among other
actions): (i) conducted regular reviews of
the applicable prevailing wage rate that
must be paid to laborers and mechanics
and the appropriate classification of such
laborers and mechanics based on actual
job duties; (ii) investigated complaints
of retaliation or adverse action resulting
from reports of suspected failures to pay
prevailing wages and/or classify workers
in accordance with applicable wage deter-
minations, and taken appropriate actions
to remedy any retaliation or adverse
action and prevent it from reoccurring;
and (iii) provided laborers and mechan-
ics with paystubs (or access to individual
payroll records) reflecting the amount
being paid per pay period (including the
specific hourly rate and all deductions
from wages).
B. Specific pre-filing activities required
under the DBA
Some commenters requested that
the final regulations incorporate certain
pre-filing requirements in line with DBA
requirements, to prevent fraud and ensure
that workers are paid wages at rates not
less than the prevailing rates to which
they are entitled. Specifically, comment-
ers recommended that the final regulations
require: (i) the submission of certified
weekly or monthly payroll records or other
compliance reports and the government’s
regular review and verification of those
submitted records through job site visits
and interviews with workers, and (ii) that
taxpayers, contractors, and subcontractors
include DBA provisions in contracts and
post applicable wage rates on job sites in
prominent and accessible locations.
1. Certified Payroll Records, Other
Compliance Reporting, and Government
Review of this Reporting
Some commenters suggested that
requiring the submission of weekly or
monthly certified payroll records to the
IRS or the DOL would allow the IRS to
monitor compliance with the PWA require-
ments. Other commenters similarly sug-
gested that the final regulations require the
submission of sworn monthly compliance
reports to the IRS to allow for effective
monitoring of compliance with the statute
prior to filing. One commenter suggested
that the IRS should regularly review the
certified payroll records submitted by
contractors and subcontractors, conduct
job site visits, and interview workers to
ensure that the information reported in the
certified payroll records is accurate, and
provides taxpayers with an opportunity to
correct any failures in advance of filing.
This commenter acknowledged that the
IRS would not be able to withhold funds
or assess penalties in connection with any
pre-filing review, because the requirement
to pay prevailing wages is not binding
until the taxpayer files a tax return claim-
ing the increased credit amount. One com-
menter stated that a requirement to regu-
larly certify payroll will deter bad actors
and preclude falsified payroll records.
Several commenters supported the
approach in the Proposed Regulations to
not require the regular submission of pay-
roll records. One commenter stated that
the submission of weekly certified pay-
roll records would not assist the IRS with
efficient administration of the increased
credit amount provisions. Additionally,
several other commenters stated that the
requirement to submit certified weekly
payroll records would be burdensome on
taxpayers. Finally, one commenter agreed
that submission of certified weekly pay-
roll to the IRS would not be in furtherance
of sound tax administration, but the com-
menter requested that contractors and sub-
contractors be required to submit certified
weekly payroll to taxpayers. The com-
menter asserted that this could be a good
way for taxpayers to monitor the activities
of contractors and subcontractors.
Applying the principle outlined in Sec-
tion I.A. of this Summary of Comments
and Explanation of Revisions to incor-
porate only the DBA requirements that
are relevant for claiming the increased
credit amount and consistent with sound
tax administration, the comments request-
ing that the final regulations require the
submission of pre-filing certified payroll
records or other sworn reports, the pre-fil-
ing review of submitted payroll records,
job site visits by the IRS, and interviews
of workers regarding the accuracy of sub-
mitted information are not adopted. While
these comments are not adopted, in the
context of an examination, the IRS rou-
tinely engages in activities such as review
of payroll records, site visits, and taxpayer
interviews.
The comments requesting that the
final regulations require the submis-
sion of pre-filing payroll information
or sworn compliance reports appear to
assert that the IRS would be able to eas-
ily discern noncompliance on the face
of payroll records or other sworn reports
submitted in advance of a taxpayer fil-
ing any claim for a related tax credit. To
the contrary, the requirement to pay pre-
vailing wages becomes binding only if a
tax return claiming the increased credit
amount is filed. Payroll records or other
sworn reports relating to the payment of
wages before a return claiming the actual
increased credit amount is filed would pro-
vide minimal benefit to the IRS’s enforce-
ment actions, and would impose consid-
erable administrative work on taxpayers,
including those who may not eventu-
ally claim the increased credit amount.
Many commenters acknowledge that this
information would not be used until the
increased credit amount is claimed. The
Treasury Department and the IRS decline
to impose these additional administrative
tasks on taxpayers because the informa-
tion would provide minimal benefit to
the IRS in advance of a taxpayer filing a
return claiming the credit.
However, the Treasury Department
and the IRS agree that there may be
advantages in taxpayers obtaining regu-
lar payroll records from contractors and
subcontractors. Accordingly, these final
regulations add as a factor for intentional
disregard whether a taxpayer (or a third
party acting on behalf of the taxpayer) has
regularly reviewed payroll information of
its contractors and subcontractors or has
required its contractors or subcontractors
to regularly provide payroll information
to the taxpayer (or a third party acting
on behalf of the taxpayer). Furthermore,
as discussed in Section X.A. of this Sum-
mary of Comments and Explanation of
Revisions, these final regulations adopt

August 19, 2024 420 Bulletin No. 2024–34
and expand upon the recordkeeping
requirements in the Proposed Regulations
and clarify that the DOL Form WH-347
may be used to satisfy some of the record-
keeping requirements.
2. Mandatory Incorporation of DBA
Contract Requirements and Posting
of Applicable Prevailing Wage
Determinations
The Proposed Regulations would have
encouraged certain behaviors that are very
similar to those required of contractors
under the DBA as factors considered for
intentional disregard. These behaviors,
which the Treasury Department and the
IRS view as indicative of an intent to com-
ply with the Prevailing Wage Require-
ments, would have included incorporat-
ing provisions in any contracts entered
with contractors that require payment by
the contractors and any subcontractors of
wages at rates not less than the prevailing
rates and posting the applicable prevailing
wage rates in a prominent place for the
duration of the construction, alteration, or
repair of the facility or otherwise notify-
ing employees of the applicable prevailing
wage rates.
Some commenters suggested that tax-
payers should be required to include cer-
tain contract provisions required by sec-
tion 3142(c) of the DBA in their contracts
with contractors and subcontractors. Some
commenters recommended the final regu-
lations mandate specific contract terms,
including the taxpayer’s intent to claim the
credit, the expected wage classifications
of laborers and mechanics who will work
on the project, estimates of apprentice-
ship hours, and flow-down responsibility
clauses requiring compliance with the
PWA requirements by all contractors and
subcontractors. Additionally, commenters
suggested that all solicitations, contracts,
and subcontracts include clauses commit-
ting to the proper hiring and involvement
of qualified apprentices under the Appren-
ticeship Requirements.
Commenters also recommended that
the final regulations adopt the requirement
in section 3142(c)(2) of the DBA that
prevailing wage rates must be posted by
employers on the job site in a prominent
and accessible location where they can
be easily seen by workers. The Proposed
Regulations would have included as a fac-
tor to be considered in the determination
of whether a failure to satisfy the Prevail-
ing Wage Requirements was due to inten-
tional disregard, whether the taxpayer
posted in a prominent place at the facility
or otherwise provided written notice to
laborers and mechanics during the con-
struction, alteration, or repair of the facil-
ity, of the applicable wage rate(s) as deter-
mined by the DOL for all classifications of
work to be performed for the construction,
alteration, or repair of the facility, and that
in order to be eligible to claim certain tax
benefits, employers must ensure that labor-
ers and mechanics are paid wages at rates
not less than such wage rates. Although
commenters were supportive of this fac-
tor, some commenters were critical of the
fact that the information proposed for the
notice leaves open the question of whether
the worker is actually entitled to prevail-
ing wages because the worker may not
know whether an increased credit amount
is being claimed with respect to the work
they are performing. One commenter fur-
ther requested that the poster include lan-
guage regarding the right to be properly
classified as an employee, the right to be
free from retaliation related to immigra-
tion status, and information regarding
how to contact the IRS. One commenter
suggested requiring each contractor and
subcontractor employing workers on proj-
ects for which an increased credit amount
could be claimed to provide each worker
with an individualized written notice iden-
tifying their respective classification and
the prevailing wage rate to which they are
entitled. The commenter suggested requir-
ing notice to be made no later than when
construction, alteration, or repair begins,
and delivering the suggested notice along
with workers’ paychecks.
Although both contract language and
the posting of the applicable prevailing
wage rates is required by the DBA, no
similar provision exists in section 45(b)
(7) of the Code that would require tax-
payers to include specific terms in a con-
tract or post prevailing wage rates during
construction. Applying the principle out-
lined in Section I.A. of this Summary of
Comments and Explanation of Revisions
to incorporate only the DBA requirements
that are relevant for claiming the increased
credit amount and consistent with sound
tax administration, the Treasury Depart-
ment and the IRS have decided not to
require specific DBA or other PWA-re-
lated provisions in private commercial
contracts. These agreements are executed
well before a tax return claiming the credit
is filed. Similarly, the final regulations do
not require the posting of applicable wage
rates, because a taxpayer may decide to
claim the increased credit amount after
construction has started. Requests regard-
ing the posting of information related to
general rights of workers under State labor
laws or other Federal laws are outside the
scope of these final regulations. For these
reasons, the comments requesting that the
final regulations require the incorporation
of DBA-contract provisions and the post-
ing of applicable prevailing wage rates are
not adopted.
However, there is likely a benefit to
taxpayers seeking to comply with the
PWA requirements if the requirement
to pay prevailing wages and hire qual-
ified apprentices is incorporated in the
terms of any contract with respect to the
construction, alteration, or repair of a
facility, including lower-tier agreements
between contractors and subcontractors,
and if the laborers and mechanics who are
employed in the construction of a facility
are informed of the applicable prevail-
ing wage rates that would be required if
the taxpayer claims the increased credit
amount. The Proposed Regulations would
have encouraged this behavior from tax-
payers who know they are going to claim
the increased credit amount, and the final
regulations incorporate and expand upon
the list of factors that may be considered
by the IRS for purposes of determining if
a failure to satisfy the PWA requirements
was due to intentional disregard.
C. Including other conditions as a
prerequisite for claiming the increased
amount of credit
Some commenters suggested that the
final regulations should require taxpay-
ers to provide advance notice to the IRS,
the DOL, potential employees, and the
general public of their intent to claim
the increased credit amount by satisfying
the PWA requirements to provide clarity
to workers. Specifically, one commenter
suggested requiring taxpayers to file a

Bulletin No. 2024–34 421 August 19, 2024
statement of intent to claim the increased
credit amount with the DOL WHD, which
would then be available for public review
to enable interested parties to monitor
projects that may be subject to the PWA
requirements. Another commenter rec-
ommended requiring taxpayers to pro-
vide notice to workers, before the start of
any project for which an increased credit
amount could be claimed, of their inten-
tion to claim the increased credit amount
by satisfying the PWA requirements.
Consistent with the principles outlined
in Section I.A. of this Summary of Com-
ments and Explanation of Revisions, the
final regulations do not adopt these sug-
gestions. Requiring taxpayers to declare
an intent to claim an increased credit
amount would provide no meaningful
benefit for the IRS’s administration of the
PWA requirements, and would impose
additional pre-filing requirements on tax-
payers. Section 45(b)(6) does not require
taxpayers to declare an intent to claim
the increased credit amount. However,
as noted previously, posting or other-
wise providing general information about
applicable wage rates is a good practice
for taxpayers to incorporate if the tax-
payer is planning to claim the increased
credit amount. The final regulations retain
these practices as a factor that may be con-
sidered by the IRS for purposes of deter-
mining if a failure to satisfy the Prevailing
Wage Requirements was due to inten-
tional disregard.
Commenters also asked that the final
regulations require a pre-filing registra-
tion or reporting system, similar to that
provided for under sections 6417 and
6418, applicable to taxpayers intending to
claim the increased credit amount for sat-
isfying the PWA requirements. Comment-
ers alleged that since many of the credits
covered by sections 6417 and 6418 also
contain PWA requirements, the language
in sections 6417 and 6418 requiring infor-
mation or registration can be applied to
require pre-filing registration of the intent
to claim the increased credit amount.
Section 6418(g)(1) provides that as a
“condition of, and prior to, any transfer
of any portion of an eligible credit” under
section 6418, the Secretary of the Treasury
or her delegate (Secretary) “may require
such information (including, in such form
or manner as is determined appropriate by
the Secretary, such information returns)
or registration as the Secretary deems
necessary for purposes of preventing
duplication, fraud, improper payments,
or excessive payments.” Section 6417(d)
(5) provides the Secretary with similar
discretion to implement a registration
requirement. The authority to implement
a pre-filing registration requirement pro-
vided in sections 6417 and 6418 is statu-
torily created and intended to address dif-
ferent underlying circumstances. Sections
6417(d)(5) and 6418(g) address the use of
a registration system as a condition of and
prior to certain events, specifically, prior
to the amounts being treated as payments
made by applicable entities or prior to
transferring a credit.
There is no analogous statutory lan-
guage in section 45 or elsewhere in the
Code related to the PWA requirements.
Moreover, the registration requirements
for sections 6417 and 6418 serve the spe-
cific purposes of preventing duplication,
fraud, improper payments, or excessive
payments. Those concerns are largely
unique to the elective pay and credit
transfer opportunities created by sections
6417 and 6418. In the context of sections
6417 and 6418, the IRS implemented the
registration portal to prevent fraud and
duplicate or improper payments, by pro-
viding the IRS with basic information that
will facilitate processing and improve the
administration of the credits. A pre-filing
registration or reporting mechanism in the
PWA context would not provide the IRS
with actionable information for purposes
of enforcing the PWA requirements. For
these reasons, the comments requesting
that the IRS establish a PWA registration
system similar to that used for sections
6417 and 6418 are not adopted.
D. Other comments regarding pre-
filing activities and IRS enforcement
procedures
1. Organizational Changes to the IRS and
General Tax Administration
Several commenters suggested that the
final regulations implement organizational
changes to the IRS. For example, one com
-
menter recommended that the regulations
create a dedicated office of labor standards
enforcement to enforce the PWA provi-
sions. An additional commenter requested
that the Treasury Department establish a
dedicated compliance and enforcement
office. The commenter also encouraged
the Treasury Department to review State
requirements for disclosures, proof of
payment, and affirmation, and adopt mod-
els that best effectuate compliance. One
commenter suggested that the Treasury
Department and the IRS create an inter-
agency office with the DOL to facilitate
the receipt of contemporaneous reporting
from taxpayers.
Another commenter suggested the
creation of a digital platform to be used
by taxpayers to submit PWA documen-
tation that would be accessible by busi-
nesses, the DOL, and local apprenticeship
programs. Several commenters recom-
mended that the Treasury Department
and the IRS partner with the DOL and
applicable State agencies in the enforce-
ment of PWA requirements. Additional
commenters requested that the Treasury
Department and the IRS establish formal
partnerships with fair contracting organi-
zations, labor unions, and other workers’
rights organizations in order to expand the
capacity to monitor jobsites. A commenter
stated that such third-party partnerships –
known as Joint Labor Compliance Mon-
itoring Programs – have been success-
fully implemented across the country as a
method of improving working conditions
for workers and ensuring that projects are
completed responsibly and on time.
A few commenters suggested the final
regulations prescribe specific actions
regarding IRS enforcement, compli-
ance, and general tax administration. For
example, one commenter recommended
that any IRS audit of increased credit
amounts verify and cross-reference State
labor materials to ensure prevailing wage
and apprenticeship standards are met. A
commenter stated that States such as Cal-
ifornia, Washington, and Wyoming have
implemented State level apprenticeship
utilization provisions and that the States
have developed user friendly systems for
contractors to report apprentice and jour-
neyworker hours. At least one commenter
also requested that the Treasury Depart-
ment ensure that audit processes and other
enforcement mechanisms are done in a
transparent, accessible manner and with
close engagement with other agencies.

August 19, 2024 422 Bulletin No. 2024–34
Several commenters provided recom-
mendations regarding information that
should be reported on IRS forms claim-
ing the increased credit amount. A com-
menter suggested that the IRS implement
a cross-withholding mechanism, mod-
eled after that used by the DOL under the
DBA, whereby a taxpayer engaged in two
or more separate projects who is found
to violate the PWA requirements on one
project is then denied the increased credit
amount with respect to any additional
projects.
Comments regarding the IRS’s organi-
zational structure, coordination with other
agencies and States, how the IRS conducts
audits, and changes to IRS forms are out-
side the scope of these final regulations.
Therefore, the changes suggested by the
comments are not adopted. In developing
the Proposed Regulations and these final
regulations, the Treasury Department and
the IRS consulted extensively with the
DOL and will continue to consult with the
DOL as appropriate to assist in the admin-
istration of the PWA requirements.
2. Requests for Private Letter Rulings
One commenter recommended that the
IRS permit taxpayers to submit requests
for Private Letter Rulings (PLRs) regard-
ing compliance with the PWA require-
ments. Whenever appropriate in the inter-
est of sound tax administration, it is the
policy of the IRS to answer inquiries of
individuals and organizations regarding
their status for tax purposes and the tax
effects of their acts or transactions, prior
to the filing of returns or reports that are
required by the revenue laws. Revenue
Procedure 2024-1, 2024-01 I.R.B. 1, is
updated each year and contains the gen-
eral procedures for requests for PLRs.
There are, however, certain areas in which
the IRS will not issue rulings or determi-
nation letters, including areas in which
the IRS is temporarily not issuing rulings
or determination letters because those
matters are under study. These no-rule
issues are set forth in Revenue Procedure
2024-3, 2024-01 I.R.B. 143, which is also
updated annually. Issues pertaining to the
application of the IRA currently are iden-
tified in Revenue Procedure 2024-3 as
matters under study by the IRS and thus
are not currently subject to PLRs, but this
position is subject to change. Updates to
the no-rule issues are outside the scope of
these final regulations.
3. Complaint Procedures for
Underpayment of Applicable Prevailing
Wage Rates and the Failure to Hire
Qualified Apprentices
The Proposed Regulations would have
included whether the taxpayer had in
place procedures whereby laborers and
mechanics could report suspected failures
to pay prevailing wages and/or suspected
failures to classify workers correctly in
accordance with the applicable wage
determination to appropriate personnel
departments or managers without retal-
iation or other adverse action as a factor
to be considered in the determination of
intentional disregard.
Many commenters requested that the
final regulations prescribe the process
through which a worker can complain
about being underpaid. Commenters sug-
gested that the process for complaints
should be available to all interested par-
ties, and that any person should be able
to submit complaints to the government,
preferably through the IRS website, with-
out fear of retaliation by their employers
or others. A commenter urged the IRS to
develop and inform stakeholders and the
public on complaint and enforcement
procedures and provide contact informa-
tion for the IRS office that will accept
and investigate complaints. Another com-
menter recommended that the Treasury
Department and the IRS create a com-
plaint mechanism with both a telephone
hotline and an online portal, and available
in English and Spanish, to file complaints.
Commenters acknowledged that unlike
under the DBA, if the Treasury Depart-
ment and the IRS are informed of viola-
tions or irregularities before the increased
credit is claimed, the agencies would not
be able to immediately assess fines or
mandate that taxpayers issue corrective
payments. A commenter acknowledged
that there are limitations on the IRS’s
remedial authority, but suggested that the
Treasury Department and the IRS have a
compelling interest in instituting a com-
plaint mechanism to obtain vital infor-
mation that they can use in determining
which taxpayers to audit. One commenter
suggested permitting registered appren-
ticeship programs to petition the Treasury
Department if they believe that a taxpayer
is falsely claiming that the program is
unable to meet the taxpayer’s request for
qualified apprentices.
While the IRS takes information it
receives regarding alleged tax violations
very seriously, the comments requesting
that the final regulations require a spe-
cific process regarding complaints are
not adopted. Similar to the comments
addressed in Section I.D.1. of this Sum-
mary of Comments and Explanation of
Revisions regarding overall IRS admin-
istration, the comments concerning how
the IRS should address reports of alleged
tax violations are outside the scope of
these final regulations. Additionally, the
commenters overstate the usefulness of
such information in the pre-filing context
with respect to the PWA requirements. A
laborer or mechanic might be paid wages
at rates less than the applicable prevail-
ing wage rates would require for such
work, but that does not mean the laborer
or mechanic was underpaid for purposes
of section 45(b)(7)(A), unless and until
a tax return claiming the increased credit
amount is filed. The PWA requirements
apply to the taxpayer, and the taxpayer
must ensure that laborers and mechan-
ics are paid wages at rates not less than
the applicable prevailing wage rates for
construction, alteration, or repair of a
qualified facility. If a taxpayer, contrac-
tor, or subcontractor underpays a laborer
or mechanic and does not subsequently
correct the underpayment with the appro-
priate backpay and interest and pay the
penalty amount, then the increased credit
amount will be disallowed by the IRS.
However, the Treasury Department and
the IRS acknowledge the value in encour-
aging internal complaint and anti-retali-
ation procedures on facilities for which
taxpayers acknowledge they anticipate
claiming an increased credit amount by
satisfying the PWA requirements. As dis-
cussed in Section VII.D.3. of this Sum-
mary of Comments and Explanation of
Revisions, the final regulations include
the existence of these procedures as a
factor in determining whether a failure to
satisfy the PWA requirements was due to
intentional disregard. Further, these final
regulations add as factors in determining

Bulletin No. 2024–34 423 August 19, 2024
intentional disregard whether the taxpayer
posted information on how to contact
the appropriate office to report suspected
failures and whether in response to any
complaint, the taxpayer investigated the
complaint and took appropriate action to
remedy the situation.
Additional commenters proposed that
the Treasury Department and the IRS clar-
ify that workers who report PWA viola-
tions are protected by the anti-retaliation
framework enacted under the Taxpayer
First Act (26 U.S.C. 7623 et seq.) (TFA).
Commenters raised that section 7623(d)
(1) states that no employer, contractor, or
subcontractor may “discharge, demote,
suspend, threaten, harass, or in any other
manner discriminate” against an employee
who has provided information or assisted
in “an investigation regarding underpay-
ment of tax or any conduct which the
employee reasonably believes constitutes
a violation of the Internal Revenue laws
or any provision of Federal law relating
to tax fraud.” Commenters stated that the
TFA’s anti-retaliation provisions under
section 7623(d)(1) cover reporting to the
Treasury Department, IRS, and related
agencies, as well as internal reporting by
a worker to their supervisors. Comment-
ers emphasized that section 7623(d)(2)(A)
also provides the right to file a complaint
with the Secretary of Labor with respect
to any reprisals and provides for a private
right of action in district court in the event
that the Secretary of Labor has not issued
a final decision within 180 days of the fil-
ing of the complaint.
The application of section 7623, includ-
ing the anti-retaliation provision enacted
under the TFA, is outside the scope of these
final regulations. However, whether labor-
ers and mechanics were provided with a
written notice of the rights conferred by
the TFA is included as a factor the IRS
will consider in determining if a failure to
comply with the PWA requirements was
due to intentional disregard. Additionally,
IRS Form 3949-A, Information Referral,
may be submitted by anyone with infor-
mation about an alleged tax violation. The
ability of any individual or organization to
notify the IRS of specific and credible sus-
pected tax violations serves as a powerful
deterrent that supports voluntary com-
pliance and has the potential to provide
the IRS with information to identify and
address noncompliance.
Commenters acknowledge that at any
point before the tax return is filed, it is
within the taxpayer’s discretion to refrain
from claiming the increased credit amount
and avoid the responsibility to make any
related payments. Even so, commenters
stated that the IRS is not limited in impos-
ing conditions that the taxpayer must meet
at the time of the construction, alteration,
or repair to later claim the increased credit
amount. The Treasury Department and
the IRS agree that for those taxpayers
that claim the increased credit amount on
a return, the obligation to pay prevailing
wages attaches as of the time that the work
was performed. The final regulations pre-
scribe correction procedures that apply
on a retroactive basis, including interest
accruing on any correction amounts from
the date of the failure, to account for past
failures that occurred at the time the con-
struction, alteration, or repair work was
performed.
II. PWA Transition Rule
Under the BOC Exception in sections
30C, 45, 45Q, 45V, 45Y, and 179D, tax-
payers may claim the amount of the
increased credit or deduction without sat-
isfying the PWA requirements if construc-
tion (or installation with respect to section
179D) “begins prior to the date that is 60
days after the Secretary publishes guid-
ance with respect to the [PWA require-
ments].” The Treasury Department and the
IRS published Notice 2022-61 on Novem-
ber 30, 2022, providing initial guidance
with respect to the PWA requirements
and starting the 60-day period described
in those sections. Unless the One Mega-
watt Exception applies, taxpayers who do
not meet the BOC Exception under these
Code sections would need to satisfy the
applicable PWA requirements to claim the
increased amount of credit or deduction.
Under sections 45L, 45U, 45Z, and 48C,
there is no BOC Exception or One Mega-
watt Exception, so taxpayers need to sat-
isfy the applicable PWA requirements to
claim the increased credit amount regard-
less of when construction began or how
small the facility (or respective underlying
creditable activity) may be.
As enacted or amended by the IRA, the
sections containing PWA provisions have
various statutory effective dates. The PWA
provisions in section 30C apply to prop-
erty placed in service after December 31,
2022.
11
The PWA provisions in section 45
apply to facilities placed in service after
December 31, 2021.
12
The PWA provi-
sions in section 45L apply to dwelling
units acquired after December 31, 2022.
13

The PWA provisions in section 45Q apply
to facilities or equipment placed in ser-
vice after December 31, 2022.
14
Section
45Y applies to facilities placed in service
after December 31, 2024.
15
In contrast,
the effective dates of the PWA provisions
in sections 45U, 45V, and 45Z are stated
in relation to when the respective elec-
tricity, hydrogen, or transportation fuel
is produced. Section 45U applies to elec-
tricity produced and sold after December
31, 2023, in taxable years beginning after
such date.
16
Section 45V applies to hydro-
gen produced after December 31, 2022.
17

And Section 45Z applies to transportation
fuel produced after December 31, 2024,
18

but includes a special rule (described in
Section IX.G. of this Summary of Com-
ments and Explanation of Revisions) with
respect to the Prevailing Wage Require-
ments if a facility is placed in service
before January 1, 2025. The new allo-
cation amounts available under section
48C(e) are effective on January 1, 2023.
19

The amendments to section 179D apply to
11
IRA §13404(f).
12
IRA §13101(k).
13
IRA §13304(f).
14
IRA §13104(i)(1). The amendments made to the definition of a qualified section 45Q facility apply to facilities or equipment the construction of which begins after the date of enactment
of the IRA (that is, after August 16, 2022).
15
IRA §13701(c).
16
IRA §13105(c).
17
IRA §13204(a)(5).
18
IRA §13704(c).
19
IRA §13501(e).

August 19, 2024 424 Bulletin No. 2024–34
taxable years beginning after December
31, 2022.
20
Several commenters requested that the
final regulations clarify whether the PWA
requirements apply to work performed
before January 29, 2023, both with respect
to Code sections with a BOC Exception
and those without a BOC Exception.
Commenters stated that it would be unfair
to require taxpayers to comply with the
PWA requirements with respect to these
activities. Several commenters stated
that the BOC Exception was intended
to ensure that the PWA requirements are
not applied retroactively and asked for a
uniform rule applicable to all increased
credit amount provisions that the PWA
requirements do not apply before the BOC
Exception trigger date. Other commenters
asked that activities that occurred before
the IRS issued Notice 2022-61 (Novem-
ber 30, 2022) be excluded from the PWA
requirements. Some commenters stated
that significant preliminary activities may
have occurred prior to the enactment of
the IRA, and they asked that the final reg-
ulations clarify that the PWA requirements
do not apply to these activities, regardless
of whether a BOC Exception may apply.
One commenter suggested that the PWA
requirements apply only after these final
regulations are issued.
The Treasury Department and the IRS
have determined that given the complex-
ity of the PWA requirements, the uncer-
tainty regarding the potential retroactive
effects of the PWA requirements, and the
benefits to tax administration gained with
consistency across the various Code sec-
tions containing PWA requirements, that a
transition rule is appropriate.
The final regulations provide that any
work performed before January 29, 2023
(the date that is 60 days after the publica-
tion of Notice 2022-61) is not subject to the
PWA requirements, regardless of whether
there is an applicable BOC Exception.
Thus, with respect to sections 45L, 45Z,
and 48C, although there is no applicable
BOC Exception and regardless of when
construction began, taxpayers must only
comply with the PWA requirements for
the construction, alteration, or repair work
(as applicable) occurring on or after Janu-
ary 29, 2023. Section 45U is not subject to
the transition rule because, as described in
Section IX.D. of this Summary of Com-
ments and Explanation of Revisions, the
Prevailing Wage Requirements of section
45U only apply to alterations or repairs
of a qualified nuclear power facility that
occur after December 31, 2023.
The transition rule also applies for tax-
payers that may initially satisfy the BOC
Exception, but later fail to meet the BOC
Exception (for example, failing to meet
the Continuity Requirement). These tax-
payers must satisfy the PWA requirements
for construction, alteration, or repair (as
applicable) that occurs on or after January
29, 2023, but do not need to meet the PWA
requirements for work that occurred prior
to that date.
III. Beginning of Construction
A. Beginning of Construction under the
IRS Notices
The IRS Notices describe two methods
of establishing that construction of a facil-
ity has begun: (i) starting physical work of
a significant nature (Physical Work Test),
and (ii) paying or incurring five percent or
more of the total cost of the facility (Five
Percent Safe Harbor).
Physical work of a significant nature
can include both on-site and offsite work.
Notice 2013-29 describes that in the case
of a wind turbine, on-site physical work
of a significant nature begins with the
beginning of the excavation for the foun-
dation, the setting of anchor bolts into the
ground, or the pouring of the concrete
pads of the foundation. Physical work of
a significant nature does not include pre-
liminary activities such as planning or
designing, securing financing, exploring,
researching, obtaining permits, licensing,
conducting surveys, environmental and
engineering studies, clearing a site, test
drilling of a geothermal deposit, test drill-
ing to determine soil condition, or exca-
vation to change the contour of the land.
Notice 2013-29 explains that removal of
existing turbines and towers is considered
preliminary work and not physical work
of a significant nature.
Under the Five Percent Safe Harbor, if
a taxpayer has paid or incurred five per-
cent or more of the total cost of the facility
and thereafter the taxpayer makes contin-
uous effort to advance towards comple-
tion of the facility, then the construction
of the facility will be considered to have
begun. All costs properly included in the
depreciable basis of the facility are taken
into account but the cost of land or any
property not integral to the facility is not
included. Taxpayers can generally choose
to structure their business affairs to meet
either the Physical Work Test or the Five
Percent Safe Harbor. However, once a tax-
payer meets either method, beginning of
construction is established and a taxpayer
may not alternate between methods.
B. Beginning of construction and the
BOC Exception under Notice 2022-61
and the Proposed Regulations
Absent an exception, the PWA require-
ments apply with respect to the construc-
tion, alteration, or repair of a qualified
facility. For purposes of the Prevailing
Wage Requirements, section 45(b)(7)(A)
provides that the taxpayer must ensure the
payment of prevailing wages to laborers
and mechanics employed in: (i) the “con-
struction” of the qualified facility, and (ii)
for “the alteration or repair” of the qual-
ified facility during the 10-year period
after the facility is placed in service. For
purposes of the Apprenticeship Require-
ments, section 45(b)(8) provides that the
taxpayer must satisfy the Labor Hours
Requirement “with respect to the con-
struction of any qualified facility.”
For purposes of determining when con-
struction or installation begins under the
BOC Exception, Notice 2022-61 incor-
porates by reference the IRS Notices.
While Notice 2022-61 served to define the
beginning of construction under the BOC
Exception, Notice 2022-61 also states
generally that it provides “guidance for
determining the beginning of construc-
tion” under sections 30C, 45, 45Q, 45V,
45Y, 48, and 48E, and the beginning of
installation under section 179D solely for
purposes of section 179D(b)(3)(B)(i). The
preamble to the Proposed Regulations
20
IRA§13303(d).

Bulletin No. 2024–34 425 August 19, 2024
explained that until further guidance is
issued on determining when construction
begins under the applicable Code sec-
tions, taxpayers may continue to rely on
the guidance provided in Notice 2022–61
and principles similar to those under the
IRS Notices for purposes of determining
when construction begins.
Section 3 of Notice 2022-61 contains
guidance with respect to the Prevailing
Wage Requirements. Section 3.03(4) of
Notice 2022-61 provides that “‘construc-
tion, alteration, or repair’ means ‘con-
struction, prosecution, completion, or
repair’ as defined under 29 CFR 5.2(j).”
In proposing rules under section 45(b)
(7)(A), the Treasury Department and the
IRS sought to incorporate those rules of
the DBA regime relevant to the intent
of the PWA requirements and useful for
tax administration. Thus, consistent with
Notice 2022-61, proposed §1.45-7(d)(2)
(i) would have provided that the “term
construction, alteration, or repair gen-
erally means construction, prosecution,
completion, or repair as defined in 29 CFR
5.2” of the DBA regulations.
In general, the DBA applies to con-
tracts for construction, alteration or repair
of public buildings and public works and
requires payment of prevailing wages
with respect to all mechanics and labor-
ers employed directly on the site of the
work.
21
Under 29 CFR 5.2, construction,
alteration, or repair is defined expansively
to include all types of work done on a par-
ticular building or work at the site of the
work, as defined in 29 CFR 5.2, by labor-
ers and mechanics employed by a contrac-
tor or subcontractor. This work includes,
but is not limited to, altering, remodeling,
installing of items fabricated offsite, paint-
ing and decorating, manufacturing, or fur-
nishing of materials, articles, and supplies
or equipment on the site of the building or
work, and certain demolition or removal
activities.
Notice 2022-61 and proposed §1.45-
7(d)(2)(i) would have defined construc-
tion, alteration, or repair by reference to
the DBA. This means that the activity
triggering the PWA requirements for a
facility subject to the PWA requirements
is determined by reference to activities
that constitute construction under the
DBA. A taxpayer must begin to satisfy
the PWA requirements once construc-
tion, alteration, or repair activities occur
if those activities are described in 29 CFR
5.2. Under this definition, construction,
alteration, or repair would mean all types
of work performed at the location of the
qualified facility.
C. Comments on determining the
beginning of construction for PWA
purposes
Several commenters requested clari-
fication concerning when the obligation
to comply with the PWA requirements
arises in the lifespan of a construction
project apart from satisfying the BOC
Exception, including what methods may
be relied upon (the Physical Work Test or
Five Percent Safe Harbor) and the Conti-
nuity Requirement. Another commenter
suggested that the final regulations incor-
porate the tests from the IRS Notices into
the final regulations. Commenters indi-
cated that there is confusion regarding the
precise scope of the PWA requirements
because the word “construction” has dif-
ferent meanings under the DBA and the
IRS Notices. One commenter stated that
the preamble’s use of both “beginning of
construction” and “start of construction”
was confusing.
Several commenters requested clari-
fication on when construction begins for
purposes of the PWA requirements, noting
that initial activities that constitute con-
struction under 29 CFR 5.2 and would be
subject to prevailing wage requirements
under the DBA may not be the same
activities that constitute the beginning
of construction under the IRS Notices. A
commenter also requested that the final
regulations provide an exception from the
PWA requirements for work subject to
an agreement entered into prior to Janu-
ary 29, 2023, or give taxpayers who are a
party to such agreements one year from the
date the final regulations are published to
comply with the PWA requirements. Fur-
ther, commenters requested that the final
regulations clarify that the beginning of
construction is determined under existing
tax principles and that preliminary activ-
ities, such as demolition or land clearing
included under the DBA as work, do not
count as the beginning of construction for
PWA purposes. A commenter requested
that the final regulations confirm that the
end of construction corresponds to when
an asset is placed in service and that activ-
ities afterward are not subject to the PWA
requirements unless they are a covered
alteration or repair.
A commenter contended that the BOC
Exception is anti-competitive and places
an undue burden on new projects, as
compared to projects that meet the BOC
Exception, because projects meeting the
BOC Exception will receive all the ben-
efits of meeting Prevailing Wage Require-
ments without having to incur any of the
associated costs. The commenter empha-
sized the importance of promoting a level
playing field for all taxpayers interested
in qualifying for increased credit amounts
across clean energy industries.
D. Beginning of construction for
purposes of the BOC Exception and the
PWA requirements in general
The Treasury Department and the IRS
understand commenters’ concerns and the
potential for confusion in determining the
beginning of construction for purposes of
the BOC Exception and the PWA require-
ments. While the Physical Work Test is
very similar to the definition of construc-
tion under the DBA, certain preliminary
activities are treated differently. Some
activities constituting construction under
the DBA definition would not constitute
construction activities under the Physical
Work Test. For instance, under the Physi-
cal Work Test, the demolition and removal
of an existing structure would be consid-
ered a preliminary activity, not the “begin-
ning of construction.” However, under the
DBA definition, the same activity would
constitute construction. The Five Percent
Safe Harbor, which has no equivalent
under the DBA, looks solely at incurred
costs in determining whether construc-
tion has begun. Under all three tests, once
construction begins a taxpayer must sat-
isfy the PWA requirements with respect
21
40 U.S.C. 3142(a) and (c).

August 19, 2024 426 Bulletin No. 2024–34
to all construction, alteration, or repair as
defined in proposed §1.45-7(d)(2) by ref-
erence to 29 CFR 5.2.
The Treasury Department and the IRS
have determined that using the DBA defi-
nition of construction to define the activ-
ities that mark the start of the obligation
to comply with the PWA requirements for
a qualified facility subject to the require-
ments provides a uniform rule across all
the relevant Code sections. This is also
consistent with the general approach in
the Proposed Regulations and Section
I.A. of this Summary of Comments and
Explanation of Revisions of adopting
DBA concepts when they are relevant to
sound tax administration. Using the DBA
definition of construction as the triggering
activity provides a clear and uniform rule
for taxpayers to determine when the obli-
gation to comply with the PWA require-
ments begins. Thus, comments proposing
use of the IRS Notices to determine the
beginning of construction for purposes of
the PWA requirements are not adopted.
Providing a uniform rule that is gener-
ally applicable across all of the PWA
provisions provides the necessary clarity
sought by commenters. The final regula-
tions provide that the activities that mark
the start of the obligation to comply with
the PWA requirements is any activity that
constitutes construction (as defined in
§1.45-7(d)(3)) of a qualified facility.
Unless an exception applies, taxpay-
ers are required to comply with the PWA
requirements once a laborer or mechanic
performs any work that is considered con-
struction, alteration, or repair of the qual-
ified facility (including work on the qual-
ified facility that occurs at a secondary
site). Thereafter, all work with respect to
the construction (or alteration or repair),
as defined in §1.45-7(d)(3) (by cross-ref-
erence to 29 CFR 5.2), of the qualified
facility is subject to the applicable PWA
requirements. The beginning of construc-
tion, for purposes of satisfying the BOC
Exception, will continue to be determined
under the IRS Notices.
In light of the differences between the
tests, and because Notice 2022-61 as well
as the Proposed Regulations indicated that
taxpayers could rely on the IRS Notices
for determining when construction begins,
the final regulations provide transition
relief for taxpayers who applied the defi-
nitions in the IRS Notices for purposes of
determining those activities that were con-
sidered construction, alteration, or repair
of the facility subject to the PWA require-
ments in the initial stages of construction.
The final regulations waive penalties for
taxpayers who applied the IRS Notices
for determining when the obligation to
pay prevailing wages began, provided the
taxpayer makes the appropriate correction
payments to the impacted workers within
180 days of the publication of the final
regulations. As part of the transition relief,
the final regulations also allow taxpayers
to use the IRS Notices for determining
when construction begins under section
45(b)(8)(A) to determine the applicable
percentage of labor hours performed by
qualified apprentices required in satisfy-
ing the Labor Hours Requirement.
IV. One Megawatt Exception
Under the One Megawatt Exception in
section 45(b)(6)(B)(i), a qualified facility
that has a maximum net output of less
than one megawatt (as measured in alter-
nating current) is eligible for the increased
credit amount. The preamble to the Pro-
posed Regulations would have provided
that a qualified facility’s nameplate capac-
ity determines whether the facility meets
the One Megawatt Exception. Similar
exceptions apply for a qualified facility
with a maximum net output of less than
one megawatt (as measured in alternating
current) under sections 45Y(a)(2)(B)(i)
and 48E(a)(2)(A)(ii)(I); an energy project
with a maximum net output of less than
one megawatt of electrical (as measured
in alternating current) or thermal energy
under section 48(a)(9)(B)(i); and energy
storage technology with a capacity of less
than one megawatt under section 48E(a)
(2)(B)(ii)(I).
Proposed §1.45-6(c) would have pro-
vided that nameplate capacity for an elec-
trical generating unit means the maximum
electrical generating output in megawatts
that the unit is capable of producing on a
steady state basis and during continuous
operation under standard conditions, as
measured by the manufacturer and con-
sistent with the definition provided in 40
CFR 96.202. If applicable, the Interna-
tional Standard Organization (ISO) con-
ditions are used to measure the maximum
electrical generating output or usable
energy capacity.
Commenters stated that the term “max-
imum net output” is ambiguous and that
no method is provided for determining
such output. A few commenters also sup-
ported the Proposed Regulation’s defini-
tion of maximum net output and suggested
carrying the nameplate capacity definition
of maximum net output forward into its
final rule. One commenter raised that for
inverter-based resources, like solar and
storage facilities, maximum net output
could be determined at different stages.
For such facilities, the commenter recom-
mended clarifying that only post-inverter
maximum electrical generating output
qualifies as maximum net output. The final
regulations do not adopt these changes
because the definition in proposed §1.45-
6(c) contained testing methodologies and
conditions and the statute already requires
the measurement be in alternating current.
The final regulations adopt the definition
without change.
Another commenter suggested clari-
fying when multiple energy projects con-
stitute a single facility for purposes of the
One Megawatt Exception under section
45. One commenter suggested adopting
the eight factors of a single project deter-
mination listed in Notice 2013-29 and
Notice 2018-59, to determine when mul-
tiple energy projects constitute a single
facility for purposes of the One Mega-
watt Exception. The commenter stated
that it could be difficult, such as for solar
arrays constructed on multiple build-
ings, to determine when multiple projects
may constitute a single facility. Another
commenter stated that taxpayers should
not be permitted to subdivide projects
and construction contracts in an effort to
evade the Prevailing Wage Requirements
using the One Megawatt Exception. The
commenter stated that to prevent taxpay-
ers from manipulating the One Mega-
watt Exception, the Treasury Department
should evaluate whether facilities will
be using the same transmission lines or
connecting to the same powerhouse. One
commenter recommended using certain
factors, including ownership, proximity,
and connection to transmission lines or
powerhouse, to determine whether mul-
tiple energy projects may be deemed to
constitute one facility.

Bulletin No. 2024–34 427 August 19, 2024
The definition of a qualified facility,
energy project, or energy storage tech-
nology under the respective Code section
controls for purposes of the One Megawatt
Exception. Therefore, the definition of a
qualified facility under section 45 governs
for purposes of the One Megawatt Excep-
tion under section 45(b)(6)(B)(i). Accord-
ingly, the application of the aggregation
principles issued under Notice 2013-29
and Notice 2018-59 is outside the scope
of these final regulations. Further, the
Section 48 Proposed Regulations would
provide guidance for taxpayers regarding
the definition of an energy project. The
Section 48 Proposed Regulations would
provide rules for purposes of the One
Megawatt Exception as well as other IRA
bonus provisions for domestic content and
energy communities. As noted previously,
comments pertaining to the 48 Proposed
Regulations will be addressed in a future
Treasury decision. The applicable scope
of the PWA requirements is further dis-
cussed in Section VI. of this Summary of
Comments and Explanation of Revisions.
V. Application to the Taxpayer
A. Definition of taxpayer, contractor, and
subcontractor
Generally, the Proposed Regulations
would have defined the term taxpayer
to mean any taxpayer as defined in sec-
tion 7701(a)(14), including applicable
entities described in section 6417(d)(1)
(A). This generally will be the entity that
claims the credit (as increased under sec-
tion 45(b)(6)) or makes an election under
section 6417 with respect to such credit
amount on a Federal income tax return.
The Proposed Regulations would have
provided that in order to earn the increased
credit amount under section 45(b)(6) by
satisfying the PWA requirements, the tax-
payer would be solely responsible for: (i)
ensuring that the relevant laborers and
mechanics are paid wages not less than
the prevailing rate whether employed
directly by the taxpayer, or by a contrac-
tor, or a subcontractor, and (ii) ensuring
that the Apprenticeship Requirements are
satisfied. The Proposed Regulations also
would have provided that the taxpayer
would be solely responsible for the PWA
recordkeeping requirements, the correc-
tion and penalty provisions under the Pre-
vailing Wage Requirements, and the Good
Faith Effort Exception and Apprenticeship
Cure Provision under the Apprenticeship
Requirements. However, nothing in the
Proposed Regulations was intended to
supersede requirements that might oth-
erwise apply to a taxpayer, contractor, or
subcontractor under State or Federal law.
Commenters requested guidance con-
cerning whether the taxpayer is responsi-
ble for ensuring the compliance with the
PWA requirements by contractors and
subcontractors if the taxpayer may not be
in privity of contract with all contractors
and subcontractors. Commenters noted
that proposed §1.45-7(d)(3) would have
defined a contractor as any person that
enters into a contract with the taxpayer
for the construction, alteration, or repair
of a qualified facility. However, comment-
ers stated that the taxpayer is not always
in privity of contract with each contrac-
tor and subcontractor. Similarly, another
commenter suggested that the definition
of contractor be revised to address situa-
tions in which the taxpayer is not in privity
of contract with the contractors, because
the sponsor or developer of the facility
assumes responsibility for construction
of the facility. The final regulations clar-
ify that the definition of contractor applies
to those situations. Additionally, a com-
menter stated that DOL guidance under
29 CFR 5.5(a)(6) provides that prime
contractors have the responsibility for the
compliance of all the subcontractors on a
covered prime contract, whereas the Pro-
posed Regulations state that the taxpayer
is solely responsible for PWA compliance.
The final regulations retain the require-
ments in the Proposed Regulations that the
taxpayer is solely responsible for the PWA
requirements, including ensuring that the
relevant laborers and mechanics are paid
wages at rates not less than the prevailing
rates whether employed directly by the
taxpayer, a contractor, or a subcontrac-
tor and ensuring that the Apprenticeship
Requirements are satisfied.
A commenter suggested that the final
regulations adopt a safe harbor allowing
taxpayers to avoid corrections and penalty
payments if the taxpayer contracted with
a third party to ensure compliance with
relevant PWA requirements. Section 45(b)
(7)(A) requires that the taxpayer ensures
that laborers and mechanics are paid
wages at rates not less than the applica-
ble prevailing wage rates with respect to
the construction, alteration, or repair of a
qualified facility and under section 45(b)
(8)(A), that the required number of labor
hours with respect to the construction of
a qualified facility are performed by qual-
ified apprentices. The burden to ensure
that these requirements are met falls with
the taxpayer. The final regulations do not
adopt the suggestion to incorporate a safe
harbor, but the penalty waiver in §1.45-
7(c)(6) and described in Section VII.D.4.
of this Summary of Comments and Expla-
nation of Revisions provides an appropri-
ately limited exception to corrections and
penalty payments in the case of inadver-
tent errors.
Similarly, one commenter requested
that the final regulations permit contractors
or subcontractors to make corrective pay-
ments on behalf of the taxpayer directly to
laborers or mechanics. The correction and
penalty provision in section 45(b)(7)(B)(i)
requires that the taxpayer makes payment
to the laborer or mechanic of the correc-
tion amount. The Treasury Department
and the IRS appreciate commenters’ sug-
gestions to encourage methods that result
in prompt correction payments to labor-
ers and mechanics. Although the stat-
ute requires that the correction payment
be made by the taxpayer to the laborers
and mechanics, it does not prescribe the
method by which the taxpayer must make
payment. The final regulations similarly
do not prescribe a specific method of pay-
ment and adopt the proposed rule without
change. Regardless of how payments are
made, taxpayers must maintain records
demonstrating when and how correction
payments were made.
A few commenters suggested that the
final regulations clarify the requirement
that the taxpayer ensure that all labor-
ers and mechanics employed by the tax-
payer, or any contractor or subcontractor,
are paid wages at rates not less than the
prevailing rates applies to all subcontrac-
tors. Specifically, taxpayers stated that the
DBA definition of subcontractor indicates
that a subcontractor includes subcontrac-
tors of any tier, and suggested that the
final regulations use the same term in the
definition of subcontractor. The definition
of subcontractor in the final regulations

August 19, 2024 428 Bulletin No. 2024–34
clarifies that the requirement applies to all
subcontractors, including those who con-
tract with other subcontractors.
Another commenter suggested that the
use of subcontractor labor providers, such
as labor brokers, should be explicitly dis-
couraged because of the risk of fraud. This
suggestion is overbroad and inconsistent
with the plain language of section 45,
which anticipates the use of contractors
and subcontractors. This suggestion is not
adopted.
B. Transferability pursuant to section
6418
The Treasury Department and the IRS
requested comments on the application of
the PWA correction and penalty provisions
in the context of transferred credits. The
credit available under section 45, includ-
ing the increased credit amount available
under section 45(b)(6), is an eligible credit
subject to section 6418. Proposed §1.45-
7(c)(1)(iv) and proposed §1.45-8(e)(2)(iv)
would have provided that to the extent
an eligible taxpayer, as defined in section
6418(f)(2), has determined an increased
credit amount under section 45(b)(6) and
transferred such increased credit amount
as part of a specified credit portion pur-
suant to section 6418(a), the obligation
to make correction and penalty payments
under proposed §1.45-7(c)(1)(i) and (ii)
and the penalty payment under proposed
§1.45-8(e)(2)(i) remains with the eligi-
ble taxpayer. No commenters disagreed
with having the eligible taxpayer remain
responsible for the PWA correction and
penalty provisions under proposed §1.45-
7(c)(1)(iv) or proposed §1.45-8(e)(2)
(iv). Consequently, these final regulations
adopt proposed §1.45-7(c)(1)(iv) and pro-
posed §1.45-8(e)(2)(iv) without change.
However, commenters raised other issues
related to the PWA provisions in the con-
text of a transfer pursuant to section 6418,
which are addressed in the following para-
graphs.
Under proposed §1.45-7(c)(1)(iv) and
proposed §1.45-8(e)(2)(iv), to the extent
an eligible taxpayer transfers a credit
increased pursuant to the PWA require-
ments, the obligation to satisfy the PWA
requirements becomes binding upon the
earlier of the filing of the eligible taxpay-
er’s return for the taxable year for which
the specified credit portion is determined
with respect to the eligible taxpayer or
the filing of the return of the transferee
taxpayer for the year in which the speci-
fied credit portion is taken into account.
One commenter stated that if the eligible
taxpayer is a calendar year taxpayer and
the transferee taxpayer is a fiscal year tax-
payer, then the ability of the eligible tax-
payer to make any correction or penalty
payments may be shortened.
Section 6418 and the final regulations
thereunder (TD 9993) published in the
Federal Register (89 FR 34770) on April
30, 2024 (6418 Final Regulations), pro-
vide that the transferee taxpayer takes into
account the transferred credit in the first
taxable year ending on or after the taxable
year of the eligible taxpayer with respect
to which the credit was determined. Con-
sequently, if an eligible taxpayer has a cal-
endar year taxable year and the transferee
taxpayer has a fiscal year taxable year,
the transferee taxpayer’s return due date
generally will be after the eligible taxpay-
er’s return due date. In the event a trans-
feree taxpayer files a return that claims an
increased credit amount transferred from
an eligible taxpayer prior to the eligible
taxpayer filing its return, the obligation
to have satisfied the PWA requirements
becomes legally binding upon the filing
of the return of the transferee taxpayer.
However, in any scenario, eligible tax-
payers will have the ability to make any
required correction and penalty payments
as provided under section 45(b)(7)(B)(iv),
which allows such payments to be made
within 180 days of a determination by the
IRS with respect to a failure regarding
prevailing wages, or under section 45(b)
(8)(D)(i) with respect to apprenticeship
failures. The transferee taxpayer filing
its tax return before the eligible taxpayer
does not shorten this period. Further, the
eligible taxpayer and the transferee tax-
payer are required to attach a transfer elec-
tion statement describing specific details
relating to the transaction, including any
increased credit amounts, and prior to fil-
ing any tax returns, the parties should have
verified eligibility under the PWA provi-
sions. Therefore, the Treasury Department
and the IRS did not revise the proposed
rule in these final regulations.
Commenters recommended specifying
that if a credit amount increased pursuant
to the PWA requirements is transferred to
multiple transferee taxpayers, the respon-
sibility to make correction and penalty
payments remains indivisible with the
eligible taxpayer. This comment is consis-
tent with the Proposed Regulations, which
did not distinguish between situations
with one or multiple transferee taxpayers.
These final regulations adopt the proposed
rule without change.
One commenter recommended that
transferee taxpayers being transferred an
eligible credit increased pursuant to the
PWA requirements should be secondarily
liable for any correction and penalty pay-
ments. The commenter stated that if the
transferee taxpayer is not secondarily
liable, then the amounts may not be paid
because the eligible taxpayer will have
already received the consideration from
the transfer of the tax credit. Further, the
commenter suggested that the transferee
taxpayer should be required to keep the
same records as the eligible taxpayer in
order to demonstrate reasonable cause
with respect to excessive credit transfers
and should also be required to contrac-
tually bind the eligible taxpayer to meet
the PWA requirements, indemnifying the
transferee taxpayer for any such payments
it is secondarily required to make.
The Treasury Department and the IRS
do not adopt these changes. As explained
in the preamble to the Proposed Regula-
tions, credit amounts increased pursuant
to the PWA requirements are part of deter-
mining the eligible credit by the eligible
taxpayer. The 6418 Final Regulations con-
firm that any specified credit portion is a
proportionate share of the entire eligible
credit, including any increases pursuant
to the PWA requirements. Therefore, it
is part of the eligible taxpayer’s respon-
sibility to satisfy the PWA requirements
and requiring the eligible taxpayer to
make any correction or penalty payments
remains appropriate. Requiring the trans-
feree taxpayer to be secondarily liable may
inappropriately shift the responsibility to
satisfy the PWA requirements. It is the
responsibility of the transferee taxpayer
under section 6418 and the 6418 Final
Regulations to perform due diligence to
show reasonable cause in the event of an
excessive credit transfer, but changes to
those rules are outside the scope of these
final regulations. Additionally, specific

Bulletin No. 2024–34 429 August 19, 2024
recordkeeping requirements for the eli-
gible taxpayer and transferee taxpayer(s)
under section 6418 are addressed in the
6418 Final Regulations and are outside
the scope of these final regulations.
A commenter recommended that a
transferee taxpayer should be able to rely
on assurances from the eligible taxpayer
that all covered work was performed
under the terms of a qualifying project
labor agreement (discussed in Section
V.D. of this Summary of Comments and
Explanation of Revisions) to demon-
strate “reasonable cause” in the context
of an excessive credit transfer relating to
the PWA requirements. These final reg-
ulations do not adopt this suggestion as
excessive credit transfers are outside the
scope of these final regulations and are
addressed in the 6418 Final Regulations.
C. Application to Indian Tribal
governments and the Tennessee Valley
Authority
The preamble to the Proposed Reg-
ulations explained that the statutory lan-
guage of the IRA does not reflect any
intent to include exceptions from the PWA
requirements other than the BOC Excep-
tion and the One Megawatt Exception.
Consequently, the Proposed Regulations
would not have included a rule that would
exempt Indian Tribal governments or the
Tennessee Valley Authority (TVA) from
the PWA requirements. The Treasury
Department and the IRS requested com-
ments on the need for any exceptions,
including for Indian Tribal governments
or the TVA, from the PWA requirements
in addition to those expressly described in
the statute.
1. Indian Tribal Governments
In accordance with Executive Order
13175 (Consultation and Coordination
with Indian Tribal governments) and Exec-
utive Order 14112 (Reforming Federal
Funding and Support for Tribal Nations
To Better Embrace Our Trust Respon-
sibilities and Promote the Next Era of
Tribal Self-Determination), the Treasury
Department and the IRS support the right
of Indian Tribes to self-govern and recog-
nize that Indian Tribes exercise inherent
sovereign powers over their members and
territory. The Treasury Department and
the IRS are guided by the fundamental
principles in Executive Orders 13175 and
14112. Under those principles, the Trea-
sury Department and the IRS have an obli-
gation to consider the concerns raised by
Tribes and, to the extent permitted by law,
address those concerns in the final regu-
lations.
On September 25, 2023, the Treasury
Department and the IRS held a Tribal con-
sultation with Tribal leaders requesting
assistance in addressing questions related
to the PWA requirements in the Proposed
Regulations. Through consultation and
in response to the Proposed Regulations,
the Treasury Department and the IRS
received numerous comments regarding
an exception to the PWA requirements
for projects constructed by Indian Tribal
governments. A number of commenters
recommended that Indian Tribal govern-
ments should not be exempted from the
PWA requirements and cited to the lack
of statutory basis to grant an exception.
In contrast, other commenters supported
an exception to the PWA requirements for
Indian Tribal governments.
A. Prevailing Wage Requirements and
Indian Tribal governments
With respect to the Prevailing Wage
Requirements, commenters suggested
that requiring projects located on Tribal
lands to comply with wage standards
set by the DOL undermines Tribal sov-
ereignty. Some commenters stated that
the DOL provides an exception from the
DOL prevailing wage rates for work done
by Indian Tribal governments using their
own employees, and advocated that the
final regulations, at a minimum, contain a
similar rule under the IRA.
Commenters also stated that the DOL
prevailing wage rates often are defined
at the county level, which may include
higher cost urban areas and could nega-
tively impact projects on Tribal lands that
often occur in the rural portions of such
counties. These commenters stated that
complying with wage standards set by the
DOL for IRA projects could place addi-
tional administrative burdens on Tribes
by requiring Tribes to administer two
sets of prevailing wages (DOL prevail-
ing wage standards for IRA projects and
Tribal prevailing wage standards for other
projects). As an alternative to permitting
Indian Tribal governments to set their own
prevailing wage rates for IRA projects,
commenters suggested defining the term
locality to include Tribal lands as a sep-
arate category to allow Tribes to submit
a request to the DOL for a supplemental
wage determination for that specific Tribal
locality.
With respect to the Prevailing Wage
Requirements, the Treasury Department
and the IRS continue to understand the
statutory language of the Code as not
reflecting an intent to entirely exempt
Indian Tribal governments from the PWA
requirements. The statutory language also
does not reflect an intent to allow Indian
Tribal governments to substitute their own
prevailing wage rates for those generally
required under the DBA.
However, in accordance with Execu-
tive Order 14112, the final regulations pro-
vide two special rules that apply to Indian
Tribal governments (including a subdi-
vision, agency, or instrumentality of an
Indian Tribal government). First, the final
regulations provide that an Indian Tribal
government, as defined in section 30D(g)
(9) of the Code, is excepted from the Pre-
vailing Wage Requirements under the IRA
with respect to laborers and mechanics
that are employees, within the meaning
of section 3121(d)(2), of the Indian Tribal
government. This rule also applies to joint
ownership arrangements that involve an
Indian Tribal government (including a
subdivision, agency, or instrumentality
of an Indian Tribal government), but only
with respect to the employees, within the
meaning of section 3121(d)(2), of the
Indian Tribal government. As stated in
some comments from Tribes, the DOL
provides an exception from the DOL pre-
vailing wage rates for work done by Tribal
governments using their own employees.
Specifically, under the DBA, a govern-
ment agency may perform construction
work in-house with its own employees
rather than contract out the work. Work
performed by these employees generally
is not subject to the DBA requirements
because governmental agencies are not
considered contractors or subcontractors
under the DBA. This is known as the
force account exception. The DOL has
explained that in cases in which an Indian

August 19, 2024 430 Bulletin No. 2024–34
Tribal government performs work with its
own employees, the force account excep-
tion to the DBA generally applies and the
Tribal government is not required to pay
DOL-determined prevailing wages for
work done by its own employees. Tribes
historically have relied on this exception.
Under these final regulations, Tribes may
continue that practice for purposes of the
Prevailing Wage Requirements under the
IRA.
Second, the Treasury Department and
the IRS recognize that Tribal lands gener-
ally are not coextensive with a single geo-
graphic area for which the DOL may have
made an applicable wage determination.
Comments from Tribes requested that the
final regulations define the term “locality”
to include Tribal lands as a separate cate-
gory to allow Tribes to submit a request
to the DOL for a supplemental wage
determination for specified Tribal lands.
However, defining locality in this way
would require that the DOL establish a
new administrative process to implement
a unique wage determination for Tribal
lands; that process is outside of the author-
ity of the Treasury Department and the
IRS. Thus, these final regulations do not
change the definition of locality to include
Tribal lands as a separate category.
However, recognizing that Tribal lands
are sovereign territories that may encom-
pass or overlap with numerous geographic
areas, the final regulations provide a spe-
cial rule for Indian Tribal governments
that perform construction, alteration, or
repair of a facility on Indian land, as that
term is defined in 25 U.S.C. 3501(2). Spe-
cifically, if the Indian land encompasses
or overlaps more than one geographic
area with respect to which the DOL has
made an applicable wage determination,
then the Indian Tribal government may
choose the applicable wage determination
for any one of those geographical areas
and apply that applicable wage determina-
tion for work performed on any qualified
facility that is located on the Indian land.
If the Indian Tribal government chooses to
use this alternative applicable wage deter-
mination, it must maintain and preserve
records sufficient to document the appli-
cable prevailing wage for each laborer or
mechanic with respect to each qualified
facility on Indian land. This rule applies to
a qualified facility that is subject to joint
ownership arrangements that involve an
Indian Tribal government (including a
subdivision, agency, or instrumentality of
an Indian Tribal government). This rule is
intended to ease the administrative burden
on Indian Tribal governments because
they can use a single applicable wage
determination for all projects on Indian
land.
b. Apprenticeship Requirements and
Indian Tribal governments
Regarding the Apprenticeship
Requirements, some commenters sup-
ported an exception for Indian Tribal gov-
ernments and stated that Tribes may have
limited access to registered apprentice-
ship programs. These commenters stated
that Tribal members may face burdens
associated with participating in existing
State registered apprenticeship programs
that are located many miles away. A com-
menter requested clarification regarding
whether Tribes, like States, have the
sovereign and jurisdictional authority to
develop and certify their own apprentice-
ship programs rather than being required
to use the DOL approval process. The
same commenter requested that the Trea-
sury Department and the IRS review and
report on any barriers that may dispro-
portionately prevent Tribes from fulfill-
ing the Apprenticeship Requirements.
Commenters suggested that if Indian
Tribal governments do not have author-
ity to certify their own programs, then
the Apprenticeship Requirements could
force Tribal governments to rely on State
or Federal apprenticeship programs,
which may frustrate Indian Tribal gov-
ernments’ efforts to develop their Tribal
workforce.
Commenters supporting an Indian
Tribal government exception to the
Apprenticeship Requirements also stated
that the Good Faith Effort Exception
places too much onus on Indian Tribal
governments to obtain qualified appren-
tices. These commenters suggested that
Indian Tribal governments could need
to submit multiple requests to multiple
apprenticeship programs and that Indian
Tribal governments could need to search
across non-Tribal areas to meet the Good
Faith Effort Exception. These commenters
suggested that the statute did not require
this level of apprenticeship coverage.
Commenters also stated that the Good
Faith Effort Exception may not be met if
a registered apprenticeship program can
meet some, but not all of the requests for
qualified apprentices, and suggested that
the Good Faith Effort Exception should
be satisfied if a registered apprenticeship
program could not fulfill more than 50
percent of a taxpayer, contractor, or sub-
contractor’s request. These commenters
also suggested that the Good Faith Effort
Exception should be satisfied if a local
registered apprenticeship program can-
not provide more than 50 percent of the
requested qualified apprentices. Com-
menters also stated that the Good Faith
Effort Exception is unreasonable for
Indian Tribal governments in rural areas
because of the limited access to registered
apprenticeship programs. Finally, another
commenter suggested creating a database
for taxpayers to find Tribal apprenticeship
programs within their State.
With respect to the Apprenticeship
Requirements, the Treasury Department
and the IRS recognize that there may be
a limited number of registered appren-
ticeship programs with an area of opera-
tion that includes the geographic location
of a facility located on Tribal lands. As
explained in Section VIII.B.1.f. of this
Summary of Comments and Explanation
of Revisions, the final regulations clarify
the scope of the Good Faith Effort Excep-
tion with respect to situations in which
only part of the request is denied. The
final regulations confirm that if there is no
registered apprenticeship program with a
geographic area of operation that includes
the location of the facility, taxpayers will
be deemed to satisfy the Good Faith Effort
Exception for the qualified apprentices
they (or the contractor or subcontractor)
would have requested for that occupation
and location.
Indian Tribal governments may also
consider sponsoring their own regis-
tered apprenticeship programs to satisfy
the Apprenticeship Requirements. The
National Apprenticeship Act (NAA) of
1937 (29 U.S.C. 50) authorizes the Sec-
retary of Labor to formulate and promote
the furtherance of labor standards neces-
sary to safeguard the welfare of appren-
tices. The Treasury Department and the
IRS have consulted with the DOL OA and

Bulletin No. 2024–34 431 August 19, 2024
understand based on that discussion that
although neither the text of the NAA, nor
the content of the NAA’s implementing
regulations at 29 CFR parts 29 and 30,
explicitly addresses Indian Tribes, Indian
Tribal governments may sponsor regis-
tered apprenticeship programs and obtain
registration of such a Tribal apprenticeship
program by a State or Federal governmen-
tal agency that has been designated for
that purpose.
Federal apprenticeship regulations
(see 29 CFR part 29) authorize the DOL
to grant recognition, for Federal pur-
poses, to State apprenticeship agencies
for the purpose of registering and over-
seeing apprenticeship programs that
operate within their respective jurisdic-
tions, provided that such State appren-
ticeship agencies operate in accordance
with the minimum standards for State
apprenticeship agencies that are estab-
lished by Federal apprenticeship regula-
tions. Nevertheless, the DOL retains the
authority under Federal apprenticeship
regulations to register any apprenticeship
program that operates within the territory
of the United States, provided that, as a
general matter, the sponsor’s proposed
program and standards of apprenticeship
satisfy the minimum requirements stipu-
lated in 29 CFR parts 29 and 30.
Accordingly, Indian Tribal govern-
ments may register their own apprentice-
ship programs through the DOL OA or
with a recognized State apprenticeship
agency. In recognition of the unique trust
and treaty responsibilities of the Federal
Government to Tribal Nations, respect
for Tribal sovereignty, and the nation-to-
nation relationship between the Federal
Government and Indian Tribes, Indian
Tribal governments (including a subdi-
vision, agency, or instrumentality of the
Indian Tribal government) are encouraged
but not required to register programs with
the DOL OA. Taxpayers, contractors, and
subcontractors can find more information
on guidance issued by the DOL OA at
https://www.apprenticeship.gov/about-us/
legislation-regulations-guidance. For an
updated map depicting the most recent
information regarding registration agen-
cies between the DOL OA and State
apprenticeship agencies, please visit:
https://www.apprenticeship.gov/about-us/
apprenticeship-system.
2. Tennessee Valley Authority
Several commenters requested that the
final regulations not provide an exception
from the PWA requirements for the TVA,
citing the lack of statutory authority for
such an exception. The Treasury Depart-
ment and the IRS agree. The final regu-
lations do not create an exception to the
PWA requirements for the TVA.
D. Project Labor Agreements
The preamble to the Proposed Reg-
ulations explained that pre-hire project
labor agreements (PLAs) may be used to
incentivize stronger labor standards and
worker protections in the types of con-
struction projects for which taxpayers
may seek the increased credit amount, and
having a PLA in place may help ensure
compliance with PWA requirements. For
these reasons, the Proposed Regulations
would have provided that the penalty
payment requirements would not apply
with respect to a laborer or mechanic
employed under a “qualifying project
labor agreement” if any correction pay-
ment owed to the laborer or mechanic is
paid on or before a return is filed claiming
an increased credit amount. The Proposed
Regulations would have defined qualify-
ing project labor agreement as “a pre-hire
collective bargaining agreement with one
or more labor organizations that estab-
lishes the terms and conditions of employ-
ment for a specific construction project.”
Proposed §1.45-7(c)(6)(ii) would have
provided that in order to be considered a
qualifying project labor agreement, such
agreement must at a minimum: (i) bind
all contractors and subcontractors on the
construction project through the inclusion
of appropriate specifications in all rele-
vant solicitation provisions and contract
documents; (ii) contain guarantees against
strikes, lockouts, and similar job disrup-
tions; (iii) set forth effective, prompt, and
mutually binding procedures for resolv-
ing labor disputes arising during the term
of the project labor agreement; (iv) con
-
tain provisions to pay prevailing wages;
(v) contain provisions for referring and
using qualified apprentices consistent
with section 45(b)(8)(A) through (C) and
guidance issued thereunder; and (vi) be a
collective bargaining agreement with one
or more labor organizations (as defined in
29 U.S.C. 152(5)) of which building and
construction employees are members, as
described in 29 U.S.C. 158(f).
The Treasury Department and the IRS
requested comments on the proposed
treatment of PLAs, other ways taxpayers
might use PLAs to meet the PWA require-
ments, and the proposed definition of a
qualifying project labor agreement. Sev-
eral comments were received addressing
the proposed treatment of PLAs under the
Proposed Regulations.
Several commenters asserted that the
Treasury Department and the IRS should
not exempt taxpayers using PLAs from
the penalty payment requirements. Com-
menters stated that the proposed rule
violates the plain text of the IRA, which
includes no PLA provision and does not
authorize the waiver of intentional vio-
lations and additional penalties based on
a clean energy project developer’s inclu-
sion of a PLA requirement in its solici-
tation for construction services. Several
commenters stated that the IRS should
not incentivize or coerce the use of PLAs
through a penalty waiver or other benefit.
Commenters suggested that PLAs will
discourage taxpayers from using their
existing workforce. Commenters were
also concerned with PLAs increasing the
cost of construction. Another commenter
suggested that PLA mandates would
likely lead to a decrease in hiring of local,
minority, women, veteran, and other
potentially disadvantaged groups. Other
commenters stated that encouraging labor
unions was not the intent of the IRA. A
commenter also asserted that PLAs force
contractors to replace employees with
workers from unions, undermine work-
force development strategies, force con-
tractors to follow inefficient union work
rules, expose workers to wage theft, and
expose employers to multiemployer pen-
sion plan liabilities. The commenter also
asserted that PLA mandates force employ-
ees to join a union and pay dues and dis-
courage competition from nonunionized
contractors. The commenter claimed that
strikes have occurred on PLA projects and
that PLAs will not improve efficiency in
terms of safety, quality, or project deliv-
ery.
In contrast, other commenters asserted
that PLAs help ensure compliance with

August 19, 2024 432 Bulletin No. 2024–34
the PWA requirements. Several comment-
ers requested that taxpayers certifying
that construction of a facility is subject to
a PLA or a collective bargaining agree-
ment should be entitled to a safe harbor
or a rebuttable presumption of compliance
with the PWA requirements. Commenters
asserted that such a presumption would be
warranted because PLAs provide assur-
ances of compliance and contractors oper-
ating under PLAs typically pay wages at
rates that are at or above the prevailing
wage rates. At least one commenter sug-
gested that the final regulations should
clarify that a taxpayer is deemed to have
satisfied the PWA requirements, including
recordkeeping requirements, if the tax-
payer can provide proof of a valid PLA.
Other commenters suggested that the
final regulations create a two-tier compli-
ance structure under which participants
with PLAs are awarded a presumption of
compliance on several requirements (or
limited review by the IRS on examination)
while other taxpayers not participating in
PLAs should be subjected to heightened
scrutiny by the IRS. A commenter stated
that, in the absence of a PLA, violations of
PWA requirements would be more preva-
lent. Therefore, the commenter suggested
increasing the oversight and noncompli-
ance penalties for non-PLA projects, man-
dating robust recordkeeping requirements
for non-PLA projects (including the filing
of certain documents with the DOL), and
creating flexible ratio requirements for
PLA projects. Another commenter sug-
gested that taxpayers who are parties to
both a collective bargaining agreement
and PLA should automatically qualify for
the Good Faith Effort Exception.
Some commenters stated that PLAs
can help taxpayers ensure payment of
prevailing wages, because PLAs will:
(i) require employers to provide workers
with notice of their pay rates; (ii) include
integrated, enforceable grievance and dis-
pute resolution procedures; and (iii) be
administered and enforced by unions that
are parties to PLAs. Another commenter
stated that PLAs typically establish pay-
ments to third-party benefit trusts, and that
IRS research shows that third-party infor-
mation can help promote tax compliance.
Additionally, another commenter stated
that entitling taxpayers to a presumption
of compliance if their construction proj-
ect is subject to a PLA would mitigate
enforcement work and therefore preserve
IRS resources.
Further, several commenters stated
that PLAs help promote the IRA’s goals
by improving efficiency, coordination,
and consistency; reducing administra-
tive costs; preventing increased costs and
project delays; providing a steady supply
of highly skilled labor; and preventing
labor disputes. Some commenters rec-
ommended that taxpayers implementing
PLAs be exempt from a determination
that they intentionally disregarded the
PWA requirements.
The Treasury Department and the IRS
disagree with commenters asserting that
the Proposed Regulation’s provisions
regarding qualifying project labor agree-
ments are unwarranted, coercive, and
would increase costs. For example, stud-
ies show that PLAs in general do not lead
to a statistically significant increase in
construction costs.
22
If a taxpayer believes
that a particular PLA would significantly
raise the cost of constructing a facility,
a taxpayer may choose not to enter into
a PLA. In response to concerns about
hiring of local, minority, women, vet-
eran, and other potentially disadvantaged
groups, the Treasury Department and the
IRS note that PLAs often include provi-
sions that create or strengthen equitable
paths to construction jobs for underserved
workers, including local hire require-
ments, equitable recruitment goals, and
community engagement requirements.
Contrary to some commenters’ concerns,
the final regulations do not require non-
union employees to join a union or to pay
union dues. The National Labor Relations
Act permits employees to choose not to
join a union in their workplace. 29 U.S.C.
157. Non-members may choose not to
pay union dues and instead pay agency
fees that cover only the share of dues used
directly for representation, such as for
collective bargaining or grievance proce-
dures. Moreover, the final regulations do
not require any taxpayer to sign a PLA.
The Treasury Department and the
IRS agree with commenters that quali
-
fying project labor agreements can help
ensure compliance with the PWA require-
ments. Under the final regulations, qual-
ifying project labor agreements will be
required to include provisions requiring
the payment of wages at rates that are
not less than the prevailing rates, include
contract provisions complying with the
Apprenticeship Requirements, and estab-
lish mechanisms for workers, labor orga-
nizations, and taxpayers to correct any
underpayments. These requirements will
help ensure that qualifying project labor
agreements support compliance with the
PWA requirements. The requirements
in PLAs, including ongoing monitoring
and administration by union officials,
enforceable grievance and dispute res-
olution mechanisms, and notice of pay
rates, will also help ensure compliance
with the PWA requirements for claiming
the increased credit amount. For example,
the final regulations require that qualify-
ing project labor agreements must include
effective grievance and dispute resolution
provisions that would provide workers
and unions an independent mechanism for
enforcing the PWA requirements included
in a qualifying project labor agreement.
Grievance and dispute resolution provi-
sions allow workers to resolve disputes
about the payment of prevailing wages
and other violations of the qualifying
project labor agreement before a taxpayer
claims the increased credit amount, assist-
ing taxpayers in complying with the final
regulations.
Regarding commenters’ requests for
deemed compliance or a rebuttable pre-
sumption of compliance, the final regu-
lations do not adopt these comments. Tax
jurisprudence requires taxpayers claim-
ing a tax credit to demonstrate that they
have met the statutory requirements and
can substantiate their claim. The final
regulations provide that the penalties do
not apply if a taxpayer uses a qualifying
22
Emma Waitzman & Peter Philips, UC Berkeley Labor Ctr., Project Labor Agreements and Bidding Outcomes: The Case of Community College Construction in California 3,51 (2017)
((finding no statistically significant difference in costs between PLA and non-PLA projects); Peter Philips & Scott Littlehale, Did PLAs on LA Affordable Housing Projects Raise Construction
Costs? (Univ. of Utah Dep’t of Econ., Working Paper No. 2015-03, 2015) (finding no statistically significant difference in costs between PLA projects and non-PLA projects); Cong. Research
Serv., R41310, Project Labor Agreements at 9 (2012) (surveying the empirical literature about the effects of PLAs on costs and finding that it was inconclusive).

Bulletin No. 2024–34 433 August 19, 2024
project labor agreement and makes the
required correction payments before filing
a return claiming the credit. The Treasury
Department and the IRS have determined
that other safe harbors for PLAs or an
exemption from a finding of intentional
disregard with respect to correction pay-
ments would not strengthen compliance
and understand this approach to strike the
appropriate balance between recognizing
PLA benefits for improving compliance
with the PWA requirements and maintain-
ing long-standing tax principles.
As the Treasury Department and the
IRS noted in the preamble to the Pro-
posed Regulations, pre-hire project labor
agreements may be used by a taxpayer
to incentivize stronger labor standards
and worker protections on a construction
project, and having a PLA in place may
also help ensure compliance with PWA
requirements for claiming the increased
credit amount. Accordingly, the IRS
would take into account on examination
whether a taxpayer has a qualifying proj-
ect labor agreement in place and would
consider books and records substantiating
that a qualifying project labor agreement
is being complied with as an indication
of compliance with the PWA require-
ments. For example, records that would
support substantiating PWA compliance
could include attestations by all counter-
parties that a taxpayer is in compliance
with the terms of the qualifying project
labor agreement, including the provisions
requiring the payment of prevailing wages
and the provisions for referring and using
qualified apprentices consistent with sec-
tion 45(b)(8)(A) through (C) and guidance
issued thereunder.
Several commenters suggested addi-
tions or revisions to the proposed defini-
tion of a qualifying project labor agree-
ment and requested clarifications. For
instance, a commenter suggested clarify-
ing that proposed §1.45-7(c)(6)(ii) applies
to both base penalty amounts and any
enhanced penalty due to intentional dis-
regard. Similarly, commenters requested
clarifying the impact of using a PLA on
any required correction payments. Com-
menters also asked for the final PWA rules
to clarify that the agreed-upon wages
under a PLA are prevailing wages for the
purposes of PWA requirements. At least
one commenter asked whether agreed-
upon wages under a PLA or a collective
bargaining agreement could be treated as
the prevailing wage for PWA purposes.
Another commenter explained that gener-
ally, under a PLA, the taxpayer must pay
the wage rates negotiated with the union,
which are often higher than the prevailing
wage rates set forth in DOL wage deter-
minations, but under the Proposed Regu-
lations, taxpayers must pay the prevailing
wage rate, even if that is lower. Another
commenter stated that asking contractors
to comply with prevailing wage rates,
which may be based on union work rates
contained in collective bargaining agree-
ments not publicly available, could add
risk for contractors and reduce competi-
tion, especially from small businesses.
Additional commenters requested per-
mitting taxpayers to satisfy the Appren-
ticeship Requirements in the case of a
PLA that includes a preference to use
qualified apprentices, even if the PLA
does not require compliance with all the
Apprenticeship Requirements under sec-
tion 45(b)(8). A commenter asserted that
the criteria that the PLA must contain pro-
visions for referring and using qualified
apprentices consistent with section 45(b)
(8)(A) through (C) and guidance issued
thereunder was circular and did not align
with PLAs generally. The commenter
explained that the requirement that the
PLA incorporate the IRA apprenticeship
rules undercuts the PLA exception and
makes it superfluous. An additional com-
menter suggested clarifying that a PLA for
PWA purposes should allow taxpayers to
use both union and non-union registered
apprenticeship programs. A commenter
also suggested revising the definition of a
PLA to include a requirement for referring
and using qualified journeyworkers. Sim-
ilarly, a commenter asked whether a tax-
payer may use the journeyworker-to-ap-
prentice ratio under a PLA or a collective
bargaining agreement for PWA purposes.
Some commenters requested that the
final regulations provide that PLA provi-
sions regarding hiring union workers be
optional and that exceptions be explic-
itly provided for circumstances in which
union labor is not available. Commenters
suggested that the final regulations should
permit contractors who sign a PLA to
use their own work rules independent of
union collective bargaining agreements.
One commenter stated that PLAs must
not require payment into union benefit
funds as long as contractors have bona
fide benefits and are satisfying DBA stan-
dards. Similarly, a commenter recom-
mended that the final regulations provide
that PLAs can only require the payment
of union dues and fringe benefits for the
duration of the contract.
A commenter requested that the final
regulations adopt the definition for a qual-
ifying project labor organization, largely
based in Executive Order 14063 (Use of
Project Labor Agreements for Federal
Construction Projects), and permit con-
tractors and subcontractors to compete
for contracts and subcontracts regardless
of whether they are a party to a collective
bargaining agreement. The commenter
also suggested revising the definition of
labor organizations to require some affil-
iation with a registered apprenticeship
program.
A commenter recommended incentiv-
izing taxpayers using a PLA to comply
with all of the PLA’s provisions, not just
PWA-related provisions. The commenter
stated that a subset of PLAs (known
as community workforce agreements)
include provisions beyond the elements
defined in the Proposed Regulations.
Additionally, a commenter recommended
requiring service maintenance workers,
like custodians, be included and covered
under PLAs used for PWA purposes.
Further, a commenter suggested that
recordkeeping related to PLAs be lim-
ited to producing a valid PLA covering
all laborers and mechanics at the site of
work. The commenter also stated that it
would be helpful to clarify the role of col-
lective bargaining agreements and a mas-
ter agreement, as well as the eligible sta-
tus, if any, of PLAs entered and covering
periods before the publication of the pro-
posed rules in the Federal Register. The
commenter also requested guidance con-
cerning whether the PLA exception still
applies if some, but not all, contractors are
able to meet the PLA requirements.
Additionally, a commenter suggested
that the PWA rules align the criteria for
PLAs with the provisions of commonly
used PLA templates or that the final reg-
ulations adopt a new template. The com-
menter stated that the proposed rules pre-
sented six criteria for qualifying PLAs,

August 19, 2024 434 Bulletin No. 2024–34
but many widely used PLA templates do
not meet all six criteria.
The Treasury Department and the
IRS agree with the comment to clarify
that proposed §1.45-7(c)(6)(ii) applies to
both the $5,000 penalty and the $10,000
enhanced penalty (for the Prevailing Wage
Requirements) and proposed §1.45-8(e)
(2)(v) applies to both the $50 penalty
and the $500 enhanced penalty (for the
Apprenticeship Requirements) due to
intentional disregard. Under the Proposed
Regulations, the penalty payment require-
ment would not have applied with respect
to a laborer or mechanic employed under a
qualifying project labor agreement if any
correction payment owed to the laborer or
mechanic is paid on or before a return is
filed claiming an increased credit amount.
The proposed rule was
intended to apply
to both penalty amounts and requires the
taxpayer to make any correction payment
owed to any laborer or mechanic on or
before the date on which the increased
credit amount is claimed. The final regula-
tions provide this clarification with respect
to both the Prevailing Wage Requirements
and the Apprenticeship Requirements.
The proposed definition of qualify-
ing project labor agreement contains six
requirements, including that it must con-
tain provisions to pay prevailing wages.
The Treasury Department and the IRS
agree with commenters that the defini-
tion of the term prevailing wages, for the
purposes of a qualifying project labor
agreement, requires clarification. The
final regulations clarify the definition of
qualifying project labor agreement to pro-
vide that it must contain provisions to pay
wages at rates not less than the prevailing
wage rates in accordance with subchapter
IV of chapter 31 of title 40 of the United
States Code. This clarification aligns with
the statutory requirements regarding pre-
vailing wage rates and maintains a clear
standard for taxpayers and tax adminis-
tration. Commenters raised that PLAs
often require the payment of wages higher
than prevailing wages under the DBA. A
qualifying project labor agreement may
require the payment of wages at rates that
are higher than the wage rates that are
required by section 45(b)(7)(A).
The proposed definition of qualify-
ing project labor agreement also would
have provided that it must contain pro-
visions for referring and using qualified
apprentices consistent with section 45(b)
(8)(A) through (C) and guidance issued
thereunder. The statute defines qualified
apprentice and provides the Apprentice-
ship Requirements. Accordingly, the final
regulations do not adopt comments to
modify the Apprenticeship Requirements
for a qualifying project labor agreement.
Regarding additions to the proposed
definition of qualifying project labor
agreement, the Treasury Department and
the IRS considered these comments and
have not adopted these comments in the
final regulations. Specific requirements
or contractual language in a PLA may
arbitrarily exclude many PLAs from the
proposed definition of a qualifying proj-
ect labor agreement for reasons unrelated
to ensuring compliance with the PWA
requirements. A PLA is a negotiated con-
tract and parties must have the appropriate
flexibility to negotiate provisions. Noth-
ing in the final regulations precludes par-
ties from negotiating additional local hire,
equity, or community engagement provi-
sions in a PLA. Since each PLA is nego-
tiated in response to unique project needs
and labor market conditions, the Treasury
Department and the IRS do not adopt the
comment to require a PLA template.
Specific to the nuclear industry, a few
commenters proposed that PLA provisions
in PWA rules be expanded to include col-
lective bargaining agreements negotiated
by nuclear operators and unions cover-
ing their direct employees. A commenter
suggested also recognizing that such
collective bargaining agreements estab-
lish the prevailing wages for their unique
classification of nuclear employees that
perform alterations or repairs. The com-
menter stated that there are significant dif-
ferences in the collective bargaining and
benefit practices between the construction
and nuclear industries. A few commenters
suggested amending the rules to permit
wages paid pursuant to collective bargain-
ing agreements to qualify as payment of
prevailing wages under section 45U(d)(2).
One commenter stated that at a minimum,
wages paid pursuant to already-existing
collective bargaining agreements should
be accepted as payment of prevailing
wages. Similarly, solely for purposes of
section 45U, one commenter requested
that wages and benefits paid to non-union-
ized direct employees be accepted as
payment of prevailing wages, if the sum
is equal to the collectively-bargained
wages and benefits paid to geographically
proximate direct employees of a qualified
nuclear facility. The commenter also sug-
gested that provisions regarding PLAs in
the Proposed Regulations be revised to
include taxpayers that have a collective
bargaining agreement covering their own
employees that perform alteration and
repair on facilities eligible for the section
45U credit. The commenter also sug-
gested that existing collective bargaining
agreements be deemed to satisfy section
45U(d)(2)(A). One commenter requested
that wages and benefits paid pursuant to
a collective bargaining agreement negoti-
ated between a taxpayer and a union rec-
ognized as the workers’ bargaining repre-
sentative by the National Labor Relations
Board, be deemed to comply with prevail-
ing wage rules under section 45U.
A commenter requested a prevailing
wage safe harbor for section 45U to recog-
nize the unique characteristics of nuclear
power facilities. Another commenter
requested permitting, solely for purposes
of section 45U, qualified nuclear power
facilities that do not directly employ col-
lectively-bargained laborers and mechan-
ics to benchmark themselves against other
similar qualified nuclear power facilities
that do directly employ collectively-bar-
gained laborers and mechanics for pur-
poses of determining whether the facility
is deemed to pay prevailing wages to its
directly employed employees. The com-
menter stated that even if not unionized,
a nuclear operator’s craft employees per-
form the same work under the same condi-
tions as unionized employees and receive
generally equivalent wages, participate
in the same employer-sponsored benefit
plans, and receive benefits equivalent to if
not identical to unionized employees.
The Treasury Department and the IRS
recognize the nuclear power industry’s
unique circumstances and that nuclear
operators cannot enter into qualifying
project labor agreements as they would
have been defined under the Proposed
Regulations. The section 45U credit has
Prevailing Wage Requirements for alter-
ation or repair work of a qualified nuclear
power facility, but not during construction.
For taxpayers seeking the section 45U

Bulletin No. 2024–34 435 August 19, 2024
credit, a collective bargaining agreement
provides workers conducting an alteration
or repair the same assurances of up-front
compliance that a PLA would, including
union oversight and private enforcement.
A taxpayer that has a collective bargaining
agreement for a qualified nuclear facility
that meets minimum requirements analo-
gous to the minimum requirements for a
qualifying project labor agreement should
also benefit from the rule that penalties do
not apply if any correction payment owed
to a laborer or mechanic is paid before
the increased credit amount is claimed. In
response to the comments, the final regu-
lations modify the definition of qualifying
project labor agreement for section 45U.
For purposes of section 45U, in order to be
a qualifying project labor agreement, such
agreement must, at a minimum: (i) be a
collective bargaining agreement with one
or more labor organizations (as defined
in 29 U.S.C. 152(5)) of which employees
of the qualified nuclear power facility are
members and such agreement establishes
the terms and conditions of employment
at the qualified nuclear power facility;
(ii) contain guarantees against strikes,
lockouts, and similar job disruptions; (iii)
set forth effective, prompt, and mutually
binding procedures for resolving labor
disputes arising during the term of the
collective bargaining agreement; and (iv)
contain provisions to pay wages at rates
not less than the prevailing rates in accor-
dance with subchapter IV of chapter 31 of
title 40 of the United States Code.
VI. Applicable Scope of the PWA
Requirements
Section 45(b)(7)(A) provides that with
respect to any qualified facility, the tax-
payer must ensure that any laborers and
mechanics employed by the taxpayer or
any contractor or subcontractor in “the
construction of such facility” and for the
10-year period after the facility is placed
in service, “the alteration or repair of
such facility” are paid wages at rates not
less than the applicable prevailing wage
rates. Under section 45(b)(7)(A)(ii), the
prevailing wage rates that are required to
be paid with respect to such construction,
alteration, or repair are determined by ref-
erence to the prevailing rates for construc-
tion, alteration, or repair of a similar char-
acter in the locality in which such facility
is located.
Section 45(b)(8) sets forth the Appren-
ticeship Requirements that apply “with
respect to the construction of any qualified
facility.” Under the Labor Hours Require-
ment, section 45(b)(8)(A)(i) provides that
taxpayers must ensure “with respect to the
construction of any qualified facility” that
the applicable percentage of the total labor
hours is performed by qualified appren-
tices. Under the Participation Require-
ment, section 45(b)(8)(C) provides that
each taxpayer, contractor, or subcontrac-
tor who employs four or more individuals
“to perform construction, alteration, or
repair work with respect to the construc-
tion of a qualified facility” must employ
one or more qualified apprentices.
The Proposed Regulations would have
defined the scope of taxpayers’ obligation
to comply with the PWA requirements
consistent with this statutory language.
Under the Proposed Regulations, taxpay-
ers would have been required to comply
generally with respect to the construc-
tion of a qualified facility. The Proposed
Regulations did not define the meaning
of construction of a qualified facility for
purposes of either the Prevailing Wage
Requirements or the Apprenticeship
Requirements.
Proposed §1.45-7(d)(2)(i) would
have defined “construction, alteration, or
repair” to mean construction, prosecu-
tion, completion, or repair as defined in
29 CFR 5.2. Under 29 CFR 5.2, construc-
tion, prosecution, completion, or repair is
defined expansively to include “all types
of work” done on a particular building or
work at the site of the work, as defined in
29 CFR 5.2, by laborers and mechanics
employed by a contractor or subcontrac-
tor. This work includes altering, remodel-
ing, installing of items fabricated offsite;
painting and decorating; manufacturing
or furnishing of materials, articles, and
supplies or equipment on the site of the
work; and certain demolition or removal
activities.
Under the Proposed Regulations, the
scope of the requirement to pay wages
at rates not less than the prevailing rates
would be clarified by the “site of the
work” definition under the DBA. Under
the DBA, the requirement to pay pre-
vailing wages is limited by statute to
work performed “directly on the site of
the work.”
23
Under the DBA, secondary
construction sites are considered part of
the site of the work if a significant por-
tion of a building or work is constructed
at the secondary site for specific use in the
designated building or work and the site
either was established specifically for the
performance of the covered contract or
project or dedicated exclusively, or nearly
so, to the covered contract or project for
a specific period of time. By comparison,
section 45(b)(7)(A)(i) and (ii) requires the
payment of prevailing wages generally in
the construction of a qualified facility and
the alteration or repair of such facility. As
explained in the preamble to the Proposed
Regulations, the language of section
45(b)(7)(A) could be, but does not need
to be, interpreted to support an expansive
reading of construction such that all con-
struction of a qualified facility, wherever
located and however small, would be sub-
ject to the Prevailing Wage Requirements,
resulting in a significantly broader scope
under section 45(b)(7) than under the
DBA. The Proposed Regulations would
have taken a less expansive reading and
applied the scope of the Prevailing Wage
Requirements to the site of the work, con-
sistent with the DBA rules.
The Treasury Department and the
IRS understood the DBA approach to
the site of the work as providing useful
guidance for balancing the requirements
to pay wages at rates not less than pre-
vailing rates with respect to the construc-
tion of a qualified facility and existing
construction practices in cases in which
some construction activities related to
a facility may occur in multiple loca-
tions. This approach is also consistent
with the principle outlined in Section
I.A. of this Summary of Comments and
Explanation of Revisions to incorporate
the DBA requirements that are relevant
for claiming the increased credit amount
and consistent with sound tax adminis-
tration. The Proposed Regulations would
have largely adopted the DBA approach
(including rules relating to secondary
23
40 U.S.C. 3142(c)(1).

August 19, 2024 436 Bulletin No. 2024–34
sites) for purposes of defining the scope
of the Prevailing Wage Requirements in
proposed §1.45-7(d)(6). Under proposed
§1.45-7(d)(6), taxpayers would have been
subject to the requirement to ensure that
laborers and mechanics are paid wages at
rates not less than prevailing wage rates
with respect to the construction, alter-
ation, or repair at the locality in which
the facility is located, which is defined to
include any secondary sites where a sig-
nificant portion of the construction, alter-
ation, or repair of the facility occurs, pro-
vided that the secondary site either was
established specifically for, or dedicated
exclusively for a specific period of time
to, the construction, alteration, or repair
of the facility.
Many commenters requested clarifi-
cation of how the definition and the site
of the work DBA-concept applies across
the various Code sections for purposes
of determining what work performed in
the construction, alteration, or repair of
a qualified facility is subject to the Pre-
vailing Wage Requirements. Commenters
also emphasized that the site of work defi-
nition must reflect the expanded realities
of modern construction practices, under
which a large and growing percentage of
construction, alteration, and repair work is
performed offsite through either prefab-
rication, modularization, or both. A com-
menter recommended that the site of work
definition account for recent technolog-
ical developments in which the COVID-
19 pandemic magnified the need to build
spaces that can be rapidly adjusted. A com-
menter stated that a number of legal chal-
lenges to newly added provisions to the
regulations under the DBA are expected
to be filed, creating ambiguity and a lack
of reliability. Commenters also suggested
providing specific examples relevant to
clean energy projects.
Commenters requested that the site of
work for PWA purposes no longer incor-
porate the DOL definition, based on the
DBA. Commenters opined that site of
the work for PWA purposes should not be
based on the scope of the DBA and should
not extend to offsite or secondary construc-
tion sites, including manufacturing sites,
access roads, substations, buildings, and
similar property. Commenters argued that
incorporating the DOL definition of site of
the work leads to an overly broad appli-
cation of the PWA requirements to such
activities as offsite manufacturing facili-
ties, dedicated production lines, or modu-
lar facilities that service multiple projects
but that may service a single large project
for an extended period of time – which is
not uncommon in the clean energy indus-
try. Commenters also sought guidance
concerning the treatment of property such
as access roads and substations that may
not be eligible property associated with
a qualified facility resulting in a scope of
the PWA requirements reaching beyond
the qualified facility that is eligible for the
increased credit amount. One commenter
stated that the incorporation of the site of
work may subject some taxpayers to dif-
ferent enforcement schemes because the
projects may be subject to State or local
prevailing wage laws.
Commenters also suggested that if
the DBA approach is adopted in the final
rule, that any discussion of secondary
manufacturing facilities distinguish with
examples between genuine offsite man-
ufacturing activities and those that the
newly expanded DBA definition would
include. Commenters requested that the
Prevailing Wage Requirements not apply
to manufacturing facilities, dedicated
production lines, prefabrication facilities,
laydown yards, or “mod-yard” locations
that generally service multiple projects
and customers. A commenter requested
that the final regulations clarify that
structures established prior to the start
of construction of the qualified facility
are not covered by the phrase “site of the
work” irrespective of their adjacency or
dedication to that site. The commenter
also suggested that adjacent or virtually
adjacent locations should not be covered
by the PWA requirements if they exceed
a 2-mile perimeter.
In contrast, other commenters urged
the Treasury Department and the IRS to
use the DBA site of work definition for
the PWA requirements, including sec-
ondary sites that are established specifi-
cally for the performance of the covered
contract or project or dedicated exclu-
sively, or nearly so, to the covered con-
tract or project for a specific period of
time. These commenters emphasized the
lack of statutory language in the IRA lim-
iting the application of prevailing wage
rules based on where work in furtherance
of the project is performed and also sug-
gested defining site of work to cover all
locations where construction of a covered
project is performed. Another commenter
claimed that Congress deliberately chose
to draft section 45(b)(7)(A) in broader
terms than the DBA and recommended
that the final regulations apply to all con-
struction sites where integral components
of the facility are constructed and dedi-
cated support sites. Commenters recom-
mended that the IRS follow DBA court
decisions and mirror the considerations
of DBA regulations.
The Treasury Department and the IRS
agree with commenters that additional
clarity is warranted with respect to defin-
ing the scope of the PWA requirements.
The Prevailing Wage Requirements apply
with respect to the construction of a facil-
ity and with respect to the alteration or
repair of a facility. The Apprenticeship
Requirements apply with respect to con-
struction of a facility. While the terms
construction, alteration, and repair draw
meaning from the DBA, Congress did not
qualify the scope of such activities by the
site of the work rule found explicitly in
the DBA in defining the scope of the PWA
requirements under the IRA. Instead, sec-
tion 45(b)(7) and (8) limit the scope of
construction, alteration, or repair to those
activities occurring with respect to a qual-
ified facility. The term qualified facility
(as described in section 45 and guidance
thereunder) has specific meaning for tax
purposes.
24

The final regulations clarify that the
PWA requirements apply with respect to
a qualified facility within the meaning
of section 45. The Treasury Department
and the IRS recognize that only a portion
of a construction project may be used to
produce energy covered by the IRA tax
credits. Under the general rule provided
for in the final regulations, the PWA
requirements apply to the portion of the
activity that is creditable or deductible per
24
See, e.g., Rev. Rul. 94-31, 1994-1 C.B. 16.

Bulletin No. 2024–34 437 August 19, 2024
the Code under the respective underlying
section.
25

As discussed elsewhere in this pream-
ble, the Treasury Department and the IRS
have incorporated DBA rules if relevant
and helpful for tax administration. Despite
the differing statutory language with
respect to scope, the DOL approach to site
of the work under the DBA regulations
is instructive for application of the PWA
requirements with respect to activities
that may occur at locations other than the
location of the facility. Accordingly, the
final regulations continue to use the DBA
concept of site of the work with respect to
secondary sites to define the scope of the
PWA requirements for work that occurs at
secondary locations.
The Treasury Department and the IRS
also agree with the concerns raised by the
commenters on how the secondary site
rule could impact manufacturing activi-
ties that occur at offsite locations and are
performed by unrelated parties. The final
regulations clarify that adoption of the
site of the work concept is designed to
define the scope of the PWA requirements
and prevent an application of the rules
that would result in all work on a facility,
wherever performed and however small,
being subject to the requirements. Under
the final regulation, unrelated third-party
manufacturers who produce materials,
supplies, equipment, and prefabricated
components for multiple customers or the
general public would not be subject to the
PWA requirements.
VII. Prevailing Wage Requirements
A. In general
Section 45(b)(7)(A)(i) requires that
with respect to a qualified facility, tax-
payers who are seeking an increased
credit amount ensure that laborers and
mechanics employed by the taxpayer,
or any contractor or subcontractor in
the construction of such facility are paid
wages at rates not less than the prevailing
rates determined by the DOL in accor-
dance with the DBA. Section 45(b)(7)
(A)(ii) further requires that prevailing
wages are paid with respect to alteration
or repair of a qualified facility for any
portion of a taxable year that is within
the 10-year period beginning on the
date the qualified facility was placed in
service. Proposed §1.45-7(a) generally
would have provided that a taxpayer
claiming or transferring (under section
6418) the increased credit amount under
section 45(b)(6)(B)(iii) with respect to
any qualified facility must satisfy the
requirements of section 45(b)(7) and
proposed §1.45-7. Proposed §1.45-7(b)
(1) would have provided that a taxpayer
needs to ensure that the wages paid to
laborers and mechanics employed by the
taxpayer, contractor, or subcontractor
in the construction, alteration, or repair
of the facility must be not less than the
prevailing rates in the geographic area in
which such facility is located. Proposed
§1.45-7(b)(6) would have provided that
all laborers and mechanics working on a
qualified facility must be paid in the time
and manner consistent with the regular
payroll practices of the taxpayer, contrac-
tor, or subcontractor.
A few commenters requested that the
final regulations require taxpayers, con-
tractors, and subcontractors to adopt
weekly payroll practices, as is required for
DBA-covered contracts. The comment-
ers stated that requiring weekly payroll
would deter fraud and enable taxpayers to
ensure that contractors and subcontractors
comply with PWA requirements. Many
other commenters supported the payment
of prevailing wages consistent with the
taxpayer’s regular payroll practices. The
commenters supported the flexibility of
the proposed rule and stated that a weekly
payroll requirement would not assist the
IRS in administering the PWA require-
ments.
Section 45(b)(7) requires that labor-
ers and mechanics be paid wages at rates
not less than the prevailing rates; there
is no statutory requirement that laborers
and mechanics must be paid on a weekly
basis. As several commenters stated, tax-
payers, contractors, and subcontractors
should have the flexibility to pay their
workers in accordance with their ordinary
payroll schedules. For these reasons, these
final regulations adopt the proposed rule
requiring payment in the time and manner
consistent with the regular payroll prac-
tices without change.
A commenter requested that the final
regulations provide an exception for
effective compliance with the Prevailing
Wage Requirements. The limited penalty
waiver in §1.45-7(c)(6) and described
in Section VII.D.4. of this Summary of
Comments and Explanation of Revisions
provides sufficient relief for inadvertent,
minor errors. Another commenter sug-
gested clarifying whether a taxpayer
would be deemed to satisfy the Pre-
vailing Wage Requirements for a given
year after a facility is placed in service
if neither alterations nor repairs were
performed during that year. The final
regulations clarify that after a facility
is placed in service, taxpayers are only
required to meet the Prevailing Wage
Requirements with respect to alterations
and repairs if alterations or repairs are
actually performed during the rele-
vant period.
26
The final regulations also
provide that if there is no alteration or
repair that occurs during the relevant
year, the taxpayer is deemed to satisfy
the Prevailing Wage Requirements with
respect to that year.
Commenters asked that the final reg-
ulations clarify whether the applicable
prevailing wage rate is based on where
25
Accordingly, as applicable, the PWA requirements apply under section 30C with respect to a qualified alternative fuel vehicle refueling project described in section 30C(g)(1)(B) (consisting
of one or more qualified properties within the meaning of section 30C(c) that are part of a single project); under section 45L with respect to a qualifying residence described in section 45L(a)
(2)(B) (that meets the requirements of section 45L(c)(1)(A) or (B), as applicable); under section 45Q, with respect to a qualified facility and any carbon capture equipment placed in service at
that facility within the meaning of section 45Q(d); under section 45U with respect to a qualified nuclear power facility within the meaning of section 45U(b); under section 45V with respect
to a qualified clean hydrogen production facility within the meaning of section 45V(c)(3); under section 45Y with respect to a qualified facility within the meaning of section 45Y(b); under
section 45Z, with respect to a qualified facility within the meaning of section 45Z(d)(4) producing transportation fuel (as defined in section 45Z(d)(5)) or sustainable aviation fuel (as defined in
section 45Z(a)(3)(B)); under section 48C, with respect to a qualified investment (as defined in section 48C(b)) in a qualifying advanced energy project within the meaning of section 48C(c)(1)
(A); and under section 179D, with respect to energy efficient commercial building property within the meaning of section 179D(c)(1), and energy efficient building retrofit property pursuant
to a qualified retrofit within the meaning of section 179D(f); and in each case including any guidance issued thereunder the relevant Code section.
26
This rule does not apply with respect to sections 30C, 45L, 48C, and 179D as those Code sections do not include a continuing obligation for the payment of prevailing wages with respect
to any alterations or repairs that occur after the placed in service date.

August 19, 2024 438 Bulletin No. 2024–34
the project is being constructed or where
the contractor is performing their work.
Another commenter stated that in most
cases the wages paid are based on the
local market where the contractor or sub-
contractor obtains their labor. Section
45(b)(7)(A) provides that the prevailing
wage rate is based on the locality of the
facility that is being constructed. The
Proposed Regulations similarly would
have provided that the wage rates must
be not less than the prevailing rates in the
geographic area in which such facility is
located. The final regulations continue to
use the DBA concept of site of the work to
address construction of a qualified facility
that occurs at one or more secondary loca-
tions. The applicable prevailing wage rate
that must be paid to laborers and mechan-
ics is determined by the location of the
work performed, which may be the loca-
tion of the qualified facility or any second-
ary locations.
The Proposed Regulations would have
provided a special rule for qualified facil-
ities located offshore so taxpayers would
not need to request a supplemental wage
determination for offshore facilities.
Under the Proposed Regulations, in lieu of
requesting a supplemental wage determi-
nation for a facility located in an offshore
area within the outer continental shelf of
the United States, a taxpayer, contractor,
or subcontractor would be permitted to
rely on the general wage determination for
the relevant category of construction that
is applicable in the geographic area clos-
est to the area in which the qualified facil-
ity will be located. To the extent that the
PWA requirements apply to onshore activ-
ities related to an offshore wind facility,
one commenter suggested clarifying that
the locality in which such onshore activ-
ities occur, and not where the offshore
wind facility is located, would determine
prevailing wage rates for those activities.
A commenter expressed their support for
permitting offshore facilities to use the
general wage determination applicable to
the closest onshore area to the facility. The
proposed rule is adopted without change.
Onshore activities that are also considered
construction of a facility within the scope
of the PWA requirements must pay wages
at rates not less than the applicable pre-
vailing rates for the location of the work
performed.
B. Determining the applicable prevailing
wage rate
1. General Wage Determinations
Section 45(b)(7)(A) requires that with
respect to a qualified facility, taxpay-
ers who are seeking an increased credit
amount ensure that laborers and mechan-
ics employed by the taxpayer, or any con-
tractor or subcontractor, in the construc-
tion, alteration, or repair of such facility
are paid wages at rates not less than the
prevailing rates as most recently deter-
mined by the DOL in accordance with
the DBA. As stated in the preamble to the
Proposed Regulations, prevailing wage
rates are those determined to be prevailing
for laborers and mechanics for the various
classifications of work performed with
respect to a specified type of construction
in a geographic area. Under the Proposed
Regulations, prevailing wage rates would
be determined by the DOL in accordance
with the DBA if they are issued and pub-
lished by the DOL as a general wage deter-
mination or if issued to a taxpayer as part
of a supplemental wage determination or
pursuant to a request for a wage rate for an
additional classification.
With respect to the proper timing of a
wage determination, proposed §1.45-7(b)
(5) would have provided that the appli-
cable prevailing wage rates on a general
wage determination are those in effect
at the time construction, alteration, or
repair of the facility begins, and generally
remain valid for the duration of the work
performed with respect to the construc-
tion, alteration, or repair of the facility
by the taxpayer, contractor, or subcon-
tractor. Taxpayers who perform any alter-
ation or repair of a facility after the facil-
ity is placed in service would have been
required to use the applicable wage deter-
mination in effect at the time the alteration
or repair work begins.
Commenters suggested aligning the
timing of wage determinations with the
DOL regulations under the DBA, includ-
ing updates to the DBA regulations
released in August of 2023, to minimize
taxpayer confusion. Several commenters
requested that the final regulations provide
that prevailing wage rates be established
for the entire project when construction
contracts are executed, not when con-
struction begins, consistent with the DBA.
Commenters emphasized that prevailing
wage determinations are an important fac-
tor in determining the cost of labor and
that project costs need to be known ahead
of time to accurately bid on contracts.
Commenters asserted that waiting until
construction begins to determine labor
costs will lead to financial uncertainty and
may discourage participation in construc-
tion projects by many contractors because
contractors need to know what the prevail-
ing wage obligations are prior to bidding
for a project. The commenter stated that
the need to apply new wage rates at the
start of construction would be disruptive
and create unnecessary financial risk for
contractors after they have entered into a
contract for construction of a facility.
Commenters stated that portions of
the Proposed Regulations refer to a con-
tract when referencing the timing of a
DBA wage determination, while others
refer to a facility, and requested clarifi-
cation. Another commenter stated that
the approach in the Proposed Regula-
tions conflicts with early guidance issued
by the DOL regarding IRA prevailing
wage compliance.
27
A few commenters
requested that the final regulations retain
the rule that the wage determination be
determined at the beginning of construc-
tion or revise the rule to provide for the
determination of wage rates at the project
level to avoid multiple wage rates for the
same work. These commenters stated that
because there is no analogous prime con-
tract with a Federal agency as under the
DBA, connecting the wage determination
timing to the execution of a contract could
be challenging. Commenters stated that
determining prevailing wage rates at the
project level would allow for greater con-
sistency between contractors and subcon-
tractors. Another commenter emphasized
that each taxpayer, contractor, and sub-
contractor should be subject to the same
27
U.S. Dept. of Labor, Davis-Bacon and Related Acts (DBRA) Frequently Asked Questions, §III.11, https://www.dol.gov/agencies/whd/government-contracts/construction/faq.

Bulletin No. 2024–34 439 August 19, 2024
applicable wage determination. At least
one commenter suggested that the final
regulations should permit taxpayers to use
wage determinations at the time contracts
are executed or when construction begins.
The DBA framework is predicated on
a Federal contract for the construction
of public buildings and public works
between the Federal Government and
contractors. Under the DBA, every con-
tract to perform construction, alteration,
or repair to which the Federal Govern-
ment is a party must contain a provision
stating the prevailing wage rates to be
paid to various classes of laborers and
mechanics. The DBA regulations gen-
erally provide that the applicable wage
rates for a contract are those in effect at
the time the prime contract is awarded by
the Federal contracting agency.
28
By con-
trast, under the PWA requirements, there
is no contracting party directly analogous
to the Federal Government. Under the
Prevailing Wage Requirements, taxpay-
ers are required to ensure the payment of
at least prevailing wages, but they may
do so through the execution of multiple
contracts and subcontracts or may per-
form the work with their own employees.
Because of the perceived difficulty
in assigning a fixed time to establish the
applicable prevailing wage rates based on
the execution of contracts, the proposed
rules would have provided that the appli-
cable prevailing rates are determined at the
beginning of construction. However, the
Treasury Department and the IRS under-
stand the need for taxpayers to reduce
uncertainty and determine expected labor
costs prior to entering into contracts for the
construction of a facility. Additionally, the
Treasury Department and the IRS agree
that the “in accordance with” language in
section 45(b)(7) supports drawing from
the DBA rules to determine the appro-
priate timing for establishing the appli-
cable wage rates. Accordingly, the final
regulations are revised to provide that the
applicable prevailing rates are determined
at the time the contract for the construc-
tion, alteration, or repair of the facility is
executed by the taxpayer (or the taxpay-
er’s designee, assignee, or agent) and a
contractor. The prevailing wage rates at
the time such contract is executed apply
to all subcontractors of that contractor. In
circumstances in which a taxpayer (or the
taxpayer’s designee, assignee, or agent)
executes separate contracts with more
than one contractor, then for each such
contract, the applicable prevailing rates
with respect to any work performed by
the contractor (and all subcontractors of
the contractor) are determined at the time
the contract is executed by the taxpayer
(or the taxpayer’s designee, assignee, or
agent) and the contractor. In the absence
of a contract, or if a contractor or subcon-
tractor is unable to determine the date of
execution of the contract, the final regu-
lations provide that the applicable wage
determinations are those in effect at the
time construction starts.
These revisions address commenters’
practical business concerns regarding
costs and financing and provide greater
consistency with how the applicable wage
rates are established under the DBA. The
final regulations address the concern
of commenters that various wage rates
would apply, or that costs will not be able
to be determined up front, because they
apply the rate at the time the contract is
executed between the taxpayer and a con-
tractor to all subsequent contracts that
flow from such contract. Thus, consistent
with the DBA, the final regulations allow
for more than one wage determination to
apply with respect to the construction,
alteration, or repair of a facility in cases in
which a taxpayer executes separate con-
tracts with more than one contractor, but
nonetheless provide certainty for the tax-
payer, contractor, and subcontractor with
respect to any work performed pursuant to
that contract.
The final regulations also adopt a sim-
ilar framework for alterations or repairs
that occur after the facility is placed in
service with applicable wage determina-
tions applying when a contract is executed
between a taxpayer and contractor for the
alteration or repair of a facility, or absent
a contract, when the repair or alteration
starts. The final regulations also add all
contracts for construction, alteration, or
repair to the list of records that may be
necessary to demonstrate compliance with
the applicable Prevailing Wage Require-
ments.
Under the Proposed Regulations, tax-
payers generally would not have been
required to update the applicable prevail-
ing wage rates during construction of the
facility in the event a new general wage
determination was published by the DOL
after construction of the facility begins.
The preamble to the Proposed Regula-
tions stated that a new wage determina-
tion would be required if the contract is
changed to include additional, substantial
construction, alteration, or repair work not
within the scope of work of the original
contract, or to require work to be per-
formed for an additional time period not
originally obligated, including in the case
of an option to extend the term of a con-
tract for the construction, alteration, or
repair being exercised. Proposed §1.45-
7(b)(5) mirrored the language in the
preamble, but omitted the term substantial
from the rule. The Proposed Regulations
also would have provided that taxpayers
would need to update the applicable wage
rate(s), as necessary, with respect to any
alteration or repair of a facility that begins
after the facility has been placed in service.
Taxpayers would do this by ensuring that
wages are paid for such alteration or repair
based on the general wage determination
in effect when the alteration or repair
begins.
Several commenters were concerned
about the requirement to update prevailing
wage rates during the lifespan of a con-
struction project. Commenters suggested
clarifying how to determine when, under
the Proposed Regulations, an additional
time period not originally obligated has
occurred that necessitates obtaining a
new wage determination. The comment-
ers stated that the language with respect
to an additional time period is ambiguous
and could apply to ordinary delays and
extensions that are common in construc-
tion projects. Commenters requested that
the terms substantial and additional be
defined, or a de minimis value be set, to
better clarify the threshold of new work
or additional time above which taxpay-
ers would be required to seek a new wage
determination.
28
Under 29 CFR 5.2, the term “contract” means any prime contract that is subject wholly or in part to the labor standards provisions of any of the laws referenced by 29 CFR 5.1 and any
subcontract of any tier thereunder, let under the prime contract.

August 19, 2024 440 Bulletin No. 2024–34
The commenters recommended inclu-
sion of language from the DBA regula-
tions to clarify that a new wage determi-
nation is not required if additional time
is given to complete the original com-
mitment or if the additional construction,
alteration, and/or repair work as part of
the modification is merely incidental.
Other commenters recommended the final
regulations include a substantiality thresh-
old consistent with DBA regulations. One
commenter suggested the final regulations
require new wage rates only if there is
a cardinal change to a covered project.
Another commenter suggested limiting
the need for additional wage determina-
tions to increases in the project’s budget of
at least 30 percent or delays of at least 120
days to the project’s expected completion
date. One commenter suggested that the
wage determination in effect at the begin-
ning of a taxpayer’s taxable year be used
for all alterations and repairs occurring in
the years after a facility is placed in ser-
vice.
The Treasury Department and the
IRS agree that clarifications are needed
and that the rules regarding when a new
wage determination is required should be
consistent with the rules under the DBA.
Under the DBA guidance in 29 CFR 1.6,
if there is additional, substantial construc-
tion, alteration, and/or repair work not
within the scope of work of the original
contract or order, or changes to require
the contractor to perform work for an
additional time period not originally obli-
gated, including cases in which an option
to extend the term of a contract is exer-
cised, the contracting agency must include
the most recent revision of any wage
determination(s) at the time the contract
is changed or the option is exercised. This
does not apply if the contractor is simply
given additional time to complete its orig-
inal commitment or if the additional con-
struction, alteration, and/or repair work in
the modification is merely incidental. The
DBA regulations also provide rules with
respect to contracts for construction, alter-
ation, or repair work over a period of time
that is not tied to the completion of any
specific work, such as indefinite operations
and maintenance or repair contracts. The
DBA regulations require contractors who
are parties to these types of contracts to
update the applicable wage rates for such
contracts on an annual basis. The revised
wage determination then applies to any
alteration or repair work that begins under
such a contract during the 12 months fol-
lowing the update until such construction
work is completed, even if the completion
of that work extends beyond the twelve-
month period.
Accordingly, the final regulations
update the proposed rule to include the
substantiality requirement discussed in
the preamble to the Proposed Regulations,
and further clarify that the requirement
to update the wage determination does
not apply if the contractor is given more
time to complete its original commitment
or if the additional work is merely inci-
dental. The final regulations also update
the proposed rule to provide that if a tax-
payer enters into a contract for alteration
or repair work over an indefinite period
of time that is not tied to the completion
of any specific work, the applicable wage
rates must be updated on an annual basis.
2. Applicable Prevailing Wage Rate for
General Wage Determinations
The Proposed Regulations would have
provided that a general wage determina-
tion would be one issued and published by
the DOL that includes a list of wage and
bona fide fringe benefit rates determined
to be prevailing for laborers and mechan-
ics for the various classifications of work
performed with respect to a specified type
of construction in a geographic area. As
stated in the preamble to the Proposed
Regulations, generally, the DOL conducts
surveys to determine the prevailing rate
based on wage rate data submitted by con-
tractors, contractors’ associations, labor
organizations, public officials, and other
interested parties. In general, the Pro-
posed Regulations would have provided
that to determine the applicable prevailing
wage rates, taxpayers would need to use
the general wage determination(s) pub-
lished by the DOL under the DBA on a
DOL approved website. The current DOL
approved website for publishing general
wage determinations is https://www.sam.
gov.
Section 45(b)(7)(A) requires that tax-
payers ensure the payment of prevailing
wages at rates not less than the prevailing
rates determined in accordance with the
DBA. The Proposed Regulations would
have largely incorporated the definition of
wages from 29 CFR 5.2 for the Prevailing
Wage Requirements. Under the Proposed
Regulations, wages would be defined as
the basic hourly rate of pay; any contri-
bution irrevocably made by a contractor
or subcontractor to a trustee or to a third
person pursuant to a bona fide fringe ben-
efit fund, plan, or program; and the rate
of costs to the contractor or subcontractor
that may be reasonably anticipated in pro-
viding bona fide fringe benefits to laborers
and mechanics pursuant to an enforceable
commitment to carry out a financially
responsible plan or program, which was
communicated in writing to the laborers
and mechanics affected. The Proposed
Regulations would have also incorporated
by reference the rules set forth in 29 CFR
5.25 through 5.33 with respect to the costs
for bona fide fringe benefits that may be
credited for purposes of the payment of
wages. The Proposed Regulations would
have prescribed rules with respect to the
payment of wages including that the pay-
ment of wages be made without deduction
(except such payroll deductions as are
required by the law or permitted by reg-
ulations issued by the Secretary of Labor)
and must consist of the full amount of
wages (including bona fide fringe benefits
or cash equivalents thereof). Under the
Proposed Regulations, whether amounts
are wages for purposes of the Prevailing
Wage Requirements would not be rele-
vant in determining whether amounts are
wages or compensation for other Federal
tax purposes.
One commenter suggested that prevail-
ing wage rates established by the DOL fail
to take into account actual compensation
to workers, including fringe benefits, in
all cases. The commenter suggested that
to calculate prevailing wage amounts, an
employer would not be able to take credit
for the cost to set up and offer medical
insurance if an employee opts out of med-
ical coverage. The commenter also stated
that taxpayers who enter into a collective
bargaining agreement may be disadvan-
taged, because the agreement could set the
wages and benefits below the prevailing
wage amounts for covered employees.
The commenter suggested establishing
a safe harbor whereby a taxpayer would
be deemed to satisfy Prevailing Wage

Bulletin No. 2024–34 441 August 19, 2024
Requirements if a substantial number –
defined as 90 percent – of their employees
are paid prevailing wages.
This comment appears to misstate the
DBA requirements, and to the extent the
comment addresses the determination of
prevailing wage rates for purposes of the
DBA, the comment is outside the scope
of these regulations. The Proposed Reg-
ulations would have largely incorporated
the definition of wages from 29 CFR 5.2
for the Prevailing Wage Requirements.
Under 29 CFR 5.2 wages include any
contribution irrevocably made by a con-
tractor or subcontractor to a trustee or
to a third person pursuant to a bona fide
fringe benefit fund, plan, or program;
and the rate of costs to the contractor or
subcontractor that may be reasonably
anticipated in providing bona fide fringe
benefits to laborers and mechanics pur-
suant to an enforceable commitment to
carry out a financially responsible plan
or program, which was communicated
in writing to the laborers and mechan-
ics affected. The Proposed Regulations
would have therefore included in the
payment of prevailing wages, the rate of
costs to an employer to provide bona fide
fringe benefits. Additionally, the statute
requires the payment of prevailing wages
in accordance with the DBA and does not
allow lower wage rates because there is
a collective bargaining agreement or if
90 percent of workers have been paid the
applicable wage rates. Accordingly, the
changes suggested by the commenter are
not incorporated.
A commenter stated that the Proposed
Regulations impose no obligation on tax-
payers to confirm that fringe benefit con-
tributions by contractors are made to bona
fide entities. The commenter suggested
requiring taxpayers to: (i) provide notice
of an enforceable commitment to provide
bona fide fringe benefits, and (ii) confirm
that fringe benefit contributions made on
behalf of laborers and mechanics by con-
tractors and subcontractors are made to a
bona fide fringe benefit fund, plan, or pro-
gram. Another commenter request that the
final regulations specifically allow for the
payment of non-required forms of com-
pensation, such as paying for a portion of
health insurance, to make up for any wage
payments that are below the prevailing
wage rate.
Consistent with the DBA, the final
regulations clarify that a taxpayer may
discharge its wage obligations for the pay-
ment of prevailing wages by paying the
full amount in cash, by making payments
to a bona fide fringe benefit provider or
incurring costs for bona fide fringe ben-
efits, or by a combination thereof. As dis-
cussed previously, wages are defined to
include contributions irrevocably made by
a contractor or subcontractor to a trustee
or to a third person pursuant to a bona fide
fringe benefit fund, plan, or program. Fail-
ures by contractors or subcontractors to
make payments to bona fide plans or pro-
grams may result in laborers and mechan-
ics being paid wages at rates less than the
required prevailing wage rates. However,
there is flexibility because the taxpayer,
contractor, or subcontractor can pay the
entire prevailing wage amount through
the basic hourly rate, including the cash
equivalent of fringe benefits. They are
permitted, but not required, to provide
bona fide fringe benefits. If they do pro-
vide bona fide fringe benefits, the cost of
those benefits is included in the prevailing
wage rate. It is ultimately the taxpayer’s
responsibility to ensure compliance with
the Prevailing Wage Requirements. These
final regulations do not require any spe-
cific method for the taxpayer to ensure
compliance; however, taxpayers must
maintain records reflecting that compli-
ance.
Other commenters opined that the
DOL prevailing wage rates are based on
unreliable methodologies and are flawed
and inaccurate. A commenter stated that
existing prevailing wage laws have an
inflationary impact on construction costs.
Similarly, a commenter suggested that
the rates used for the wages are gener-
ally drawn from the nearest urban center
and don’t necessarily reflect local market
conditions. A commenter expressed that
the prevailing wage rates published by
the DOL are subject to change and can
vary greatly by location, category, and job
type. The commenter suggested the uncer-
tainty of prevailing wage rates will inhibit
investment in clean energy projects and
raise the cost and risk of such projects.
Under section 45(b)(7)(A), the
increased credit amount provided by sec-
tion 45(b)(6) is available with respect to a
qualified facility if a taxpayer ensures that
laborers and mechanics are paid wages
at rates not less than the prevailing rates
for construction, alteration, or repair of a
similar character in the locality in which
such facility is located as most recently
determined by the Secretary of Labor in
accordance with the DBA. The statute
mandates the use of prevailing wage rates
determined by the DOL. The DOL wage
determination survey process and data
sufficiency are outside the scope of these
final regulations.
Commenters also stated that union
classifications are complex and confusing
and that nonunion contractors may strug-
gle to classify certain jobs with descrip-
tions contained in collective bargaining
agreements that are not shared publicly.
The commenter raised that the DOL has
applied union work rules and job descrip-
tions to any classification for which the
union rate prevails. A commenter recom-
mended that taxpayers, contractors, and
subcontractors should not be penalized for
failing to conform to job descriptions that
are not published by the DOL and/or the
unions whose wage scales are found to be
prevailing. The commenter suggested that,
at a minimum, no intentional violation
penalty should be assessed in the absence
of publication of the job descriptions for
each trade, which can be readily accom-
plished by posting hyperlinks to union
collective bargaining agreements, or the
DOL dictionary of occupation definitions.
Commenters also encouraged the Trea-
sury Department and the IRS to recognize
that new clean energy technologies require
new labor classifications and suggested
providing additional guidance regard-
ing other types of professional workers
unique to clean energy that should be con-
sidered distinct from laborers or mechan-
ics. Commenters also requested that the
DOL FAQs be amended to no longer pre-
emptively declare that clean technology
workers will generally be deemed covered
and classified under so-called established
trades, particularly with regard to solar
and wind turbine industries. Commenters
stated that standardization and definition
regarding multiple labor categories is nec-
essary to avoid protracted delays and con-
fusion. Similarly, a commenter suggested
that taxpayers should not be penalized for
misclassifications arising from delays in
the DOL determinations. Another com-

August 19, 2024 442 Bulletin No. 2024–34
menter stated that no clear labor classifica-
tions exist for workers directly employed
by nuclear power plant operators.
Other commenters recommended
implementing the DOL system of trade
and craft classifications under the DBA,
including updates to the DBA regulations
released in August of 2023. A commenter
stated that the update contained specific
recommendations for prevailing wage
classifications, including new definitions
of geographic localities and broader defi-
nitions of construction to better reflect
work on clean energy projects.
The Treasury Department and the IRS
appreciate commenters’ concerns and sug-
gestions regarding emerging technologies
and the need for consistency and transpar-
ency in the classification process. How-
ever, revisions to the DOL regulations and
other guidance regarding worker classifi-
cations for DBA purposes are outside the
scope of these final regulations.
Commenters also requested that the
final regulations clarify the types of con-
struction subject to wage determinations.
For purposes of determining the appli-
cable general wage determination, the
Proposed Regulations would have pro-
vided that the types of construction for
which wage determinations may be issued
include, but are not limited to, building,
residential, heavy, and highway, which
are the types of construction for which the
DOL issues general wage determinations
under the DBA.
29

A commenter recommended clarifying
that the DOL definition and interpretation
of the types of construction should con-
trol for PWA purposes and that only those
types of construction designated by the
DOL as of a similar character in the local-
ity should be permitted for IRA projects.
Other commenters supported only recog-
nizing the DOL’s four major categories of
construction.
The language in the Proposed Reg-
ulations was intended to align with the
types of construction for which the DOL
currently issues wage determinations and
allow for additional or different classifica-
tions should the DOL designate additional
classifications in the future. The final reg-
ulations clarify that the types of construc-
tion are those identified by the DOL and
provide the flexibility for the DOL to add
to or modify those categories as necessary
within the DOL’s existing authorities. Any
decision by the DOL to add to or modify
those categories is outside of the scope of
these final regulations.
A commenter requested that the final
regulations clarify whether the definition
of wages as used in sections 45(b)(7)(A)
and 45Q(h)(3) has the same meaning as
wages provided by 48 CFR 22.401 and
whether such wages should be computed
according to 48 CFR 22.406-2. The final
regulations do not adopt this comment
because section 45(b)(7)(A) requires tax-
payers to ensure that wages are paid at
rates not less than the prevailing rates in
accordance with the DBA and not the Fed-
eral Acquisition Regulations in Title 48 of
the Code of Federal Regulations.
One commenter recommended
expressly adopting the DBA’s “30-percent
rule,” whereby the prevailing wage rate
is defined as the rate paid to the greatest
number of laborers or mechanics in the
classification on similar projects in the
area during the period in question, pro-
vided that the wage is paid to at least 30
percent of those employed in the classi-
fication. Section 45(b)(7)(A)(ii) requires
taxpayers who are seeking an increased
credit amount to ensure that laborers and
mechanics are paid wages at rates that
are not less than the prevailing rates “as
most recently determined” by the DOL
in accordance with the DBA. The Pro-
posed Regulations would have provided
for incorporation of DBA rules for deter-
mining prevailing wage rates by defining
prevailing wage rates as those rates most
recently determined by the DOL. Con-
sistent with section 45(b)(7)(A)(ii), the
final regulations retain the rule from the
Proposed Regulations; they do not incor-
porate the comment to expressly adopt the
30-percent rule.
3. Supplemental Wage Determinations
and Rates for Additional Classification
Requests
The Proposed Regulations would have
provided special procedures for the lim-
ited circumstances in which a general
wage determination does not provide an
applicable wage rate(s) for the work to be
performed on the facility or if there is no
applicable general wage determination.
These circumstances would include cases
in which no general wage determination
has been issued for the geographic area or
for the specified type of construction, or in
which the DOL has issued a general wage
determination for the relevant geographic
area and type of construction, but one or
more labor classifications necessary for
the construction, alteration, or repair work
that will be done on the facility is not
listed as part of that determination.
The Proposed Regulations would have
provided that under these circumstances,
a taxpayer, contractor, or subcontractor
would need to request a supplemental
wage determination or request a prevailing
wage rate for an additional classification
from the DOL. Under the Proposed Regu-
lations, a taxpayer, contractor, or subcon-
tractor could have also requested a supple-
mental wage determination if the location
of the facility involves work by covered
laborers and mechanics that spans more
than one contiguous geographic area. The
procedures for requesting a supplemental
wage determination or a prevailing wage
rate for an additional classification from
the DOL were intended to correspond to
the provisions under the DBA that allow
contracting agencies to seek a project
wage determination or a conformance
under 29 CFR 1.5(b) and 5.5(a)(1)(iii),
respectively.
With respect to supplemental wage
determination requests and requests for
additional classifications and wage rates,
proposed §1.45-7(b)(3)(ii)(A) would have
provided that a taxpayer, contractor, or
subcontractor should make such requests
no more than 90 days before the begin-
ning of construction, alteration, or repair,
as appropriate. While the procedures for
requesting a supplemental wage determi-
nation or rates for additional classifica-
tions would have generally been consis-
tent with DBA rules, there is no similar
timing requirement under DBA rules with
respect to project wage determinations or
conformances that are requested by the
29
Dep’t of Labor, ALL AGENCY MEMORANDUM NO. 130 (March 17, 1978).

Bulletin No. 2024–34 443 August 19, 2024
contracting agency. The 90-day limitation
was proposed to limit requests for hypo-
thetical wage determinations that were
not tied to actual construction projects
in the final planning stages. According
to the DOL, this concern is addressed in
the DBA context through the involvement
of the contracting agency, but there is no
contracting agency involved in the con-
struction of facilities for PWA purposes
that would help avoid unnecessary and
hypothetical requests.
Commenters generally expressed sup-
port of the supplemental wage determina-
tion and additional classification process.
Commenters stated that the procedures
were largely consistent with processes
under the DBA and were necessary given
the constant transformational nature of
the construction industry. One commenter
expressed support for the requirement that
any requests for additional wage deter-
minations bear a reasonable relationship
to the established wage rates, consistent
with the DBA rules. The commenter also
supported the IRS’s recognition that a
request for a prevailing wage rate for an
additional classification would not be per-
mitted to be used to split, subdivide, or
otherwise avoid application of classifica-
tions listed in a general wage determina-
tion. In addition, commenters supported
adopting the DOL test for determining
whether to approve a taxpayer or contrac-
tor’s request to add a missing classifica-
tion to a DBA wage determination. Some
commenters requested that the final regu-
lations expressly adopt the DOL three-part
conformance test for adding missing clas-
sifications to wage determinations. Com-
menters claimed that adopting DOL reg-
ulations governing conformance requests
would help protect multiskilled occu-
pations from unscrupulous contractors
inventing unnecessary subclassifications
for the purpose of paying workers less.
The commenters also suggested clarifying
that the DOL will consider the views of
construction workers to be employed in
the requested classification and stakehold-
ers, including labor unions in the affected
area, with respect to the adequacy of the
requested classification and/or proposed
wage and fringe benefits rates.
The Treasury Department and the IRS
coordinated extensively with the DOL in
drafting the supplemental wage determi-
nation and additional classification pro-
cess outlined in the Proposed Regulations.
The procedures in proposed §1.45-7(b)
(3) for requesting a supplemental wage
determination or a rate for an additional
classification from the DOL would have
corresponded to the provisions under the
DBA that allow contracting agencies to
seek a project wage determination or a
conformance under 29 CFR 1.5(b) and
5.5(a)(1)(iii), respectively. They would
have included certain minor differences
from the conformance process to account
for the absence of a Federal contracting
agency. The comments suggesting that the
DOL should alter its underlying process
and methodology for determining prevail-
ing wages (both in the DBA and the PWA
context) are not adopted. Additionally,
changes to DOL procedures regarding the
DBA are outside the scope of these final
regulations as the DOL administers those
DBA provisions.
Several commenters shared concerns
with the wage determination process
administered by the DOL. One com-
menter stated that numerous occupations
in the clean energy industry are unrepre-
sented in the general wage determinations
currently offered by the DOL, such as
wind technicians often relied upon for the
installation and assembly of onshore and
offshore wind turbines. One commenter
stated that nuclear power generating facil-
ities are different than other construction
projects, including other electric generat-
ing facilities, and that the specialized roles
performed by employees at nuclear facil-
ities are not always covered by existing
DOL classifications. A commenter also
asked for guidance on how to categorize
specific repairs or alterations of an exist-
ing nuclear facility for purposes of DOL
general wage determinations. Similarly,
commenters recommended providing
additional guidance about multi-category
projects, such as who will make the final
determination on the classification of a
project (for example, building or heavy),
and the category a contractor should fol-
low.
Comments requesting additional clas-
sifications and additional guidance from
the DOL on the application of appropri-
ate classifications are outside the scope
of these final regulations. The procedures
for requesting a supplemental wage deter-
mination or a prevailing wage rate for an
additional classification from the DOL
continue to apply.
Some commenters were critical of the
proposed rule requiring that a taxpayer,
contractor, or subcontractor request a sup-
plemental wage determination no more
than 90 days before the beginning of con-
struction of a facility. Commenters stated
that the 90-day period is too short because
of the high importance of the prevailing
wage determination on the cost of labor.
Similar to general wage determinations,
commenters stated that it is necessary to
know project costs at the bidding stage,
and bidding on contracts to construct a
facility takes place far more than 90 days
before the beginning of construction, often
more than one year prior to construction
beginning. Some commenters suggested
the time be extended to a year before a
bid is due or 24 months before the begin-
ning of construction, asserting that this
would provide all potential bidders with
sufficient clarity on wage determinations
and job classifications in sufficient time
to make informed bids on solar and other
clean energy projects. The commenter also
stated that this would reduce the number
of requests to the DOL, which will miti-
gate the burden on government regulators
and allow them to process requests more
efficiently.
The Treasury Department and the IRS
agree with the comments seeking addi-
tional time to request supplemental wage
determinations and rates for additional
classifications. The commenters persua-
sively argued that wage determinations
issued at or near the beginning of con-
struction are not helpful for taxpayers who
will likely seek to enter contracts well in
advance of construction starting. Taxpay-
ers and their contractors need certainty
regarding the labor costs of a project at
the time of entering contracts for work to
be performed rather than when construc-
tion begins. Moreover, the 90-day period
prior to construction starting lacks con-
sistency with the rules under the DBA.
The final regulations revise the Proposed
Regulations to align the timing of requests
for supplemental wage determinations or
rates for additional classification with the
contract framework adopted for general
wage determinations. The final regula-
tions update when taxpayers must request

August 19, 2024 444 Bulletin No. 2024–34
a supplemental wage determination or rate
for additional classification from the DOL
to provide greater certainty for taxpayers
and better align with the rules under the
DBA, while also preventing an influx of
hypothetical requests for supplemental
wage determinations or additional classi-
fications that would be administratively
burdensome to the DOL.
Under the final regulations, requests for
supplemental wage determinations cannot
be made more than 90 days before the date
the contract between the taxpayer (or the
taxpayer’s designee, assignee, or agent)
and a contractor for construction, alter-
ation, or repair of the facility is expected
to be executed. The final regulations fur-
ther prescribe that any supplemental wage
determinations are required to be incor-
porated into the contract between the tax-
payer and contractor within 180 days of
issuance. The 180-day period for incorpo-
ration into a contract provides consistency
with the DBA rules under 29 CFR 1.6(a)
(3)(i).
Under the final regulations, requests
for prevailing wage rates for additional
classifications can be made any time after
a contract for the construction, alteration,
or repair of a facility has been executed
between the taxpayer and a contractor.
The final regulations balance the need of
taxpayers for increased certainty regard-
ing labor costs at or near the time of enter-
ing a contract with the need to limit hypo-
thetical requests that are not tied to actual
construction projects. The DOL WHD has
advised the Treasury Department and the
IRS that most taxpayers will likely not
need to use the process for requesting
a supplemental wage determination or
request a rate for an additional classifica-
tion because of the availability of general
wage determinations.
Commenters requested that the final
regulations provide that if a response from
the DOL for an additional wage rate is not
provided within a specific time period,
such as 60 days, the prevailing wage rate
requirement for that role should no longer
apply. Under the Proposed Regulations,
the procedures for requesting a prevailing
wage rate for an additional classification
from the DOL were intended to corre-
spond to the provisions under the DBA
that allow contracting agencies to seek a
conformance under 29 CFR 5.5(a)(1)(iii).
Section 5.5(a)(1)(iii) of the DBA regula-
tions provides that the DOL will approve,
modify, or disapprove any classification
action within 30 days of receipt or advise
the requesting contracting agency within
the 30-day period that additional time
is necessary. To retain consistency with
the DBA and address the valid taxpayer
and contractor concerns regarding cost
certainty and preventing unreasonable
delays, the final regulations adopt sim-
ilar language that the DOL will resolve
requests for a prevailing wage rate for an
additional classification within 30 days
of receipt or advise the requester within
the 30-day period that additional time is
necessary. The final regulations do not,
however, adopt the commenters sugges-
tion that a delay in receiving an additional
wage rate excepts a taxpayer from the
requirement to pay wages at rates not less
than the prevailing rates for that role.
An additional commenter recom-
mended that, in instances in which tax-
payers receive a supplemental wage deter-
mination or a prevailing wage rate for an
additional classification, taxpayers be pro-
vided a 30-day grace period during which
to pay the affected employees the differ-
ence between the wage determination and
previous wage rates. A commenter also
proposed a 30-day grace period following
a denial or partial-relief from an appeal
with respect to wage determinations gen-
erally.
The Treasury Department and the IRS
recognize the possibility that the DOL
response to a request for a supplemental
wage determination or additional classifi-
cations may not be issued until after labor-
ers and mechanics have started working
on the facility or project. The Proposed
Regulations would have provided that
the taxpayer would not be considered to
have failed to meet the Prevailing Wage
Requirements with respect to any mechan-
ics or laborers whose wage rate was sub-
ject to the request and who were paid less
than the prevailing wage rate before the
determination by the DOL if the taxpayer
requests the supplemental wage determi-
nation or prevailing wage rate for an addi
-
tional classification before the beginning
of construction (or as soon as practicable
after the start of construction) and makes
a correction payment within 30 days
of the determination to each laborer or
mechanic equal to the difference between
the amount of wages paid to such laborer
or mechanic before the determination and
the amount of wages required by the Pre-
vailing Wage Requirements to be paid
to such laborer or mechanic during such
period. This exception is intended to mit-
igate a rule that would require taxpayers
to make correction and penalty payments
for failures to pay a prevailing wage rate
that could not be timely determined by the
taxpayer. The same considerations do not
apply to the request for additional time
while an appeal with respect to a wage
determination is pending. Therefore, the
final regulations adopt the proposed rule
without change.
Commenters also requested that the
final regulations require consistency
between who can request supplemental
wage determinations or additional classifi-
cations and who can seek reconsideration
of such a decision. A commenter stated
that proposed §1.45-7(b)(3)(ii)(A) would
have provided that a taxpayer, contractor,
or subcontractor request a supplemental
wage determination or additional classi-
fication and wage rate and after review,
the DOL WHD will notify the taxpayer,
contractor, or subcontractor as to the
supplemental wage determination or the
labor classifications and wage rates to be
used for the type of work in question in
the geographic area in which the facility
is located. However, proposed §1.45-7(b)
(4) would have provided that, in connec-
tion with seeking a reconsideration of a
wage determination, a “taxpayer may seek
reconsideration and review by the Admin-
istrator of the Wage and Hour Division of
a general wage determination, or a deter-
mination issued with respect to a request
for a supplemental wage determination or
additional classification and wage rate.”
In contrast, one commenter requested that
only taxpayers be permitted to request
supplemental wage determinations. Under
29 CFR 1.8(a), any interested party may
seek reconsideration of a wage determina-
tion.
The final regulations clarify that any
supplemental wage determination or rate
for additional classification request may
be made by the taxpayer, contractor, or
subcontractor. With respect to seeking a
reconsideration of a general wage deter-
mination, or a determination issued with

Bulletin No. 2024–34 445 August 19, 2024
respect to a request for a supplemental
wage determination or rate for additional
classification request, the final regulations
further clarify that the taxpayer, contrac-
tor, or subcontractor may seek the recon-
sideration. Ultimately, the taxpayer must
ensure that the PWA requirements are sat-
isfied regardless of whether a contractor
or subcontractor requested a supplemental
wage determination or requested an addi-
tional classification.
4. Applicable Prevailing Wage Rate for
Apprentices
With respect to the prevailing wage
rates for apprentices, the Proposed Regu-
lations would have adopted 29 CFR 5.5(a)
(4)(i), allowing the payment of wages that
differ from the applicable prevailing wage
rate to apprentices who are participating
in a registered apprenticeship program.
The Proposed Regulations would have
also provided that taxpayers and con-
tractors or subcontractors who employ
individuals who are not in a registered
apprenticeship program or who employ
apprentices in excess of applicable ratios
permitted by the registered apprenticeship
program would need to pay those individ-
uals the full prevailing wage rate listed for
the classification of the work performed in
the applicable wage determination.
A commenter recommended increasing
the rate of pay for apprentices, given the
frequency at which apprentices travel for
work. This comment is not adopted as the
prevailing rate of pay for work performed
by apprentices is determined by the DOL
and is outside the scope of these final reg-
ulations. Comments concerning employ-
ing apprentices in excess of the applicable
ratios are discussed in Section VIII.A.2.
and employing individuals who are not
apprentices because they are not partici-
pating in a registered apprenticeship pro-
gram are discussed in Section VIII.A.5.,
of this Summary of Comments and Expla-
nation of Revisions.
The Proposed Regulations would have
provided a reciprocity rule. Under the pro-
posed reciprocity rule, if the construction
is occurring in a geographic area other
than the geographic area in which an
apprenticeship program is registered, the
ratio applicable within the geographic area
where the construction is being performed
would apply. If there is no applicable ratio
for the geographic area of the facility, the
ratio specified in the registered appren-
ticeship program standard would apply.
Commenters requested clarification
on the applicable apprentice-to-journey-
worker ratio if work is performed outside
of the geographic area in which the appren-
ticeship program typically operates. A few
commenters suggested that the final reg-
ulations adopt a reciprocity standard that
would permit taxpayers to apply either the
apprenticeship-to-journeyworker ratio set
by the registered apprenticeship program
or the State where the construction is
being performed. Another commenter rec-
ommended giving taxpayers flexibility to
determine the appropriate ratio and wage
rates if the taxpayer, contractor, or sub-
contractor is performing covered work in
a geographic area other than that in which
the apprenticeship program is registered.
The Treasury Department and the IRS
appreciate commenters’ requested clarifi-
cation on the proposed reciprocity rule and
work that is performed outside of the geo-
graphic area in which the apprenticeship
program is registered. The proposed rec-
iprocity rule would have largely followed
the rule in 29 CFR 5.5(a)(4)(i)(D) regard-
ing the payment of prevailing wages to
apprentices. Based on consultations with
the DOL, the Treasury Department and the
IRS understand that this rule is intended to
apply in cases in which the ratio require-
ment of the State where the construction
occurs is stricter than that of the regis-
tered apprenticeship program. The final
regulations largely adopt the proposed
rule, and also clarify that if more than one
apprentice-to-journeyworker ratio could
apply because the construction work is
occurring in a geographic area where the
registered apprenticeship program is not
registered, the taxpayer must comply with
the apprentice-to-journeyworker ratio set
for the geographic area where the con-
struction occurs. Thus, if the geographic
area in which the construction is occurring
requires a higher number of journeywork-
ers per apprentices than the ratio required
by the registered apprenticeship program,
then the taxpayer, contractor, or subcon-
tractor must follow the stricter ratio. The
final regulations also adopt the proposed
rule that the wage rates (expressed in per-
centage of the journeyworker hourly rate)
applicable in the geographic area in which
the construction, alteration, or repair work
is performed must be observed.
A commenter requested guidance for
determining the apprentice or apprentices
that must be paid not less than the full
prevailing wage rate for their hours if the
daily ratio requirement is not satisfied. The
final regulations clarify that the taxpayer,
contractor, or subcontractor, as applica-
ble, has the discretion to determine which
apprentice(s) must receive the full prevail-
ing wage rate for hours worked if there is
a failure to satisfy the Ratio Requirement.
At least one commenter recommended
that the final regulations not require tax-
payers to pay at least the full prevailing
wage rate to apprentices in excess of the
applicable ratio. Under the DBA, any
apprentice performing work on the job site
in excess of the ratio permitted under the
registered program or the ratio applicable
to the geographic area of the facility pur-
suant to 29 CFR 5.5(a)(4)(i) must be paid
not less than the full applicable prevailing
wage rate on the wage determination for
the work actually performed. The Pro-
posed Regulations would have provided
that the calculation of the prevailing wage
rate for the work of apprentices would be
in accordance with the DBA rules. The
proposed rule is adopted as final.
A commenter raised that the Proposed
Regulations appear to limit the number of
apprentices that can be paid the appren-
ticeship rate to the number of apprentices
required by the regulation. The com-
menter stated that limiting the number of
apprentices that can be paid the appren-
ticeship rate to the number of apprentices
required by the regulation discourages the
use of a larger number of apprentices and
would seem to violate the policy objec-
tives of the requirements to use appren-
tices. On the other hand, a commenter rec-
ommended adopting the DOL oversight
and quality control standards, including
apprentice-to-journeyworker ratios, to
help ensure safe training of apprentices.
Apprentice-to-journeyworker ratios
prescribe the minimum number of jour-
neyworkers required for each apprentice
that is on a job site on a given day to ensure
the appropriate training and supervision
of apprentices and to maintain workplace
safety. The apprentice-to-journeyworker
ratio does not impose a cap on the total

August 19, 2024 446 Bulletin No. 2024–34
number of apprentices that can be paid the
apprentice rate. For example, a taxpayer
may satisfy a 1:1 ratio by hiring one jour-
neyworker and one apprentice or by hiring
20 journeyworkers and 20 apprentices.
The prescribed ratio does not restrict the
total number of individuals that are hired.
C. Definitions
Commenters suggested clarifying the
extent to which the relevant definitions
under proposed §1.45-7(d) for the Pre-
vailing Wage Requirements apply to the
proposed §1.45-8(f) definitions for the
Apprenticeship Requirements. The final
regulations align the relevant definitions
for the Prevailing Wage Requirements
in §1.45-7(d) with the Apprenticeship
Requirements in §1.45-8(g).
1. Laborer and Mechanic
Proposed §1.45-7(d)(7) would have
defined the terms laborer and mechanic
consistent with the definition under the
DBA as those individuals whose duties
are manual or physical in nature (includ-
ing those individuals who use tools or
who are performing the work of a trade).
Under the Proposed Regulations, laborers
and mechanics would not have included
individuals whose duties are primarily
administrative, executive, or clerical,
rather than manual. Persons employed
in a bona fide executive, administrative,
or professional capacity as defined in 29
CFR part 541 would not be deemed to
be laborers or mechanics. These individ-
uals are generally exempt under the Fair
Labor Standards Act and are not labors or
mechanics for purposes of the DBA. Con-
sistent with the DBA, working foreper-
sons who devote more than 20 percent of
their time during a workweek to laborer or
mechanic duties, and who do not meet the
criteria for exemption under 29 CFR part
541, also would be considered laborers
and mechanics for the time spent conduct-
ing laborer and mechanic duties. Under
the Proposed Regulations, laborers and
mechanics would have included appren-
tices and helpers. The Treasury Depart-
ment and the IRS requested comments
on the treatment of working forepersons
or owners performing the duties of labor-
ers and mechanics under certain circum-
stances, and other executive or adminis-
trative personnel who also perform duties
of a manual or physical nature, in the con-
struction, alteration, or repair of a quali-
fied facility.
At least one commenter requested that
the Treasury Department and the IRS con-
firm that the terms laborer and mechanic
are defined as under the DBA to include
individuals whose duties are manual or
physical in nature rather than primar-
ily administrative, executive, or clerical.
Commenters also requested that the final
regulations exclude certain owners and
specialized employees from the defini-
tions of laborer and mechanic, such as
engineers, architects, inspectors, testers,
and troubleshooters; wind or solar com-
missioning technicians; workers involved
in tie-ins and other commissioning, test-
ing, and troubleshooting of grid-con-
nected facilities after mechanical com-
pletion; workers associated with initial
energization, testing, and synchronization
of installed equipment; wind turbine com-
missioners; and other similar profession-
als. In requesting these exclusions from
the definition of laborer or mechanic,
commenters analogized work described
in the DOL Field Operations Handbook
(FOH)
30
that is not covered under the DBA
unless those individuals are performing
the duties of a laborer or mechanic.
Commenters generally supported the
working foreperson rule, but some sought
additional guidance regarding whether
the 20-percent threshold applies to pro-
fessional workers other than working
forepersons. Some commenters requested
clarifying that any foreperson, owner, or
administrative, executive, or clerical per-
sonnel contributing more than 20 percent
of their time during a workweek to laborer
or mechanic duties be considered laborers
and mechanics for the time spent conduct-
ing laborer and mechanic duties, even if
they are exempt under 29 CFR part 541.
Other commenters suggested limiting the
application of the 20-percent threshold to
these other individuals, but only if they are
not exempt under 29 CFR part 541. A few
commenters suggested that individuals
who own at least a 20 percent equity inter-
est and work on a construction project,
should also be excluded from the PWA
requirements, because they are not sub-
ject to DBA requirements to receive pre-
vailing wages. One commenter asked if
non-exempt individuals (other than work-
ing forepersons) who devote 20 percent or
less of their time to laborer and mechanic
duties are laborers and mechanics. One
commenter stated that it would be difficult
for taxpayers and contractors to bifurcate
supervisory and direct time for a working
foreperson in determining the 20-percent
threshold.
The final regulations incorporate
the definitions of laborer and mechanic
from the Proposed Regulations, which is
largely consistent with the definition of
those terms for DBA purposes. The Trea-
sury Department and the IRS have deter-
mined that providing an exhaustive list of
those specialized employees who are not
laborers or mechanics or defining laborers
and mechanics on an industry-by-industry
basis is not practical and does not provide
the necessary flexibility for future industry
developments. Although the DOL FOH
may provide some guidance to taxpay-
ers, whether an individual is a laborer or
mechanic will depend on the specific job
duties and the relevant facts and circum-
stances. The final regulations also adopt
the rule that persons employed in a bona
fide executive, administrative, or pro-
fessional capacity as defined in 29 CFR
part 541 are not deemed to be laborers or
mechanics and the working foreperson
rule as proposed. The final regulations do
not extend the working forepersons rule
to other working professionals or adopt
any exceptions from the proposed rule for
owners.
2. Employed
Consistent with the DBA, proposed
§1.45-7(d)(4) would have provided
that the definition of employed means
“performing the duties of a laborer or
30
The DOL Field Operations Handbook for administering the DBA can be found at https://www.dol.gov/agencies/whd/field-operations-handbook/Chapter-15.

Bulletin No. 2024–34 447 August 19, 2024
mechanic for the taxpayer, contractor,
or subcontractor (as applicable), regard-
less of whether the individual would be
characterized as an employee or an inde-
pendent contractor for other Federal tax
purposes.” For purposes of the Prevail-
ing Wage Requirements, this definition
would generally be different and broader
than the definition used elsewhere in
the Code, for example with respect to
employment taxes, as well as the asso-
ciated reporting and withholding obli-
gations. Laborers and mechanics who
are independent contractors for employ-
ment tax purposes may be considered
employed for purposes of the Prevailing
Wage Requirements.
Commenters supported the Proposed
Regulation’s definition of “employed.”
The commenters stated that the applica-
tion of prevailing wages to all workers,
even if they are non-employees, aligns
with the DBA. The Treasury Department
and the IRS agree, and the proposed defi-
nition is adopted without change.
3. Construction, Alteration, or Repair
Proposed §1.45-7(d)(2)(i) would have
provided that the term construction, alter-
ation, or repair generally means “construc-
tion, prosecution, completion, or repair”
as defined in 29 CFR 5.2 of the DBA reg-
ulations. In general, 29 CFR 5.2 defines
construction, prosecution, completion, or
repair as all types of work done on a par-
ticular building or work at the site of the
work. Proposed §1.45-7(d)(2)(i) would
have also clarified that construction,
alteration, or repair for purposes of the
PWA requirements has no bearing on any
other sections of the Code, including any
determination of construction, alteration,
repair, or maintenance under section 162
or 263 of the Code.
Some commenters requested clari-
fication on the definition of construc-
tion, alteration, or repair of a facility.
Commenters also requested clarification
that alteration or repair means construc-
tion-like or construction-type activities.
One commenter suggested clarifying the
differences between construction and
alteration or repair so that a taxpayer may
determine those activities that constitute
construction and those that are alteration
or repair. Commenters also recommended
clarifying whether, as under the DBA,
the PWA requirements do not apply to
installation work related to supply or ser-
vice contracts, unless such installation
involves substantial construction work
distinct and separable from the non-con-
struction aspects of the contract. One
commenter requested clarifying that the
work of material suppliers is not con-
sidered construction consistent with the
DBA. Another commenter requested that
the final regulations clarify that certain
preliminary work that is not considered
construction for DBA purposes (such as
exploratory drilling), is not considered
construction for PWA purposes.
In response to comments the final reg-
ulations clarify that “construction, alter-
ation, or repair” means the same activities
that are covered by the DBA definition
of construction, prosecution, completion,
or repair under 29 CFR 5.2 that are per-
formed with respect to a facility. Activities
that are excluded from the DBA definition
of construction, prosecution, completion,
or repair under 29 CFR 5.2 are similarly
excluded under the final regulations. This
definition of construction, alteration, or
repair covers some activities that occur
during the construction of a facility before
it is placed in service as well as activities
that take place after placed in service as
alterations or repairs. Further, specific
installation work (as applicable) that
occurs during the construction of a facil-
ity would be subject to PWA requirements
consistent with 29 CFR 5.2. As discussed
in Section VI. of this Summary of Com-
ments and Explanation of Revisions, the
final regulations clarify that construction
of a facility is interpreted consistent with
the underlying definition of a facility for
tax purposes.
4. Maintenance
Proposed §1.45-7(d)(2)(i) would have
provided that the term construction, alter-
ation, or repair generally excludes main-
tenance work that occurs after a facility
is placed in service. The preamble to the
Proposed Regulations stated that mainte-
nance would be work that is ordinary and
regular in nature and designed to main-
tain existing functionality of a facility as
opposed to an isolated or infrequent repair
of a facility to restore specific functional-
ity or adapt the facility for a different or
improved use.
Under the Proposed Regulations, work
designed to maintain and preserve func-
tionality of a facility after it is placed in
service would have included basic main-
tenance such as regular inspections of the
facility, regular cleaning and janitorial
work, replacing materials with limited
lifespans such as filters and light bulbs,
and the calibration of any equipment. Pro-
posed §1.45-7(d)(2)(i) would have pro-
vided that maintenance work that occurs
before the facility is placed in service
may constitute construction for which
prevailing wages must be paid in order
to claim the increased credit amount.
Under the Proposed Regulations, mainte-
nance would not have included work that
improves a facility, adapts it for a different
use, or restores functionality as a result of
inoperability. Proposed §1.45-7(d)(2)(ii)
would have also included an example.
Commenters requested additional
guidance on how to determine whether
work performed after a facility is placed
in service is alteration or repair work
or maintenance work. One commenter
requested clarification on how to distin-
guish between work that restores function-
ality and work designed to maintain and
preserve existing functionalities. Com-
menters also suggested clarifying whether
work performed before or after a facility
is placed in service impacts whether it
would be considered maintenance work.
One commenter suggested that the
final regulations provide that maintenance
work includes the standard replacement
of equipment and parts (including with
functionally similar, yet improved parts),
minor or incidental repair or installation
work, and routine tasks preventing failure
or decline. Another commenter requested
that the final regulations define mainte-
nance to exclude work that is extended
in nature, involves a major replacement,
or is otherwise not regular and customary
for the applicable type of project. Several
commenters also requested that the final
regulations define maintenance to include
reactive maintenance, isolated or infre-
quent repair to restore specific function-
ality; troubleshooting; activities related to
operations (operations and maintenance
or O&M work); and work performed by
welders, winders, or machinists to address

August 19, 2024 448 Bulletin No. 2024–34
a customer service outage. Another com-
menter suggested that work performed
under a construction contract warranty
after a facility is placed in service should
be treated as maintenance work.
A few commenters suggested that the
final regulations incorporate a de minimis
threshold to distinguish between mainte-
nance and alteration or repair work based
on either a specified dollar amount and/or a
percentage of the original capitalized cost
of the qualified facility. Other comment-
ers suggested that the term maintenance
in the Proposed Regulations be revised to
mirror descriptions of maintenance work
in DBA sub-regulatory guidance, the Ser-
vice Contract Act (SCA), nuclear industry
maintenance standards, or regulations and
case law related to sections 162 and 263.
Commenters stated that the example
provided under proposed §1.45-7(d)(2)
(ii) may have unintentionally suggested
a broader definition of alteration or repair
than anticipated, because the example
described the replacement of a part in
an inverter as a rare occurrence although
it may be a regular occurrence at a solar
farm. A few commenters suggested that
the final regulations incorporate addi-
tional examples of basic maintenance, and
alteration or repair activities, as applied to
specific facilities or properties, including
alternative fuel infrastructure, solar farms,
biogas systems, ethanol facilities, nuclear
facilities, and offshore wind facilities.
In the Proposed Regulations, the Trea-
sury Department and the IRS sought to
distinguish between alteration and repair
work (for which payment of prevailing
wages is required whether the work occurs
before or after the qualified facility is
placed in service) and maintenance work
(for which payment of prevailing wages is
required only if the work occurs before a
qualified facility is placed in service), con-
sistent with the DBA and DOL sub-regu-
latory guidance contained in the Prevail-
ing Wage Resource Book (PWRB).
31
While 29 CFR 5.2 includes various
activities that fall within the definition of
construction, including altering, remodel-
ing, some installation work, and painting
and decorating, it does not specifically
address maintenance work. However,
the DOL PWRB compares servicing and
maintenance work typically covered by
the SCA and construction activities of all
types that are covered by the DBA.
The DOL PWRB describes mainte-
nance work that would be covered by
the SCA, and not the DBA, as work that
is routinely scheduled and continuous
or recurring. According to the PWRB,
SCA-covered maintenance work typi-
cally includes: (i) work that is needed to
keep the building or work in its current
condition so that it may continue to be
used; (ii) work that does not improve
the current condition or function of
the building or work; or (iii) work that
may be completed relatively quickly.
Additionally, according to the PWRB,
SCA-covered maintenance work uses
skills that are not typical of the construc-
tion trade. By contrast, the PWRB states
that DBA-covered repair work typically
includes activities such as the restoration
or improvement of a building or work by
replacement, overhaul, or reprocessing of
constituent parts or materials. According
to the PWRB, DBA-covered repair work
includes an activity that: (i) generally
improves the building or work, either by
fixing something that is not functioning
properly or by improving upon the build-
ing or work’s existing condition; (ii) is
not continuous or recurring, but involves
the correction of individual problems
or defects as separate and segregable
incidents; (iii) improves the building
or work’s structural strength, stability,
safety, capacity, efficiency, or useful-
ness; or (iv) takes more time to com-
plete. Finally, according to the PWRB,
DBA-covered repair work uses skills that
are typical of the construction trades.
The DOL PWRB also states that an
important factor in determining coverage
under the SCA or the DBA is whether the
activity is undertaken as part of a con-
struction project prior to its completion.
For example, the DBA applies if cleanup,
landscaping, carpet laying, and drapery
installation activities are undertaken as an
integral part of or in conjunction with new
construction, such as under a construction
contract under which such activities pre-
ceded and are conditional to acceptance of
a building or public work by the owner.
The SCA, however, applies if the same
activities are performed after construction
and after contractors and subcontractors
have finished and left the site, and after
the contracting agency has accepted the
building.
The Proposed Regulations would have
distilled the guidance in 29 CFR 5.2 and
the guidance in the DOL PWRB
32
to pro-
vide that work designed to maintain and
preserve functionality of a facility after it
is placed in service would not be subject
to the Prevailing Wage Requirements.
Work designed to maintain and preserve
functionality of a facility after it is placed
in service would have included basic
maintenance such as regular inspections
of the facility, regular cleaning and jan-
itorial work, replacing materials with
limited lifespans such as filters and light
bulbs, and the calibration of any equip-
ment. However, paying prevailing wages
would be required for work that improves
a facility, adapts it for a different use, or
restores functionality as a result of inop-
erability.
The Treasury Department and the IRS
agree that additional clarification on the
distinction between alteration and repair
work and maintenance work is needed.
Accordingly, the final regulations revise
the Proposed Regulations to more closely
align with 29 CFR 5.2 and DOL sub-regu-
latory guidance in the PWRB.
Specifically, the final regulations pro-
vide that maintenance work is work that
is routinely scheduled and continuous or
recurring. The final regulations explain
that maintenance normally involves the
activity of keeping the facility in its cur-
rent condition so that it may continue to
be used. The final regulations include
additional clarifying criteria that repair
work normally includes an activity that:
(i) improves the facility, either by fix-
ing something that is not functioning
properly or by improving upon the facil-
ity’s existing condition; (ii) involves
the correction of individual problems or
defects as separate and segregable inci-
31
The DOL Prevailing Wage Resource Book can be found at https://www.dol.gov/agencies/whd/government-contracts/prevailing-wage-resource-book/determining-which-labor-stan-
dards-apply#_SCA-covered_maintenance_work.
32
The Proposed Regulations relied on a prior version of the PWRB. These final regulations reflect updates to the PWRB made in April of 2024.

Bulletin No. 2024–34 449 August 19, 2024
dents and is not continuous or recurring;
or (iii) improves the facility’s structural
strength, stability, safety, capacity, effi-
ciency, or usefulness. The final reg-
ulations retain the proposed rule that
maintenance work that occurs before
the qualified facility is placed in service
generally constitutes construction work
for which wages at rates not less than
the prevailing rates must be paid.
As stated by many commenters, and
several administrative decisions involv-
ing the application of the DBA or the
SCA,
33
the determination of whether work
is properly viewed as maintenance or as
an alteration or repair is dependent on the
specific facts and circumstances of the
work. The final regulations clarify that
the facts and circumstances are ultimately
determinative.
Because of the highly factual nature
of the determination regarding whether
an activity is maintenance or alteration
or repair work, the final regulations do
not adopt suggestions to include addi-
tional examples distinguishing between
maintenance and alteration or repair.
Additionally, the example in proposed
§1.45-7(d)(2)(ii) has been removed.
Providing industry-by-industry exam-
ples is not practicable and may imply
an inconsistent application of the gen-
eral rule. As stated in the comments, for
example, the proposed example was not
indicative of ordinary practices in the
solar industry. The Treasury Department
and the IRS understand that taxpayers
may encounter difficulties in distin-
guishing maintenance from alterations
or repairs; however, the additional
information contained in the final reg-
ulations provides taxpayers with suffi-
cient guidance to help differentiate their
activities based on the taxpayer’s rele-
vant facts and circumstances. Addition-
ally, the Treasury Department and the
IRS decline, at this time, to provide a
de minimis threshold or safe harbor dis-
tinguishing between maintenance work
and alteration or repair work.
D. Correction and penalty procedures
1. In General
Section 45(b)(7)(B)(i) provides that if
a taxpayer fails to satisfy the Prevailing
Wage requirements, the taxpayer “shall be
deemed to have satisfied such requirement
under such subparagraph with respect to
such facility for any year if, with respect
to any laborer or mechanic who was paid
wages at a rate below the [prevailing rate]
for any period during such year,” the tax-
payer makes the applicable correction pay-
ments and pays the penalty. Under section
45(b)(7)(B)(i)(II), the amount of the pen-
alty is $5,000 multiplied by the total num-
ber of laborers and mechanics who were
paid wages at a rate below the required
prevailing rates. Section 45(b)(7)(B)(iii)
provides that if the failure to ensure that
the laborers and mechanics are paid wages
at rates not less than the prevailing rates is
found to be due to intentional disregard,
then the amount of the correction payment
is tripled and the amount of the penalty
payment is doubled.
The Proposed Regulations would have
required the payment of wages at rates
not less than the prevailing wage rates at
the time work is performed with respect
to the construction, alteration, or repair of
a facility in order to claim the increased
credit amount. The Proposed Regulations
would have also provided that the require-
ment to pay not less than the prevailing
wage rates becomes binding only if the
increased credit amount is claimed on
a return, and that the obligation to make
correction payments and pay the penalty
would not become binding until a return is
filed claiming the increased credit amount.
The preamble to the Proposed Regu-
lations stated that, in general, taxpayers
would be obligated to make any necessary
correction payments to any laborer and
mechanic on or before the date a return is
filed claiming an increased credit amount.
Under the Proposed Regulations, the ear-
liest time that a taxpayer can make a pen-
alty payment to the IRS would have been
at the time of filing a tax return claiming
the increased credit amount. However,
taxpayers would retain the option of mak-
ing correction payments to laborers and
mechanics at any time after the initial
wage payments were made and in advance
of the filing of a tax return claiming the
increased credit amount in order to limit
the amount of additional interest the tax-
payer would have to pay at the elevated
rates set forth in section 45(b)(7)(B)(i)
(I)(bb). The Proposed Regulations would
have provided that whether taxpayers
make the necessary correction payments
and pay the penalty amounts promptly is
one of the facts and circumstances that
would be considered for purposes of the
enhanced penalties for intentional disre-
gard.
Under section 45(b)(7)(B)(iv), once the
IRS makes a final determination that a tax-
payer has failed to satisfy the Prevailing
Wage Requirements, the taxpayer must
make the correction and penalty payments
within 180 days after the final determina-
tion to be eligible for the increased credit.
The Proposed Regulations would have
also provided a deadline for a taxpayer’s
ability to use the correction and penalty
provisions to rectify a failure to comply
with the Prevailing Wage Requirements
once the IRS makes a final determination
that a taxpayer has failed to satisfy the
Prevailing Wage Requirements. The Pro-
posed Regulations would have clarified
that this final determination would come
in the form of a notice sent by the IRS.
One commenter argued that it is ineq-
uitable to permit taxpayers to receive the
benefit of increased credit amounts before
workers received their rightful compensa-
tion. The commenter stated that the pen-
alty and cure provisions allow corrections
after the filing of a tax return, when the
credit is already claimed. The commenter
suggested that the final regulations require
correction no later than the earlier of the
tax return filing or when the taxpayer
receives an economic benefit. Another
33
See Norsaire Systems Inc., WAB Case No. 94-06, 1995 WL 90009 (Feb. 28, 1995) (explaining that the distinction between covered construction work and non-covered service and mainte-
nance work depended on using a number of nondeterminative factors to closely examine actual work performed); see also ITT Base Services, Inc., B–220518.2 (Nov. 10, 1986) (noting that
distinguishing between construction and maintenance activities may be difficult, and some repair activities could reasonably be categorized as either Davis-Bacon Act or Service Contract
Act repair work depending upon the context in which they are performed); Four Star Maintenance, B–229703 (Apr. 7, 1988) (noting that the determination of whether items of work involve
basic maintenance within the coverage of the Service Contract Act, or are more in the nature of construction, alteration, or repair within the scope of the Davis–Bacon Act, is largely a matter
of judgment).

August 19, 2024 450 Bulletin No. 2024–34
commenter recommended that corrective
payments be required to be paid within 90
days following the year in which the orig-
inal compensation should have been paid.
One commenter suggested that if the
taxpayer’s failure to pay prevailing wages
was unintentional, the taxpayer should be
given 90 days to make correction and pen-
alty payments, but if the taxpayer acted
intentionally then the taxpayer should be
given 30 days to pay the penalty and two
weeks to make correction payments. An
additional commenter suggested extend-
ing the cure period to permit taxpayers to
cure further mistakes once they become
known.
The comments requesting changes to
the timing of correction and penalty pay-
ments are not adopted. The prevailing
wage provisions generally require com-
pliance with the payment of applicable
prevailing wage rates at the time work is
performed. The final regulations reiterate
the position in the Proposed Regulations
that the correction and penalty provisions
relate back to the time of the failure. For
example, the final regulations provide that
interest accrues on back wages to the time
of the failure to pay wages at rates not
less than the applicable prevailing rates.
However, section 45(b)(7)(B)(iv) permits
taxpayers to make correction and pen-
alty payments up to 180 days after a final
determination and remain eligible for the
increased credit amount. These final reg-
ulations encourage the taxpayer to make
correction payments sooner by waiving
the penalty payment requirement if the
taxpayer makes the required correction
payment in a timely manner and meets
additional requirements. Further, taxpay-
ers may avoid some of the challenges
in making correction payments, such as
locating former employees, by addressing
any failures immediately after discovering
them.
Consistent with section 45(b)(7)(B)
(ii), the Proposed Regulations would have
provided that deficiency procedures do
not apply to the assessment or collection
of any penalty payment required to be
made in connection with a failure to meet
the Prevailing Wage Requirements. The
Proposed Regulations would have clari-
fied that although deficiency procedures
would not apply to the penalty payment,
deficiency procedures would apply to any
determination by the IRS disallowing a
taxpayer’s claim for the increased credit
amount (for example, because of a failure
to pay prevailing wages and the correction
and penalty amounts). Under the Proposed
Regulations, if the taxpayer does not cor-
rect, and therefore is not subsequently
granted the increased credit amount, no
penalty would have been assessed under
section 45(b)(7)(B).
Commenters requested that the final
regulations provide guidance regarding
a taxpayer’s ability to contest an IRS
determination that a taxpayer failed to
pay prevailing wages. Commenters sug-
gested that deficiency procedures be
made available to challenge correction
payment amounts due to laborers and
mechanics once a final determination is
made. A commenter suggested that tax-
payers be provided a forum to expedi-
tiously resolve any disputes regarding
disallowed credits and all appeals of IRS
determinations before such decisions
become final. Commenters stated that,
other than a failure to make the required
correction and penalty payments, the
Proposed Regulations do not specify
under what circumstances there would be
a determination by the IRS disallowing
a claim for the increased credit amount.
The deficiency procedures are statu-
torily precluded and providing taxpayers
prepayment forums to resolve disputes
would cause unreasonable delays to work-
ers who were entitled to correction pay-
ments from receiving the full amount of
underpaid wages. Additionally, the statu-
tory 180-day period taxpayers are allowed
to cure a failure after receiving a final
determination does not toll the general
three-year statute of limitations for assess-
ment under section 6501. Thus, the final
regulations do not provide any additional
forum for taxpayers to challenge an IRS
determination. However, if a taxpayer
refuses to make correction and penalty
payments, the increased credit amount
will be disallowed. Any disallowance
of a credit, including disallowance of
increased credit amounts, would be sub-
ject to deficiency procedures (including
the opportunity to seek review by the IRS
Independent Office of Appeals) and a tax-
payer would be able to petition the U.S.
Tax Court to review the underlying defi-
ciency determination on a de novo basis.
A commenter appreciated the Treasury
Department and the IRS’s consideration
of waivers for penalties and provisions
for curing wage deficiencies but recom-
mended that the taxpayer be given the
opportunity to review and cure mistakes.
The commenter explained that due to the
complexity of the PWA requirements, the
logistics of projects, and the management
of people, there will be instances in which
the taxpayer will not meet all of the PWA
requirements perfectly. The Treasury
Department and the IRS agree and have
provided for a limited penalty waiver to
address such circumstances as discussed
in Section VII.D.4. of this Summary of
Comments and Explanation of Revisions.
One commenter stated that a failure to
maintain records by one or more subcon-
tractors or a subsequent determination by
the IRS that additional work, additional
laborers or mechanics, or secondary con-
struction sites are covered by the PWA
requirements may create a circumstance in
which the curative payment cannot be cal-
culated because of the absence of records.
The commenter suggested that the tax-
payer not be disallowed the increased
credit amount under such circumstances
if the taxpayer is willing to make a cura-
tive payment based on a reasonable esti-
mate of the wages that should have been
paid. Commenters also suggested that the
final regulations waive penalties and the
requirement to make correction payments
if the taxpayer hires a third-party reviewer,
such as a certified public accountant, to
review payroll records for compliance
with the Prevailing Wage Requirements.
Permitting taxpayers to rely on a third-
party reviewer to demonstrate compliance
is inconsistent with the statutory require-
ment that the taxpayer ensure that laborers
and mechanics are paid prevailing wages.
Maintaining adequate records is the tax-
payer’s responsibility under section 6001
as explained in Section X.A. of this Sum-
mary of Comments and Explanation of
Revisions. A failure to maintain adequate
records, even those of lower tier subcon-
tractors, does not excuse taxpayers from
their obligations to comply with the PWA
requirements.
One commenter requested that the
final regulations provide that corrective
payments are neither taxable income to
the workers nor deductible by the payors.

Bulletin No. 2024–34 451 August 19, 2024
The commenter stated that taxing cor-
rective payments is unfair to the workers
and argued that a taxpayer or transferee
who receives the benefit of the tax cred-
its should not be able to “double dip” and
take a tax deduction for the payment of the
penalty or the increased corrective pay-
ments. The determination of whether cor-
rection payments are taxable to a laborer
or mechanic or deductible by the payor is
governed by Federal tax law that is out-
side the scope of these final regulations.
Commenters stated that the preamble to
the Proposed Regulations explained that
the regulations would adopt, by cross-ref-
erence, the review and appeal procedures
available to any interested party under the
DBA with respect to wage determinations
generally. Commenters explained that a
DBA determination can be appealed to
the DOL, a process that could take lon-
ger than the 180-day cure period under
section 45(b)(7)(B)(iv). Commenters also
sought clarification that the 180-day cure
period would be tolled until a taxpayer
has exhausted the appellate remedies with
the DOL. From a practical standpoint,
the commenter emphasized that once
wages are paid it would be harmful to
both employees and employers to attempt
to claw back such payments if there is a
subsequent determination by the DOL that
results in the correction and penalty pay-
ments not being owed.
The final regulations do not adopt
this comment to provide for tolling of
the 180-day cure period if a wage deter-
mination has been appealed to the DOL.
With respect to the commenter’s compar-
ison to the review and appeal procedures
for wage determinations, that process is
distinct from the 180-day period after an
IRS determination during which a tax-
payer may make correction and penalty
payments to be deemed to have complied
with the Prevailing Wage Requirements.
The review and appeal procedures avail-
able to a taxpayer under the Proposed
Regulations regarding wage determina-
tions are with respect to the DOL’s deter-
mination of an applicable prevailing wage
rate. The IRS’s determination of a failure
to pay prevailing wage rates triggering
the 180-day cure period is not subject to
appeal, and thus not subject to tolling.
Section 45(b)(7)(B)(ii) provides that the
deficiency procedures for income, estate,
gift, and certain excise taxes do not apply
with respect to the assessment or collec-
tion of any penalty imposed by section
45(b)(7)(B). A taxpayer would, however,
be able to appeal any disallowance of the
increased credit amount after the expira-
tion of the 180-day cure period.
Regarding the commenter’s practical
concern, if a taxpayer believes that the
IRS incorrectly issued a final determina-
tion that the taxpayer failed to pay prevail-
ing wages, then the taxpayer may decline
to make correction and penalty payments
and wait to petition an IRS deficiency
determination to the U.S. Tax Court fol-
lowing the end of the 180-day cure period.
Alternatively, after the IRS issues a final
determination, the taxpayer could make
correction and penalty payments and
remain eligible for the increased credit
amount. The taxpayer in this scenario
would retain the ability to seek a refund
of the penalty payments paid to the IRS.
One commenter observed that the cost
of penalties is steep, given the reliance
that most taxpayers will have to place on
contractors and subcontractors to comply
with the PWA requirements. The Treasury
Department and the IRS recognize that
taxpayers will have to oversee and rely on
contractors and subcontractors to comply
with the PWA requirements. However, the
statutory text of the IRA puts the respon-
sibility on the taxpayer to ensure that con-
tractors and subcontractors comply with
the PWA requirements, including section
45(b)(7)(B)(i)(ll), which prescribes the
amount of penalty payment. Through the
factors considered for purposes of inten-
tional disregard, these regulations create
a framework that encourages taxpayer
practices, such as quarterly compliance
reviews and flow-down contract provi-
sions, that will assist taxpayers in com-
plying with the Prevailing Wage Require-
ments. Further, these regulations reflect
the Treasury Department’s and the IRS’s
waiver authority with respect to the pen-
alty if the failures were small in amount
or occurred in a limited number of pay
periods.
Additionally, a commenter requested
that, specifically for the initial years
following the application of the PWA
requirements to the section 45Z credit,
taxpayers be exempted from penalties
if they make correction payments. The
commenter stated that any noncompliance
during initial years will more likely be a
result of inexperience than intentional
disregard. The Treasury Department and
the IRS understand commenters’ concerns
regarding how the correction and penalty
procedures affect each relevant industry or
taxpayers claiming the increased amount
of credit. A transition rule is provided for
section 45Z, described in Section IX.G. of
this Summary of Comments and Explana-
tion of Revisions. The penalty waiver for
inadvertent errors is described in Section
VII.D.4. of this Summary of Comments
and Explanation of Revisions.
2. Laborers or Mechanics Who Cannot be
Located
Under section 45(b)(7)(B)(i), a tax-
payer is deemed to satisfy the Prevailing
Wage Requirements if, with respect to any
laborer or mechanic who was paid wages
at rates less than the prevailing rates for
any period during that year, the taxpayer
makes a correction payment to the affected
laborer or mechanic and the required pen-
alty payment to the IRS. Section 45(b)(7)
(B)(i) does not except taxpayers from the
requirement to make the correction pay-
ment, even if the taxpayer is unable to
locate the laborer or mechanic.
The preamble to the Proposed Regula-
tions explained that the Treasury Depart-
ment and the IRS expect that taxpayers
will be able to establish having made cor-
rection payments even if a former laborer
or mechanic cannot be located and pro-
vided examples of how such payments
could be made, such as compliance with
State unclaimed property rules and with-
holding and information reporting obli-
gations as means of substantiating the
payments. The Treasury Department and
the IRS requested comments concerning
appropriate rules for situations in which
laborers and mechanics who are owed
wages cannot be located and how taxpay-
ers may establish that they have made the
required correction payment described in
section 45(b)(7)(B)(i)(I).
A few commenters suggested that the
final regulations provide additional guid-
ance regarding situations in which correc-
tion payments are due to affected laborers
or mechanics who cannot be located. A
commenter suggested the formalization

August 19, 2024 452 Bulletin No. 2024–34
of specific procedures by the Treasury
Department for such circumstances and
asked the Treasury Department to solicit
further comments from stakeholders on
this issue. One commenter suggested
requiring the taxpayer to send the correc-
tive payment amount to the State where
the missing worker performed the work
along with payroll information validat-
ing the payment amount, and records of
attempts by the taxpayer to reach the for-
mer laborer or mechanic. One commenter
stated that the final regulations should not
rely on State unclaimed property laws. A
commenter stated that State unclaimed
property laws may impose additional bur-
dens and complexities on taxpayers (such
as requirements that due diligence efforts
be undertaken by a holder of unclaimed
property to find the rightful owner of
such property before the property can be
delivered to the State). Other commenters
asked that the final regulations provide
that a payment made to a State pursuant
to the State’s unclaimed property rules be
deemed to satisfy the correction payment
requirement for purposes of section 45(b)
(7)(B)(i)(I).
The Treasury Department and the
IRS recognize that the construction of
a qualified facility may occur over the
course of several years and some taxpay-
ers who fail to meet the Prevailing Wage
Requirements may be unable to locate all
laborers and mechanics to which correc-
tion payments must be made. However,
section 45(b)(7)(B)(i) does not excuse
taxpayers from the requirement to make
the correction payment, even if the tax-
payer is unable to locate the laborer or
mechanic. Unless another exception
applies, if a taxpayer fails to make and
substantiate all necessary correction pay-
ments, the taxpayer will not be eligible
for the increased credit amount. Although
the statute and final regulations permit
corrections, contemporaneous compli-
ance with the Prevailing Wage Require-
ments will likely be easier for taxpayers
to administer and substantiate, because
locating workers after a project has ended
may be difficult and time consuming. The
final regulations confirm that a taxpayer
is not excused from the requirement to
make the correction payment even if the
taxpayer is unable to locate a laborer or
mechanic.
As provided for under the Proposed
Regulations, the Treasury Department and
the IRS continue to expect that taxpayers
will be able to substantiate having made
all necessary correction payments even if
a former laborer or mechanic cannot be
located. In general, States have developed
specific rules for the payment of wages to
former laborers and mechanics who can-
not be located. These rules can include dil-
igence requirements to locate the laborer
or mechanic, information reporting obli-
gations to relevant State agencies on the
unclaimed wage amounts, and require-
ments to remit any unclaimed wage
amounts to State control as unclaimed
property after defined holding periods. A
taxpayer will be deemed to have paid a cor-
rection payment to a laborer or mechanic
who cannot be located if the taxpayer can
establish that correction payments have
been made. A taxpayer may establish that
correction payments have been made by
demonstrating compliance with the appli-
cable State unclaimed property law and
all Federal and State withholding and
information reporting requirements with
respect to the payments.
3. Intentional Disregard
Section 45(b)(7)(B)(iii) provides that if
the failure to ensure that the laborers and
mechanics are paid wages at rates not less
than the applicable prevailing wage rates
is found to be due to intentional disregard,
then the amount of the correction payment
is tripled and the amount of the penalty
payment is doubled. The Proposed Regu-
lations would have provided that failures
to meet the Prevailing Wage Require-
ments would be due to intentional disre-
gard if they are knowing or willful, which
is a determination that must be made by
considering all relevant facts and circum-
stances. The Proposed Regulations would
have provided a non-exhaustive list of
factors that may be relevant to this deter-
mination.
Proposed §1.45-7(c)(3)(iii) provided
that the relevant facts and circumstances
in weighing intentional disregard would
include whether a failure to satisfy the Pre-
vailing Wage Requirements was part of a
pattern of conduct that includes repeated
or systemic failures to ensure that the
laborers and mechanics were paid wages
at or above the applicable prevailing wage
rate and whether the taxpayer: (i) failed to
take steps to determine the applicable clas-
sifications of laborers and mechanics; (ii)
failed to take steps to determine the appli-
cable prevailing wage rate(s) for labor-
ers and mechanics; (iii) promptly cured
any failures to ensure that laborers and
mechanics were paid wages not less than
the applicable prevailing rates; (iv) has
been required to make a penalty payment
in previous years; (v) undertook a quar-
terly, or more frequent, review of wages
paid to mechanics and laborers to ensure
that wages not less than the applicable pre-
vailing wage rate were paid; (vi) included
provisions in any contracts entered into
with contractors that required the contrac-
tors and any subcontractors retained by the
contractors to pay laborers and mechanics
at or above the prevailing wage rates and
maintain records to ensure the taxpay-
er’s compliance with the recordkeeping
requirements; (vii) posted in a prominent
place at the facility or otherwise provided
written notice to laborers and mechan-
ics during the construction, alteration, or
repair of the facility: (a) of the applicable
wage rate(s) as determined by the DOL
for all classifications of work to be per-
formed for the construction, alteration, or
repair of the facility, and (b) that in order
to be eligible to claim certain tax bene-
fits, employers must ensure that laborers
and mechanics are paid wages at rates not
less than such wage rates; and (viii) had
in place procedures whereby laborers and
mechanics could report suspected failures
to pay prevailing wages and/or suspected
failures to classify workers in accordance
with the wage determination of workers
to appropriate personnel departments or
managers without retaliation or adverse
action. The Treasury Department and the
IRS requested comments on additional
criteria that might be used as part of a facts
and circumstances analysis of intentional
disregard in this context.
Many commenters generally expressed
support for enhanced penalties for inten-
tional failures to comply with the PWA
requirements and the factors that would
be considered in the Proposed Regula-
tions. One commenter suggested that
the Treasury Department and the IRS
engage in outreach to educate taxpayers
about distinguishing between intentional

Bulletin No. 2024–34 453 August 19, 2024
and unintentional violations of the PWA
requirements. Some commenters recom-
mended that the final regulations provide
an inclusive and exhaustive list of prac-
tices for taxpayers to follow in order to
show they acted with proper diligence and
in good faith in trying to meet the PWA
requirements. The final regulations do not
incorporate this suggestion. Although the
final regulations provide a detailed list of
factors for determining intentional dis-
regard, the list remains non-exhaustive.
There may be additional factors that the
IRS will consider based on the specific
facts and circumstances of the failure.
These final regulations provide guidance
to taxpayers about the application of the
PWA requirements to assist with com-
pliance, including the numerous factors
that the IRS will consider in determining
whether failures to comply were the result
of intentional disregard.
Commenters had the following sug-
gestions for additional factors or mod-
ifications to the proposed factors. Sev-
eral commenters suggested that the final
regulations include intentional disre-
gard factors relating to pre-filing activ-
ities that are not applicable to taxpayers
claiming the increased credit amount
(for example, whether a taxpayer regu-
larly submitted certified weekly payroll
records to the IRS or publicly declared
the intent to claim the credit). Because
those underlying pre-filing activities are
not applicable, the comments suggesting
factors relating to those specific actions
are not included as factors demonstrating
intentional disregard. However, several
other commenters suggested additional
factors or modifications to the proposed
factors relating to other pre-filing activ-
ities, that while not required, could be
relevant to a determination of intentional
disregard.
Specifically, with respect to the factors
in proposed §1.45-7(c)(3)(iii)(A) through
(C) commenters suggested that the final
regulations clarify what would constitute
a pattern of conduct and a failure to take
steps to determine applicable classifica-
tions and wage rates. One commenter
suggested that a taxpayer’s pattern of
conduct include the taxpayer’s conduct
on non-IRA projects and violations unre-
lated to prevailing wage rules (including
violations under DBA). Another com-
menter recommended that the final regu-
lations consider the taxpayer’s history of
violations of any Federal, State, or local
laws. The Treasury Department and the
IRS agree that some additional clarifica-
tion would be helpful for taxpayers and
the IRS. The final regulations clarify that
taking steps to determine applicable clas-
sifications and wage rates could include a
quarterly or more frequent review of these
actions by the taxpayer (or a third party
acting on behalf of the taxpayer). The
final regulations retain the factor describ-
ing a pattern of conduct and clarify that
the pattern of conduct could include fail-
ures to pay prevailing wages as required
under other laws. The final regulations do
not specifically include all possible viola-
tions of law; although certain violations
may be relevant depending on the facts
and circumstances. What constitutes a
pattern will depend on the facts and cir-
cumstances.
Commenters also suggested modifi-
cations to the factors in proposed §1.45-
7(c)(3)(iii)(H) and (I). Specifically, com-
menters stated that proof, via signatures
of laborers and mechanics, that covered
employees have been given notice of
the taxpayer’s intent to pay prevailing
wages should be a factor. The final regu-
lations retain the factor from the Proposed
Regulations regarding written notice to
laborers and mechanics. However, this
factor relates to the notice that in order to
claim certain tax benefits, employers must
ensure that laborers and mechanics are
paid wages at rates not less than prevailing
wage rates. It does not consider whether a
taxpayer disclosed their intent to claim a
tax benefit. In response to the comment,
the final regulations further clarify that
acknowledgement of the notice by the
laborer or mechanic is an additional fac-
tor.
Commenters also suggested that the
poster or notice to employees described
in proposed §1.45-7(c)(3)(iii)(H) include
instructions on how laborers and mechan-
ics may contact the taxpayers’ person-
nel departments or taxpayers’ managers
to report suspected failures to pay pre-
vailing wages and/or suspected failures
to classify workers without retaliation
or adverse action. The final regulations
include this additional information. At
least one commenter suggested that the
factor in proposed §1.45-7(c)(3)(iii)(I)
regarding whether a taxpayer had in place
a procedure to report suspected failures to
pay prevailing wages without retaliation
or adverse action be expanded to include
employment tax violations or workplace
standards laws. The commenter also sug-
gested the factor be revised to also require
that no actual retaliation or adverse action
occurred. The final regulations incorporate
the comments regarding employment tax
and workplace standards violations. The
final regulations also consider whether the
taxpayer investigated complaints and took
appropriate action.
A commenter suggested adding a factor
addressing the use of debarred contractors.
The commenter stated that contractors
who are debarred from working on pub-
licly funded projects for serious violations
of DBA prevailing wage requirements
are more likely to violate the Prevailing
Wage Requirements on IRA projects. The
Treasury Department and the IRS agree
that knowingly contracting with debarred
contractors could be a factor demonstrat-
ing intentional disregard. The final regula-
tions reflect this comment.
Several commenters made general
suggestions that the intentional disregard
factors should be strengthened to encour-
age behaviors that will help ensure that
laborers and mechanics working on proj-
ects for which an increased credit amount
may be claimed are paid prevailing wages.
As stated elsewhere in this preamble, the
Treasury Department and the IRS agree
that adding factors to encourage certain
practices will further compliance with the
Prevailing Wage Requirements. Accord-
ingly, the final regulations add new factors
that consider whether the taxpayer has: (i)
provided or otherwise made available to
laborers and mechanics paystubs or other
individual payroll records reflecting the
amount being paid per pay period (includ-
ing the specific hourly rate and any deduc-
tions from wages); (ii) conducted investi-
gations or otherwise reviewed complaints
of retaliation or adverse actions against
workers for reporting the underpayment
of wages and took appropriate corrective
action; (iii) provided notice regarding
possible rights under the Taxpayer First
Act; and (iv) whether the taxpayer failed
to maintain and preserve records in accor-
dance with §1.45-12.

August 19, 2024 454 Bulletin No. 2024–34
Some commenters stated that consider-
ing all relevant facts and circumstances in
determining whether a failure to comply
with the PWA requirements was inten-
tional would be burdensome to taxpayers
who would have to investigate their con-
tractors and subcontractors about possible
failures. One commenter suggested that
additional guidance consider the degrees
of separation between contractual par-
ties responsible for fulfilling the PWA
requirements. The final regulations do not
incorporate this suggestion. Under sec-
tion 45(b)(7)(A), the taxpayer must ensure
that any laborers and mechanics employed
by the taxpayer, contractor, or subcontrac-
tor are paid wages at rates not less than the
prevailing rates. If the taxpayer fails to do
so, and that failure is due to intentional dis-
regard, the enhanced correction and pen-
alty payments apply. It is the obligation of
the taxpayer to ensure that its contractors
and subcontractors pay wages at rates not
less than the applicable prevailing wage
rates if the taxpayer claims the increased
credit amount, regardless of the number of
contracts separating the taxpayer and the
subcontractor. This responsibility of the
taxpayer is one reason why the final reg-
ulations include factors that help demon-
strate whether a taxpayer’s failure was due
to intentional disregard.
One commenter requested that inten-
tional disregard penalties be solely limited
to those taxpayers who admit to intention-
ally failing to pay prevailing wages. The
final regulations do not adopt this sugges-
tion, as the statute does not limit the appli-
cation of intentional disregard penalties
to only those who admit to intentionally
failing to pay prevailing wages.
The Proposed Regulations would have
also provided a rebuttable presumption
against a finding of intentional disregard if
the taxpayer made the correction and pen-
alty payments before receiving a notice
of an examination with respect to a return
that claimed the underlying increased
amount of credit. This presumption of
no intentional disregard is intended to
encourage taxpayers who discover a fail-
ure to meet the Prevailing Wage Require-
ments after filing a return to promptly use
the correction and penalty procedures to
remedy that failure.
Some commenters supported the rebut-
table presumption against intentional dis-
regard and agreed that it would encourage
taxpayers to make timely curative pay-
ments. Other commenters were critical
of the presumption and suggested that
it might encourage taxpayers to avoid
promptly curing failures or allow taxpay-
ers who knowingly or willfully violate
the PWA requirements to avoid penalties.
A few commenters suggested that the
final regulations modify the presumption
to apply only if the taxpayer makes the
required correction and penalty payments
before: (i) the earlier of the filing of the tax
return claiming the credit or one year after
discovering the failure, or (ii) the earlier
of receiving notice of an examination
from the IRS or one year after discovering
the failure.
The final regulations adopt the rebut-
table presumption of no intentional disre-
gard as proposed. The Treasury Depart-
ment and the IRS appreciate the concerns
of commenters. However, the presumption
of no intentional disregard as proposed
provides a valuable incentive to encourage
taxpayers to regularly review and confirm
that they are complying with the PWA
requirements. Additionally, the rebuttable
presumption requires all correction pay-
ments (including correction payments if
a former laborer or mechanic cannot be
located as described in Section VII.D.2. of
this Summary of Comments and Explana-
tion of Revisions) and penalty amounts be
paid before the taxpayer receives a notice
of examination. If the taxpayer does not
correct the failure to ensure that prevailing
wages are paid (either as a precursor to the
application of the rebuttable presumption
or otherwise in response to an IRS deter-
mination of a failure), the taxpayer is not
eligible for the increased credit amount.
Taxpayers are encouraged to regularly
review payroll records to ensure that
workers are paid prevailing wages. Con-
ducting reviews and curing discovered
failures to pay prevailing wages several
years after payments were made may be
difficult, particularly if multiple contrac-
tors and subcontractors were involved in
the project.
A few commenters suggested including
a presumption of intentional disregard if a
labor union or other worker representative
reaches out to a taxpayer, project devel-
oper, or contractor and raises concerns
about the PWA requirements and the proj-
ect developer or taxpayer chooses to move
forward without making any changes
regardless of the concern that was raised.
Commenters also suggested finding that
taxpayers acted with intentional disregard
if they did not diligently investigate their
contractor and subcontractor practices.
For the reasons noted herein regarding the
factors for intentional disregard, the sug-
gestions to include a new presumption of
intentional disregard are not adopted. The
final regulations retain the approach of
providing factors that will be considered
in determining whether a failure was due
to intentional disregard based on all rele-
vant facts and circumstances.
4. Penalty Waiver
In general, the IRS may exercise its
discretion to waive or decline to assert
penalties in the interest of sound tax
administration. The Proposed Regula-
tions would have provided limited penalty
waivers for instances in which the fail-
ures to pay prevailing wages to laborers
and mechanics for the construction, alter-
ation, or repair of a facility were small in
amount or occurred in a limited number
of pay periods. The Proposed Regulations
would have also provided that the penalty
waiver cannot be used after a return has
been filed claiming the increased credit
amount. Finally, the Proposed Regulations
would have applied the waiver authority
in a manner that assists taxpayers seek-
ing to be eligible for the increased credit
amount while remaining consistent with
the statutory requirement to ensure that
laborers and mechanics are paid applica-
ble prevailing wage rates. As noted in the
preamble to the Proposed Regulations,
the Treasury Department and the IRS
understand that taxpayers intending to pay
prevailing wage rates may make payroll
errors or classification errors with respect
to work that is performed by laborers or
mechanics. The Proposed Regulations
sought to account for these circumstances
while continuing to ensure that laborers
and mechanics are paid according to the
applicable prevailing wage rates.
Proposed §1.45-7(c)(6)(i) provided
that the penalty payment requirement
would be waived with respect to the con-
struction, alteration, or repair performed
by a laborer or mechanic during a calendar

Bulletin No. 2024–34 455 August 19, 2024
year if: (i) the taxpayer makes the required
correction payment (back wages and inter-
est) by the earlier of: (a) 30 days after the
taxpayer became aware of the error, or (b)
the date on which the tax return claiming
the increased credit amount is filed; and
(ii) either: (a) the laborer or mechanic is
paid below the prevailing wage rate for
not more than 10 percent of all pay peri-
ods of the calendar year (or part thereof)
during which the laborer or mechanic
worked on the construction, alteration,
or repair of the facility, or (b) the differ-
ence between the amount the laborer or
mechanic was paid for the calendar year
(or part thereof) during which the laborer
or mechanic worked on the construction,
alteration, or repair of the facility and the
amount required to be paid by the Prevail-
ing Wage Requirements for the calendar
year is not greater than 2.5 percent of the
amount required under the Prevailing
Wage Requirements. The Proposed Reg-
ulations would have used calendar years
to measure any failures because taxpayers,
contractors, and subcontractors perform-
ing construction may have different tax-
able years and laborers and mechanics are
generally paid on a calendar year basis.
The Treasury Department and the IRS
requested comments on the proposed use
of calendar years in place of taxable years
for this purpose.
Many commenters were supportive
of the penalty waiver, but they provided
practical concerns with the 30-day correc-
tion period and the maximum underpay-
ment period due to the short-term nature
of some construction work, as well as the
logistical difficulties involving multiple
payroll periods and/or payroll processors
used by different contractors and subcon-
tractors. Commenters suggested increas-
ing both the correction period and maxi-
mum underpayment period and amount
to provide more time to account for these
practical difficulties. Some commenters
suggested increasing the correction period
to 60 or 90 days. Others suggested raising
the maximum underpayment period to the
greater of three pay periods or 20 percent
of all pay periods in a calendar year, and
the maximum underpayment amount to
the greater of $5,000 or five percent of
all amounts required to be paid in a cal-
endar year. Another commenter suggested
removing the maximum underpayment
amounts entirely. At least one commenter
supported finalizing the rule as is in the
Proposed Regulations, because it is suffi-
cient to address de minimis payroll errors.
A few commenters suggested that the
waiver should not be available to a tax-
payer who did not provide their workers
notice of their wage rate, maintained poor
records, exercised no contemporaneous
monitoring or due diligence, or retaliated
against workers who complained of not
being paid the prevailing wage. Given the
complexity of the PWA requirements, one
commenter recommended limiting pen-
alties that apply to businesses with fewer
than 50 employees.
In recognition of the comments that
the proposed correction period is too short
to be useful, the final regulations revise
the proposed penalty waiver to provide
that corrections must be made by the
last day of the first month following the
end of the calendar quarter in which the
failure occurred. The final regulations
clarify that the correction must be made
within the relevant time period after the
failure occurred, not when the taxpayer
becomes aware of the failure. This revised
correction period is intended to coincide
with the due date for the filing of Federal
employment tax returns. The Treasury
Department and the IRS expect that most
employers will have conducted a review
of payroll for each quarter in connection
with the filing of their quarterly employ-
ment tax return, and they should be aware
of failures at this time. This change will
result in a correction period that generally
ranges from one to three months depend-
ing on when the failure occurred.
The final regulations also modify the
proposed waiver provision by increasing
the maximum underpayment amount to
underpayments that do not exceed five
percent of all amounts required to be
paid in a calendar year. The final regula-
tions retain the maximum underpayment
period as proposed to reflect the intent
that this waiver provision apply only to
minor errors that occur infrequently. The
change to the correction period provides
additional time, more certainty, and aligns
with filing of the majority of employment
tax returns. This change also removes the
knowledge requirement, providing a more
definitive correction period for taxpayer
certainty and aiding IRS administration.
A few commenters indicated support
of the use of calendar years for purposes
of the waiver provision. No commenters
suggested a different time period. Thus,
the final regulations adopt calendar years
as the appropriate period to measure fail-
ures for purposes of the waiver provisions.
VIII. Apprenticeship Requirements
A. In general
1. Scope
Under section 45(b)(8), in order to
satisfy the Apprenticeship Require-
ments, certain requirements with respect
to the construction of any qualified
facility relating to labor hours, appren-
tice-to-journeyworker ratios, and partic-
ipation by qualified apprentices must be
satisfied. Under section 45(b)(8)(D)(i), a
taxpayer is not treated as failing to satisfy
the Apprenticeship Requirements in sec-
tion 45(b)(8) if: (i) the taxpayer satisfies
the Good Faith Effort Exception, or (ii)
in the case of any failure by the taxpayer
to satisfy the Labor Hours Requirement
under section 45(b)(8)(A) and the Partic-
ipation Requirement under section 45(b)
(8)(C), the taxpayer makes a penalty pay-
ment to the IRS under the Apprenticeship
Cure Provision.
Proposed §1.45-8(a) generally would
have provided that a taxpayer claiming
or transferring (under section 6418) the
increased credit amount under section
45(b)(6)(B)(iii) with respect to any qual-
ified facility must satisfy the require-
ments of section 45(b)(8) and proposed
§1.45-8. Proposed §1.45-8(b), (c), and
(d) would have provided the Labor Hours
Requirement, the Ratio Requirement,
and the Participation Requirement,
respectively. Proposed §1.45-8(e)
would have detailed exceptions to the
Apprenticeship Requirements, enabling
the taxpayer to be deemed to have
satisfied the Apprenticeship Requirements
if the taxpayer has either made a good
faith effort to meet the Apprenticeship
Requirements as described in proposed
§1.45-8(e)(1) or made the penalty
payment provided in proposed §1.45-8(e)
(2) for any failures to which the Good
Faith Effort Exception does not apply.
Proposed §1.45-8(f) would have provided

August 19, 2024 456 Bulletin No. 2024–34
additional definitions applicable to the
Apprenticeship Requirements.
Section 45(b)(8) imposes the Appren-
ticeship Requirements with respect to the
construction of any qualified facility. As
discussed in Section VI. of this Summary
of Comments and Explanation of Revi-
sions, the final regulations clarify that the
qualified facility for both the Prevailing
Wage Requirements and the Apprentice-
ship Requirements is defined as a quali-
fied facility under section 45.
Commenters asked whether the
Apprenticeship Requirements applied
to work performed on a qualified facil-
ity after the facility is placed in service.
Commenters asserted that the statutory
text supports limiting the Apprentice-
ship Requirements to the construction of
the qualified facility. Many commenters
pointed to the explicit language in sec-
tion 45(b)(7)(A)(ii) applying the Prevail-
ing Wage Requirements to alteration and
repair activities in the 10-year period after
a facility is placed in service, and they
stated that there is no similar language
in section 45(b)(8) applying the Appren-
ticeship Requirements to alteration and
repair activities for the period after a
facility is placed in service. Comment-
ers also pointed out the impracticality
of applying the Apprenticeship Require-
ments to alteration and repair activities
after a facility is placed in service. Com-
menters emphasized that repairs to facil-
ities already in service usually must be
made as quickly as possible. They indi-
cated that such repairs are often a short-
term project, and requesting, hiring, and
onboarding qualified apprentices consis-
tent with the Labor Hours Requirement
would cause costly delays. Commenters
stated that during large power outages
and other emergencies, energy-produc-
tion facilities are primarily focused on
returning power to customers in as timely
and efficient a manner as possible.
While there is some ambiguity in
the statutory text regarding whether the
Apprenticeship Requirements apply to the
alteration or repair of a qualified facility
after it is placed in service, the more nat-
ural reading of section 45(b)(8) supports
the interpretation of the commenters that
the Apprenticeship Requirements only
apply to the construction of a qualified
facility. Under this reading, alterations
and repairs occurring while a facility is
being constructed would be subject to the
Apprenticeship Requirements, but those
occurring after the facility is placed in ser-
vice would not.
Section 45(b)(7) is clear that the Pre-
vailing Wage Requirements apply to two
distinct periods with respect to the con-
struction, alteration, or repair of a quali-
fied facility: (i) construction under section
45(b)(7)(A)(i); and (ii) alteration or repair
for any portion of a taxable year that is
within the 10-year period beginning on
the date the qualified facility is placed
in service under section 45(b)(7)(A)(ii).
Conversely, section 45(b)(8) provides
requirements that apply only with respect
to the construction of any qualified facil-
ity. The lack of any explicit language in
section 45(b)(8) with respect to alterations
or repairs during the 10-year period after
a facility is placed in service, as is seen in
section 45(b)(7), suggests that the Appren-
ticeship Requirements do not apply after a
facility is placed in service.
This conclusion is also supported by the
specific language in the Apprenticeship
Requirements. The applicable percent-
age under the Labor Hours Requirement
in section 45(b)(8)(A) applies to the total
labor hours of the construction, alteration,
or repair work performed with respect to
construction of the qualified facility. This
language suggests that although hours
spent on alteration and repair work can be
part of the calculation used to determine
whether the Labor Hours Requirement is
satisfied, the requirement only applies to
the construction of the qualified facility
and not after it is placed in service. Simi-
lar language is used in section 45(b)(8)(C)
in which the Participation Requirement is
limited by the phrase “with respect to the
construction of the facility.” Together, the
language of these provisions suggests that
taxpayers, contractors, and subcontractors
may perform alteration and repair work
that would be subject to the Apprentice-
ship Requirements, but that obligation
only applies during construction and not
after the facility is placed in service. The
final regulations have been amended to
confirm that the Apprenticeship Require-
ments apply only to the construction of the
qualified facility including alteration and
repair work that is performed prior to the
facility being placed in service, and not to
alteration or repair work occurring after
the facility is placed in service.
2. Labor Hours Requirement
Section 45(b)(8)(A)(i) provides that
“[t]axpayers shall ensure that, with respect
to the construction of any qualified facil-
ity, not less than the applicable percentage
of the total labor hours of the construc-
tion, alteration, or repair work (including
such work performed by any contractor or
subcontractor) with respect to such facil-
ity shall, subject to [section 45(b)(8)(B)],
be performed by qualified apprentices.”
This rule is referred to as the Labor Hours
Requirement.
For purposes of the Labor Hours
Requirement, section 45(b)(8)(A)(ii) pro-
vides that the applicable percentage is:
(i) 10 percent in the case of a qualified
facility the construction of which begins
before January 1, 2023; (ii) 12.5 percent
in the case of a qualified facility the con-
struction of which begins after December
31, 2022, and before January 1, 2024; and
(iii) 15 percent in the case of a qualified
facility the construction of which begins
after December 31, 2023. Section 45(b)(8)
(E)(i) provides that the term “labor hours”
means the total number of hours devoted
to the performance of construction, alter-
ation, or repair work by any individual
employed by the taxpayer or by any con-
tractor or subcontractor, and excludes any
hours worked by foremen, superinten-
dents, owners, or persons employed in a
bona fide executive, administrative, or
professional capacity (within the meaning
of those terms in part 541 of title 29, Code
of Federal Regulations).
Commenters recommended that the
final regulations clarify that there is no
minimum amount of time that a qual-
ified apprentice must be registered or
employed in order to count the qualified
apprentice’s work towards the labor hours
requirement. The statute does not impose
a minimum time period, and the Treasury
Department and the IRS have determined
that any additional requirement would
not be in furtherance of the IRA or in the
interest of sound tax administration. Thus,
the final regulations do not require a min-
imum number of hours worked before
labor hours count toward the total labor
hours performed by a qualified apprentice.

Bulletin No. 2024–34 457 August 19, 2024
Commenters requested that the final
regulations provide additional guidance
regarding how to calculate the total labor
hours and the applicable percentage. Spe-
cifically, a few commenters requested
guidance on the period of time the total
labor hours requirement encompasses and
when the applicable percentage should be
calculated. Similarly, another commenter
asked whether total labor hours should be
calculated on a trade-by-trade basis or by
aggregating all contractors’ labor hours. A
commenter stated that one of the exam-
ples in the Proposed Regulations seemed
to imply that the Labor Hour Requirement
apply to each contractor and subcontractor
involved in the construction, alteration, or
repair of a covered facility, rather than the
aggregate labor hours for the construc-
tion project. One commenter requested
that the final regulations clarify that the
labor hours calculation does not include
hours worked by contractors with fewer
than four employees. Another commenter
asked whether on-the-job training hours
worked by qualified apprentices at loca-
tions other than the location of the facil-
ity count for purposes of the Labor Hours
Requirement.
Consistent with the statutory lan-
guage in section 45(b)(8)(A)(i), the final
regulations clarify that the Labor Hours
Requirement applies to the construction
of a facility, not on a contractor-by-con-
tractor or trade-by-trade basis. The final
regulations further clarify that taxpay-
ers determine whether the Labor Hours
Requirement has been satisfied by aggre-
gating all labor hours worked by laborers
and mechanics on the construction of the
facility (including those hours worked by
contractors with fewer than four employ-
ees), from the beginning of construction
through the time the facility is placed in
service and calculating whether the appli-
cable percentage of those labor hours
was worked by qualified apprentices.
Accordingly, taxpayers, contractors, and
subcontractors will need to keep track of
labor hours from the beginning of the con-
struction of the facility until the project or
facility is placed in service. Additionally,
since the statute requires not less than
the applicable percentage of total labor
hours of construction, alteration, or repair
work with respect to the qualified facility
be performed by qualified apprentices,
on-the-job training hours worked by qual-
ified apprentices at a location other than
the location of the facility do not count for
purposes of the Labor Hours Requirement.
Training hours of qualified apprentices at
the location of the facility that involve the
performance of construction, alteration, or
repair work with respect to the qualified
facility count towards the labor hours per-
formed by qualified apprentices for pur-
poses of the Labor Hours Requirement.
The final regulations provide examples to
illustrate these calculations.
One commenter asked whether the
hours worked by a working foreperson
are included in the total number of labor
hours in calculating the applicable per-
centage for purposes of the Labor Hours
Requirement. One commenter requested
guidance on whether a subcontractor, who
only had working foremen on site to com-
plete a project, and no qualified appren-
tices, would be considered to have worked
zero labor hours and would not be subject
to any penalties. The Proposed Regula-
tions would have provided that working
forepersons who devote more than 20 per-
cent of their time during a workweek to
laborer or mechanic duties, and who do
not meet the criteria for exemption of 29
CFR part 541, are considered laborers and
mechanics for the time spent conducting
laborer and mechanic duties for purposes
of the Prevailing Wage Requirements.
As discussed in Section VII.C.1. of this
Summary of Comments and Explana-
tion of Revisions, the final regulations
retain this rule. The Proposed Regula-
tions also would have provided that the
hours worked by forepersons, regardless
of whether they are considered working
forepersons for purposes of the Prevailing
Wage Requirements are excluded from
labor hours for purposes of the Labor
Hours Requirement. The final regulations
also retain this rule.
Commenters suggested that the regu-
lations clarify whether the Labor Hours
Requirement applies to projects with
three or fewer employees. The comment
seems to be asking whether the Labor
Hours Requirement applies if the Partic-
ipation Requirement does not apply. The
two requirements are separate. Under
the Participation Requirement in section
45(b)(8)(C), each taxpayer, contractor, or
subcontractor who employs four or more
individuals to perform construction, alter-
ation, or repair work with respect to the
construction of a qualified facility must
employ one or more qualified apprentices.
There is no similar minimum threshold in
the Labor Hours Requirement. To satisfy
the Apprenticeship Requirements, a tax-
payer needs to satisfy the Labor Hours
Requirement, the Ratio Requirement, and
the Participation Requirement. If the Par-
ticipation Requirement does not apply,
the taxpayer will still need to satisfy the
Labor Hours Requirement and the Ratio
Requirement.
Commenters also requested guidance
on the effect of the Good Faith Effort
Exception with respect to the Labor Hours
Requirement. The Proposed Regulations
would have provided that if a taxpayer,
contractor, or subcontractor qualifies for
the Good Faith Effort Exception, the num-
ber of hours that the qualified apprentices
would have performed had a registered
apprenticeship program supplied those
qualified apprentices, would have counted
towards the number of labor hours per-
formed by qualified apprentices. The Pro-
posed Regulations included an example
illustrating the interaction between the
Labor Hours Requirement and the Good
Faith Effort Exception. The final regula-
tions retain this rule and example.
Commenters also inquired whether
total labor hours continue to be aggregated
for all work in subsequent tax years after
construction has ended, or only for those
labor hours resulting from covered alter-
ation or repair work. Another commenter
requested further examples illustrating the
proper calculation of labor hours for the
10-year period beginning on the date the
facility was originally placed in service.
Because the final regulations clarify that
the Apprenticeship Requirements apply
only to the construction (including alter-
ations and repairs during construction)
of the qualified facility, and not to alter-
ation or repair work occurring after the
facility is placed in service, the Labor
Hours Requirement does not apply after
the qualified facility has been placed in
service. The final regulations incorporate
additional examples clarifying this rule.
Another commenter suggested that
the final regulations clarify whether the
hours qualified apprentices are paid as
journeyworkers as a result of failing the

August 19, 2024 458 Bulletin No. 2024–34
daily Ratio Requirement count towards
the Labor Hours Requirement as quali-
fied apprentice hours or as journeyworker
hours. Proposed §1.45-8(c)(3) would have
provided that any labor hours performed
by any qualified apprentice in excess of
the applicable apprentice-to-journey-
worker ratio may not be counted as hours
performed by qualified apprentices for
purpose of the Labor Hours Requirement.
The final regulations retain this rule and
clarify that these labor hours performed
by qualified apprentices in excess of the
apprentice-to-journeyworker ratio will
count towards the total labor hours but
will not count as hours performed by qual-
ified apprentices for the purposes of calcu-
lating the applicable percentage.
A commenter requested additional
examples addressing work performed in
years after the initial year of construc-
tion. The final regulations address this
comment by providing an example illus-
trating the calculation of the Labor Hours
Requirement after the initial year of con-
struction.
3. Ratio Requirement
Under section 45(b)(8)(B), the Labor
Hours Requirement is subject to any
applicable requirements for appren-
tice-to-journeyworker ratios of the DOL
or the applicable State apprenticeship
agency. Under 29 CFR part 29, regis-
tered apprenticeship programs prescribe
a numeric ratio of apprentices to jour-
neyworkers in their standards of appren-
ticeship.
34
This ratio is intended to ensure
that there are enough journeyworkers to
oversee the work of qualified apprentices,
provide appropriate training, and maintain
workplace safety. The Treasury Depart-
ment and the IRS understand that the DOL
and State apprenticeship agencies review
and approve the prescribed ratio require-
ments. Proposed §1.45-8(c)(2), would
have provided that the allowable ratio of
apprentices to journeyworkers on the job
site in any occupation and its correspond-
ing classification on any day must comply
with the applicable apprentice-to-jour-
neyworker ratio of the registered appren-
ticeship program in accordance with 29
CFR part 29. The Treasury Department
and the IRS requested comments on the
application of the Ratio Requirement for
purposes of satisfying the Apprenticeship
Requirements. Commenters generally
supported the Ratio Requirement aligning
with ratio requirements set by registered
apprenticeship programs.
As discussed in section VII.B.4. of this
Summary of Comments and Explanation
of Revisions, the Proposed Regulations
would have provided a reciprocity rule
for purposes of the payment of applicable
prevailing wage rates for qualified appren-
tices. The final regulations adopt the rec-
iprocity rule under the Prevailing Wage
Requirements as proposed. The comments
with respect to the reciprocity rule and the
need for clarity on the ratio requirement
if registered apprenticeship programs sup-
ply qualified apprentices outside of the
geographic area in which the program is
registered apply equally with respect to
the Ratio Requirement under the Appren-
ticeship Requirements. Accordingly, the
final regulations adopt the reciprocity rule
for purposes of determining the applica-
ble ratio of apprentices to journeyworkers
under the Ratio Requirement. The final
regulations clarify that if more than one
apprentice-to-journeyworker ratio could
apply because the construction work is
occurring in a geographic area where the
registered apprenticeship program is not
registered, the taxpayer must comply with
the apprentice-to-journeyworker ratio set
for the geographic area where the con-
struction occurs.
One commenter recommended that the
final regulations clarify whether taxpay-
ers, contractors, or subcontractors must
only follow the ratio requirement of a reg-
istered apprenticeship program in those
States and localities that prescribe ratio
requirements for private sector projects.
There is no such exception under the Ratio
Requirement, and therefore the final regu-
lations do not adopt this suggestion.
One commenter suggested that regis-
tered apprenticeship programs in some
States may have a difficult time supplying
enough qualified apprentices to meet the
applicable apprentice-to-journeyworker
ratios. The comment is inconsistent with
the general application of apprentice-
ship ratio requirements. The Treasury
Department and the IRS understand from
the DOL that ratio requirements of reg-
istered apprenticeship programs that are
reviewed and approved by the DOL and
State apprenticeship agencies do not
prescribe a certain number of qualified
apprentices at a job site. Instead, they
prescribe the number of journeyworkers
required for each qualified apprentice
that is on a job site on a given day. If on
a particular day there are no qualified
apprentices scheduled to work, there is
no ratio requirement to adhere to. Addi-
tionally, comments regarding substan-
tive ratio requirements set by registered
apprenticeship programs and reviewed
and approved by the DOL and State
apprenticeship agencies are outside the
scope of these final regulations.
One commenter suggested that the final
regulations should incorporate the DOL
regulations at 29 CFR part 29 to account
for the fact that collective bargaining
agreements may prohibit employers from
abiding by the Ratio Requirement. The
commenter was concerned that contractors
may be faced with conflicting obligations
and that taxpayers may be required to pay
penalties as a result of negotiations out-
side of the taxpayer’s control. The Trea-
sury Department and the IRS understand
that collective bargaining agreements may
have terms that prohibit the use of appren-
tice-to-journeyworker ratios established
as part of a registered apprenticeship pro-
gram; however, section 45(b)(8)(B) pro-
vides that the Labor Hours Requirement
is subject to the apprentice-to-journey-
worker ratios of the DOL or the applicable
State apprenticeship agency. The Trea-
sury Department and the IRS decline to
provide a rule in the final regulations that
is contrary to this statutory requirement.
Changes to the ratio requirements that are
approved by the DOL OA or applicable
State apprenticeship agencies as part of
the standards for registered apprenticeship
programs under 29 CFR part 29 are out-
side the scope of these final regulations.
34
On January 17, 2024, the DOL published a notice of proposed rulemaking (ETA–2023–0004) in the Federal Register (89 FR 3118), to revise the regulations for registered apprenticeships.
Under proposed 29 CFR 29.8(a)(19) each registered apprenticeship program must have a written set of standards of apprenticeship that includes the program’s specific numeric ratio of
apprentices to journeyworkers. National Apprenticeship System Enhancements, 89 FR 3118, 3279 (proposed Jan. 17, 2024).

Bulletin No. 2024–34 459 August 19, 2024
The Proposed Regulations would have
provided that the applicable ratio estab-
lished by the registered apprenticeship
program would need to be satisfied each
day during construction, alteration, or
repair of the qualified facility for which
qualified apprentice labor hours are being
claimed. Some commenters stated that it
would be administratively challenging to
comply with the Ratio Requirement each
day. One commenter suggested that the
apprenticeship-to-journeyworker ratio be
measured over a 30-day time period. One
commenter suggested providing a safe
harbor for taxpayers who are able to meet
the relevant apprenticeship-to-journey-
worker ratio requirement for at least 90
percent of the working days of a construc-
tion project. Additionally, a commenter
requested guidance on the effect on tax-
payers’ responsibility to meet applicable
apprenticeship-to-journeyworker ratios
if a registered apprenticeship program is
unable to supply the necessary qualified
apprentices requested by the taxpayer. At
least one commenter stated that applying
the Ratio Requirement on a daily basis
aligns with industry custom.
The Treasury Department and the IRS
recognize that there may be scheduling
conflicts or other issues that may make it
difficult to meet the Ratio Requirement.
Under 29 CFR 29.5, registered appren-
ticeship programs must have a ratio
requirement as part of their program stan-
dards. According to the DOL, it is indus-
try practice for registered apprenticeship
programs to set daily ratio requirements
to ensure the safety and welfare of the
apprentices and properly oversee the work
of apprentices, and requiring different
ratios under the final regulations could be
administratively challenging and confus-
ing. Additionally, a daily requirement is
needed to determine whether a qualified
apprentice may be paid at a rate less than
the prevailing rate for work performed
that day as explained in Section VII.B.4.
of this Summary of Comments and Expla-
nation of Revisions. Accordingly, the
final regulations confirm that the Ratio
Requirement applies each day.
One commenter requested that the final
regulations require that registered appren-
ticeship programs identify and publish
their apprentice-to-journeyworker ratios.
Based on consultations with the DOL, the
Treasury Department and the IRS under-
stand that apprentice-to-journeyworker
ratios of individual registered apprentice-
ship programs are not publicly available.
However, under 29 CFR 29.5(b)(7), the
ratio of apprentices to journeyworkers
is a part of a registered apprenticeship
program’s standards of apprenticeship.
A registered apprenticeship program’s
apprentice-to-journeyworker ratio is pro-
vided to an employer when the employer
joins a registered apprenticeship program
and agrees to abide by the standards of
apprenticeship under 29 CFR part 29. The
DOL regulates registered apprenticeship
programs, and requests to impose require-
ments on registered apprenticeship pro-
grams is outside the scope of these final
regulations.
4. Participation Requirement
Under section 45(b)(8)(C), each tax-
payer, contractor, or subcontractor who
employs four or more individuals to per-
form construction, alteration, or repair
work with respect to the construction of
a qualified facility must employ one or
more qualified apprentices to perform
that work. The Proposed Regulations
would have provided that the Participa-
tion Requirement would be satisfied as
long as the taxpayer, contractor, or sub-
contractor employs one or more qualified
apprentices to perform work on the facil-
ity and this requirement would not be a
daily requirement. Additionally, the Pro-
posed Regulations would have clarified
that it would be the responsibility of the
taxpayer to ensure that any contractor or
subcontractor with four or more employ-
ees who perform work on the facility has
hired one or more qualified apprentices.
The preamble to the Proposed Regula-
tions explained that the Treasury Depart-
ment and the IRS proposed to interpret
the Participation Requirement as designed
to prevent taxpayers from satisfying the
Labor Hours Requirement by only hiring
qualified apprentices to perform one type
of work and instead encourages taxpayers
to use qualified apprentices across the full
range of work performed with respect to
the facility.
Commenters requested clarification on
how to determine whether a taxpayer, con-
tractor, or subcontractor employs four or
more individuals to perform construction,
alteration, or repair work with respect to
the construction of a qualified facility. One
commenter sought confirmation that the
Participation Requirement does not apply
on a daily basis. Commenters specifically
requested clarification on whether the
number of employees counted in deter-
mining whether the Participation Require-
ment applies are only those employed in
the construction of the facility at the same
time and at the same location.
Under section 45(b)(8)(C), the Partici-
pation Requirement applies if the taxpayer,
contractor, or subcontractor employs
four or more individuals to perform con-
struction, alteration, or repair work with
respect to the construction of a qualified
facility. It does not require employment
of four individuals in the construction of
the qualified facility at the same time or
at the same location. The final regulations
clarify that the Participation Requirement
applies if the taxpayer, contractor, or sub-
contractor employ four individuals in the
construction of the qualified facility at any
time during the construction, regardless
of whether they are employed at the same
location or at the same time.
Commenters suggested raising the
number of employees that are required for
the Participation Requirement to apply so
that qualified apprentices will only need
to be employed on larger projects with
more resources. Section 45(b)(8)(C) pro-
vides that each taxpayer, contractor, or
subcontractor who employs four or more
individuals to perform construction, alter-
ation, or repair work with respect to the
construction of a qualified facility must
employ one or more qualified apprentices
to perform such work. The final regula-
tions adhere to the statutory requirement
under section 45(b)(8)(C).
5. Other General Apprenticeship Issues
Section 45(b)(8)(A) provides, in rele-
vant part, that taxpayers must ensure that
not less than the applicable percentage of
the total labor hours of the construction,
alteration, or repair work with respect to
such facility are performed by qualified
apprentices. Consistent with this statu-
tory provision, the Proposed Regulations
would have provided that the taxpayer
would be solely responsible for ensuring

August 19, 2024 460 Bulletin No. 2024–34
that the Apprenticeship Requirements are
satisfied. Some commenters stated that
this provision is burdensome on taxpay-
ers because it makes them responsible
for the hiring decisions of contractors and
subcontractors. Specifically, commenters
were concerned that taxpayers may fail to
satisfy the Apprenticeship Requirements
if a contractor does not hire a sufficient
number of qualified apprentices.
The statute requires that the taxpayer
ensure that the applicable percentage of
total labor hours are performed by qual-
ified apprentices, irrespective of which
entity employs the qualified apprentices.
If a contractor or subcontractor does not
comply with the Labor Hours Require-
ment, the taxpayer retains the opportunity
to cure that failure by paying the penalty
described under section 45(b)(8)(D)(i)(II).
Thus, subject to the Participation Require-
ment, the taxpayer retains some flexibil-
ity in ensuring that the Apprenticeship
Requirements are satisfied.
One commenter suggested that the
final regulations require taxpayers to col-
lect and audit their contractor and sub-
contractors’ requests for qualified appren-
tices. Taxpayers may establish procedures
to help ensure their compliance with the
Apprenticeship Requirements. Those pro-
cedures may include regularly reviewing
the qualified apprentice hiring practices of
contractors and subcontractors or includ-
ing requirements to hire qualified appren-
tices in contracts. Whether a taxpayer
regularly reviewed contractors’ and sub-
contractors’ use of qualified apprentices is
a factor in determining intentional disre-
gard.
A commenter stated that depending on
a construction project’s geographic access
to registered apprenticeship programs,
it could be impractical for some smaller
contractors to maintain the relatively high
percentage of qualified apprentices neces-
sary to meet each of the Apprenticeship
Requirements. The Participation Require-
ment, which does not require the hiring of
qualified apprentices if a contractor does
not employ four or more individuals, pro-
vides limited relief for smaller businesses
and addresses potential burdens. Further,
the Good Faith Effort Exception discussed
in Section VIII.B.1. of this Summary of
Comments and Explanation of Revisions
may provide relief in those circumstances
raised by commenters. Accordingly, the
final regulations do not provide any addi-
tional exceptions.
Section 45(b)(8)(E)(ii) defines a qual-
ified apprentice as an individual who is
employed by the taxpayer or by any con-
tractor or subcontractor and who is par-
ticipating in a registered apprenticeship
program, as defined in section 3131(e)(3)
(B). For purposes of the Apprenticeship
Requirements, the Proposed Regulations
would have defined a qualified apprentice,
in part, as an individual who is employed
by the taxpayer or by any contractor or
subcontractor who is participating in a
registered apprenticeship program. Under
the Proposed Regulations, participating
in a registered apprenticeship program
would have included entering into a writ-
ten agreement with a registered appren-
ticeship program. The Proposed Regula-
tions would have also provided that for
purposes of the Prevailing Wage Require-
ments, an apprentice includes an individ-
ual in the first 90 days of probationary
employment who has been certified by the
DOL OA or a State apprenticeship agency
(if appropriate) to be eligible for proba-
tionary employment as an apprentice.
One commenter asked for the final regula-
tions to clarify whether the term qualified
apprentice includes those individuals in
the first 90 days of probationary employ-
ment with the registered apprenticeship
program, similar to how such individuals
are treated as apprentices under 29 CFR
22.401. The final regulations clarify that
a qualified apprentice includes those indi-
viduals in the first 90 days of probationary
employment with the registered appren-
ticeship program because they are par-
ticipating in the registered apprenticeship
program.
The Proposed Regulations would have
provided that pre-apprenticeship pro-
grams do not qualify as registered appren-
ticeship programs for purposes of section
45(b)(8) and hours worked as part of a
pre-apprenticeship program would not
count towards the Labor Hours Require-
ment. Commenters recommended that the
Treasury Department and the IRS permit
other programs, such as trade schools,
colleges, programs run by local high
schools and school districts, and other
privately run, non-registered apprentice-
ship or workforce development programs
to supply apprentices to taxpayers, con-
tactors, or subcontractors to satisfy the
Apprenticeship Requirements. Comment-
ers asserted that permitting programs
in addition to registered apprenticeship
programs to supply apprentices will help
ease the expected short supply of qualified
apprentices due to high demand. A com-
menter also explained that biogas systems
are usually co-located at farms and some
members in the biogas industry rely on
apprenticeship programs run through local
high schools and school districts, that help
provide hands-on experience and develop
interest for agricultural careers. The com-
menter suggested including those school-
based apprenticeship programs if they
meet certain criteria.
Although the Treasury Department and
the IRS understand there may be advan-
tages to hiring individuals through pro-
grams other than registered apprentice-
ship programs, the statute requires that
qualified apprentices be employed by the
taxpayer, contractor, or subcontractor and
be participating in a registered apprentice-
ship program for purposes of the Appren-
ticeship Requirements. The final regula-
tions adhere to the statutory requirements
and the proposed rule is adopted without
change.
Several commenters indicated a gen-
eral concern with the lack of qualified
apprentices to staff construction projects.
One commenter stated that in the next five
to ten years, the construction industry is
bracing for hundreds of billions of dollars
of additional infrastructure spending and
tax incentives. The commenter was skep-
tical that there are sufficient registered
apprenticeship programs and qualified
apprentices available to meet the Appren-
ticeship Requirements. An additional
commenter shared survey data indicating
that the necessary registered apprentice-
ship programs have not been established
in their geographic area. The same com-
menter also opined that there are not
enough qualified apprentices currently
enrolled in registered apprenticeship pro-
grams to supply a workforce capable of
meeting the Labor Hour Requirements.
Comments discussing the possible
shortage of qualified apprentices or reg-
istered apprenticeship programs are out-
side the scope of these final regulations.
However, the Treasury Department and

Bulletin No. 2024–34 461 August 19, 2024
the IRS appreciate that the commenters
raised these concerns and have consulted
with the DOL OA regarding them. The
DOL OA explained that group registered
apprenticeship programs that typically
place qualified apprentices with multi-
ple employers for on-the-job training are
designed to expand with demand because
they typically only admit as many quali-
fied apprentices as they have guaranteed
placements for. If there are additional
employers, they can admit additional
qualified apprentices to their programs.
The DOL OA also indicated that over
the last several years the DOL has made
significant investments in the registered
apprenticeship space to prepare and
expand access to qualified apprentices.
The DOL OA is ready to assist in the cre-
ation of new registered programs that may
be needed to meet the increased demand
for apprentices. Taxpayers, contractors,
and subcontractors are encouraged to start
their own registered apprenticeship pro-
grams to help increase the supply of qual-
ified apprentices.
Additionally, the Good Faith Effort
Exception contemplates that the supply
of available qualified apprentices may
not always match the demand necessary
to meet the Apprenticeship Require-
ments and provides relief in those cases
as explained in Section VIII.B.1. of this
Summary of Comments and Explanation
of Revisions. However, use of the Good
Faith Effort Exception if there is no reg-
istered apprenticeship program that oper-
ates in the geographic location of the
facility is expected to be rare because reg-
istered apprenticeship programs can oper-
ate across State and county lines and are
expected to expand according to demands.
A commenter requested that the final
regulations clarify that a registered
apprenticeship program may only pro-
vide qualified apprentices for the specific
classification(s) requested by the taxpayer.
The regulation of registered apprentice-
ship programs is outside the scope of these
final regulations. Taxpayers, contrac-
tors, and subcontractors retain flexibility
in their hiring decisions, including with
respect to qualified apprentices. Under
these final regulations, the hours that are
worked by a qualified apprentice only
qualify towards the Labor Hours Require-
ment and the Participation Requirement to
the extent the qualified apprentice is per-
forming construction, alteration, or repair
work with respect to the construction of a
facility consistent with the occupation in
which the qualified apprentice is training.
Another commenter claimed that the
Proposed Regulations would place the
responsibility to provide qualified appren-
tices on group sponsors of registered
apprenticeship programs, thereby limiting
taxpayer incentives to launch their own
programs and hire qualified apprentices in
other circumstances. The Proposed Regu-
lations did not intend to restrict taxpayers,
contractors, or subcontractors from devel-
oping their own registered apprenticeship
programs. The final regulations clarify
that taxpayers, contractors, and subcon-
tractors have the flexibility to create their
own registered apprenticeship program
(within the meaning of section 3131(e)
(3)(B)) or partner with existing registered
apprenticeship programs to satisfy the
Apprenticeship Requirements.
Another commenter requested that the
final regulations require that any funds
contributed to a registered apprenticeship
program must be used to train qualified
apprentices. While the Treasury Depart-
ment and the IRS understand that com-
menters want to ensure funds contributed
to a registered apprenticeship program
are used appropriately, this is outside the
scope of the final regulations.
Several commenters requested assis-
tance in finding registered apprenticeship
programs to provide qualified apprentices
to a project. The DOL OA, in collaboration
with participating State apprenticeship
agencies, has created an online search tool
to assist taxpayers, contractors, and sub-
contractors in finding registered appren-
ticeship programs (currently https://www.
apprenticeship.gov/partner-finder). Tax-
payers, contractors, and subcontractors
can search for registered apprenticeship
programs by occupation or industry in a
certain State, city, or zip code. Taxpayers,
contractors, and subcontractors can also
contact the DOL OA or their State appren
-
ticeship agency for assistance in locating
registered apprenticeship programs.
A commenter also stated that the
Apprenticeship Requirements could cre-
ate new challenges for taxpayers who
depend on labor from other countries to
help install equipment. The commenter
explained that foreign contractors and
subcontractors will be unable to meet the
Apprenticeship Requirements because
they are not permitted to hire qualified
apprentices from registered apprentice-
ship programs. The commenter suggested
that the final regulations expand the Good
Faith Effort Exception to provide reason-
able accommodations for taxpayers who
rely on foreign companies for specific
work.
The Treasury Department and the IRS
understand from the DOL OA that DOL
regulations governing registered appren-
ticeship programs do not prohibit foreign
employers from hiring qualified appren-
tices from registered apprenticeship pro-
grams or registering an apprenticeship
program, provided certain requirements
are satisfied (for example, the foreign
employer must have a physical presence
in the United States and be legally autho-
rized to conduct business in the United
States). The DOL OA confirmed that there
are several registered apprenticeship pro-
grams sponsored by foreign employers.
Accordingly, the Treasury Department
and the IRS decline to provide special
exceptions for taxpayers who use foreign
contractors or subcontractors for specific
work as the statute does not contemplate
such an exception.
A commenter requested that the final
regulations clarify the effect of the DOL
deregistering a registered apprenticeship
program. The commenter recommended
that the final regulations permit taxpay-
ers, contractors, and subcontractors to
continue to pay the applicable apprentice-
ship prevailing wage rate if a registered
apprenticeship program is deregistered,
provided the taxpayer, contractor, or
subcontractor can find a new registered
apprenticeship program for the appren-
tices already employed within 90 days
from the date the taxpayer, contractor, or
subcontractor is notified in writing that
the program was deregistered. The com-
menter also requested that the Treasury
Department and the IRS provide an option
for enrolling apprentices in registered
apprenticeship programs that offer remote
learning in the event a registered appren-
ticeship program is deregistered.
The Treasury Department and the IRS
understand that programs may be deregis-
tered by the DOL OA or the State appren-

August 19, 2024 462 Bulletin No. 2024–34
ticeship agency as a result of the program’s
failure to follow the requirements in 29
CFR parts 29 and 30. When an appren-
ticeship program is deregistered, the DOL
OA or State apprenticeship agency assists
with transferring the apprentices to other
registered apprenticeship programs. The
DOL OA has indicated that deregistration
is rare and the process leading up to dereg-
istration involves ample opportunities for
programs to take corrective action prior to
deregistration such that there will be time
for taxpayers, contractors, and subcon-
tractors to find new registered apprentice-
ship programs or qualified apprentices if a
program is at risk of deregistration.
The final regulations do not adopt this
comment. Section 45(b)(8) requires the
use of qualified apprentices participating
in a registered apprenticeship program.
An individual registered in an appren-
ticeship program that has been deregis-
tered is no longer a qualified apprentice
and the hours worked by the individual
after deregistration of the program will
not qualify towards the Apprenticeship
Requirements. The Treasury Department
and the IRS also decline to permit taxpay-
ers, contractors, or subcontractors to pay
the reduced applicable apprenticeship pre-
vailing wage rate in the event of deregis-
tration as doing so would be inconsistent
with the statute.
A commenter recommended that the
final regulations provide guidance for sit-
uations in which the construction work
outlasts the qualified apprentice’s tenure
with a registered apprenticeship program,
because the qualified apprentice is pro-
moted, graduates, or otherwise leaves the
program. The employment of individuals
who are no longer qualified apprentices for
any reason will not qualify for purposes of
the Apprenticeship Requirements.
Similarly, a few commenters requested
guidance regarding the impact to the
Apprenticeship Requirements if circum-
stances change in the middle of con-
struction of a facility, such as qualified
apprentice labor becoming unavailable.
The Treasury Department and the IRS
understand there might be situations in
which qualified apprentice labor becomes
unavailable, which may affect a taxpayer’s
ability to comply with the Labor Hours
Requirement. In this situation, taxpayers
may be eligible for the Good Faith Effort
Exception (if those requirements are sat-
isfied) or may cure the failure to meet the
Apprenticeship Requirements by pay-
ing the prescribed penalty under section
45(b)(8)(D)(i)(II). The Good Faith Effort
Exception and the Apprenticeship Cure
Provision are discussed in Section VIII.B.
of this Summary of Comments and Expla-
nation of Revisions.
A commenter also suggested that in
order to ensure high quality on-the-job
training in registered apprenticeship pro-
grams, the final regulations should either
support or require employers seeking the
increased amounts of credit to be regis-
tered training agents and demonstrate their
proof of status with a registered appren-
ticeship program. Because registered
apprenticeship programs must provide
supervised work experience and training
on the job, the use of qualified appren-
tices already ensures quality on-the-job
training, and the final regulations do not
require taxpayers, contractors, or subcon-
tractors to register as training agents.
B. Exceptions to the Apprenticeship
Requirements
Under section 45(b)(8)(D)(i), a tax-
payer is not treated as failing to satisfy the
Apprenticeship Requirements in section
45(b)(8) if: (i) the taxpayer satisfies the
Good Faith Effort Exception in section
45(b)(8)(D)(ii), or (ii) in the case of any
failure by the taxpayer to satisfy the Labor
Hours Requirement under section 45(b)
(8)(A) and the Participation Requirement
under section 45(b)(8)(C), the taxpayer
makes a penalty payment to the IRS.
1. Good Faith Effort Exception
Under the Good Faith Effort Excep-
tion, a taxpayer is deemed to have sat-
isfied the Apprenticeship Requirements
with respect to a qualified facility if the
taxpayer has requested qualified appren-
tices from a registered apprenticeship
program and: (i) such request has been
denied, provided that such denial is not
the result of a refusal by the taxpayer or
any contractors or subcontractors engaged
in the performance of construction, alter-
ation, or repair work with respect to such
qualified facility to comply with the estab-
lished standards and requirements of the
registered apprenticeship program, or (ii)
the registered apprenticeship program
fails to respond to such request within
five business days after the date on which
such registered apprenticeship program
received the request.
The Proposed Regulations would
have provided that, generally, a taxpayer
is deemed to have satisfied the Appren-
ticeship Requirements with respect to a
request for qualified apprentices if the
taxpayer, contractor, or subcontractor
submitted a written request for quali-
fied apprentices to at least one registered
apprenticeship program that: (i) has a geo-
graphic area of operation that includes the
location of the facility, or that can reason-
ably be expected to provide apprentices
to the location of the facility; (ii) trains
apprentices in the occupation(s) needed to
perform construction, alteration, or repair
with respect to the facility; and (iii) has a
usual and customary business practice of
entering into agreements with employers
for the placement of apprentices in the
occupation for which they are training,
pursuant to its standards and require-
ments. The Proposed Regulations would
have further required that the request be in
writing and sent electronically or by reg-
istered mail. The Proposed Regulations
would have defined a registered appren-
ticeship program to mean a program that
has been registered by the DOL OA or a
recognized State apprenticeship agency
pursuant to 29 CFR parts 29 and 30, as
meeting the basic standards and require-
ments of the DOL (DOL Apprenticeship
Standards).
The Proposed Regulations would have
provided that the Good Faith Effort Excep-
tion is specific to the request for qualified
apprentices made by the taxpayer, con-
tractor, or subcontractor, including the
number of apprentice hours for which the
request for apprentices has been made to a
registered apprenticeship program. Thus,
the Good Faith Effort Exception would
have applied to the specific portion of the
request for qualified apprentices that was
not responded to or denied. The Proposed
Regulations would also have provided
that the denial of a request for qualified
apprentices would qualify for the Good
Faith Effort Exception for a period of 120
days after the denial and that taxpayers,
contractors, or subcontractors would be

Bulletin No. 2024–34 463 August 19, 2024
required to submit an additional request
for apprentices every 120 days after a
denial to continue to qualify for the Good
Faith Effort Exception. The Treasury
Department and the IRS requested com-
ments on the duration of requests for qual-
ified apprentices under the Good Faith
Effort Exception.
The Treasury Department and the IRS
are aware that the DOL OA, as well as
State apprenticeship agencies, routinely
provide technical expertise on registered
apprenticeship program matters, includ-
ing identifying registered apprenticeship
programs and assisting employers seeking
to register their own programs. The Trea-
sury Department and the IRS requested
comments on whether and how the pro-
posed Good Faith Effort Exception might
account for a situation in which a taxpayer
contacts the DOL OA or the appropriate
State apprenticeship agency regarding
their apprenticeship request, in addition
to contacting a specific registered appren-
ticeship program(s).
The Treasury Department and the IRS
also requested comments on how the pro-
posed Good Faith Effort Exception would
align with current practices with respect
to use of apprentices in the construction,
alteration, or repair of facilities. In par-
ticular, the Treasury Department and the
IRS requested comments on the role of
collective bargaining agreements, PLAs,
and other agreements to satisfy the request
for apprentices under the Good Faith
Effort Exception. The following sections
summarize the comments received. The
final regulations provide further guidance
regarding the Good Faith Effort Exception
and revise the Proposed Regulations in
response to the comments received.
a. Content and scope of a request
The Proposed Regulations would
have required that a request for qualified
apprentices must include the proposed
dates of employment, occupation of
apprentices needed, location of the work
to be performed, number of apprentices
needed, the expected number of labor
hours to be performed by the apprentices,
and the name and contact information of
the taxpayer, contractor, or subcontractor
requesting employment of apprentices
from the registered apprenticeship pro-
gram. The Proposed Regulations would
have also required that the request state
that the request for qualified apprentices
is made with an intent to employ appren-
tices in the occupation for which they are
being trained and in accordance with the
requirements and standards of the regis-
tered apprenticeship program.
Several commenters requested that the
final regulations further clarify what infor-
mation must be included in the request for
qualified apprentices for purposes of the
Good Faith Effort Exception. At least one
commenter asked whether the request
could estimate the dates of employment
and the number of qualified apprentices
needed. Commenters suggested that
the final regulations require requests to
explain the need for qualified apprentices
and provide the exact number of quali-
fied apprentices needed. Other comment-
ers specifically asked that the request be
required to include the name and contact
information of the entity that will employ
the qualified apprentices.
The final regulations retain the pro-
posed rule requiring taxpayers, contrac-
tors, and subcontractors to include specific
and detailed information concerning the
qualified apprentices that are requested
and the work to be performed with cer-
tain revisions to provide greater clarity
for taxpayers and to strengthen the Good
Faith Effort Exception. The final regula-
tions further require that a request must
identify who will employ the qualified
apprentices. The Treasury Department
and the IRS understand that requests for
qualified apprentices will be based on pro-
jections or estimates of the work to be per-
formed including the duration of the work
and the number of hours. Nonetheless,
the estimates must be consistent with the
requester’s intent to employ the qualified
apprentices. Accordingly, the final regu-
lations provide that requests may include
reasonable estimates, and also require that
the request include a statement of intent
to employ qualified apprentices consistent
with the hours and dates of employment
included in the request.
The Treasury Department and the IRS
are aware of the concerns about potential
abuse of the Good Faith Effort Exception.
Taxpayers, contractors, and subcontrac-
tors should be mindful that requests that
lack specific details of employment or do
not reflect reasonable estimates will not
be considered valid requests under the
final regulations. Consistent with the gen-
eral rule in §1.45-12 that taxpayers must
maintain and preserve records sufficient to
demonstrate compliance with the applica-
ble PWA requirements, taxpayers need to
keep records demonstrating the estimates
included in the request were reasonable,
such as projected and actual labor needs
(both for journeyworkers and qualified
apprentices) during the construction of the
qualified facility, and any factors impact-
ing those needs, such as apprentice utili-
zation plans or contract requirements, as
applicable.
b. Required format of a request
Commenters recommended that the
final regulations require taxpayers to
make requests for qualified apprentices
in writing and by telephone. Commenters
argued that adding the requirement to con-
tact registered apprenticeship programs by
telephone would ensure taxpayers, con-
tractors, and subcontractors use forms of
communication that are reasonably cal-
culated to properly and timely notify reg-
istered apprenticeship programs of their
requests.
The Treasury Department and the IRS
recognize that some taxpayers, contrac-
tors, and subcontractors have ongoing
relationships with registered apprentice-
ship programs and may request quali-
fied apprentices from the program infor-
mally, such as by telephone. However,
in administering the Good Faith Effort
Exception the IRS needs to be able to ver-
ify and evaluate the request for qualified
apprentices, including if the request was
received by the registered apprenticeship
program and whether the request included
the necessary details to be considered a
valid request. Accordingly, the final reg-
ulations retain the rule that a request to a
registered apprenticeship program must
be a written request, sent electronically
or by registered mail, for purposes of the
Good Faith Effort Exception. Taxpayers,
contractors, or subcontractors are permit-
ted and encouraged to contact registered
apprenticeship programs in writing and by
telephone, but in order to satisfy the Good
Faith Effort Exception, the request must
be in writing.

August 19, 2024 464 Bulletin No. 2024–34
c. Required recipients of a request
A commenter stated that many employ-
ers who are signatories to collective bar-
gaining agreements with building trades
labor unions request qualified apprentices
from the labor union and not from a reg-
istered apprenticeship program. The com-
menters indicated that this is the common
practice because the labor union will have
a list of qualified apprentices who will be
dispatched to the employer’s job site. The
commenter suggested the final regulations
revise the Good Faith Effort Exception to
reflect this practice. The Treasury Depart-
ment and the IRS understand that this prac-
tice may occur; however, section 45(b)(8)
(D)(ii) provides that requests for qualified
apprentices must be made to a registered
apprenticeship program. Accordingly, the
Treasury Department and the IRS decline
to amend the Good Faith Effort Exception
to allow this alternative procedure.
The Proposed Regulations would have
provided that in order to qualify for the
Good Faith Effort Exception, taxpayers,
contractors, or subcontractors must submit
a written request for qualified apprentices
to at least one registered apprenticeship
program, which has a geographic area of
operation that includes the location of the
facility, or to a registered apprenticeship
program that can reasonably be expected
to provide apprentices to the location of
the facility. In the preamble to the Pro-
posed Regulations, the Treasury Depart-
ment and the IRS explained that although
a taxpayer only needs to submit a request
to one registered apprenticeship program,
depending on the size of the facility and
the likelihood of multiple occupations
involved in the construction of the facility,
a taxpayer may need to submit a request
to more than one apprenticeship program
in order to meet the Good Faith Effort
Exception.
Several commenters suggested that
the final regulations require taxpayers
to request qualified apprentices from all
available registered apprenticeship pro-
grams. Other commenters requested the
final regulations retain the requirement to
contact at least one available registered
apprenticeship program in order to meet
the Good Faith Effort Exception. Given
that the statute does not impose this
requirement, it would be unreasonable to
require taxpayers to contact all possible
apprenticeship programs. The final reg-
ulations adopt the proposed rule without
change. In order to qualify for the Good
Faith Effort Exception, taxpayers, con-
tractors, or subcontractors must submit a
written request for qualified apprentices
to at least one registered apprenticeship
program. The Good Faith Effort Excep-
tion is limited to the number of qualified
apprentice labor hours that are requested
as part of a valid request for qualified
apprentices.
A commenter requested that the final
regulations clarify that taxpayers are not
required to request apprentices from the
same geographic area as the project. The
final regulations do not require taxpayers
to use qualified apprentices from a pro-
gram located in the same geographic area
as the project to meet the Labor Hours
Requirement. Taxpayers, contractors,
or subcontractors have the flexibility to
request and use qualified apprentices from
any location so long as the apprentices
are part of a registered apprenticeship
program. However, as provided herein,
in order to qualify for the Good Faith
Effort Exception, taxpayers are required
to request qualified apprentices from at
least one apprenticeship program with a
geographic area of operation that includes
the geographic location of the facility.
Commenters requested additional
guidance regarding how to determine
those apprenticeship programs that
would reasonably be expected to provide
apprentices to the location of a facility.
Some commenters suggested making this
requirement less ambiguous by requiring
taxpayers, contractors, and subcontractors
to contact all registered apprenticeship
programs within a certain distance from
the project location. One commenter sug-
gested that taxpayers should be required
to accept apprentices from a “sister” pro-
gram either from within the same State or
from one or more States adjacent to the
State in which the construction is occur-
ring. Other commenters recommended
being able to unconditionally use local
registered apprenticeship programs. A
commenter also recommended clarifying
the expectations for nonunion contractors
to use apprentices from union-affiliated
programs if nonunion programs are not
locally available.
The Treasury Department and the
IRS agree that additional clarification is
needed on which registered apprentice-
ship program must be contacted to satisfy
the Good Faith Effort Exception. The pro-
posed rule was intended to require sending
the request to a registered apprenticeship
program that would ordinarily provide
apprentices to the area where the facility is
located. The Treasury Department and the
IRS have determined that this prerequisite
is sufficiently addressed in the require-
ment that the registered apprenticeship
program have a geographic area of opera-
tion that includes the location of the facil-
ity, because those registered apprentice-
ship programs can reasonably be expected
to provide apprentices to the area where
the facility is located. Accordingly, the
proposed requirement to contact a reg-
istered apprenticeship program that can
reasonably be expected to provide appren-
tices to the location of the facility is not
retained in the final regulations. The final
regulations clarify that the geographic
area of operation of a registered appren-
ticeship program has the same meaning as
geographic area and locality for purposes
of the Prevailing Wage Requirements. In
most cases, this will mean that the regis-
tered apprenticeship program operates in
the county, independent city, or other civil
subdivision of the State in which the facil-
ity is located, regardless of where the reg-
istered apprenticeship program is physi-
cally located.
Commenters requested guidance with
respect to the application of the Good Faith
Effort Exception if there is no registered
apprenticeship program with a geographic
area of operation that includes the loca-
tion of the facility or that can be reason-
ably expected to provide apprentices to a
project. A commenter also requested guid-
ance in situations in which certain trades
lacked qualified apprentices either locally
or nationally. Commenters also requested
clarification on how to determine that
there are no registered apprenticeship pro-
grams in the geographic area or that can
be reasonably expected to provide appren-
tices to a project. Other commenters rec-
ommended requiring taxpayers, contrac-
tors, or subcontractors to seek assistance
from the DOL OA or State apprenticeship
agency if the taxpayer is having trouble
locating a registered apprenticeship pro-

Bulletin No. 2024–34 465 August 19, 2024
gram with a geographic area of operation
that includes the location of the facility in
order to qualify for the Good Faith Effort
Exception.
Although the Treasury Department and
the IRS expect this situation to be rare,
the final regulations address the applica-
tion of the Good Faith Effort Exception in
the absence of a registered apprenticeship
program with an area of operation that
includes the location of the facility. The
final regulations provide that if there is no
registered apprenticeship program with a
geographic area of operation that includes
the location of the facility, taxpayers will
be deemed to satisfy the Good Faith Effort
Exception for the apprentices they (or the
contractor or subcontractor) would have
requested for that occupation.
Taxpayers, contractors, and subcon-
tractors should keep records sufficient
to substantiate that there are no existing
registered apprenticeship programs with a
geographic area of operation that includes
the facility at the time the request would
have been made, as well as documentation
of the requests for apprentices that would
have been made, including the specific
work and hours that would have been per-
formed by the apprentices if a registered
apprenticeship program were available.
Taxpayers are also able, but not required
for the purposes of the Good Faith Effort
Exception, to create their own registered
apprenticeship programs.
Because registered apprenticeship
programs can operate across State and
county lines, determining that a registered
apprenticeship program does not have a
geographic area of operation that includes
the location of the facility may necessitate
contacting the registered apprenticeship
program to determine its geographic area
of operation. Taxpayers should also con-
sider contacting the DOL OA or relevant
State apprenticeship agency for assistance
in locating registered apprenticeship pro-
grams and documenting that no registered
apprenticeship programs are available.
Examples of evidence that no registered
apprenticeship programs were available
could include written confirmation from
registered apprenticeship programs that
they do not have a geographic area of
operation that includes the location of
the facility or confirmation from the DOL
OA or the relevant State apprenticeship
agency that there are no existing regis-
tered apprenticeship programs with a geo-
graphic area of operation that includes the
facility.
Commenters also requested guidance
on how a taxpayer, contractor, or subcon-
tractor who sponsors its own registered
apprenticeship program and employs
qualified apprentices would qualify for
the Good Faith Effort Exception. The final
regulations clarify that if a taxpayer, con-
tractor, or subcontractor is a registered
apprenticeship program sponsor and there
are no available qualified apprentices in
the registered apprenticeship program
sponsored by the taxpayer, contractor, or
subcontractor, the taxpayer, contractor, or
subcontractor may qualify for the Good
Faith Effort Exception by demonstrating
that it made a request to another registered
apprenticeship program (and such request
was denied or not responded to within
five business days) or by establishing that
there are no other registered apprentice-
ship programs with an area of operation
that includes the location of the facility.
One commenter stated that it is cus-
tomary for some employers who are
signatories to collective bargaining
agreements to hire qualified apprentices
through the union instead of by contacting
a registered apprenticeship program. The
commenter requested the final rule clar-
ify that this practice is permissible. The
final regulations do not adopt this sugges-
tion. The Treasury Department and the
IRS recognize that an employer may not
directly contact a registered apprentice-
ship program for qualified apprentices if
the employer is a signatory to a collective
bargaining agreement with a labor organi-
zation. However, for purposes of satisfy-
ing the Good Faith Effort Exception, the
taxpayer must have requested qualified
apprentices from a registered apprentice-
ship program and not a labor organization.
In the preamble to the Proposed Reg-
ulations, the Treasury Department and
the IRS requested comments on whether
and how the proposed Good Faith Effort
Exception might take into account a sit-
uation in which a taxpayer contacts the
DOL OA or the appropriate State appren-
ticeship agency regarding their appren-
ticeship request, in addition to contact-
ing a specific registered apprenticeship
program or programs. Some commenters
requested that the final regulations clarify
that a taxpayer’s outreach to the DOL OA
or a State apprenticeship agency has no
bearing on whether a taxpayer qualifies
for a Good Faith Effort Exception. The
Treasury Department and the IRS have
determined that taxpayers, contractors,
or subcontractors are not required to con-
tact the DOL OA or State apprenticeship
agency to satisfy the Good Faith Effort
Exception. However, as noted previously,
it is recommended that taxpayers, contrac-
tors, and subcontractors contact the DOL
OA or a State apprenticeship agency if
they have difficulty locating a registered
apprenticeship program. Additionally, the
final regulations provide that evidence that
the taxpayer, contractor, or subcontractor
contacted the DOL OA or a State appren-
ticeship agency for assistance will be con-
sidered in determining whether taxpayers,
contractors, or subcontractors acted with
intentional disregard if the Good Faith
Effort Exception does not apply.
d. Timing of a request
Commenters asked that the final reg-
ulations clarify when a request must be
made in order to satisfy the Good Faith
Effort Exception. Several comment-
ers recommended that requests should
be made within a certain time before
the requested qualified apprentices are
needed. Some commenters indicated that
in the absence of a temporal requirement,
some taxpayers, contractors, or subcon-
tractors may make last-minute requests
for qualified apprentices. The comment-
ers asserted that it may be very difficult
or impossible for a registered apprentice-
ship program to respond to a request for
qualified apprentices without adequate
time to staff the request. Some comment-
ers suggested that there may be a loophole
allowing for the application of the Good
Faith Effort Exception in situations in
which it was not intended to apply if the
final regulations do not impose a temporal
requirement. Commenters proposed time
periods that ranged from five days before
qualified apprentices are needed (if a tax-
payer, contractor, or subcontractor has a
pre-existing relationship with the regis-
tered apprenticeship program) to 90 days
before qualified apprentices are needed
in the absence of a pre-existing relation-

August 19, 2024 466 Bulletin No. 2024–34
ship. Several commenters suggested that
requests should be required 10 to 14 days
before qualified apprentices are expected
to start work on the project.
The DOL OA has indicated that typi-
cal apprenticeship cycles in construction
involve at least 2,000 hours of on-the-job
training and at least 144 hours of related
instruction for each year of the apprentice-
ship program. According to the DOL OA,
registered apprenticeship programs in the
construction industry typically hire qual-
ified apprentices in cohorts, and advance
notice is needed to allow the registered
apprenticeship program adequate time to
supply the requested qualified apprentices
within the timeframe needed.
The Treasury Department and the IRS
agree that in order to satisfy the Good
Faith Effort Exception, the initial request
for qualified apprentices must be made
with enough advance notice to allow reg-
istered apprenticeship programs time to
respond. The Treasury Department and
the IRS also recognize that given the
nature of construction projects, and the
desire to complete projects on time, a
shorter timeframe may be appropriate for
any subsequent requests once construction
is underway. Accordingly, the final regu-
lations require that taxpayers, contractors,
and subcontractors must make an initial
request for qualified apprentice(s) from
a registered apprenticeship program at
least 45 days before the qualified appren-
tice is requested to begin work on the
facility so that registered apprenticeship
programs have adequate time to plan for
the anticipated need. The final regulations
also clarify that to satisfy the Good Faith
Effort Exception, any subsequent requests
to the same registered apprenticeship pro-
gram must be made no later than 14 days
before qualified apprentices are requested
to begin work on the facility.
The Treasury Department and the IRS
received numerous comments regarding
the 120-day period for which the denial
or nonresponse of a request for quali-
fied apprentices is considered to satisfy
the Good Faith Effort Exception and the
requirement for taxpayers to submit addi-
tional requests for qualified apprentices
to continue to satisfy the Good Faith
Effort Exception at the end of the 120-
day period. Some commenters suggested
eliminating the requirement to submit
additional requests or extending the time
before an additional request needs to be
made from 120 days to one year, noting
that the 120-day period could be imprac-
tical or burdensome, create uncertainty,
and that it might not increase the hiring
of qualified apprentices. Several com-
menters asserted that the 120-day period
and the requirement to submit additional
requests lacked a statutory basis, because
the statutory text of the Good Faith Effort
Exception in section 45(b)(8)(D) does not
prescribe or mention any 120-day period
and does not require any renewal by the
taxpayer of its request for a qualified
apprentice in order to be deemed to satisfy
the Apprenticeship Requirements. Other
commenters suggested that the 120-day
period be shortened to better align with
project timelines for subcontractors who
typically conclude their work on a project
well within the 120-day window.
Commenters also asked that the final
regulations clarify if subsequent requests
have to be made to the same registered
apprenticeship program and if there is
a limit on the number of times an addi-
tional request needed to be made in order
to satisfy the Good Faith Effort Excep-
tion. Additionally, a commenter suggested
that the final regulations require fol-
low-up requests for qualified apprentices
to include the names of any registered
apprenticeship programs the taxpayer
previously contacted for qualified appren-
tices. Commenters also asked whether the
Labor Hours Requirement applied if tax-
payers, contractors, or subcontractors met
the Good Faith Effort Exception for 120
days, and subsequently obtained quali-
fied apprentices in response to an addi-
tional request made after the expiration
of the 120-day period. If the Labor Hours
Requirement applied in this scenario, the
commenter requested guidance on how to
determine if a taxpayer satisfied the Labor
Hours Requirement under these circum-
stances.
The Treasury Department and the IRS
agree with the comments indicating that
the 120-day period introduces unnecessary
uncertainty with respect to labor supply
and costs. A request that is initially denied
for lack of available qualified apprentices
that is later accepted pursuant to a renewed
request after only 120 days could disrupt
staffing decisions. Moreover, the Treasury
Department and the IRS acknowledge
that a requirement to submit additional
requests after 120 days could increase
burdens in cases in which businesses may
not have the staff or staffing flexibility to
comply with a requirement for multiple,
ongoing requests. However, the Treasury
Department and the IRS also recognize
the value in prescribing the duration of
requests to prevent the Good Faith Effort
Exception from allowing the Apprentice-
ship Requirements to be avoided in their
entirety if qualified apprentices will likely
be available for work at some time during
the lifespan of a construction project as
the supply adjusts to demands.
Based on the comments received and in
consultation with the DOL, the Treasury
Department and the IRS have determined
that the maximum duration of a request
for qualified apprentices is 365 days (366
days in case of a leap year). The final reg-
ulations have been revised to provide that
taxpayers must submit additional requests
365 days (366 days in case of a leap year)
after the denial of a previous request to
continue to satisfy the Good Faith Effort
Exception. The final regulations also clar-
ify that the annual duration applies if a
taxpayer, contractor, or subcontractor is
not able to locate a registered apprentice-
ship program with an area of operation
that includes the location of the facility.
Extending the maximum duration of
requests for qualified apprentices to an
annual period will allow employers suf-
ficient time to assess future work needs
appropriate for qualified apprentices with-
out causing uncertainty for existing staff
and unexpected costs that might otherwise
result if requests were required on a more
frequent basis. It also allows sufficient
time for the supply of qualified appren-
tices to adjust to the construction demands
of the location of the facility through
the registration of new apprenticeship
programs and recruitment of qualified
apprentices into those programs. The final
regulations retain the rule that requests for
purposes of the Good Faith Effort Excep-
tion must be specific as to the dates of
employment and the expected number of
hours the qualified apprentices are needed
with the intent to employ the qualified
apprentices consistent with the request.
Taxpayers, contractors, or subcontrac-
tors making general requests that lack an

Bulletin No. 2024–34 467 August 19, 2024
intent to employ the qualified apprentices
consistent with the request would not sat-
isfy the Good Faith Effort Exception. The
final regulations also clarify that requests
for qualified apprentices do not need to be
made to the same registered apprentice-
ship program that received and denied an
earlier request.
The final regulations also include an
example in response to the request for
clarification on how the Labor Hours
Requirement applies if a taxpayer satisfies
the Good Faith Effort Exception for one
365-day period (or 366-day period in the
case of a leap year), and then obtains qual-
ified apprentices in response to an addi-
tional request for qualified apprentices
that is made later.
e. Definition of a response
The Proposed Regulations would
have provided that an acknowledgement,
whether in writing or otherwise by a reg-
istered apprenticeship program, of receipt
of the request is a sufficient response for
purposes of the Good Faith Effort Excep-
tion. Several commenters requested that
the final regulations modify this proposed
requirement and provide that open-ended
and non-substantive replies do not consti-
tute a response for purposes of satisfying
the Good Faith Effort Exception. Com-
menters were concerned that if a non-sub-
stantive acknowledgement is treated as a
response, taxpayers could be foreclosed
from relying on the Good Faith Effort
Exception and be unable to satisfy the
Apprenticeship Requirements despite
legitimate attempts to do so. They also
stated that the proposed rule could lead
to uncertainty for taxpayers and indefi-
nitely delay construction while taxpayers
attempt to comply with the Apprentice-
ship Requirements. Another commenter
requested that the final regulations require
the acknowledgment to be in writing,
consistent with the requirement that the
request must be in writing.
The Treasury Department and the IRS
agree with the concerns raised by the
commenters. Accordingly, the final reg-
ulations provide that a response is a sub-
stantive written reply that agrees, in part
or in whole, to the specific requirements
in the taxpayer’s, contractor’s, or sub-
contractor’s request. Automated or other
non-substantive responses or acknowl-
edgments are not responses for purposes
of the Good Faith Effort Exception.
One commenter suggested the final
regulations clarify that if a program
replies with a non-substantive response,
the taxpayer is not required to follow up
with the registered apprenticeship pro-
gram for a more specific response. The
Treasury Department and the IRS agree
that additional guidance is needed on the
procedures after a taxpayer, contractor, or
subcontractor makes an initial request to
a registered apprenticeship program. The
final regulations clarify that, for purposes
of the Good Faith Effort Exception and
subject to the annual duration of a request,
a taxpayer, contractor, or subcontractor
does not need to follow up with the reg-
istered apprenticeship program after an
initial request is made or after receipt of a
non-substantive response.
Although follow-up requests are not
required for purposes of the Good Faith
Effort Exception, the Treasury Depart-
ment and the IRS encourage taxpayers,
contractors, and subcontractors to regu-
larly follow up with registered apprentice-
ship programs regarding requests for qual-
ified apprentices, and the final regulations
clarify that evidence that this occurred is a
factor the IRS will consider in determin-
ing whether there is intentional disregard
of the Apprenticeship Requirements if
the Good Faith Effort Exception does not
apply.
f. Denial of a request
The Proposed Regulations would have
provided that a denial of a request means
that the registered apprenticeship program
denied the request in its entirety. The Pro-
posed Regulations would have further
provided that a registered apprenticeship
program’s response that it could partially
fulfill a request in the occupation(s) for
which it trains apprentices would not con-
stitute a denial of the request with respect
to the parts of the request that could be
fulfilled. Commenters suggested that
the final regulations require taxpayers to
accept all qualified apprentices offered by
a registered apprenticeship program, even
if a registered apprenticeship program is
only partially able to meet a request. The
final regulations clarify that partial deni
-
als may also serve as a valid basis for the
Good Faith Effort Exception with respect
to the portion denied, provided that the
taxpayer, contractor, or subcontractor
hires the qualified apprentices that are
available for the construction as provided
by the registered apprenticeship program
in its response. The final regulations also
clarify through an example that a denial
that follows an initial acceptance and is
received prior to the start of the requested
work (for example, if a registered appren-
ticeship program indicates it can provide
qualified apprentices to a project and is
subsequently unable to fulfill the request)
may also serve as a valid basis for the
Good Faith Effort Exception.
Commenters also asked if the Labor
Hours Requirement is proportionately
reduced in the event of a partial denial.
The Treasury Department and the IRS
understand the need for clarification on
the interaction between the Labor Hours
Requirement and the Good Faith Effort
Exception. An example in proposed §1.45-
8(e)(1)(ii)(F) illustrates that if a request is
partially denied, the part of the request that
was denied would qualify for the Good
Faith Effort Exception. As proposed, the
example would have stated the number
of qualified apprentice labor hours that
would qualify for the Good Faith Effort
Exception, but it did not clearly indicate
how these hours are treated. The final reg-
ulations contain a revised example clarify-
ing that there is no proportionate reduction
of the Labor Hours Requirement. Instead,
the qualified apprentice labor hours that
qualify for the Good Faith Effort Excep-
tion are treated as labor hours performed
by qualified apprentices.
Commenters requested that the final
regulations clarify how to determine the
date on which a registered apprenticeship
program received a request for purposes
of the Good Faith Effort Exception. One
commenter suggested that the date of
receipt should be determined by a proof
of receipt from a delivery service. As
explained in Section VIII.B.1.b. of this
Summary of Comments and Explanation
of Revisions, for purposes of the Good
Faith Effort Exception, requests for qual-
ified apprentices must be in writing and
sent electronically or by registered mail.
The final regulations provide that date of
receipt of the request is the date an email

August 19, 2024 468 Bulletin No. 2024–34
request is sent to the registered appren-
ticeship program, or the date of delivery
shown on a receipt from the registered
mail delivery.
Under section 45(b)(8)(D)(ii)(I), in
order to satisfy the Good Faith Effort
Exception, a denial of a request for quali-
fied apprentices cannot be “the result of a
refusal by the taxpayer or any contractors
or subcontractors engaged in the perfor-
mance of construction, alteration or repair
work with respect to such qualified facil-
ity to comply with the established stan-
dards and requirements of the registered
apprenticeship program.” The Proposed
Regulations reiterated this requirement.
The preamble to the Proposed Regula-
tions provided further that “if a regis-
tered apprenticeship program requires
a requesting employer to enter into an
agreement with the registered apprentice-
ship program, then a denial of the request
because the employer refused to enter into
the agreement would not be a valid denial
for purposes of the Good Faith Effort
Exception.”
A few commenters requested that the
final regulations confirm that the estab-
lished standards and requirements of the
registered apprenticeship program refer
to those requirements included in the
DOL Apprenticeship Standards. Com-
menters asserted that requiring taxpayers
to comply with requirements other than
those necessary to comply with the DOL
Apprenticeship Standards would unfairly
restrict a taxpayer’s ability to negotiate
contract terms with a registered appren-
ticeship program. Some commenters
were also concerned that the proposed
rule would require taxpayers, contractors,
and subcontractors who are not parties to
collective bargaining agreements or PLAs
to enter into these agreements in order to
comply with a union registered appren-
ticeship program’s standards and require-
ments. Commenters stated that non-union
contractors generally do not employ qual-
ified apprentices enrolled in union spon-
sored registered apprenticeship programs,
and they requested confirmation that this
rule would not require them to do so. A
commenter also requested guidance con-
cerning what remedies are available to
taxpayers if there is a conflict between
standards imposed by an apprenticeship
program registered by the DOL OA and
an apprenticeship program registered by
a State apprenticeship agency. The com-
menter requested clarification that tax-
payers may choose to request and employ
qualified apprentices from either regis-
tered apprenticeship program.
The Treasury Department and the IRS
agree that the final regulations should fur-
ther clarify what established standards and
requirements means. Under section 45(b)
(8)(D)(ii) the denial cannot be a result of
a failure to comply with the “established
standards and requirements” of a regis-
tered apprenticeship program (as defined
in section 3131(e)(3)(B)). Section 3131(e)
(3)(B) requires a registered apprenticeship
program to satisfy the DOL Apprentice-
ship Standards.
Section 29.5 of the current DOL
Apprenticeship Standards provides the
standards of apprenticeship that an appren-
ticeship program must satisfy to be eligible
for approval and registration by the DOL
OA or a State apprenticeship agency.
35

Under 29 CFR 29.5(a), the apprenticeship
program must have “an organized, writ-
ten plan (program standards) embodying
the terms and conditions of employment,
training, and supervision of one or more
apprentices in an apprenticeable occu-
pation, as defined in this part, and sub-
scribed to by a sponsor who has under-
taken to carry out the apprentice training
program.” Section 29.5(b) lists 23 differ-
ent provisions that the program standards
must address, including the employment
and training of the apprentice, the term of
apprenticeship and the minimum qualifi-
cations required by a sponsor for persons
entering the apprenticeship program. The
Treasury Department and the IRS have
determined that the use of the phrase
“established standards” in section 45(b)
(8)(D)(ii)(l) of the Code should be con-
strued as a reference to the DOL Appren-
ticeship Standards referenced by section
3131(e)(3)(B) of the Code and contained
in 29 CFR parts 29 and 30. Based on con-
sultation with the DOL OA, the Treasury
Department and the IRS understand that
the DOL also refers to the established
standards as the DOL Apprenticeship
Standards that are applicable to – and
required of – all employers who wish to
join the registered apprenticeship program
for the purpose of employing apprentices.
However, Congress’s use of the phrase
“established standards and requirements”
captures more than the DOL Apprentice-
ship Standards. In order to give meaning
to the words “and requirements,” terms
and conditions beyond those contained in
the DOL Apprenticeship Standards (those
that are necessary for DOL approval) must
not be rejected by taxpayers, contractors,
and subcontractors for purposes of the
Good Faith Effort Exception. Whether
additional requirements may be imposed
by the registered apprenticeship program
will depend, in part, on what the DOL
allows the registered apprenticeship pro-
gram to require. The DOL is the agency
responsible for regulating registered
apprenticeship programs, and the DOL
determines the permissible standards and
requirements of a registered apprentice-
ship program. The DOL OA has indicated
it is important for efficient oversight and
administration of registered apprentice-
ship programs that these programs not be
required to establish separate standards
and requirements for the purposes of the
IRA.
The Treasury Department and the IRS
appreciate the importance of the DOL’s
management of the registered apprentice-
ship program and the DOL’s well-estab-
lished understanding of what constitutes
established standards and requirements
for the registered apprenticeship programs
that the DOL is responsible for oversee-
ing and approving. Based on consultation
with the DOL OA, the Treasury Depart-
ment and the IRS also understand that
registered apprenticeship programs are
expected to provide prospective employ-
ers with the program’s established stan-
dards and requirements, including those
reviewed by the DOL or the State appren-
ticeship agency.
The Treasury department and the IRS
have determined that the final regulations
must interpret the statutory language in
a way that gives meaning to the entire
phrase, and also appropriately recognize
35
On January 17, 2024, the DOL released a notice of proposed rulemaking proposing to update the DOL Apprenticeship Standards contained in 29 CFR part 29. See 89 FR 3118.

Bulletin No. 2024–34 469 August 19, 2024
procedures implemented by the DOL OA.
Accordingly, the final regulations provide
that the requirements referenced as part
of the established standards and require-
ments are those additional requirements
that are established by the registered
apprenticeship program for the placement
of apprentices, applicable to all employers
participating in the registered apprentice-
ship program, and not found by the DOL
OA or a State apprenticeship agency to be
contrary to the DOL guidance regarding
the administration of registered appren-
ticeship programs.
Consistent with this explanation and
in response to comments, the final reg-
ulations revise the proposed rule with
respect to the established standards and
requirements that must not be rejected by
taxpayers, contractors, or subcontractors
for purposes of satisfying the Good Faith
Effort Exception. For example, if a regis-
tered apprenticeship program requires all
employers who request qualified appren-
tices to enter into an agreement with the
registered apprenticeship program, sign
a collective bargaining agreement, and
pay user fees, and these requirements
have not been found by the DOL OA or
a State apprenticeship agency to be con-
trary to DOL guidance regarding the
administration of registered apprentice-
ship programs, then a denial of the request
because the employer refused to enter into
the agreement, sign the collective bargain-
ing agreement, or pay the user fees would
not qualify as a valid denial for purposes
of the Good Faith Effort Exception. In
order to substantiate the Good Faith Effort
Exception, a taxpayer will be expected to
document that a denial of a request was
not because of the taxpayer’s refusal to
comply with the established standards and
requirements of the registered apprentice-
ship program.
Taxpayers, contractors, and subcon-
tractors also retain the ability to contact
other registered apprenticeship programs
that do not have similar requirements in
an effort to satisfy the Apprenticeship
Requirements or the Good Faith Effort
Exception. Because of the requirement
that taxpayers, contractors, and subcon-
tractors contact registered apprentice-
ship programs with a geographic area of
operation that includes the location of the
facility, the Treasury Department and the
IRS do not anticipate that the established
standards and requirements of the regis-
tered apprenticeship program will conflict
with those required by State law. In the
unlikely event that they do, the taxpayer,
contractor, or subcontractor should con-
tact the DOL OA for assistance.
g. Other Good Faith Effort Exception
issues
A commenter asked the Treasury
Department and the IRS to consider lim-
iting the number of Good Faith Effort
Exceptions available per trade to encour-
age taxpayers to individually sponsor
new registered apprenticeship programs.
The Treasury Department and the IRS
acknowledge that there is interest in
developing new registered apprenticeship
programs to meet the anticipated need for
additional qualified apprentices. The final
regulations already impose some limits on
the Good Faith Effort Exception through
the requirement to submit additional
requests following the denial of a request
and other requirements relating to the
required contents and scope of a request.
The final regulations do not otherwise
impose a limit on the availability of using
the Good Faith Effort Exception.
Under section 45(b)(8)(D)(ii), to satisfy
the Good Faith Effort Exception, requests
must be made for qualified apprentices
from a registered apprenticeship program
as defined in section 3131(e)(3)(B). One
commenter was concerned that employers
would fund apprenticeship programs and
request qualified apprentices from those
programs in an effort to manufacture deni-
als. To reduce abuse of the Good Faith
Effort Exception, the commenter recom-
mended requiring apprenticeship requests
to be sent only to registered programs with
a prior record of operation and prior record
of meeting certain graduation rates. A few
other commenters were concerned with
the proliferation of new registered appren-
ticeship programs that are registered with
the DOL but do not provide training to a
meaningful number of workers.
As discussed in Section VIII.B.1.c.,
the final regulations clarify that a tax-
payer cannot satisfy the Good Faith Effort
Exception through a denial from a regis-
tered apprenticeship program it sponsors.
If the program sponsored by the taxpayer
has no available qualified apprentices, the
taxpayer must contact other registered
apprenticeship programs for qualified
apprentices to satisfy the Apprenticeship
Requirements or the Good Faith Effort
Exception. Additionally, while the Trea-
sury Department and the IRS recognize
that there are concerns that the Good Faith
Effort Exception may be abused, the stat-
ute requires requests of qualified appren-
tices from registered apprenticeship
programs. Registered apprenticeship pro-
grams are registered by the DOL OA or
a recognized State apprenticeship agency,
pursuant to the standards in 29 CFR parts
29 and 30. As indicated in Section II.D.1.
of this Background, the DOL is responsi-
ble for regulating the registered appren-
ticeship programs, and the extent to which
operational history, graduation rates, and
training are relevant to registration is
more appropriate for the DOL to deter-
mine. Comments suggesting that the final
regulations impose requirements on reg-
istered apprenticeship programs beyond
those required by the DOL are outside the
scope of these final regulations and are not
adopted.
36

Another commenter suggested that
taxpayers make requests solely to the
DOL registered apprenticeship programs.
Under section 45(b)(8)(D)(ii), to qualify
for the Good Faith Effort Exception, a
taxpayer is required to make a request for
a qualified apprentice from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B). Under 3131(e)(3)
(B), a registered apprenticeship program
means an apprenticeship registered under
36
Under 29 CFR 29.5(a), registered apprenticeship programs must have an organized, written plan embodying the terms and conditions of employment, training, and supervision of one or
more apprentices in an apprenticeable occupation, as defined in 29 CFR part 29, and subscribed to by a sponsor who has undertaken to carry out the apprentice training program. Additionally,
under 29 CFR 29.5(b)(3), a registered apprenticeship program’s program standards must contain provisions that outline the work process in which the apprentice will receive supervised
work experience and training on the job. Accordingly, taxpayers are required to make requests to programs that provide meaningful training to qualified apprentices. The DOL’s proposed 29
CFR 29.8(a) provides that each registered apprenticeship program must have a written set of standards of apprenticeship that will govern the conduct and operation of that program. 89 FR
3118, 3278.

August 19, 2024 470 Bulletin No. 2024–34
the Act of August 16, 1937 (commonly
known as the National Apprenticeship
Act; 50 Stat. 664, chapter 663; 29 U.S.C.
50 et seq.) that meets the standards of sub-
part A of part 29 and part 30 of title 29,
Code of Federal Regulations.
29 CFR 29.3(a) provides that eligibil-
ity for registration of an apprenticeship
program is conditioned upon a program’s
conformity with the apprenticeship pro-
gram standards of 29 CFR part 29. For
a program to be determined by the DOL
as conforming with the standards under
29 CFR part 29, the program must apply
for registration and be registered with
the DOL OA or with a State apprentice-
ship agency recognized by the DOL OA.
29 CFR 29.2 defines a State apprentice-
ship agency to mean an agency of a State
government that has responsibility and
accountability for apprenticeship within
the State. 29 CFR 29.2 specifies that only
a State apprenticeship agency may seek
recognition by the DOL OA as an agency
that has been properly constituted under
an acceptable law or Executive order, and
authorized by the DOL OA to register and
oversee apprenticeship programs. Thus,
the final regulations provide that a request
may be made to a registered apprentice-
ship program that is either registered by
the DOL OA or a State apprenticeship
agency. Regardless of whether the pro-
gram is registered by the DOL OA or a
State apprenticeship agency, the regis-
tered apprenticeship program must meet
the standards of 29 CFR parts 29 and 30.
A commenter recommended expanding
the Good Faith Effort Exception to make
allowances for emergency circumstances
during which it may not be practicable or
in the public interest to ensure compliance
with the Apprenticeship Requirements,
such as during an unexpected outage due
to severe weather or operational issues.
The commenter explained that in these
circumstances, companies must be able to
restore service quickly to provide critical
fuel supplies.
The Treasury Department and the IRS
acknowledge that there may be circum-
stances in which it will be impractical
to have qualified apprentices perform
work on the qualified facility. However,
the Apprenticeship Requirements do not
require qualified apprentices to work at
all times. The Participation Requirement
only requires each taxpayer, contractor,
or subcontractor who employs four or
more individuals to perform construction,
alteration, or repair work with respect to
the construction of a qualified facility to
employ one or more qualified apprentices
to perform such work. The Labor Hours
Requirement only requires taxpayers to
ensure that not less than a certain per-
centage (10 percent, 12.5 percent, or 15
percent, depending on the date on which
construction began) of total labor hours of
the construction, alteration, or repair work
(including such work performed by any
contractor or subcontractor) with respect
to such facility, be performed by qualified
apprentices.
In other words, taxpayers have flexibil-
ity in satisfying the Labor Hours Require-
ment. Additionally, the Apprenticeship
Requirements apply only to the construc-
tion of the qualified facility (including
alteration and repair performed during
construction), and not to alteration or
repair work conducted after the facility
is placed in service. Because the Appren-
ticeship Requirements do not apply to the
alteration or repair work after a facility is
placed in service and because the Labor
Hours Requirement only requires quali-
fied apprentices to perform a certain per-
centage of work, the Treasury Department
and the IRS have determined that the Good
Faith Effort Exception does not need to be
expanded to make allowances for emer-
gency circumstances contemplated by the
commenter.
One commenter requested that the
Treasury Department and the IRS grant a
Good Faith Effort Exception in situations
in which taxpayers are denied qualified
apprentices because States have illegally
and unjustifiably delayed or denied reg-
istration of apprenticeship programs. The
Good Faith Effort Exception requires a
request to a registered apprenticeship pro-
gram. If the apprenticeship program is not
registered, the denial of or nonresponse
to that request is irrelevant for purposes
of the Good Faith Effort Exception. The
Treasury Department and the IRS decline
to adopt an exception from that rule based
on the reasons an apprenticeship program
is denied registration.
Commenters asked for clarification
regarding the operation of the Good Faith
Effort Exception for employers that do not
participate in registered apprenticeship
programs that share a “pool” of qualified
apprentices. The Treasury Department and
the IRS are interpreting these comment
letters as referring to group registered
apprenticeship programs, under which the
registered apprenticeship program places
qualified apprentices with multiple-em-
ployer participants. One commenter
stated that many construction firms typ-
ically sponsor an existing employee’s
apprenticeship through an association,
community-based, or employer-run reg-
istered apprenticeship programs and the
commenter was concerned that the Good
Faith Effort Exception would not align
with those existing practices.
Section 45(b)(8)(D)(ii) provides
that taxpayers are deemed to satisfy the
Apprenticeship Requirements if they have
requested qualified apprentices from a
registered apprenticeship program and
such request has been denied or if the
registered apprenticeship program fails
to respond within five business days of
receiving a request. The Proposed Regula-
tions would have provided that a taxpayer,
contractor, or subcontractor must submit
a written request to at least one registered
apprenticeship program that has a usual
and customary business practice of enter-
ing into agreements with employers for
the placement of qualified apprentices in
the occupation for which they are training.
The Treasury Department and the IRS
recognize that many contractors currently
sponsor existing employees through regis-
tered apprenticeship programs, and hours
worked by those employees may satisfy
the Apprenticeship Requirements, pro-
vided all requirements are met. However,
as discussed in Section VII.B.1.c. of this
Summary of Explanations and Revisions,
if a taxpayer, contractor, or subcontractor
is a registered apprenticeship program
sponsor and there are no available quali-
fied apprentices in the registered appren-
ticeship program sponsored by the tax-
payer, contractor, or subcontractor, then
the taxpayer, contractor, or subcontractor
may only qualify for the Good Faith Effort
Exception by demonstrating that it made
a request to another registered apprentice-
ship program (and such request was denied
or not responded to within five business
days) or by establishing that there are no
other registered apprenticeship programs

Bulletin No. 2024–34 471 August 19, 2024
with an area of operation that includes the
location of the facility. The final regula-
tions clarify this requirement.
A commenter asked the Treasury
Department and the IRS to consider
requiring the DOL OA or the appropriate
State apprenticeship agency representa-
tive to sign off on a taxpayer’s satisfaction
of the Good Faith Effort Exception. As
discussed in Section V.A. of this Summary
of Comments and Explanation of Revi-
sions, the taxpayer is ultimately responsi-
ble for ensuring compliance with the PWA
requirements, including exceptions to the
requirements such as the Good Faith Effort
Exception, and may not rely on other par-
ties, the DOL OA, or State apprenticeship
agencies to certify compliance. Conse-
quently, the final regulations do not adopt
this suggestion. The final regulations
provide that contacting the DOL OA or a
State apprenticeship agency for assistance
in locating a registered apprenticeship
program may be a factor for purposes of
determining intentional disregard.
A commenter suggested requiring tax-
payers relying on the Good Faith Effort
Exception to summarize their good faith
efforts as part of their reporting to the
IRS. As an example, the commenter stated
that taxpayers could list the registered
apprenticeship programs from which they
requested qualified apprentices, the dates
of their requests, and any reasons that
their requests were denied. The final reg-
ulations retain the requirement from the
Proposed Regulations that taxpayers must
maintain and preserve sufficient records
to demonstrate compliance with the PWA
requirements, and if the taxpayer is rely-
ing on the Good Faith Effort Exception,
this includes any written requests for
the employment of qualified apprentices
from registered apprenticeship programs
and all correspondence with the regis-
tered apprenticeship program regarding
the request, including denials of such
requests. Whether, and to what extent
information must be provided to the IRS
at filing will be addressed in IRS forms,
instructions, and publications.
Some commenters suggested that to
qualify for the Good Faith Effort Excep-
tion, taxpayers, contactors, or subcontrac-
tors should develop and submit appren-
ticeship utilization plans to the Treasury
Department. The Treasury Department
and the IRS decline to include this require-
ment in the final regulations because such
rules would not further tax administra-
tion and are not required by the statute.
While an apprenticeship utilization plan
is not required for the Good Faith Effort
Exception, the existence of a utilization
plan may assist taxpayers in requesting
qualified apprentices from a registered
apprenticeship program and the final reg-
ulations provide that the development and
use of an apprenticeship utilization plan
is a factor the IRS will consider in deter-
mining whether the failure to satisfy the
Apprenticeship Requirements is due to
intentional disregard.
2. Apprenticeship Cure Provision
a. General procedures
Commenters requested additional
guidance concerning the Apprenticeship
Cure Provision. Specifically, comments
asked if there is a deadline for the pen-
alty payment provided by section 45(b)
(8)(D)(i)(II) to cure any failure to satisfy
the Labor Hours Requirement and Par-
ticipation Requirement, and whether, for
such penalties, the IRS would issue a final
determination consistent with the Prevail-
ing Wage Requirements, a statutory notice
of deficiency, or other notice to the tax-
payer regarding this penalty. The Treasury
Department and the IRS understand the
need for clarification regarding the dead-
line to make the penalty payment required
by the Apprenticeship Cure Provision.
With respect to failures to pay wages
at rates not less than the prevailing rates,
section 45(b)(7)(B)(iv) provides that the
taxpayer must make required correction
and penalty payments within 180 days
after a final determination to be eligible
for the increased credit amount. There is
no similar statutory requirement in the
Apprenticeship Cure Provision. Further,
section 45(b)(7)(B)(ii) provides that Sub-
chapter B of chapter 63 (relating to defi-
ciency procedures for income, estate, gift,
and certain excise taxes) does not apply
with respect to the assessment or collec-
tion of any penalty imposed by section
45(b)(7) with respect to the Prevailing
Wage Requirements. Section 45(b)(8)
does not provide a similar exception to the
deficiency procedures with respect to the
Apprenticeship Cure Provision. The final
regulations clarify that there is no spe-
cific deadline for payment of the penalty
required by the Apprenticeship Cure Pro-
vision. The deficiency procedures apply
to the penalty payments for the failure to
satisfy the Apprenticeship Requirements.
Although there is no specific statutory
deadline for payment of the penalty, as
discussed in Section VII.D.3. of this Sum-
mary of Comments and Explanation of
Revisions, if a taxpayer makes the nec-
essary penalty payments before the tax-
payer receives notice of an examination
from the IRS with respect to a claim for
the increased credit amount under section
45(b)(6), the taxpayer will be presumed
not to have intentionally disregarded the
Apprenticeship Requirements.
At least one commenter suggested
clarifying whether the Treasury Depart-
ment and the IRS intended to dou-
ble-count the penalty with respect to any
given labor hour if the taxpayer fails to
meet both the Labor Hours Requirement
and Participation Requirement. The Pro-
posed Regulations would have provided
that if a taxpayer fails both the Labor
Hours Requirement and the Participation
Requirement the penalty would equal the
sum of the penalty for the failure to meet
the Labor Hours Requirement plus the
penalty for failure to meet the Participa-
tion Requirement. The penalty provision
of section 45(b)(8)(D)(i)(II) provides
that the penalty applies to any failure by
the taxpayer to satisfy the Labor Hours
Requirement under section 45(b)(8)(A)
and the Participation Requirement under
section 45(b)(8)(C). The use of “any fail-
ure” reflects a broad scope such that tax-
payers may be subject to penalties for fail-
ure to meet the Labor Hours Requirement
and the Participation Requirement with
respect to the same facility.
One commenter requested that the
Treasury Department and the IRS exer-
cise discretion to decline to impose pen-
alties for any failure to satisfy the Partic-
ipation Requirement with respect to any
contractor or subcontractor that qualifies
as a small business under the U.S. Small
Business Administration’s guidance.
Although the Treasury Department and
the IRS appreciate the concern for small
businesses, the Participation Requirement
in section 45(b)(8)(C) applies to each tax-

August 19, 2024 472 Bulletin No. 2024–34
payer, contractor, or subcontractor who
employs four or more individuals to per-
form construction, alteration, or repair
work with respect to the construction of
a qualified facility. The final regulations
retain the proposed rule consistent with
this statutory language.
b. Intentional disregard
The Proposed Regulations would
have provided that failures to meet the
Apprenticeship Requirements would be
due to intentional disregard, and subject
to enhanced penalty amounts, if the fail-
ure is knowing or willful, considering all
relevant facts and circumstances. The Pro-
posed Regulations would have provided
a non-exhaustive list of facts and circum-
stances that may be relevant to determin-
ing whether the failure was knowing or
willful.
In assessing intentional disregard,
commenters recommended considering
whether the taxpayer: (i) used and com-
plied with an apprenticeship utilization
plan; (ii) failed to require contractors and
subcontractors to forward to the taxpayer
all requests to registered apprenticeship
programs for qualified apprentices within
five business days of when the requests
were made; (iii) failed to audit requests
to registered apprenticeship programs for
qualified apprentices to ensure compli-
ance with the labor hours, participation,
and ratio obligations in the Apprenticeship
Requirements; and (iv) abided by anti-re-
taliation procedures. The Proposed Regu-
lations would have provided that the fail-
ure to meet the Labor Hours Requirement
or the Participation Requirement would be
due to intentional disregard if the failure
was knowing or willful. The determina-
tion that a failure was knowing or willful
will be made by considering all the rele-
vant facts and circumstances.
The final regulations provide a non-ex-
haustive list of facts and circumstances
that may be relevant to determine whether
the failure was knowing or willful. The
Treasury Department and the IRS agree
that the following factors are relevant and
may be considered in determining whether
a failure was due to intentional disregard:
(i) the taxpayer’s use of and compliance
with an apprenticeship utilization plan;
(ii) the taxpayer requiring contractors and
subcontractors to forward to the taxpayer
requests to registered apprenticeship pro-
grams within five business days of when
requests are made; (iii) whether taxpayers
regularly reviewed contractors’ and sub-
contractors’ use of qualified apprentices;
and (iv) investigating complaints concern-
ing failures to comply with the Appren-
ticeship Requirements and complaints
concerning retaliation. The final regula-
tions incorporate these additional factors
and other clarifying edits consistent with
the intentional disregard factors in §1.45-
7(c)(3) that are applicable to the Prevail-
ing Wage Requirements. Intentional disre-
gard for purposes of the Prevailing Wage
Requirements is discussed in Section
VII.D.3. of this Summary of Comments
and Explanation of Revisions.
A commenter recommended that a
taxpayer who is found to have failed the
Good Faith Effort Exception, be presumed
to have done so with intentional disre-
gard. The Good Faith Effort Exception is
intended to provide relief for taxpayers,
contractors, and subcontractors who were
unable to employ qualified apprentices
despite making valid requests for qualified
apprentices to registered apprenticeship
programs. The failure to qualify for the
Good Faith Effort Exception does not cre-
ate a presumption of intentional disregard
because the intentional disregard provi-
sions are only relevant if the taxpayer has
otherwise failed to meet the Apprentice-
ship Requirements. Thus, the Treasury
Department and the IRS decline to adopt
the commenter’s suggestion.
A commenter suggested that the Trea-
sury Department and the IRS adopt a
presumption that the taxpayer did not act
in good faith if a labor union or represen-
tative of a registered apprenticeship pro-
gram contacted the taxpayer, contractor,
or subcontractor and made them aware
of the apprenticeship requirement and the
availability of qualified apprentices and
was ignored. The Treasury Department
and the IRS decline to adopt this recom-
mendation. The Proposed Regulations
would have provided a non-exhaustive
list of facts and circumstances considered
to determine whether a failure to satisfy
the Apprenticeship Requirements is due
to intentional disregard. If a taxpayer
makes a request for qualified apprentices
to a registered apprenticeship program
and the registered apprenticeship program
informs the taxpayer of available quali-
fied apprentices, but the taxpayer does not
employ the available qualified apprentices
and fails to satisfy the Apprenticeship
Requirements, then the taxpayer’s refusal
to employ the available qualified appren-
tices could be considered in determining
whether the taxpayer’s failure was due to
intentional disregard. However, if labor
unions or representatives of registered
apprenticeship programs are reaching out
to taxpayers regarding the Apprentice-
ship Requirements and the availability of
qualified apprentices and taxpayers ignore
these solicitations, taxpayers will not
automatically be deemed to have acted
with intentional disregard.
IX. Applying the PWA Provisions
for Increased Amounts of Credit and
Deduction Under Other Code Sections
The majority of the comments the Trea-
sury Department and the IRS received
relate to the general application of the
PWA requirements across multiple Code
sections, and those comments have been
addressed in Sections I. through VIII. of
this Summary of Comments and Explana-
tion of Revisions. Additional comments
that relate solely to specific Code sections
are discussed in this Section IX. of this
Summary of Comments and Explanation
of Revisions.
A. Section 30C
Section 30C provides a credit for the
cost of any qualified alternative fuel vehi-
cle refueling property placed in service
during the taxable year. For properties
placed in service before January 1, 2023,
the credit is equal to 30 percent. For prop-
erties placed in service after December 31,
2022, the credit is equal to 30 percent (6
percent for property of a character subject
to depreciation). If a taxpayer satisfies
the PWA requirements in sections 30C(g)
(2) and (3) or meets the BOC Exception
with respect to a qualified alternative fuel
vehicle refueling project, then the credit
determined under section 30C(a) for any
qualified alternative fuel vehicle refuel-
ing property of a character subject to an
allowance for depreciation that is part of
such project is multiplied by five. For pur-

Bulletin No. 2024–34 473 August 19, 2024
poses of the PWA requirements, section
30C(g)(1)(B) defines a qualified alter-
native fuel vehicle refueling project as a
project consisting of one or more proper-
ties that are part of a single project. The
Prevailing Wage Requirements in section
30C(g)(2)(A) are that the taxpayer ensure
that laborers and mechanics employed by
the taxpayer or any contractor or subcon-
tractor in the construction of any qualified
alternative fuel vehicle refueling property
that is part of a qualified alternative fuel
vehicle refueling project are paid wages at
rates not less than prevailing rates. Under
section 30C(c)(g)(3), rules similar to the
rules in section 45(b)(8) apply regarding
the Apprenticeship Requirements.
Proposed §1.30C-3(b) would have
provided that a qualified alternative fuel
vehicle refueling project would satisfy
the PWA requirements for the increased
credit amount if the project either begins
construction prior to January 29, 2023, or
meets the Prevailing Wage Requirements
of section 45(b)(7) and proposed §1.45-7,
the Apprenticeship Requirements of sec-
tion 45(b)(8) and proposed §1.45-8, and
the recordkeeping and reporting require-
ments of proposed §1.45-12.
Commenters asked whether cross-ref-
erences in proposed §1.30C-3(b)(2) to
sections 45(b)(7) and 45(b)(8) meant that
PWA requirements apply to alteration or
repair work after a qualified property is
placed in service under section 30C. Com-
menters asserted that the statutory text
of section 30C(g)(2)(A) limits the PWA
requirements only to the construction of
any qualified alternative fuel vehicle refu-
eling property. Commenters also stated the
impracticality of imposing PWA require-
ments under section 30C after qualified
alternative fuel vehicle refueling property
is placed in service. Commenters empha-
sized that alteration or repair work of such
property often requires a trained techni-
cian due to the necessary skill sets for both
the hardware and software characteristics
of the charging property. Commenters fur-
ther stated that requesting and waiting for
qualified apprentices in order to complete
alteration or repair work could imperil a
taxpayer’s ability to comply with national
uptime requirements implemented by the
Department of Transportation through the
National Electric Vehicle Infrastructure
program.
Section 30C(g)(2)(A) states that the
Prevailing Wage Requirements apply in
the construction of any qualified alterna-
tive fuel vehicle refueling property that is
part of a qualified alternative fuel vehicle
refueling project. Nothing in section 30C
requires the payment of prevailing wages
with respect to alterations or repairs after
the property is placed in service. By con-
trast, section 45(b)(7)(A) provides that
the Prevailing Wage Requirements apply
in the construction of a facility and to the
alteration and repair of the facility in the
10-year period after placed in service. The
final regulations clarify that the Prevailing
Wage Requirements do not apply after a
section 30C project is placed in service.
The applicable scope of the PWA require-
ments is explained in Section VI. of this
Summary of Comments and Explanation
of Revisions. As explained in Section
VIII.A.1. of this Summary of Comments
and Explanation of Revisions, the Appren-
ticeship Requirements apply only during
the construction of the qualified alterna-
tive fuel vehicle refueling property that is
part of a qualified alternative fuel vehicle
refueling project (including alterations and
repairs that occur during construction) and
not with respect to any alteration or repair
after a section 30C project is placed in ser-
vice. Under the transition rule described in
Section II. of this Summary of Comments
and Explanation of Revisions, the PWA
requirements do not apply to any work
performed before January 29, 2023.
Another commenter suggested that the
Treasury Department and the IRS con-
sider aligning the implementation of PWA
requirements for section 30C projects with
forthcoming guidance on section 30C eli-
gible census tracts. On January 19, 2024,
the Treasury Department and the IRS
issued Notice 2024-20 providing notice
of intent to propose regulations on eligible
census tracts under section 30C. Notice
2024-20 does not address the applica-
tion of PWA requirements under section
30C. Guidance concerning eligible cen-
sus tracts under section 30C is outside the
scope of these final regulations.
B.
Section 45L
Section 45L provides a credit for a
qualified new energy efficient home (qual-
ified home) that is constructed by an eli-
gible contractor and acquired by a person
from that eligible contractor for use as a
residence during the taxable year. In the
case of a qualifying residence that meets
the Prevailing Wage Requirements, sec-
tion 45L(g)(1) provides an increased
credit amount. The Prevailing Wage
Requirements in section 45L(g)(2)(A) are
that the taxpayer must ensure that laborers
and mechanics employed by the taxpayer
or any contractor or subcontractor in the
construction of any qualified residence are
paid wages at rates not less than prevailing
rates.
Proposed §1.45L-3(a) would have
provided that with respect to a qualified
home, the credit determined under section
45L(a)(2)(B)(i) is $2,500 and the credit
determined under section 45L(a)(2)(B)
(ii) is $5,000 if the qualified home meets
the requirements under section 45L(c)
(1)(A) or 45L(c)(1)(B), as applicable; is
constructed by an eligible contractor; is
acquired by a person for use as a residence
during the taxable year; and satisfies the
Prevailing Wage Requirements of section
45(b)(7) and proposed §1.45-7, and the
recordkeeping and reporting requirements
of proposed §1.45-12.
One commenter stated that the Pro-
posed Regulations may have erroneously
incorporated the requirement in proposed
§1.45-7(a) to pay prevailing wages during
the 10-year period after a facility is placed
in service and requested that the final reg-
ulations specify whether the PWA require-
ments apply after a facility is placed in
service.
Section 45L(g)(2)(A) provides that
the Prevailing Wage Requirements apply
“in the construction of such residence.”
Nothing in section 45L requires the pay-
ment of prevailing wages with respect to
alterations or repairs after construction of
a qualified residence ends. For the reasons
described in Section IX.A. of this Sum-
mary of Comments and Explanation of
Revisions, the final regulations clarify that
the Prevailing Wage Requirements under
section 45L do not apply after construc-
tion of a qualified residence ends. The
applicable scope of the Prevailing Wage
Requirements is explained in Section VI.
of this Summary of Comments and Expla-
nation of Revisions. Under the transition
rule described in Section II. of this Sum-
mary of Comments and Explanation of

August 19, 2024 474 Bulletin No. 2024–34
Revisions, the Prevailing Wage Require-
ments do not apply to any work performed
before January 29, 2023.
C. Section 45Q
Section 45Q provides a credit for the
capture and sequestration of qualified car-
bon oxide using equipment placed in ser-
vice at a qualified facility. Section 45Q(h)
provides an increased credit amount for
qualified facilities or any carbon capture
equipment placed in service or installed
at such facilities that satisfies the PWA
requirements.
Proposed §1.45Q-6(b)(1) would have
provided that to claim the increased credit
amount with respect to a qualified facil-
ity the construction of which begins on
or after January 29, 2023, and any carbon
capture equipment placed in service at
such facility, the taxpayer must meet the
Prevailing Wage Requirements of sec-
tion 45(b)(7) and proposed §1.45-7 with
respect to such facility and equipment,
the Apprenticeship Requirements of sec-
tion 45(b)(8) and proposed §1.45-8 with
respect to the construction of such facility
and equipment, and the recordkeeping and
reporting requirements of proposed §1.45-
12.
Proposed §1.45Q-6(b)(2) would have
provided that to claim the increased credit
amount with respect to any carbon cap-
ture equipment the construction of which
begins on or after January 29, 2023, and
that is installed at a qualified facility the
construction of which began prior to such
date, the taxpayer must meet the Prevail-
ing Wage Requirements of section 45(b)
(7) and proposed §1.45-7 with respect
to such equipment, the Apprenticeship
Requirements of section 45(b)(8) and
proposed §1.45-8 with respect to the
construction of such equipment, and the
recordkeeping and reporting requirements
of proposed §1.45-12.
Proposed §1.45Q-6(b)(3) would have
provided that to claim the increased credit
amount a taxpayer does not need to meet
the PWA requirements with respect to the
construction of carbon capture equipment
the construction of which begins prior
to January 29, 2023, provided that such
equipment is installed at a qualified facil-
ity the construction of which also begins
prior to January 29, 2023.
Commenters sought clarification
regarding the application of PWA require-
ments to construction of a qualified facil-
ity the construction of which begins on
or after January 29, 2023. Commenters
opined that section 45Q(h)(2)(A) could be
interpreted to apply the PWA requirements
with respect to construction of a facility
before it is known or even expected to be
within the definition of a qualified facil-
ity. Commenters argued that this would
equate to a retroactive application of the
PWA requirements and may have a neg-
ative impact on the construction of these
facilities. Commenters stated that facili-
ties may be built in 2023, but the decision
to construct and install carbon capture
equipment can come later as technolo-
gies develop. Commenters argued that a
retroactive application of PWA require-
ments would put an end to investment
in this area. At least one commenter also
contended that the penalty and cure pro-
visions built into the PWA requirements
would be a far from certain means to
secure the increased credit amount under
section 45Q. The commenter stated that
construction contracts for facilities with
no plans for carbon capture would have
no reason to require contractors to retain
and disclose wage and apprenticeship
information to the taxpayer. Without such
information, the taxpayer would be unable
to later determine the applicable correc-
tion and penalty payments.
Section 45Q(h)(2)(A) states that to
qualify for the increased credit amount,
the taxpayer must satisfy the PWA require-
ments with respect to the construction of
any qualified facility the construction of
which begins on or after January 29, 2023,
as well as any carbon capture equipment
placed in service at such facility. Under
section 45Q(d), a facility may be a quali-
fied facility, even if carbon capture equip-
ment was not included in its original plan-
ning and design, so long as construction of
the facility and carbon capture equipment
begins before January 1, 2033. There is no
exception from the PWA requirements if
the construction of the qualified facility
begins on or after January 29, 2023. The
commenters’ suggestions are not adopted
in the final regulations.
One commenter stated that the defini-
tion of a qualified facility could be con-
strued as requiring taxpayers to satisfy
the PWA requirements with respect to the
entire facility even if only a small portion
of the facility is responsible for the car-
bon oxide emission stream. Similarly, a
commenter recommended clarifying that
the scope of construction, alteration, or
repair work only applies to the single pro-
cess train of carbon capture equipment as
defined in §1.45Q-2(c)(3), and is not inclu-
sive of any other construction, alteration,
or repair work performed at the facility or
plant. The applicable scope of the PWA
requirements is explained in Section VI.
of this Summary of Comments and Expla-
nation of Revisions.
Another commenter stated that pro-
posed §1.45Q-6(b) would have errone-
ously incorporated the requirement in
section 45(b)(7) and proposed §1.45-7 to
pay prevailing wages for the alteration
or repair of a facility during the 10-year
period after a facility is placed in ser-
vice, even though section 45Q(h)(3)(A)
(ii) prescribes the payment of prevailing
wages for alteration or repair during the
12-year period beginning on the date the
equipment was originally placed in ser-
vice. The final regulations clarify that
the Prevailing Wage Requirements under
section 45Q apply with respect to the
alteration or repair of a qualified facility
or carbon capture equipment placed in
service at such facility during the applica-
ble 12-year period. As explained in Sec-
tion VIII.A.1. of this Summary of Com-
ments and Explanation of Revisions, the
Apprenticeship Requirements apply only
during the construction of the facility and
not with respect to any alteration or repair
after a facility is placed in service. Under
the transition rule described in Section II.
of this Summary of Comments and Expla-
nation of Revisions, the PWA require-
ments do not apply to any work performed
before January 29, 2023.
D. Section 45U
Section 45U provides a credit for elec-
tricity produced by the taxpayer at a qual-
ified nuclear power facility (as defined in
section 45U(b)(1)) and sold by the tax-
payer to an unrelated person during the
taxable year. Generally, for taxable years
beginning after December 31, 2023, the
credit is equal to the amount by which
the product of 0.3 cents multiplied by the

Bulletin No. 2024–34 475 August 19, 2024
kilowatt hours of electricity produced by
the taxpayer at a qualified nuclear power
facility and sold by the taxpayer to an
unrelated person during the taxable year
exceeds the reduction amount (as deter-
mined under section 45(b)(2)) for such
taxable year. Under section 45U(d), if a
taxpayer satisfies the Prevailing Wage
Requirements with respect to a qualified
nuclear power facility, then the credit
determined under section 45U(a) for the
qualified nuclear power facility is multi-
plied by five. Under section 45U(d)(2)(A),
the Prevailing Wage Requirements apply
to the alteration or repair of any qualified
nuclear power facility.
Proposed §1.45U-3(a) would have pro-
vided that the amount of the zero-emis-
sion nuclear power production credit
for the taxable year is equal to the credit
amount determined under section 45U(a)
multiplied by five, if a qualified nuclear
power facility satisfies the Prevailing
Wage Requirements of section 45(b)(7)
and proposed §1.45-7 in the alteration or
repair of such facility, and the recordkeep-
ing and reporting requirements of pro-
posed §1.45-12.
One commenter suggested that the final
regulations create an exception from the
Prevailing Wage Requirements under sec-
tion 45U for taxpayers, contractors, and
subcontractors who have fewer than 25
employees. There is no statutory excep-
tion for employers of less than 25 individ-
uals and, consistent with the statute, the
final regulations do not adopt one.
The applicable scope of the Prevailing
Wage Requirements is explained in Sec-
tion VI. of this Summary of Comments
and Explanation of Revisions. As dis-
cussed in Section II. of this Summary of
Comments and Explanation of Revisions,
a transition rule is unnecessary because
the Prevailing Wage Requirements under
section 45U apply to electricity produced
and sold after December 31, 2023, in
taxable years beginning after such date.
The Treasury Department and the IRS
interpret section 13105(c) of the IRA
as providing that the Prevailing Wage
Requirements only apply to alterations or
repairs of a qualified nuclear power facil-
ity occurring in taxable years beginning
after December 31, 2023. The final regu-
lations are clarified to reflect the statutory
effective date under section 45U of the
Code for alteration and repairs. Finally,
as explained in Section V.D. of this Sum-
mary of Comments and Explanation of
Revisions, the final rules include a defi-
nition of “qualifying project labor agree-
ment” that is modified specifically for the
purposes of section 45U.
E. Section 45V
Section 45V provides a credit for the
production of qualified clean hydrogen
by the taxpayer during the taxable year
at a qualified clean hydrogen production
facility during the 10-year period begin-
ning on the date the facility was originally
placed in service. Proposed §1.45V-3(b)
(1) would have provided that with respect
to a facility the construction of which
began prior to January 29, 2023, the tax-
payer must meet the Prevailing Wage
Requirements of section 45(b)(7) and
proposed §1.45-7 with respect to an alter-
ation or repair of the facility that occurs
after January 29, 2023 (to the extent appli-
cable), and must meet the recordkeeping
and reporting requirements of proposed
§1.45-12, in order to claim the increased
credit amount. Proposed §1.45V-3(b)(2)
would have provided that with respect
to a facility, a taxpayer must meet the
Prevailing Wage Requirements of sec-
tion 45(b)(7) and proposed §1.45-7, the
Apprenticeship Requirements of section
45(b)(8) and proposed §1.45-8, and the
recordkeeping and reporting requirements
of proposed §1.45-12 in order to claim the
increased credit amount.
No comments were received specif-
ically pertaining to proposed §1.45V-3.
The applicable scope of the PWA require-
ments is explained in Section VI. of this
Summary of Comments and Explana-
tion of Revisions. As explained in Sec-
tion VIII.A.1. of this Summary of Com-
ments and Explanation of Revisions,
the Apprenticeship Requirements apply
only during the construction of the facil-
ity and not with respect to any alteration
or repair after a facility is placed in ser-
vice. Under the transition rule described
in Section II. of this Summary of Com-
ments and Explanation of Revisions, the
PWA requirements do not apply to any
work performed before January 29, 2023.
Proposed §1.45V-3 is otherwise adopted
without change.
F. Section 45Y
Section 45Y provides a credit for clean
electricity produced by the taxpayer at a
qualified facility and sold to an unrelated
person, or in the case of a qualified facil-
ity that is equipped with a metering device
that is owned and operated by an unrelated
person, sold, consumed, or stored by the
taxpayer during the taxable year, for facil-
ities placed in service after December 31,
2024. Generally, the credit for any taxable
year is the product of the kilowatt hours
of electricity multiplied by either: (i) 0.3
cents (the base amount under section
45Y(a)(2)(A)); or (ii) 1.5 cents (the alter-
native amount under section 45Y(a)(2)
(B)) for certain qualified facilities. Under
section 45Y(c), both the base amount and
the alternative amount are adjusted for
inflation in years beginning after 2024.
Proposed §1.45Y-3(a) would have
provided that the amount of the credit for
producing clean electricity determined
under section 45Y(a)(2) equals 1.5 cents
if any qualified clean electricity produc-
tion facility satisfies the requirements of
proposed §1.45Y-3(b). Proposed §1.45Y-
3(b) would have provided that a qualified
facility satisfies the PWA requirements
by having a maximum net output of less
than one megawatt (as measured in alter-
nating current), or beginning construction
prior to January 29, 2023, or meeting the
Prevailing Wage Requirements of sec-
tion 45(b)(7) and proposed §1.45-7, the
Apprenticeship Requirements of section
45(b)(8) and proposed §1.45-8, and the
recordkeeping and reporting requirements
of proposed §1.45-12.
Commenters suggested definitions
regarding the One Megawatt Exception
for purposes of section 45Y and requested
clarifications with respect to determining
nameplate capacity. A few commenters
suggested testing methodologies for pur-
poses of the greenhouse gas emissions
rate under section 45Y(b)(2) and specific
approaches for publishing those emis-
sions rates under section 45Y(b)(2)(C)(i).
Comments regarding the One Megawatt
Exception for the purposes of section 45Y
will be addressed in future guidance under
section 45Y finalizing those rules.
The applicable scope of the PWA
requirements is explained in Section
VI. of this Summary of Comments and

August 19, 2024 476 Bulletin No. 2024–34
Explanation of Revisions. As explained
in Section VIII.A.1. of this Summary of
Comments and Explanation of Revisions,
the Apprenticeship Requirements apply
only during the construction of the facil-
ity (including alterations and repairs that
occur during construction) and not with
respect to any alteration or repair after
a facility is placed in service. Under the
transition rule described in Section II. of
this Summary of Comments and Explana-
tion of Revisions, the PWA requirements
do not apply to any work performed before
January 29, 2023. The final regulations
also clarify that for certain facilities, the
applicable amount determined under sec-
tion 45Y(a)(2) is the alternative amount
described in section 45Y(a)(2)(B), subject
to adjustment for inflation as provided by
section 45Y(c). Proposed §1.45Y-3 is oth-
erwise adopted without change.
G. Section 45Z
Section 45Z provides a credit for clean
transportation fuel produced by the tax-
payer at a qualified facility after December
31, 2024, and sold to an unrelated person
in a manner described in section 45Z(a)
(4). Generally, the credit is the product of
the applicable amount (determined under
section 45Z(a)(2) and (3)) per gallon (or
gallon equivalent) of transportation fuel
multiplied by the emissions factor for the
fuel (determined under section 45Z(b)). If
a taxpayer satisfies the PWA requirements
in sections 45Z(f)(6) and (7), then the
applicable amount is $1.00 for transporta-
tion fuel that is not a sustainable aviation
fuel (non-SAF) (determined under section
45Z(a)(2)(B)) and $1.75 for transporta-
tion fuel that is a sustainable aviation fuel
(SAF) (determined under section 45Z(a)
(3)(A)(ii)). If the taxpayer does not sat-
isfy the PWA requirements in section
45Z(f)(6) and (7), the applicable amount
is 20 cents for non-SAF and 35 cents for
SAF. Under section 45Z(c), the applicable
amounts are adjusted for inflation in years
beginning after 2024.
In general, section 45Z(f)(6)(A) pro-
vides that rules similar to section 45(b)
(7) apply for purposes of the Prevailing
Wage Requirements. Section 45Z(f)(7)
provides that rules similar to section 45(b)
(8) apply for purposes of the Apprentice-
ship Requirements. Section 45Z(f)(6)(B)
provides a special rule for a facility placed
in service before January 1, 2025. Under
this rule, if a facility is placed in service
before January 1, 2025, the taxpayer is not
subject to the Prevailing Wage Require-
ments with respect to the construction of
the facility but is subject to the Prevailing
Wage Requirements for the alteration or
repair of the facility with respect to any
taxable year beginning after December
31, 2024, for which the section 45Z credit
is allowed. Section 13704(c) of the IRA
provides that these provisions are effec-
tive for transportation fuel produced after
December 31, 2024.
Proposed §1.45Z-3(b)(1) would have
provided that a qualified facility that
begins construction on or after January 29,
2023, and is placed in service after Decem-
ber 31, 2024, satisfies the requirements for
the increased credit under section 45Z of
the Code if it meets the Prevailing Wage
Requirements of section 45(b)(7) and
proposed §1.45-7, the Apprenticeship
Requirements of section 45(b)(8) and pro-
posed §1.45-8, and the recordkeeping and
reporting requirements of proposed §1.45-
12. Proposed §1.45Z-3(b)(2) would have
provided that a qualified facility that is
placed in service before January 1, 2025,
satisfies the requirements for the increased
credit amount under section 45Z if it
meets the Prevailing Wage Requirements
of section 45(b)(7) and proposed §1.45-7,
the Apprenticeship Requirements of sec-
tion 45(b)(8) and proposed §1.45-8, and
the recordkeeping and reporting require-
ments of proposed §1.45-12, with respect
to any alteration or repair of the facility
with respect to any taxable year beginning
after December 31, 2024, for which the
credit is allowed under section 45Z.
With respect to the proposed rule in
§1.45Z-3(b)(1), commenters asked that
the final regulations clarify the require-
ments for the increased credit amount
with respect to facilities that begin con-
struction before January 29, 2023, but are
not placed in service until after December
31, 2024. Commenters asked whether the
Proposed Regulations intended to create
a BOC Exception for section 45Z. Some
commenters indicated support for a BOC
Exception for consistency with other
increased credit provisions, while others
argued that there is no statutory support
for a BOC Exception. Other commenters
generally requested transition relief from
the PWA requirements and suggested
that the final regulations clarify proposed
§1.45Z-3(b)(1) to remove the clause
requiring construction on or after January
29, 2023.
In response to comments, the final
regulations modify the Proposed Regula-
tions in several respects. With respect to
the rule in proposed §1.45Z-3(b)(1) for
facilities placed in service after December
31, 2024, the final regulations remove the
clause requiring construction on or after
January 29, 2023. The Treasury Depart-
ment and the IRS agree that this language,
which was intended to provide transition
relief similar to that described in Section
II. of this Summary of Comments and
Explanation of Revisions, was confusing.
Taxpayers can satisfy the requirements
for the increased credit amount regard-
less of whether construction began before
or after January 29, 2023. The Treasury
Department and the IRS decline to pre-
scribe a BOC Exception through regula-
tion because Congress did not statutorily
provide for one. Under the transition rule
described in Section II. of this Summary
of Comments and Explanation of Revi-
sions, the PWA requirements do not apply
for any work performed before January
29, 2023. Thus, the final regulations pro-
vide that for facilities placed in service on
or after January 1, 2025, taxpayers must
meet the Prevailing Wage Requirements,
but only for construction, alteration, and
repair work performed on or after January
29, 2023.
Regarding the special rule proposed in
§1.45Z-3(b)(2) for facilities placed in ser-
vice before January 1, 2025, commenters
requested that the final regulations clarify
that the special rule in section 45Z(f)(6)
(B) applies to all facilities placed in ser-
vice before January 1, 2025, regardless
of whether construction began before
January 29, 2023. The final regulations
confirm that with respect to all facilities
placed in service before January 1, 2025
(regardless of when construction began),
the Prevailing Wage Requirements do
not apply with respect to construction,
but taxpayers must satisfy the Prevailing
Wage Requirements with respect to any
alteration or repair of the facility for tax-
able years beginning after December 31,
2024, for which the credit is allowed.

Bulletin No. 2024–34 477 August 19, 2024
At least one commenter asserted that
the special rule in section 45Z(f)(6)(B) also
includes an exception from the Appren-
ticeship Requirements for facilities placed
in service before January 1, 2025. Section
45Z(f)(6)(A) provides that, “[s]ubject to
[the special rule of] subparagraph (B),
rules similar to the [prevailing wage] rules
of section 45(b)(7) shall apply.” Section
45Z(f)(7) provides that “[r]ules similar
to the apprenticeship requirement rules
of section 45(b)(8) shall apply.” Under
section 13101(k) of the IRA, the rules of
section 45(b)(7) and 45(b)(8) apply with
respect to facilities that are placed in ser-
vice after December 31, 2021. Thus, the
Treasury Department and the IRS interpret
the PWA requirements of sections 45Z(f)
(6) and 45Z(f)(7) generally as applying to
any qualified facility that is placed in ser-
vice after December 31, 2021, subject to
the transition rule described in Section II.
of this Summary of Comments and Expla-
nation of Revisions. There is no exception
to the Apprenticeship Requirements in
section 45Z(f)(7), regardless of whether a
facility is placed in service before, on, or
after January 1, 2025. In the absence of a
statutory basis, the Treasury Department
and the IRS do not provide an exception
to the Apprenticeship Requirements in the
final regulations.
While there is no statutory basis to
except taxpayers from the Apprenticeship
Requirements in section 45Z, the Trea-
sury Department and the IRS agree that
the proposed rule caused confusion for
taxpayers that intend to place a qualified
facility in service before January 1, 2025.
The Proposed Regulations suggested that
taxpayers that placed a qualified facility in
service before January 1, 2025, must only
satisfy the Prevailing Wage Requirements
and the Apprenticeship Requirements with
respect to alterations and repairs that occur
in taxable years beginning after December
31, 2024. This incorrectly suggested that
there was an Apprenticeship Requirement
with respect to alterations and repairs to a
facility after it is placed in service and did
not address whether the construction of a
qualified facility is subject to the Appren-
ticeship Requirements prior to the facility
being placed in service.
In recognition of the confusion created
by the Proposed Regulations, the final
regulations provide additional transition
relief under section 45Z for taxpayers who
relied on the Proposed Regulations with
respect to the Apprenticeship Require-
ments for facilities placed in service
before January 1, 2025. In general, the
final regulations allow taxpayers to con-
tinue to rely on the Proposed Regulations
up to the date these regulations are pub-
lished in the Federal Register. The final
regulations provide that taxpayers may
rely on proposed §1.45Z-3(b)(2) for an
additional 90 days from the date these reg-
ulations are published in the Federal Reg-
ister as transition relief from the Appren-
ticeship Requirements. This 90-day
period will provide taxpayers with time
to locate and request qualified apprentices
from registered apprenticeship programs
for any remaining construction work that
occurs after 90 days after the date these
regulations are published in the Federal
Register and before the facility is placed
in service. This transition relief does not
apply to facilities that are placed in service
after December 31, 2024. Such facilities
must comply with the Prevailing Wage
Requirements and the Apprenticeship
Requirements with respect to construc-
tion, alteration, or repair work beginning
on or after January 29, 2023.
A commenter asked for clarification
regarding the applicable amount used
to calculate the increased credit amount
under section 45Z if the PWA requirements
are satisfied. The commenter requested
that the description of the credit amount in
proposed §1.45Z-3(a) be amended to clar-
ify that the alternative applicable amount
of the credit is $1.00 per gallon for non-
SAF (and $1.75 for SAF) and not $5.00
per gallon for non-SAF ($8.75 for SAF).
Section 45Z generally provides a base
applicable amount, and if the PWA require-
ments are satisfied, an alternative appli-
cable amount that is five times the base
amount. The Treasury Department and the
IRS recognize that proposed §1.45Z-3(a)
could have been interpreted to mean that
the entire increased credit amount deter-
mined under section 45Z(a) should be
multiplied by five, rather than just the base
applicable amount. The final regulations
clarify that if the PWA requirements are
satisfied, then the applicable amount is the
alternative applicable amount determined
under section 45Z(a)(2)(B) for non-SAF
or section 45Z(a)(3)(A)(ii) for SAF, each
subject to adjustments for inflation under
section 45Z(c).
H. Section 48C
Section 48C provides a credit for
a qualified investment in a qualifying
advanced energy project for that taxable
year (section 48C Credit). The IRA added
section 48C(e) to the Code, extending the
section 48C Credit to provide an addi-
tional section 48C Credit allocation of
$10 billion. Generally, the credit amount
for section 48C Credits allocated pursuant
to section 48C(e) is equal to six percent
of the basis of the eligible property. Under
section 48C(e)(4), if a taxpayer satisfies
the PWA Requirements in section 48C(e)
(5) and (6) with respect to a qualifying
advance energy project, then the credit
amount determined under section 48C(a)
is 30 percent.
To satisfy the Prevailing Wage Require-
ments under section 48C(e)(5)(A), a tax-
payer must ensure that with respect to a
qualifying advanced energy project, any
laborers and mechanics employed by the
taxpayer or any contractor or subcon-
tractor in the re-equipping, expansion, or
establishment of a manufacturing facility
are paid wages at rates not less than the
prevailing rates for construction, alter-
ation, or repair of a similar character in
the locality in which the project is located.
Section 48C(e)(5)(B) provides that rules
similar to section 45(b)(7)(B) apply for
purposes of the correction and penalty
related to the failure to satisfy the Prevail-
ing Wage Requirements. Section 48C(e)
(6) provides that rules similar to sec-
tion 45(b)(8) apply for purposes of the
Apprenticeship Requirements.
A section 48C Credit allocation is made
after an application and project certifica-
tion. The extension of section 48C and
the additional allocations under section
48C(e) are effective on January 1, 2023.
The Treasury Department and the IRS
issued Notice 2023-18, 2023-10 I.R.B.
508, Notice 2023-44, 2023-25 I.R.B. 924,
and Notice 2024-36, 2024-24 I.R.B. 1479,
to provide guidance under section 48C(e).
These notices provide a process for the
IRS to allocate section 48C Credits. To
prevent an overallocation of section 48C
Credits, section 5.07 of Notice 2023-18
requires a taxpayer that applies for a sec-

August 19, 2024 478 Bulletin No. 2024–34
tion 48C Credit allocation at the 30 percent
credit amount to confirm that the taxpayer
intends to satisfy the PWA requirements.
Section 5.07 of Notice 2023-18 addition-
ally requires that if the taxpayer provides
notification that it placed the project in
service, the taxpayer must also confirm
that it satisfied the PWA requirements.
The Proposed Regulations would
have provided that if a taxpayer satisfies
both the PWA requirements and the PWA
confirmation requirements provided in
Notice 2023-18 (or any subsequent guid-
ance), then the credit amount for sec-
tion 48C Credits allocated pursuant to
section 48C(e) of the Code would be equal
to 30 percent. Notice 2023-44 provides
that a property placed in service prior to
being awarded a section 48C Credit under
the section 48C(e) program is not eligible
to receive such an allocation. It is possi-
ble that a taxpayer will have performed
work after January 1, 2023, with respect
to the construction, alteration, or repair of
a qualifying advanced energy project and
before being awarded an allocation under
section 48C.
Proposed §1.48C-3 would have pro-
vided that the increased credit amount
is available for any qualifying advanced
energy project that satisfies the Prevail-
ing Wage Requirements of section 45(b)
(7) and proposed §1.45-7, the Apprentice-
ship Requirements of section 45(b)(8) and
proposed §1.45-8, and the recordkeeping
and reporting requirements of proposed
§1.45-12.
One commenter stated that the Pro-
posed Regulations may have erroneously
incorporated the requirement in pro-
posed §1.45-7(a) to pay prevailing wages
during the 10-year period after a facility
is placed in service and requested that
the final regulations specify whether the
PWA requirements apply after a facility
is placed in service. Section 48C provides
that the Prevailing Wage Requirements
apply in the “re-equipping, expansion, or
establishment of a manufacturing facil-
ity.” Nothing in section 48C requires the
payment of prevailing wages with respect
to alterations or repairs after a qualifying
advanced energy project is placed in ser-
vice. For the reasons described in Sections
VIII.A.1. and IX.A. of this Summary of
Comments and Explanation of Revisions,
the final regulations amend the Proposed
Regulations to confirm that the PWA
requirements under section 48C apply
only during the re-equipping, expansion,
or establishment of a qualifying advanced
energy project and not with respect to
any alteration or repair after a qualifying
advanced energy project is placed in ser-
vice. Under the transition rule described in
Section II. of this Summary of Comments
and Explanation of Revisions, the PWA
requirements do not apply to any work
performed before January 29, 2023.
Additionally, a commenter requested
guidance concerning whether for pur-
poses of section 48C projects the PWA
requirements are similarly limited to the
same eligible property defined by section
48C(c)(2). The commenter asked for PWA
requirements to be limited to this same
eligible property and any costs integral
to that eligible property – excluding any
work related to the building or its struc-
tural components. The applicable scope
of the PWA requirements is explained
in Section VI. of this Summary of Com-
ments and Explanation of Revisions.
I. Section 179D
Section 179D(a) generally allows a
deduction in an amount equal to the cost
of energy efficient commercial build-
ing property placed in service during the
taxable year. Section 179D(f) generally
allows as a deduction for the taxable year
the amount of the aggregate adjusted basis
of energy efficient building retrofit prop-
erty placed in service by the taxpayer pur-
suant to a qualified retrofit plan. Under sec-
tion 179D(b)(3), (4), and (5), an increased
deduction amount is allowed if the tax-
payer ensures that laborers and mechanics
employed by the taxpayer or any contrac-
tor or subcontractor in the installation of
any energy efficient commercial building
property, energy efficient building retrofit
property, or property installed pursuant to
a qualified retrofit plan (collectively, 179D
qualified property) are paid wages at rates
not less than the prevailing rates and sat-
isfies the Apprenticeship Requirements.
Under section 179D(g), the increased
deduction amount in section 179D(b) is
subject to an adjustment for inflation in
taxable years beginning after 2022.
Proposed §1.179D-3(b) would have
provided that the increased deduction is
available for any 179D qualified property
that either began installation prior to
January 29, 2023, or meets the Prevailing
Wage Requirements of section 45(b)(7)
and proposed §1.45-7, the Apprenticeship
Requirements of section 45(b)(8) and
proposed §1.45-8, and the recordkeeping
and reporting requirements of proposed
§1.45-12.
One commenter stated that the Pro-
posed Regulations may have erroneously
incorporated the requirement in proposed
§1.45-7(a) to pay prevailing wages during
the 10-year period after a property is
placed in service and requested that the
final regulations specify whether the PWA
requirements apply after a property is
placed in service. Section 179D provides
that the Prevailing Wage Requirements
apply “in the installation of any property.”
Nothing in section 179D requires the pay-
ment of prevailing wages with respect to
alterations or repairs after such installa-
tion. For the reasons described more fully
in Sections VIII.A.1. and IX.A. of this
Summary of Comments and Explanation
of Revisions, the final regulations amend
the Proposed Regulations to confirm that
the PWA requirements under section
179D apply only during the installation of
the 179D qualified property and not with
respect to any alteration or repair after the
179D qualified property is placed in ser-
vice. The applicable scope of the PWA
requirements is explained in Section VI.
of this Summary of Comments and Expla-
nation of Revisions. Under the transition
rule described in Section II. of this Sum-
mary of Comments and Explanation of
Revisions, the PWA requirements do not
apply to any work performed before Jan-
uary 29, 2023. The final regulations also
clarify that the deduction amounts are
increased for inflation.
On October 5, 2022, the IRS issued
Notice 2022-48 and requested comments
with respect to the allocation of the sec-
tion 179D deduction and the criteria that
the Treasury Department and the IRS
should consider in drafting rules to deter-
mine the person that is primarily respon-
sible for designing the property under
section 179D(d)(3)(A). The Proposed
Regulations would have provided gen-
eral rules for satisfying the PWA require-
ments for purposes of section 179D, but
the Proposed Regulations would not have

Bulletin No. 2024–34 479 August 19, 2024
addressed the allocation of the deduction
in the case of 179D qualified property
installed on, or in property owned by, a
specified tax-exempt entity as described
in section 179D(d)(3)(B).
A few commenters suggested that
the Treasury Department and the IRS
provide an exception to meeting PWA
requirements for primary designers who
are allocated the deduction under section
179D(d)(3)(A). For example, the com-
menters explained that because designers
do not directly employ laborers, mechan-
ics, contractors, or subcontractors and
because the allocating tax-exempt entity
has little interest in undertaking the com-
pliance burden for an allocated deduction,
the designer will have difficulty ensuring
compliance with the PWA requirements.
Another commenter suggested that the
regulations require the contractor to con-
sult with all other contractors and subcon-
tractors on the project and certify that they
are not also seeking the allocation of the
deduction, similar to an approach devel-
oped by the General Services Administra-
tion.
The Proposed Regulations would not
have provided rules regarding the alloca-
tion of the deduction in the case of 179D
qualified property installed on or in prop-
erty owned by a specified tax-exempt
entity. After reviewing comments, the
Treasury Department and the IRS deter-
mined that the section 179D allocation is
outside the scope of these final regulations
and rules for the section 179D allocation
will be addressed in future guidance.
One commenter asked whether archi-
tects and engineers who do not employ
laborers, mechanics, contractors, or sub-
contractors automatically qualify for
the increased section 179D deductions.
Generally applicable rules for laborers
and mechanics are discussed in Section
VII.C.1. of this Summary of Comments
and Explanation of Revisions. Another
commenter stated that without a de mini-
mis threshold for noncompliance, small,
accidental deviations may prevent earn-
ing the increased section 179D deduction.
The limited penalty waiver is discussed
in Section VII.D.4. of this Summary of
Comments and Explanation of Revisions.
Additionally, a commenter requested
that section 179D be modified so that the
relevant property’s basis is not reduced by
the amount of the claimed deduction under
section 179D. The commenter stated
that reducing the property’s basis by the
received deduction amount may actually
place the taxpayer worse off financially.
Statutory revisions are outside the scope
of these final regulations.
X. Recordkeeping and Reporting
Requirements
A. In general
Section 45(b)(12) authorizes the Sec-
retary to issue such regulations or other
guidance as the Secretary determines nec-
essary to carry out the purposes of sec-
tion 45(b), including regulations or other
guidance that provide requirements for
recordkeeping or information reporting
for purposes of administering the require-
ments of section 45(b). Section 6001
provides that every person liable for any
tax imposed by the Code, or for the col-
lection thereof, must keep such records as
the Secretary may from time to time pre-
scribe. Section 1.6001-1(a) provides that
any person subject to income tax must
keep such permanent books of account
or records, including inventories, as are
sufficient to establish the amount of gross
income, deductions, credits, or other mat-
ters required to be shown by such person
in any return of such tax. Section 1.6001-
1(e) provides that the books and records
required by §1.6001-1 must be retained so
long as the contents thereof may become
material in the administration of any Inter-
nal Revenue law.
Proposed §1.45-12(a) would have pro-
vided that the increased credit amount
must be claimed in such form and man-
ner as may be prescribed in IRS forms or
instructions or in publications or guidance
published in the Internal Revenue Bulle-
tin. The preamble to the Proposed Regu-
lations also stated that the Proposed Regu-
lations would require taxpayers to provide
a statement with the tax return that claims
an increased amount of credit or deduc-
tion that includes aggregate information
as detailed in proposed §1.45-12.
The Proposed Regulations would have
imposed recordkeeping requirements that
are generally consistent with the record-
keeping requirements under the DBA
regime for purposes of the PWA require-
ments. Proposed §1.45-12(b) would have
provided that with respect to each quali-
fied facility for which a taxpayer is claim-
ing or transferring (under section 6418)
an increased credit amount under sec-
tion 45(b)(6)(A), unless section 45(b)(6)
(B)(i) or 45(b)(6)(B)(ii) applies, the tax-
payer would be required to maintain and
preserve records sufficient to demonstrate
compliance with the applicable PWA
requirements in proposed §§1.45-7 and
1.45-8, respectively. Under the Proposed
Regulations, at a minimum, those records
would have included payroll records for
each laborer and mechanic (including
each qualified apprentice) employed by
the taxpayer, contractor, or subcontractor
in the construction, alteration, or repair of
the qualified facility.
Proposed §1.45-12(c) would have
provided an enumerated list of records,
in addition to payroll records otherwise
maintained by the taxpayer, that may be
sufficient to establish compliance with
the Prevailing Wage Requirements. The
list in proposed §1.45-12(c) included the
following information for each laborer
or mechanic (including each qualified
apprentice) employed by the taxpayer, a
contractor, or subcontractor with respect
to each qualified facility: (i) identifying
information, including the name, social
security or tax identification number,
address, telephone number, and email
address; (ii) the location and type of quali-
fied facility; (iii) the labor classification(s)
the taxpayer applied to the laborer or
mechanic for determining the prevailing
wage rate and documentation supporting
the applicable classification, including the
applicable wage determination; (iv) the
hourly rate(s) of wages paid (including
rates of contributions or costs for bona fide
fringe benefits or cash equivalents thereof)
for each applicable labor classification;
(v) records to support any contribution
irrevocably made on behalf of a laborer or
mechanic to a trustee or other third person
pursuant to a bona fide fringe benefit pro-
gram, and the rate of costs that were rea-
sonably anticipated in providing bona fide
fringe benefits to laborers and mechanics
pursuant to an enforceable commitment to
carry out a plan or program described in
40 U.S.C. 3141(2)(B), including records
demonstrating that the enforceable com-
mitment was provided in writing to the

August 19, 2024 480 Bulletin No. 2024–34
laborers and mechanics affected; (vi) the
total number of labor hours worked per
pay period; (vii) the total wages paid for
each pay period (including identifying any
deductions from wages); (viii) records to
support wages paid to any apprentices
at less than the applicable prevailing
wage rates, including records reflecting
the registration of the apprentices with a
registered apprenticeship program and
the applicable wage rates and appren-
tice-to-journeyworker ratios prescribed
by the apprenticeship program; and (ix)
the amount and timing of any correction
payments and documentation reflecting
the calculation of the correction payments.
Proposed §1.45-12(d) would have
required taxpayers subject to the Appren-
ticeship Requirements to maintain suf-
ficient records to establish compliance
with the Labor Hours Requirement, Ratio
Requirement, and Participation Require-
ment. Under the Proposed Regulations,
records that may be sufficient to demon-
strate compliance with the applicable
Apprenticeship Requirements in §1.45-8
would have included the following infor-
mation for each apprentice employed by
the taxpayer, a contractor, or subcontractor
with respect to each qualified facility: (i)
any written requests for the employment
of apprentices from registered appren-
ticeship programs, including any contacts
with the DOL OA or a State apprenticeship
agency regarding requests for apprentices
from registered apprenticeship programs;
(ii) any agreements entered into with
registered apprenticeship programs with
respect to the construction, alteration,
or repair of the facility; (iii) documents
reflecting the standards and requirements
of any registered apprenticeship program,
including the applicable ratio requirement
prescribed by each registered apprentice-
ship program from which taxpayers, con-
tractors, or subcontractors employ appren-
tices; (iv) the total number of labor hours
worked by apprentices; and (v) records
reflecting the daily ratio of apprentices to
journeyworkers.
The Proposed Regulations under sec-
tions 30C, 45L, 45Q, 45U, 45V, 45Y,
45Z, 48C, and 179D would have provided
similar recordkeeping requirements as
described in proposed §1.45-12.
As discussed in Section I. of this Sum-
mary of Comments and Explanation of
Revisions, several commenters suggested
that the final regulations should impose
additional reporting and recordkeeping
requirements, including many pre-filing
reporting requirements such as certified
weekly payroll and monthly apprentice-
ship hours reporting. However, other com-
menters stated that having to comply with
the recordkeeping and reporting require-
ments as proposed would be burdensome
and create costly administrative work
for business owners. These commenters
requested that documentation and report-
ing requirements be as streamlined and
minimal as possible.
As explained in greater detail in Sec-
tion I. of this Summary of Comments
and Explanation of Revisions, the final
regulations strike an appropriate balance
between imposing requirements intended
to encourage the timely and correct pay-
ment of prevailing wages and the hiring
of qualified apprentices while recogniz-
ing the prospective nature inherent in the
increased amount of credit and deduc-
tion. The Treasury Department and the
IRS want to avoid imposing unnecessary
administrative work on taxpayers, espe-
cially small businesses. However, the IRS
must be able to determine taxpayer com-
pliance with the PWA requirements once
a return is filed claiming an increased
amount of credit or deduction. For this
reason, the final regulations do not incor-
porate the suggestions regarding pre-filing
activities, although many comments are
incorporated as factors for determining
intentional disregard, and instead adopt
the robust recordkeeping and reporting
requirements from the Proposed Reg-
ulations. The final regulations provide
recordkeeping and reporting requirements
that are consistent with the DBA, relevant
for the purposes of the increased amount
of credit and deduction and the intent of
the IRA, and that are necessary for, and
consistent with, sound tax administration.
Many commenters stated that the pro-
posed regulations struck an appropriate
balance between ensuring there is signif-
icant documentation to ensure compliance
without adding unnecessary burden. Some
commenters requested that taxpayers be
provided flexibility related to the record-
keeping requirements, while others asked
for guidance on how to demonstrate com-
pliance with the recordkeeping require-
ments and whether specific records would
satisfy the recordkeeping requirement. A
few commenters suggested that the final
regulations incorporate or require specific
forms or reporting methods similar to
those used in other contexts (for example,
the IRS Form 1099). Some commenters
suggested taxpayers could use the DOL’s
Registered Apprenticeship Partners Infor-
mation Data System (commonly referred
to as RAPIDS) to assist in reporting com-
pliance with the Participation Require-
ment. Another commenter suggested the
final regulations require taxpayer to report
evidence of compliance with the Good
Faith Effort Exception at filing.
The final regulations largely follow
the approach in the Proposed Regula-
tions. Consistent with IRS practice, the
final regulations adopt the rule from the
Proposed Regulations that the increased
credit amount must be claimed in such
form and manner as may be prescribed in
IRS forms, instructions, publications, or
guidance published in the Internal Reve-
nue Bulletin. Comments suggesting spe-
cific forms or reporting methods are not
incorporated. It is critical that the IRS
retain the ability to prescribe the required
reporting requirements in relevant forms
and instructions to allow for modifications
as necessary. Draft forms and instructions
are typically made available for public
comment on https://www.irs.gov.
To provide flexibility to taxpayers, the
final regulations do not prescribe a specific
form or manner in which records must be
kept. In response to comments that asked
whether certain records would be suffi-
cient, the final regulations indicate that an
accurately completed DOL Form WH-347
may constitute a sufficient record reflect-
ing the payment of prevailing wages to the
individuals identified on the form for the
period identified on the form for purposes
of §1.45-12. The final regulations also
add copies of contracts for construction,
alteration, or repair of the facility with any
contractor or subcontractor to the list of
records that may be sufficient to demon-
strate compliance with the Prevailing
Wage Requirements. In most cases, pay-
roll records alone will not demonstrate a
taxpayer’s compliance with the totality of
the PWA requirements. Nothing in these
regulations is intended to restrict the IRS’s
authority to request additional records to

Bulletin No. 2024–34 481 August 19, 2024
determine whether the taxpayer has com-
plied with the PWA requirements. For
example, during an examination, the IRS
may request information and documents
with respect to the taxpayer’s process for
the proper identification, classification,
and payment of wages to laborers and
mechanics performing construction on the
qualified facility and for determining labor
needs on a construction project, including
specific apprenticeship needs.
Commenters requested guidance on
the length of time records need to be
maintained. A commenter stated that once
a construction project is completed, the
taxpayer would no longer have access to
competitively sensitive data, such as wage
information, stored by contractors and
subcontractors. One commenter suggested
that records should be retained for at least
three years after all work on the construc-
tion project is completed. Another com-
menter suggested requiring taxpayers to
retain adequate payroll records for at least
five years from the projected end of the
tax credit period. At least one commenter
suggested that not retaining adequate
records should be considered evidence
of intentional disregard. The commenter
emphasized that maintaining such records
would not be burdensome because records
are now kept digitally. The final regula-
tions clarify that taxpayers are required
to maintain and preserve records suffi-
cient to establish compliance with the
PWA requirements for relevant tax years
as provided for under section 6001 and
§1.6001-1(e). The final regulations also
add the failure to maintain records to the
intentional disregard factors.
Some commenters stated that it might
be difficult for taxpayers to obtain records
of wages paid by contractors and subcon-
tractors. Commenters suggested permit-
ting taxpayers to rely on written certifica-
tions from contractors and subcontractors
that the contractor or subcontractor is
complying with the PWA requirements,
including recordkeeping. One commenter
suggested that the final regulations permit
taxpayers to rely on contractual provisions
that require strict adherence to IRS goals
and standards. Another commenter was
concerned that despite contractual agree-
ments between the taxpayer and a general
contractor detailing the PWA require-
ments, taxpayers would be subject to the
subcontractors’ recordkeeping abilities,
over which they have no control.
Commenters also claimed that the pro-
posed recordkeeping requirements raise
privacy and antitrust concerns. Specifi-
cally, commenters argued that requiring
taxpayers to maintain the payroll records
of contractors and subcontractors could
violate Federal or State privacy laws or
company policies on the proper handling
of personally identifiable information
(PII) such as social security numbers and
dates of birth. Commenters suggested: (i)
allowing the direct employer (whether that
is the taxpayer, contractor, or subcontrac-
tor) to maintain required payroll records
and confidential employee information
subject to contractual provisions requir-
ing the maintenance and preservation of
the records and permitting access to such
records by the IRS as part of a duly issued
audit request; (ii) allowing the taxpayer to
collect and maintain the payroll records
and data specified in proposed §1.45-12
with a third-party vendor subject to sim-
ilar contractual provisions and access to
the IRS audit function; (iii) allowing tax-
payers, transferee taxpayers, and/or their
agents to inspect payroll records and data
under a nondisclosure arrangement as part
of proper due diligence without taking
physical custody or control of such pay-
roll records or data; (iv) allowing payroll
records and data to be collected and main-
tained by the taxpayer or any contractor
in a manner that redacts certain sensitive
information as long as the information is
maintained by the direct employer pursu-
ant to contractual arrangements; and (v)
allowing alternative forms of validation
for hourly wage rates and other payroll
data to avoid antitrust and confidentiality
concerns among taxpayers, contractors,
and subcontractors. A commenter recom-
mended that for recordkeeping of fringe
benefits, the final regulations should
accept sworn statements of contributions
as sufficient. The commenter stated that it
is exceedingly difficult for entities to mon-
itor and verify subcontractor contributions
to fringe benefit programs.
Consistent with the requirements in
section 45(b)(7) and (8) that the taxpayer
ensure that the Prevailing Wage Require-
ments and Apprenticeship Requirements
are satisfied, the final regulations adopt
the rule as proposed that the taxpayer is
required to maintain all relevant records,
regardless of whether the laborers and
mechanics are employed by the taxpayer, a
contractor, or a subcontractor. In response
to comments regarding privacy concerns
and data sensitivity, the final regulations
amend the proposed rule to clarify that
records need only contain the last four dig-
its of a social security number. The final
regulations also provide three alterna-
tives that taxpayers may use to satisfy the
recordkeeping requirements in §1.45-12.
These alternatives are intended to assist
taxpayers in satisfying the recordkeeping
requirements while also complying with
applicable law. Under the final regula-
tions: (i) taxpayers may collect and phys-
ically retain redacted records from every
relevant contractor and subcontractor; (ii)
taxpayers may use a third-party vendor
to collect and physically retain records
from every relevant contractor and sub-
contractor on behalf of the taxpayer, and
the records may have PII redacted to com-
ply with applicable privacy laws; or (iii)
taxpayers, contractors, and subcontractors
may physically retain unredacted records
for their own employees. Under all three
alternatives, unredacted records must be
made available to the IRS upon request.
Although retaining records consistent
with one or more of these options will
constitute satisfaction of the recordkeep-
ing requirements in §1.45-12 of these final
regulations, the Prevailing Wage Require-
ments in §1.45-7 and the Apprenticeship
Requirements in §1.45-8 of these final
regulations must be satisfied (as applica-
ble) in order for the taxpayer to obtain the
increased amount of credit or deduction.
The taxpayer is ultimately responsible for
compliance with the PWA requirements
and may not rely on certifications from
contractors and subcontractors that they
are complying with PWA requirements
(including recordkeeping). Taxpayers
may delegate certain recordkeeping activ-
ities to comply with applicable laws; how-
ever, the ultimate responsibility to ensure
compliance with the PWA requirements
remains with the taxpayer, and taxpayers
may not rely on a contractual provision to
delegate that responsibility to contractors
and subcontractors for purposes of satisfy-
ing the PWA requirements. Additionally,
taxpayers should consider the impact that
a recordkeeping approach may have on

August 19, 2024 482 Bulletin No. 2024–34
their ability to demonstrate the facts and
circumstances listed in §§1.45-7(c)(3)(iii)
and 1.45-8(f)(2)(ii) pertaining to inten-
tional disregard.
The preamble to the Proposed Regula-
tions would have provided that to demon-
strate that a failure was not due to inten-
tional disregard, taxpayers must maintain
and preserve records sufficient to docu-
ment any failures to satisfy the Prevailing
Wage Requirements or the Apprenticeship
Requirements, and the actions taken to
prevent, mitigate, or remedy the failure
(for example, records demonstrating that
the taxpayer regularly reviewed payroll
practices, included requirements to pay
prevailing wages in contracts with con-
tractors, and posted prevailing wage rates
in a prominent place on the job site). The
preamble to the Proposed Regulations
also indicated that the Proposed Regula-
tions would have imposed recordkeeping
requirements related to correction and
penalty payments, penalty waiver provi-
sions, and the Good Faith Effort Excep-
tion. The final regulations incorporate
these provisions as described in the pre-
amble to the Proposed Regulations and
clarify that any failures to satisfy the
Prevailing Wage Requirements and the
actions taken to prevent, mitigate, or rem-
edy the failure may be documented with
records demonstrating that the taxpayer
engaged an independent third party to aid
in the review of payroll information.
B. Recordkeeping for credits transferred
pursuant to section 6418
The Proposed Regulations would have
provided that because an eligible taxpayer
determines any increased credit amount
applicable to the PWA requirements,
the general recordkeeping requirements
would remain with an eligible taxpayer
who transfers a specified credit portion
that includes an increased credit amount.
The increased credit amount that is deter-
mined by an eligible taxpayer would be
reported on the return of the eligible tax-
payer. The minimum required documen-
tation to be provided to the transferee
taxpayer is a separate requirement under
the 6418 Final Regulations that does not
impact the requirements in these final
regulations. Comments received relat-
ing to section 6418 and responses by the
Treasury Department and the IRS are dis-
cussed in Section V.B. of this Summary of
Comments and Explanation of Revisions.
XI. Applicability Date
The Proposed Regulations would have
provided that the final regulations apply to
facilities, property, projects, or equipment
placed in service in taxable years ending
after the date these final regulations are
published in the Federal Register and
the construction, or installation, of which
begins after the date these final regula-
tions are published in the Federal Regis-
ter. The Proposed Regulations would have
provided that taxpayers could rely on the
Proposed Regulations with respect to con-
struction or installation of a facility, prop-
erty, project, or equipment beginning on
or after January 29, 2023, and on or before
the date these final regulations are pub-
lished, provided, that beginning after the
date that is 60 days after August 29, 2023,
taxpayers follow the Proposed Regula-
tions in their entirety and in a consistent
manner. The Proposed Regulations would
have also provided that the provisions of
sections 3 and 4 of Notice 2022-61 would
be obsoleted for facilities, property, proj-
ects, or equipment the construction, or
installation of which begins after the date
these final regulations are published. The
Proposed Regulations would not have oth-
erwise affected Notice 2022-61.
Several commenters requested tran-
sition relief with respect to the applica-
bility date of these final regulations. One
commenter suggested that because Notice
2022-61 was used to justify the applica-
tion of PWA requirements to projects that
started after January 29, 2023, the IRS
should establish a new effective date for
the IRA’s PWA requirements. The com-
menter argued that, at a minimum, addi-
tional guidance set forth in the Proposed
Regulations and the final regulations
should be applied only prospectively.
The commenter raised that the rescission
of guidance issued in Notice 2022-61, if
done on a retroactive basis, would be arbi-
trary and capricious and a violation of the
Administrative Procedure Act, 5 U.S.C.
702, unless the IRS provides much greater
explanation for its actions.
As stated in Section II. of this Sum-
mary of Comments and Explanation of
Revisions, the final regulations provide
a transition rule under which the PWA
requirements do not apply to construction,
alteration, and repair activities occurring
before January 29, 2023. Further, the final
regulations generally apply to qualified
facilities placed in service in taxable years
ending after June 25, 2024, and the con-
struction of which begins after June 25,
2024. Additionally, taxpayers may choose
to apply the final regulations to qualified
facilities placed in service in taxable years
ending on or before June 25, 2024, and
qualified facilities placed in service in tax-
able years ending after June 25, 2024, the
construction of which begins before June
25, 2024, provided that taxpayers follow
the final regulations in their entirety and
in a consistent manner. Taxpayers may
also rely on the Proposed Regulations
with respect to construction of a qualified
facility beginning on or after January 29,
2023, and on or before June 25, 2024, pro-
vided, that beginning after the date that is
60 days after August 29, 2023, taxpayers
follow the Proposed Regulations in their
entirety and in a consistent manner.
Consistent with the Proposed Regula-
tions, the final regulations confirm that the
obsoletion of sections 3 and 4 of Notice
2022-61 is prospective as it applies facil-
ities, property, projects, or equipment the
construction, or installation, of which
begins after June 25, 2024. The final reg-
ulations do not otherwise affect Notice
2022-61.
XII. Severability
If any provision in this rulemaking
is held to be invalid or unenforceable
facially, or as applied to any person or
circumstance, it shall be severable from
the remainder of this rulemaking, and
shall not affect the remainder thereof, or
the application of the provision to other
persons not similarly situated or to other
dissimilar circumstances.
Applicability Dates
These regulations apply to qualified
facilities placed in service in taxable
years ending after June 25, 2024, and
the construction of which begins after
June 25, 2024. Taxpayers may choose to
apply these regulations to qualified facil-

Bulletin No. 2024–34 483 August 19, 2024
ities placed in service in taxable years
ending on or June 25, 2024, and quali-
fied facilities placed in service in taxable
years ending after June 25, 2024, the
construction of which begins before June
25, 2024, provided that taxpayers follow
these regulations in their entirety and in
a consistent manner. Taxpayers may also
continue to rely on the Proposed Regu-
lations with respect to construction of a
qualified facility beginning on or after
January 29, 2023, and on or before June
25, 2024, provided, that beginning after
the date that is 60 days after August 29,
2023, taxpayers follow the Proposed
Regulations in their entirety and in a con-
sistent manner.
Effect on Other Documents
Sections 3 and 4 of Notice 2022-61 are
obsoleted for facilities, property, projects,
or equipment the construction, or instal-
lation, of which begins after August 26,
2024.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum of Agree-
ment, Review of Treasury Regulations
under Executive Order 12866 (June 9,
2023), tax regulatory actions issued by the
IRS are not subject to the requirements of
section 6(b) of Executive Order 12866, as
amended. Therefore, a regulatory impact
assessment is not required.
II. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520) (PRA) generally
requires that a Federal agency obtain the
approval of the Office of Management and
Budget (OMB) before collecting infor-
mation from the public, whether such
collection of information is mandatory,
voluntary, or required to obtain or retain
a benefit.
The collections of information in
these final regulations contain reporting,
recordkeeping, and third-party disclosure
requirements, each of which is described
below. These collections are required for
purposes of claiming an increased amount
of credit or deduction; and are necessary
for the IRS to validate that taxpayers
have met the regulatory requirements and
are eligible to claim the increased credit
amounts. The likely respondents are indi-
vidual, business, trust and estate filers, and
tax-exempt organizations.
These final regulations set forth proce-
dures for requesting supplemental wage
determinations and wage rates for addi-
tional classifications from the DOL. This
collection is approved by the OMB under
DOL Control Number 1235-0034. These
final regulations do not alter any of the
DOL collections approved under this con-
trol number.
These final regulations include
requirements to keep records sufficient to
demonstrate that the PWA requirements
have been met as detailed in §1.45-12.
For purposes of the PRA, the records
required to be kept pursuant to §1.45-12
are considered general tax records. The
collection of these general tax records is
approved annually under 1545-0074 for
individuals/sole proprietors, 1545-0123
for business entities, and 1545-0047
for tax-exempt organizations. The IRS
received from the OMB a new OMB
Control number (1545-2315) for trust
and estate filers.
These final regulations also include
reporting requirements that taxpayers
provide a statement with the tax return
that claims an increased amount of credit
or deduction that includes aggregate
information as detailed in §1.45-12. The
IRS may issue forms and instructions in
future guidance for the purpose of meet-
ing these reporting requirements. These
reporting requirements will be covered
under 1545-0074 for individuals/sole
proprietors and 1545-0123 for business
entities. These reporting requirements
are covered under the new OMB Control
Number (1545-2315) for trust and estate
filers.
These final regulations include third-
party disclosures that include notifying
laborers and mechanics of the applica-
ble prevailing wage rates as detailed in
§1.45-7. These final regulations also
include third-party disclosures for tax-
payers requesting the dispatch of qualified
apprentices from a registered apprentice-
ship program as detailed in §1.45-8. The
third-party disclosures apply to all filers.
The third-party disclosures applicable to
all filers are also covered under the new
OMB Control Number (1545-2315).
In the Notice of Proposed Rulemak-
ing, the Treasury Department and the IRS
requested public comments on the pro-
posed collections of information includ-
ing: (i) whether the proposed collection
of information is necessary for the proper
performance of the functions of the IRS;
(ii) the accuracy of the estimated burden
associated with the proposed collection of
information; (iii) how the quality, utility,
and clarity of the information to be col-
lected may be enhanced; (iv) how the bur-
den of complying with the proposed col-
lection of information may be minimized;
and (v) estimates of capital or start-up
costs and costs of operation, maintenance,
and purchase of services to provide infor-
mation.
One commenter suggested the Trea-
sury Department and the IRS provide
additional clarification regarding the esti-
mated time for filers to find and display
the prevailing wage rates and to request
qualified apprentices from registered
apprenticeship programs. One commenter
suggested that the estimate failed to con-
sider additional actions related to comply-
ing with PWA rules, such as tracking the
payment of prevailing wages and usage of
qualified apprentices. Commenters stated
that it may take some taxpayers more than
two hours annually to find and display the
prevailing wage rates and to request qual-
ified apprentices from registered appren-
ticeship programs. Another commenter
expressed confusion over the difference in
the proposed compliance time required by
trusts and estate in comparison to all other
filers.
The Treasury Department and the IRS
agree that the estimated annual burden
with respect to the reporting and record-
keeping requirements of these final regu-
lations can be clarified. The preamble to
the notice of proposed rulemaking esti-
mated these recordkeeping and reporting
obligations necessary for compliance with
the PWA Requirements will take 40 hours
annually. This estimate was submitted as
part of seeking a new OMB control num-
ber with respect to trust and estate fil-
ers. The estimate will also be submitted
to OMB as part of the annual approval
process with respect to the OMB control
numbers that already exist for other fil-

August 19, 2024 484 Bulletin No. 2024–34
ers.
36
This estimate includes time neces-
sary for taxpayers to become familiar with
the obligations set forth in these regula-
tions. Much of the data taxpayers will be
required to maintain, such as the applica-
ble prevailing wage rates, is readily avail-
able from DOL websites. Additionally, the
recordkeeping requirements with respect
to amounts paid to laborers and mechan-
ics are similar to existing requirements
imposed by other law. While exact data
is not available to estimate the additional
burden imposed by these regulations, the
Treasury Department and the IRS have
retained the estimate of 40 hours.
The commenters also suggested that
the two hours estimated for all filers with
respect to the third-party disclosures did
not properly account for the expected
burdens. The Treasury Department and
the IRS agree with this comment and
have revised the estimate to account
for the burden of complying with the
Apprenticeship Requirements. The final
regulations require taxpayers to request
qualified apprentices from an apprentice-
ship program with an area of operation
that includes the location of the facil-
ity and may require taxpayers to submit
additional requests on an annual basis if
requests have been denied. Further, the
final regulations will require taxpayers to
review the standards and requirements of
the registered apprenticeship program as
part of making a request, which will likely
take more than the two hours estimated
as part of the preamble to the proposed
regulations. Accordingly, the Treasury
Department and the IRS have determined
that the estimated burden to comply with
the third-party disclosures is four hours
instead of two hours.
No other public comments were
received by the IRS directed specifically
at the PRA or on the collection require-
ments, but commenters generally artic-
ulated the burdens associated with the
documentation requirements contained in
the Proposed Regulations. As described in
the relevant portions of this preamble, the
Treasury Department and the IRS believe
that the documentation requirements are
necessary to administer the increased
credit amounts resulting from compliance
with the PWA requirements.
III. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) (RFA) imposes certain
requirements with respect to Federal rules
that are subject to the notice and comment
requirements of section 553(b) of the
Administrative Procedure Act (5 U.S.C.
551 et seq.) and that are likely to have a
significant economic impact on a sub-
stantial number of small entities. Unless
an agency determines that a proposal is
not likely to have a significant economic
impact on a substantial number of small
entities, section 603 of the RFA requires
the agency to present a final regulatory
flexibility analysis (FRFA) of the final
regulations. The Treasury Department and
the IRS have not determined whether the
final regulations will likely have a signif-
icant economic impact on a substantial
number of small entities. This determina-
tion requires further study. Because there
is a possibility of significant economic
impact on a substantial number of small
entities, a FRFA is provided in these final
regulations.
Pursuant to section 7805(f) of the Code,
the Proposed Regulations were submit-
ted to the Chief Counsel of the Office of
Advocacy of the Small Business Adminis-
tration for comment on its impact on small
business. The Treasury Department and
the IRS also requested comments gener-
ally with respect to the number of entities
affected by the Proposed Regulations and
the economic impact on small entities.
A. Need for and objectives of the rule
The final regulations provide clarify-
ing guidance for taxpayers intending to
satisfy the PWA requirements to qualify
for the increased amounts of credit or
deduction under sections 30C, 45, 45Q,
45V, 45Y, 45Z, 48C, and 179D and for
those taxpayers intending to satisfy the
Prevailing Wage Requirements to qual-
ify for the increased credit amounts under
sections 45L and 45U. These final regu-
lations provide needed guidance for tax-
payers on obtaining and using applicable
wage determinations issued by the DOL,
on the time and manner for reporting com-
pliance with the PWA requirements, as
well as needed definitions. The final reg-
ulations also provide guidance concerning
correction and penalty payments that can
be made by taxpayers who initially fail to
satisfy the PWA requirements in order to
qualify for the increased amounts of credit
and deduction.
The Treasury Department and the
IRS expect that the increased amounts of
credit and deduction of five times the base
amount of credit or deduction for taxpay-
ers that ensure the payment of prevailing
wages and hiring of qualified apprentices
in the construction, alteration, or repair of
qualified facilities provides financial incen-
tives that will beneficially impact various
industries involved in the investment in
and production of clean energy. These final
regulations provide clarifying guidance
that will assist taxpayers seeking to com-
ply with the statutory PWA requirements
in order to take advantage of the financial
incentives. In the absence of this clarifying
guidance, taxpayers would be required to
rely solely upon the language of the Code
in determining how to comply with the
PWA requirements, which would likely
deter many taxpayers from seeking the
increased amounts of credit and deduction
and would otherwise greatly increase the
costs of compliance for taxpayers choosing
to pursue the credits. The Treasury Depart-
ment and the IRS expect that the increased
credit and deduction amounts available
to taxpayers as financial incentives will
exceed the costs of the additional record-
keeping and reporting obligations imposed
on taxpayers by these regulations beyond
those otherwise required by the statute.
The Treasury Department and the IRS
also expect the financial incentives of the
increased amounts of credit and deduc-
tion for taxpayers that ensure payment of
prevailing wage rates and use of qualified
apprentices will deliver benefits across
the economy by creating increased oppor-
tunities for contractors and subcontrac-
tors as well as laborers and mechanics to
become involved in clean energy produc-
tion. Allowing these increased amounts of
credits and deduction for taxpayers who
satisfy the PWA requirements will incen-
tivize expansion of clean energy resources
and will reduce economy wide greenhouse
gas emissions.
37
Additional information on taxpayer compliance burdens can be found in Publication 5743, IRS Taxpayer Compliance Burden, https://www.irs.gov/pub/irs-pdf/p5743.pdf.

Bulletin No. 2024–34 485 August 19, 2024
B. Significant issues raised by public
comments in response to the initial
regulatory flexibility analysis
The Small Business Administration’s
Office of Advocacy provided comments
on the initial regulatory flexibility analysis
(IRFA) set forth in the Proposed Regula-
tions. Specifically, the Office of Advocacy
commented that the IRFA did not ade-
quately describe regulated small entities,
that the IRFA did not adequately estimate
potential impacts to regulated small enti-
ties, and that the IRFA did not adequately
discuss specific alternatives that might
reduce the impact on small entities.
Other comments were received on the
burdens associated with the PWA require-
ments, including burdens on small busi-
nesses. One commenter requested that
the process for obtaining wage determi-
nations from the DOL be streamlined to
avoid delays that might increase uncer-
tainty and costs for contractors. Another
commenter suggested that because pre-
vailing wage rates are subject to change,
the PWA requirements create uncertainty
and risk that will increase costs for con-
struction projects. One commenter sug-
gested reducing the burden on small busi-
nesses to qualify for the Good Faith Effort
Exception. Another commenter proposed
that the Treasury Department and the IRS
decline to impose penalties for any failure
to satisfy the Participation Requirement
with respect to any contractor or subcon-
tractor that qualifies as a “small business”
under the U.S. Small Business Adminis-
tration’s “Table of Size Standards”.
The Treasury Department and the
IRS have made a number of revisions to
these final regulations to assist taxpayers,
including small businesses, and reduce the
burdens associated with complying with
the PWA requirements. These revisions
are discussed in this Summary of Com-
ments and Explanation of Revisions of the
preamble to these regulations and in this
FRFA.
C. Affected small entities
The RFA directs agencies to provide
a description of, and if feasible, an esti-
mate of, the number of small entities that
may be affected by the proposed rules,
if adopted. The Small Business Admin-
istration’s (SBA) Office of Advocacy
estimates in its 2023 Frequently Asked
Questions that 99.9 percent of American
businesses meet its definition of a small
business. The applicability of these Pro-
posed Regulations does not depend on
the size of the business, as defined by the
SBA. These final regulations may affect a
variety of different entities across several
different green energy industries as they
prescribe rules with respect to ten differ-
ent sections of the Code with provisions
related to increased amounts of credit and
deduction.
The Office of Advocacy commented
that the IRFA did not describe or estimate
the number of impacted small entities and
did not provide information related to such
entities such as the North American Indus-
try Classification System (NAICS) clas-
sifications. The Office of Advocacy also
commented that because the regulation
requires taxpayers to verify compliance
for contracted work, that the Proposed
Regulations were directly regulating the
contractors hired to perform the work and
that the IRFA failed to consider the impact
of the proposed rules on these contrac-
tors and subcontractors, many of which
are likely small businesses. The Treasury
Department and the IRS utilize tax data
as the basis for its Regulatory Flexibility
Act analysis. Tax entities supply informa-
tion on tax forms, which information is
processed and recorded by the IRS. This
data is then available to the IRS office of
Research, Applied Analytics and Statistics
and to the Treasury Department’s Office
of Tax Policy for use in estimating the
impact of tax regulation on businesses.
Tax data is the more appropriate data
as it provides nearly universal coverage
of the entities that are affected by these
tax regulations. All taxpayers and many
potential taxpayers are represented in
the universe of tax data. Second, the tax
data more accurately reflect the level of
organization to which tax regulations are
applicable because tax data is collected on
the entity rather than the enterprise level.
Overwhelmingly, business tax regulations
apply to the entity level making tax data
a natural fit for the analysis of regulatory
impact. Further, with limited exceptions,
tax regulations apply to all entities orga
-
nized in a particular manner regardless
of industry or size. Finally, analysis of
the implications of tax regulations for the
purposes of the Paperwork Reduction Act
and any Special Analyses, including the
Regulatory Impact Analysis, are carried
out using tax data. Generally, restricting
analysis for the RFA to tax data prevents
difficulties in reconciling the different
analyses within a given regulation.
Reliance on tax data has some draw-
backs. In general, tax forms do not collect
information unless it is directly relevant
to the calculation of tax liability. The
NAICS codes referenced by the Office
of Advocacy are included on tax forms
for informational purposes and may not
be reliable. For example, past the first
two-digits of the NAICS code, economic
sector level, entries may be left blank in
the raw data. In addition, for a tax entity
that is comprised of multiple different
enterprises that each operate in a different
industry, the NAICS code reported on a
tax form may not reflect the appropriate
industry for the regulation under analysis.
Furthermore, most tax returns have no
independent verification of the accuracy
of NAICS codes. Notwithstanding this
concern, tax data remains the most appro-
priate data for analysis of the implications
of tax regulations.
The Treasury Department and the IRS
have considered other data alternatives
including Census data sources, such as
the Statistics of U.S. Businesses (SUSB)
suggested by SBA’s Office of Advocacy.
The 2020 SUSB includes only six million
firms and eight million establishments
while the proposed tax data includes
approximately 18 million business enti-
ties. Unlike the SUSB data, the tax data
includes more small businesses, not only
ones with at least one employee. Tax data
provides a more inclusive estimate of
businesses affected by tax regulations. In
conclusion, while tax data is an appropri-
ate resource for evaluating the impact of
tax regulations, this data does not permit
some of the usual analysis presented to
the SBA. Furthermore, since the NAICS
codes reported on the tax return may not
accurately reflect the industry of the entity,
applying separate standards by industry is
inadvisable.
Thus, the Treasury Department and
the IRS have determined that reliance on
NAICS codes would not accurately reflect
the entities affected by these regulations.

August 19, 2024 486 Bulletin No. 2024–34
Further, the Treasury Department and the
IRS currently do not have useable tax
data that reflects the entities that will be
affected by these regulations. While there
is uncertainty as to the exact number of
small businesses within this group, the
Treasury Department and the IRS continue
to estimate that approximately 70,000 tax-
payers will be impacted as described in
the preamble to the Proposed Regulations.
With respect to the Office of Advoca-
cy’s comments regarding the regulation of
contractors and subcontractors, these reg-
ulations provide guidance for taxpayers
that seek the increased amounts of credit
and deduction provided under the IRA by
ensuring the payment of prevailing wage
rates and the use of qualified apprentices
with respect to the construction of qual-
ified facilities. The regulations do not
directly regulate the contractors and sub-
contractors who may be hired by taxpay-
ers. The taxpayers claiming the increased
amounts of credit and deduction are the
entities responsible for compliance with
the PWA requirements. While the final
regulations set forth and incentivize var-
ious practices, taxpayers retain flexibility
to determine how best to ensure compli-
ance with the statutory requirements and
the recordkeeping and reporting obliga-
tions imposed as part of these final regu-
lations.
D. Impact of the rules
These final regulations provide rules
for how taxpayers can satisfy the PWA
requirements in order to seek the increased
credit amounts under section 45 as well as
the increased amounts of credit or deduc-
tion available under sections 30C, 45L,
45Q, 45U, 45V, 45Y, 45Z, 48C, and 179D.
Taxpayers that seek to claim the increased
amount of credit or deduction will have
administrative costs related to reading and
understanding these final regulations, as
well as increased costs for the recordkeep-
ing and reporting requirements necessary
to establish compliance with the PWA
requirements. The costs will vary across
different-sized taxpayers and across the
type of facilities and projects in which
such taxpayers are engaged.
The Prevailing Wage Requirements
require the taxpayer to obtain the pub-
lished wage determination issued by the
DOL for the county in which the facility
is located. To the extent a wage determi-
nation does not include a required classi-
fication, or if no wage determination has
been published, the taxpayer is required to
contact the DOL to obtain a supplemental
wage determination or a wage rate for an
additional classification. The taxpayer is
required to ensure that any contractor or
subcontractor that works on the construc-
tion, alteration, or repair of a facility has
paid hourly wages in accordance with the
applicable wage determination for each
classification required to complete such
work. In order to be eligible for certain
cure provisions, the taxpayer is required to
know or be able to determine whether the
laborers and mechanics employed for con-
struction, alteration, or repair of the facil-
ity were paid in accordance with the appli-
cable wage determination. Additionally,
the taxpayer is required to retain records
sufficient to establish compliance for as
long as may be relevant. The Treasury
Department and the IRS expect that some
of the recordkeeping that is required under
these rules will be consistent with record-
keeping requirements already imposed
under the DBA and the Fair Labor Stan-
dards Act, 29 U.S.C. 201 et seq.
In adopting these final regulations, the
Treasury Department and the IRS have
made several revisions that will ease
burdens for taxpayers. A few comment-
ers commented on the time that will be
required for taxpayers and contractors to
read and understand these regulations. In a
number of instances, the final regulations
have been revised in response to com-
ments to assist taxpayers with understand-
ing the rules, including through clarifying
explanations in the preamble, edits to the
regulatory text, and additional examples.
Other changes have been made
throughout these regulations that will
reduce burdens on taxpayers. The Pro-
posed Regulations would have estab-
lished the time that construction starts
as the applicable time for taxpayers and
contractors to determine applicable wage
rates. Commenters stated this would be
burdensome for taxpayers to determine
labor costs and could require the renego-
tiation of contracts that have been exe-
cuted. In response to these comments, the
final regulations provide that generally
the applicable prevailing wage rates are
determined at the time a taxpayer (or the
taxpayer’s designee, assignee, or agent)
executes the contract for the construc-
tion, alteration, or repair of the facility
with a contractor. The final regulations
also provide transition rules that delay
the start of the PWA Requirements to
assist taxpayers with complying with the
PWA requirements. Under the transition
rules, the PWA requirements only apply
for work performed on or after January
29, 2023, which follows the issuance of
the initial guidance on the PWA require-
ments by the Treasury Department and
the IRS. The final regulations also pre-
scribe penalty waivers for taxpayers
who make limited errors in compliance
with the Prevailing Wage Requirements.
In response to comments, the threshold
to qualify for the penalty waivers has
been increased to underpayments that do
not exceed five percent of all amounts
required to be paid in a calendar year to
make the penalty waiver more accessible
to taxpayers with small failures.
For the Apprenticeship Requirements,
the taxpayer, contractor, or subcontractor,
is required to contact a registered appren-
ticeship program for purposes of request-
ing the dispatch of qualified apprentices
to work on the construction, alteration,
or repair of the facility. Whether or not
the registered apprenticeship program
dispatches qualified apprentices, the tax-
payer is required to maintain and preserve
records to establish compliance for as
long as may be relevant.
The Apprenticeship Requirements
have also been revised in these final reg-
ulations that will reduce burdens for tax-
payers. In response to several comments,
the final regulations clarify that the
requirement to use qualified apprentices
only applies with respect to the construc-
tion of a facility prior to the facility being
placed in service, and does not apply to
alterations or repairs after the facility is
placed in service. Several comments were
received on the burden of the Proposed
Regulations that would have required the
renewal of requests for qualified appren-
tices every 120 days for taxpayers to con-
tinue to qualify for the Good Faith Effort
Exception. These final regulations have
extended the 120-day period to provide
that qualified apprentices only need to be
requested on an annual basis to qualify

Bulletin No. 2024–34 487 August 19, 2024
for the Good Faith Effort Exception. This
revision reduces burdens for taxpayers
and contractors who would have been
required to evaluate labor needs on a fre-
quent basis and provides taxpayers and
their contractors with flexibility to make
hiring decisions over a longer period of
time.
The taxpayer claiming the increased
credit or deduction amount is required to
report the payment of prevailing wages
and the utilization of qualified apprentices
consistent with the forms and instructions
of the IRS. Although the Treasury Depart-
ment and the IRS do not have sufficient
data to precisely determine the likely
extent of the increased costs of compli-
ance, the estimated burden of comply-
ing with the recordkeeping and reporting
requirements are described in Section II.
of this Special Analyses pertaining to the
Paperwork Reduction Act.
E. Alternatives considered
The Treasury Department and the
IRS considered alternatives to these final
regulations. The Office of Advocacy
commented that the recordkeeping and
reporting requirements of the Proposed
Regulations would likely discourage small
entities from bidding on clean energy
projects because they will incur height-
ened compliance costs without sharing
in the financial benefits of the increased
amounts of credit and deduction. In con-
trast, several commenters recommended
that the Treasury Department and the
IRS adopt additional pre-filing enforce-
ment processes to ensure that laborers
and mechanics are paid wages at rates not
less than the applicable prevailing wage
rates. Commenters suggested that the final
regulations impose significant additional
reporting and recordkeeping require-
ments, including many pre-filing report-
ing requirements such as certified weekly
payroll and monthly apprenticeship hours
reporting.
The final regulations strike an appro-
priate balance between these alternatives
that minimizes burdens for taxpayers and
their contractors while also ensuring that
laborers and mechanics are paid wages at
rates not less than the applicable prevail-
ing wage rates, and ultimately that the
IRS has sufficient information to admin-
ister the provisions related to increased
amounts of credit and deduction that are
claimed on returns filed by taxpayers.
Thus, the final regulations do not adopt
the pre-filing alternatives urged by the
commenters, including the DBA require-
ment of submitting weekly certified pay-
roll records to the IRS. The submission of
weekly payroll records to the IRS by tax-
payers would not assist the IRS with the
efficient administration of the increased
credit amount provisions and would
increase burdens for taxpayers. The Trea-
sury Department and the IRS also con-
sidered an alternative requirement that
taxpayers submit payroll records for all
laborers and mechanics at the time of
filing a return that claims an increased
credit amount. The Treasury Department
and the IRS determined that per-laborer
and per-mechanic payroll records would
not provide the IRS with useful infor-
mation and would also involve substan-
tial burdens for taxpayers to report such
information.
The Office of Advocacy also com-
mented that the IRFA did not analyze
how the Proposed Regulations treatment
of PLAs would increase the compliance
costs of the regulation to small construc-
tion firms because they primarily use non-
union labor. As discussed in Section V.D.
of this Summary of Comments and Expla-
nation of Revisions, the Treasury Depart-
ment and the IRS have determined that
PLAs may help taxpayers comply with the
PWA requirements. Further, studies show
that PLAs do not necessarily increase
construction costs. Lastly, a taxpayer may
choose to use a PLA for construction of its
facility; it is not a mandate.
A few commenters expressed con-
cern regarding the potential of the PWA
requirements to inflate construction
costs, increase the time to complete clean
energy projects, and lessen the participa-
tion of small businesses in such projects.
Commenters opined that by using the
DBA prevailing wage rates, the Treasury
Department and the IRS were setting
wage standards using a process that is
flawed and inaccurate, and that will have
inflationary impacts on construction costs.
The Prevailing Wage Requirements for an
increased credit (or deduction) amount are
set forth in the various provisions of the
IRA that direct the use of prevailing wage
rates as determined by the Secretary of
Labor in accordance with the DBA. Thus,
alternatives to using the DBA prevailing
rates were not adopted in the final regula-
tions as they would lack a statutory basis.
Further, DOL processes for setting stan-
dards are within the DOL’s jurisdiction
and thus outside the scope of these final
regulations.
F. Duplicative, overlapping, or conflicting
Federal rules
For facilities built under contracts
with the Federal Government, or with
Federal financial or other assistance pro-
vided under a Davis-Bacon Related Act,
the final regulations may overlap with the
rules under the DBA, 29 CFR parts 1, 5,
and 7. In all other instances, the final reg-
ulations do not duplicate, overlap, or con-
flict with any relevant Federal rules.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 requires that agencies
assess anticipated costs and benefits and
take certain other actions before issuing a
final rule that includes any Federal man-
date that may result in expenditures in
any one year by a State, local, or Tribal
government, in the aggregate, or by the
private sector, of $100 million (updated
annually for inflation). These final regula-
tions do not include any Federal mandate
that may result in expenditures by State,
local, or Tribal governments, or by the pri-
vate sector in excess of that threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding
requirements of section 6 of the Executive
order. These final regulations do not have
federalism implications and do not impose
substantial direct compliance costs on
State and local governments or preempt
State law within the meaning of the Exec-
utive order.

August 19, 2024 488 Bulletin No. 2024–34
VI. Executive Order 13175: Consultation
and Coordination with Indian Tribal
governments
Executive Order 13175 (Consulta-
tion and Coordination with Indian Tribal
governments) prohibits an agency from
publishing any rule that has Tribal impli-
cations if the rule either imposes substan-
tial, direct compliance costs on Indian
Tribal governments, and is not required
by statute, or preempts Tribal law, unless
the agency meets the consultation and
funding requirements of section 5 of the
Executive order. On September 25, 2023,
the Treasury Department and the IRS
held a consultation with Tribal leaders
requesting assistance in addressing ques-
tions related to the Proposed Regulations,
which informed the development of these
final regulations.
VII. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs desig-
nated this rule as a major rule as defined
by 5 U.S.C. 804(2).
Statement of Availability of IRS
Documents
IRS notices and other guidance cited in
this preamble are published in the Internal
Revenue Bulletin (or Cumulative Bulletin)
and are available from the Superintendent
of Documents, U.S. Government Publish-
ing Office, Washington, DC 20402, or by
visiting the IRS website at https://www.
irs.gov.
Drafting Information
The principal author of these final
regulations is the Office of the Associate
Chief Counsel (Passthroughs and Special
Industries). However, other personnel
from the Office of Chief Counsel, the
Treasury Department, and the IRS partic-
ipated in the development of these regu-
lations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is amended
as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by adding entries for
§§1.30C-3, 1.45-6 through 1.45-8, 1.45-
12, 1.45L-3, 1.45Q-6, 1.45U-3, 1.45V-
3, 1.45Y-3, 1.45Z-3, and 1.179D-3 in
numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.30C-3 also issued under 26
U.S.C. 30.
* * * * *
Section 1.45-6 also issued under 26
U.S.C. 45.
Section 1.45-7 also issued under 26
U.S.C. 45.
Section 1.45-8 also issued under 26
U.S.C. 45.
Section 1.45-12 also issued under 26
U.S.C. 45.
* * * * *
Section 1.45L-3 also issued under 26
U.S.C. 45L.
* * * * *
Section 1.45Q-6 also issued under 26
U.S.C. 45Q.
Section 1.45U-3 also issued under 26
U.S.C. 45U.
Section 1.45V-3 also issued under 26
U.S.C. 45V.
Section 1.45Y-3 also issued under 26
U.S.C. 45Y.
Section 1.45Z-3 also issued under 26
U.S.C. 45Z.
* * * * *
Section 1.179D-3 also issued under 26
U.S.C. 179D.
* * * * *
Par. 2. Sections 1.30C-1 through
1.30C-3 are added to read as follows:
§§1.30C-1 - 1.30C-2 [Reserved]
§1.30C-3 Rules relating to the
increased credit amount for prevailing
wage and apprenticeship.
(a) In general. If any qualified alter-
native fuel vehicle refueling project (as
defined by section 30C(g)(1)(B)) placed
in service during the taxable year satisfies
the requirements in paragraph (b) of this
section, the credit determined under sec-
tion 30C(a) for any qualified alternative
fuel vehicle refueling property of a char-
acter subject to an allowance for depreci-
ation that is part of such project is multi-
plied by five.
(b) Qualified alternative fuel vehicle
refueling project
requirements. A qualified
alternative fuel vehicle refueling project
satisfies the requirements of this para-
graph (b) if it is one of the following–
(1) A project the construction of which
began prior to January 29, 2023; or
(2) A project that meets the prevailing
wage requirements of section 45(b)(7) and
§1.45-7, the apprenticeship requirements
of section 45(b)(8) and §1.45-8, and the
recordkeeping and reporting requirements
of §1.45-12, all with respect to the con-
struction of any qualified alternative fuel
refueling property within the meaning of
section 30C before such project is placed
in service.
(c) Applicability date. This section
applies to qualified alternative fuel
vehicle refueling projects placed in ser-
vice in taxable years ending after June
25, 2024, and the construction of which
begins after June 25, 2024. Taxpay-
ers may apply this section to qualified
alternative fuel vehicle refueling proj-
ects placed in service in taxable years
ending on or before June 25, 2024, and
qualified alternative fuel vehicle refu-
eling projects placed in service in tax-
able years ending after June 25, 2024,
the construction of which begins before
June 25, 2024, provided that taxpayers
follow this section in its entirety and in
a consistent manner.
Par. 3. Sections 1.45-0 through 1.45-
12 are added to read as follows:
Sec.
* * * * *
1.45-0 Table of contents.
1.45-1 - 1.45-5 [Reserved]
1.45-6 Increased credit amount.
1.45-7 Prevailing wage requirements.
1.45-8 Apprenticeship requirements.
1.45-9 - 1.45-11 [Reserved]
1.45-12 Recordkeeping and reporting.
* * * * *

Bulletin No. 2024–34 489 August 19, 2024
§1.45-0 Table of contents.
This section lists the table of contents
for §§1.45-1 through 1.45-12.
§§1.45-1 - 1.45-5 [Reserved]
§1.45-6 Increased credit amount.
(a) In general.
(b) Qualified facility requirements.
(c) Definition of nameplate capacity
for purposes of determining maximum net
output under section 45(b)(6)(B)(i).
(d) Applicability date.
§1.45-7 Prevailing wage requirements.
(a) Prevailing wage requirements.
(b) Wage determinations.
(c) Curing a failure to satisfy the pre-
vailing wage requirements.
(d) Definitions.
(e) Applicability date.
§1.45-8 Apprenticeship requirements.
(a) Apprenticeship requirements.
(b) Labor hours requirement.
(c) Ratio requirement.
(d) Participation requirement.
(e) Examples.
(f) Exceptions to the apprenticeship
requirements.
(g) Definitions.
(h) Applicability date.
§§1.45-9 – 1.45-11 [Reserved]
§1.45-12 Recordkeeping and reporting.
(a) In general.
(b) Recordkeeping for the prevailing
wage and apprenticeship requirements.
(c) Recordkeeping for the prevailing
wage requirements.
(d) Recordkeeping for the apprentice-
ship requirements.
(e) Satisfaction of the recordkeeping
requirements.
(f) Applicability date.
§§1.45-1 - 1.45-5 [Reserved]
§1.45-6 Increased credit amount.
(a) In general. If a qualified facility (as
defined in section 45) satisfies the require-
ments in paragraph (b) of this section,
the amount of the renewable electricity
production credit determined under sec-
tion 45(a) (after the application of section
45(b)(1) through (5)) is equal to the credit
determined under section 45(a) multiplied
by five.
(b) Qualified facility requirements. A
qualified facility satisfies the requirements
of this paragraph (b) if it is one of the fol-
lowing–
(1) A facility with a maximum net out-
put (as determined under paragraph (c) of
this section) of less than one megawatt (as
measured in alternating current);
(2) A facility the construction of which
began prior to January 29, 2023; or
(3) A facility that meets the prevailing
wage requirements of section 45(b)(7) and
§1.45-7, the apprenticeship requirements
of section 45(b)(8) and §1.45-8, and the
recordkeeping and reporting requirements
of §1.45-12.
(c) Definition of nameplate capacity
for purposes of determining maximum net
output under section 45(b)(6)(B)(i). For
purposes of determining whether a facil-
ity has a maximum net output of less than
one megawatt (as measured in alternating
current) for purposes of section 45(b)(6)
(B)(i), nameplate capacity is determina-
tive. Nameplate capacity for an electrical
generating unit means the maximum elec-
trical generating output in megawatts that
the unit is capable of producing on a steady
state basis and during continuous operation
under standard conditions, as measured
by the manufacturer and consistent with
the definition provided in 40 CFR 96.202.
If applicable, the International Standard
Organization (ISO) conditions are used to
measure the maximum electrical generat-
ing output or usable energy capacity.
(d) Applicability date. This section
applies to qualified facilities placed in
service in taxable years ending after June
25, 2024, and the construction of which
begins after June 25, 2024. Taxpayers may
apply this section to qualified facilities
placed in service in taxable years ending
on or before June 25, 2024, and qualified
facilities placed in service in taxable years
ending after June 25, 2024, the construc-
tion of which begins before June 25, 2025,
provided that taxpayers follow this section
in its entirety and in a consistent manner.
§1.45-7 Prevailing wage requirements.
(a) Prevailing wage requirements—(1)
In general. Except as provided in para-
graphs (a)(2), (3), and (c) of this section,
a taxpayer claiming or transferring (under
section 6418) the increased credit amount
under section 45(b)(6)(B)(iii) with respect
to any qualified facility must satisfy the
requirements of section 45(b)(7) and this
section by ensuring that all laborers and
mechanics employed by the taxpayer or
any contractor or subcontractor in the
construction of such facility, and with
respect to any taxable year, for any por-
tion of such taxable year that is within the
10-year period beginning on the date the
qualified facility was placed in service,
the alteration or repair of such facility, are
paid wages at rates not less than the pre-
vailing rates for construction, alteration, or
repair of a similar character in the locality
in which such facility is located (Prevail-
ing Wage Requirements). If alteration or
repair of a qualified facility occurs during
any portion of such taxable year(s) within
the 10-year period after the qualified facil-
ity was placed in service, the Prevailing
Wage Requirements apply with respect to
such taxable year(s) in which that alter-
ation or repair occurs. If no alteration
or repair work occurs during the taxable
year(s) with respect to the qualified facil-
ity after the facility is placed in service,
the taxpayer is deemed to satisfy the Pre-
vailing Wage Requirements with respect
to such taxable year. Prevailing rates
are those rates most recently determined
by the Secretary of Labor in accordance
with 40 U.S.C. chapter 31, subchapter
IV (Davis-Bacon Act), and as set forth in
paragraph (b) of this section. See para-
graph (d) of this section for definitions of
terms used in this section.
(2) Transition relief. Taxpayers are
excepted from the Prevailing Wage
Requirements with respect to any activ-
ities that would be considered construc-
tion, alteration, or repair of the qualified
facility and that occurred prior to January
29, 2023.
(3) Relief for Indian Tribal govern-
ments. An Indian Tribal government, as
defined in section 30D(g)(9), and includ-
ing any subdivision, agency, or instrumen-
tality of the Indian Tribal government,
is excepted from the Prevailing Wage
Requirements with respect to laborers
and mechanics that are employees, within
the meaning of section 3121(d)(2), of
the Indian Tribal government. This para-

August 19, 2024 490 Bulletin No. 2024–34
graph (a)(3) also applies to a qualified
facility that is subject to joint ownership
arrangements that involve an Indian Tribal
government, including any subdivision,
agency, or instrumentality of the Indian
Tribal government. However, any activ-
ity that would be considered construction,
alteration, or repair of the qualified facility
that is not performed by Indian Tribal gov-
ernment employees (within the meaning
of section 3121(d)(2)), but that is instead
performed by or through a contractor or
subcontractor, is subject to the Prevail-
ing Wage Requirements described in this
paragraph (a).
(b) Wage determinations—(1) In gen-
eral. A taxpayer satisfies the Prevailing
Wage Requirements with respect to a qual-
ified facility, if the taxpayer ensures that
laborers and mechanics employed by the
taxpayer or any contractor or subcontrac-
tor in the construction, alteration, or repair
of the facility are paid wages at rates not
less than those set forth in the applicable
wage determination issued by the Secre-
tary of Labor pursuant to 40 U.S.C. 3142,
29 CFR part 1, and other implementing
guidance for the specified type of con-
struction in the geographic area where
that facility is located. If the construction,
alteration, or repair of a facility occurs in
more than one geographic area, the tax-
payer, contractor, or subcontractor must
use the applicable wage determination for
the work performed in each geographic
area. Subject to the requirements of this
section, the applicable wage determination
is a general wage determination described
in paragraph (b)(2) of this section (includ-
ing any additional classifications and
wage rates described in paragraph (b)(3)
of this section), or a supplemental wage
determination described in paragraph (b)
(3) of this section.
(2) General wage determinations—(i)
In general. Except as provided in para-
graph (b)(3) of this section, to satisfy the
Prevailing Wage Requirements described
in paragraph (a) of this section with
respect to a qualified facility, taxpayers
must ensure that laborers and mechanics
employed by the taxpayer or any contrac-
tor or subcontractor in the construction,
alteration, or repair of the facility are paid
wages at rates not less than those set forth
in the applicable general wage determina-
tion(s) published by the U.S. Department
of Labor on the approved website. The
applicable general wage determination is
the general wage determination in effect
for the specified type of construction in
the geographic area at the time a contract
for the construction, alteration, or repair
of the facility is executed by the taxpayer
(or the taxpayer’s designee, assignee, or
agent) and any contractor. The applicable
general wage determination will continue
in effect for any additional contracts exe-
cuted by such contractor with any subcon-
tractors with respect to the construction,
alteration, or repair of the facility. In the
absence of a contract (or if the date of exe-
cution of the contract cannot be reason-
ably determined), the applicable general
wage determination is the general wage
determination in effect for the specified
type of construction in the geographic
area when the construction, alteration, or
repair of the facility starts.
(ii) Wage determinations applicable
to Indian Tribal governments. If the tax-
payer is an Indian Tribal government, as
defined in section 30D(g)(9), including
any subdivision, agency, or instrumen-
tality of the Indian Tribal government,
and the construction, alteration, or repair
of a qualified facility occurs on Indian
land, as defined in 25 U.S.C. 3501(2),
that encompasses or overlaps with more
than one geographic area with respect to
which the U.S. Department of Labor has
issued a general wage determination, the
Indian Tribal government may choose
the general wage determination applica-
ble for any one of those geographic areas
and apply that general wage determina-
tion for work performed on any qualified
facility that is located on the Indian land.
This paragraph (b)(2)(ii) also applies to
a qualified facility that is subject to joint
ownership arrangements that involve an
Indian Tribal government, including any
subdivision, agency, or instrumentality
of the Indian Tribal government. If the
Indian Tribal government chooses to
use a single general wage determination
under this paragraph (b)(2)(ii), it must
maintain and preserve records sufficient
to document the applicable prevailing
wage rates for each laborer and mechanic
employed by the Indian Tribal govern-
ment or any contractor or subcontractor
with respect to each qualified facility on
Indian land.
(3) Supplemental wage determinations
and additional classifications and rates—
(i) Use of supplemental wage determina-
tions and additional classifications and
rates. In the event the Secretary of Labor
has not issued a general wage determina-
tion for the relevant geographic area and
type of construction for the facility, or
the Secretary of Labor has issued a gen-
eral wage determination for the relevant
geographic area and type of construction,
but one or more labor classifications for
the construction, alteration, or repair work
that will be done on the facility by labor-
ers or mechanics is not listed, the taxpayer
must ensure that laborers and mechanics
employed by the taxpayer or any contrac-
tor or subcontractor in the construction,
alteration, or repair of a facility are paid
wages at rates not less than those set forth
in a supplemental wage determination or
in an additional classification and wage
rate issued to the taxpayer by the U.S.
Department of Labor upon request by
the taxpayer, contractor, or subcontractor
in accordance with paragraph (b)(3)(ii)
of this section. A taxpayer, contractor, or
subcontractor may also request a supple-
mental wage determination if the location
of the facility involves work by covered
laborers and mechanics that spans more
than one contiguous geographic area.
(ii) Request for supplemental wage
determinations and additional classifica-
tions and rates—(A) Manner of making
request. A taxpayer, contractor, or subcon-
tractor requesting a supplemental wage
determination or additional classification
and wage rate under paragraph (b)(3)(i)
of this section must submit the request
to the U.S. Department of Labor at, U.S.
Department of Labor, Wage and Hour
Division, Branch of Construction Wage
Determinations, Washington, D.C. 20210,
by email at IRAprevailingwage@dol.gov,
or such other address as may be prescribed
in guidance and instructions issued by
the Administrator of the Wage and Hour
Division of the U.S. Department of Labor
(Wage and Hour Division).
(B) Timing of supplemental wage
determination requests. A taxpayer, con-
tractor, or subcontractor should make
requests for a supplemental wage deter-
mination no more than 90 days before
the taxpayer (or the taxpayer’s designee,
assignee, or agent) expects to execute the

Bulletin No. 2024–34 491 August 19, 2024
contract for the construction, alteration,
or repair of the facility with a contractor.
In the absence of a contract, the taxpayer,
contractor, or subcontractor should make
such requests no more than 90 days before
construction, alteration, or repair of the
facility starts.
(C) Timing of requests for prevailing
wage rates for additional classifications.
A request for prevailing wage rates for
additional classifications can be made any
time after a contract for the construction,
alteration, or repair of a facility has been
executed between the taxpayer (or the tax-
payer’s designee, assignee, or agent) and
a contractor. In the absence of a contract,
the taxpayer, contractor, or subcontractor
should make such requests no more than
90 days before construction, alteration,
or repair of the facility starts. If the tax-
payer, contractor, or subcontractor cannot
reasonably determine prior to execution of
the contract between the taxpayer (or the
taxpayer’s designee, assignee, or agent)
and the contractor or prior to the start of
the construction, alteration, or repair work
that an additional classification and wage
rate is necessary, the taxpayer, contractor,
or subcontractor should make such request
as soon as practicable after determining
that an additional classification and wage
rate is necessary.
(D) Required information. The request
for a supplemental wage determination
or additional classification and wage rate
must include the following information:
(1) The name of the taxpayer, contrac-
tor, or subcontractor requesting the sup-
plemental wage determination or wage
rate;
(2) The general wage determination(s),
if any, applicable to construction, alter-
ation, or repair of the facility;
(3) A description of the work to be per-
formed, including the type(s) of construc-
tion involved and, if the project involves
multiple types of construction, informa-
tion indicating the expected cost break-
down by type of construction;
(4) The geographic area in which the
facility is being constructed, altered, or
repaired, including the name and address
of the facility (if known);
(5) The date the taxpayer (or the tax-
payer’s designee, assignee, or agent)
expects to enter into a contract with a
contractor for which a supplemental wage
determination is needed or the date of exe-
cution of the contract with a contractor for
which a prevailing wage rate for an addi-
tional classification is needed;
(6) The start date of construction, alter-
ation, or repair at the facility;
(7) The labor classification(s) needed
for performance of the work on the facility
(excluding those for which wage rates are
available on an applicable general wage
determination);
(8) The duties to be performed by each
such labor classification on the facility;
(9) The proposed wage rate, including
any bona fide fringe benefits, for each
such labor classification;
(10) Any pertinent wage payment
information that may be available;
(11) Any additional relevant infor-
mation otherwise required by forms and
instructions published by the U.S. Depart-
ment of Labor; and
(12) Any additional information the
taxpayer, contractor, or subcontractor
wants the U.S. Department of Labor to
consider.
(iii) Issuance of supplemental wage
determinations and additional classifica-
tions and wage rates. After review, the
Wage and Hour Division will notify the
taxpayer, contractor, or subcontractor as
to the supplemental wage determination
or the labor classifications and wage rates
to be used for the type of work in question
in the geographic area in which the facility
is located. Supplemental wage determina-
tions issued by the Wage and Hour Divi-
sion are effective for 180 calendar days
from the date such determinations are
issued. If a supplemental wage determina-
tion is not incorporated into the contract
(or, in the absence of a contract, if con-
struction has not started) during the 180-
day period, the determination is no longer
effective, and a new supplemental wage
determination will need to be requested.
The Wage and Hour Division will resolve
requests for a prevailing wage rate for an
additional classification within 30 days of
receipt of the request or will advise the
requester within the 30-day period that
additional time is necessary.
(iv) Special rule for qualified facili-
ties located offshore. If a general wage
determination is not available, in lieu of
requesting a supplemental wage determi-
nation for a qualified facility located in an
offshore area within the outer continental
shelf of the United States, a taxpayer, con-
tractor, or subcontractor may rely on the
general wage determination for the rele-
vant category of construction that is appli-
cable in the geographic area closest to the
area in which the qualified facility will be
located.
(4) Reconsideration and review. A
taxpayer, contractor, or subcontractor
may seek reconsideration and review by
the Administrator of the Wage and Hour
Division of a general wage determination,
or a determination issued with respect to
a request for a supplemental wage deter-
mination or additional classification and
wage rate in accordance with the proce-
dures set forth in 29 CFR 1.8 and 5.13
and any subsequent guidance issued by
the U.S. Department of Labor. A tax-
payer, contractor, or subcontractor may
appeal the decision of the Administrator
of the Wage and Hour Division to the U.S.
Department of Labor’s Administrative
Review Board in accordance with the pro-
cedures set forth in 29 CFR part 7 and any
subsequent guidance issued by the U.S.
Department of Labor. Questions regard-
ing wage determinations and rates may be
referred to the Administrator of the Wage
and Hour Division.
(5) Timing of wage determination.
The applicable prevailing wage rates on
a general wage determination are those in
effect at the time a contract for the con-
struction, alteration, or repair of the qual-
ified facility is executed by the taxpayer
(or the taxpayer’s designee, assignee, or
agent) and a contractor. After the qualified
facility is placed in service, the applicable
prevailing wage rates on a general wage
determination for the alteration or repair
of a qualified facility are those in effect at
the time the contract for the alteration or
repair work is executed by the taxpayer
(or the taxpayer’s designee, assignee, or
agent) and a contractor. The applicable
prevailing wage rates on a general wage
determination at the time such contract
is executed apply to all subcontractors
of that contractor. If a taxpayer (or the
taxpayer’s designee, assignee, or agent)
executes separate contracts with more
than one contractor with respect to the
construction, alteration, or repair of the
qualified facility, then, for each such con-
tract, the applicable prevailing wage rates

August 19, 2024 492 Bulletin No. 2024–34
with respect to any work performed by
the contractor (and all subcontractors of
the contractor) are determined at the time
the contract is executed by the taxpayer
(or the taxpayer’s designee, assignee, or
agent). If no contract exists with respect
to the construction, alteration, or repair
of the qualified facility (or if the date of
execution of the relevant contract cannot
be reasonably determined), the applicable
prevailing wage rates on a general wage
determination are those in effect at the
time the construction, alteration, or repair
work starts. The applicable prevailing
wage rates of a general wage determina-
tion generally remain valid for the dura-
tion of the work performed with respect
to the construction, alteration, or repair of
the qualified facility by the taxpayer, con-
tractor, or subcontractor. A new general
wage determination is required to be used
if the contract between the taxpayer (or the
taxpayer’s designee, assignee, or agent)
and the contractor for work on a facility
is modified to include additional sub-
stantial construction, alteration, or repair
work not within the scope of work of the
original contract, or to require work to be
performed for an additional time period
not originally obligated, including if an
option to extend the term of a contract for
the construction, alteration, or repair is
exercised. A new general wage determina-
tion is not required if the contractor is sim-
ply given additional time to complete its
original commitment or if the additional
construction, alteration, and/or repair
work in the modification of the contract
is merely incidental. In circumstances in
which a new general wage determination
is required, the applicable prevailing wage
rates on a general wage determination are
those in effect at the time the additional
substantial work is agreed to or at the time
when an option to extend the term of the
contract is executed. If a taxpayer enters
into a contract for alteration or repair work
over an indefinite period of time that is
not tied to the completion of any specific
work, the applicable prevailing wage rates
must be updated on an annual basis on the
anniversary date of such contract. Gen-
eral wage determinations published on the
U.S. Department of Labor approved web-
site contain no expiration date and remain
valid until revised, superseded, or can-
celed. Any supplemental wage determina-
tion issued under paragraph (b)(3) of this
section applies without expiration from the
time the taxpayer incorporates the supple-
mental wage determination into the con-
tract provided that the supplemental wage
determination is incorporated into the
contract within 180 days of issuance of the
supplemental wage determination. If there
is no contract, any supplemental wage
determination issued under paragraph (b)
(3) of this section applies without expira-
tion from the time construction, alteration,
or repair starts provided the construction,
alteration, or repair starts within 180 days
of issuance of the supplemental determi-
nation. Any additional classification and
wage rate issued under paragraph (b)(3)
of this section applies without expira-
tion from the earlier of the date of issu-
ance or the first day in which work in the
additional classification was performed.
If a supplemental wage determination or
additional classification and wage rate is
issued after construction, alteration, or
repair of the facility has started, the appli-
cable prevailing rates apply retroactively
to the date construction started.
(6) Payment of wages. All laborers and
mechanics working on a qualified facility
must be paid in the time and manner con-
sistent with the regular payroll practices
of the taxpayer, contractor, or subcontrac-
tor, as applicable. The payment of wages
must be made without subsequent deduc-
tion or rebate on any account (except such
payroll deductions as are required by the
law or permitted by regulations issued by
the Secretary of Labor), and must consist
of the full amount of wages (including
bona fide fringe benefits or cash equiva-
lents thereof) due at the time of payment
computed at rates not less than those con-
tained in the applicable wage determina-
tion of the Secretary of Labor. A taxpayer
may discharge its wage obligations for
the payment of wages by paying the full
amount in cash, by making payments to a
bona fide fringe benefit provider or incur-
ring costs for bona fide fringe benefits, or
by a combination thereof. The taxpayer is
solely responsible for ensuring that labor
-
ers and mechanics are paid wages not less
than the prevailing rate whether employed
directly by the taxpayer, a contractor, or
a subcontractor in the construction, alter-
ation, or repair of the qualified facility for
purposes of claiming the increased credit
amount under section 45(b)(6)(B)(iii).
The rules set forth in 29 CFR 5.25 through
5.33, and any subsequent guidance issued
by the U.S. Department of Labor apply
with respect to costs for bona fide fringe
benefits that may be credited for purposes
of the payment of wages.
(7) Apprentices—(i) Rate of pay.
Apprentices who perform work with
respect to the construction, alteration, or
repair of a qualified facility consistent
with the requirements of section 45(b)(8)
and §1.45-8 may be paid wages at rates
that are less than the rates that would
otherwise apply under paragraph (a) of
this section. Every apprentice must be
paid wages at rates not less than the rates
specified by the registered apprentice-
ship program for the apprentice’s level
of progress, expressed as a percentage
of the journeyworker hourly rate spec-
ified for the apprentice’s classification
in the applicable wage determination. If
the apprentice is working in a classifica-
tion that is not part of the occupation of
the registered apprenticeship program,
the apprentice must be paid not less than
the applicable wage rate on the wage
determination for laborers or mechanics
working in that classification. Any indi-
vidual listed on payroll at an apprentice-
ship wage, who is not participating in a
registered apprenticeship program, must
be paid not less than the applicable wage
rate on the wage determination for the
classification of work actually performed
to satisfy the Prevailing Wage Require-
ments. In the event the U.S. Department
of Labor’s Office of Apprenticeship or a
State apprenticeship agency recognized
by the U.S. Department of Labor’s Office
of Apprenticeship withdraws approval of
an apprenticeship program, the taxpayer,
contractor, or subcontractor will no longer
satisfy the Prevailing Wage Requirements
by paying apprentices less than the appli-
cable predetermined rate for the work
performed until an acceptable program is
approved.
(ii) Bona fide fringe benefits. To sat-
isfy the Prevailing Wage Requirements,
apprentices must be paid bona fide fringe
benefits in accordance with the provisions
of the registered apprenticeship program.
If the apprenticeship program does not
specify the payment of bona fide fringe
benefits, apprentices must be paid the full

Bulletin No. 2024–34 493 August 19, 2024
amount of bona fide fringe benefits listed
on the wage determination for the applica-
ble classification in cash or in kind.
(iii) Apprenticeship ratio. The allow-
ance for payment of wages to apprentices
at rates less than the applicable prevail-
ing wage rates determined by the U.S.
Department of Labor is subject to any
applicable ratio of apprentices to jour-
neyworkers required under the registered
apprenticeship program and consistent
with section 45(b)(8)(B) and §1.45-8.
Any apprentice performing construction,
alteration, or repair work on the job site
in excess of the ratio permitted under the
registered program or the ratio applica-
ble to the geographic area of the facility
pursuant to 29 CFR 5.5(a)(4)(i) must be
paid not less than the applicable wage rate
on the wage determination for the work
actually performed to satisfy the Prevail-
ing Wage Requirements. Taxpayers, con-
tractors, or subcontractors have the dis-
cretion to determine which apprentice(s)
must receive the full prevailing wage rate
for hours worked if the applicable ratio
of apprentices to journeyworkers has not
been met.
(iv) Reciprocity of ratios and wage
rates. If a taxpayer, contractor, or sub-
contractor is performing construction,
alteration, or repair work on a facility in a
geographic area other than the geographic
area in which an apprenticeship program
is registered, the taxpayer, contractor,
or subcontractor must comply with the
apprentice-to-journeyworker ratios appli-
cable within the geographic area in which
the construction, alteration, or repair work
is being performed. If there is no appli-
cable ratio for the geographic area of the
facility, the ratio specified in the registered
apprenticeship program standard must be
observed. The wage rates (expressed in
percentages of the journeyworker’s hourly
rate) applicable within the geographic
area in which the construction, alteration,
or repair work is being performed must be
observed.
(c) Curing a failure to satisfy the pre-
vailing wage requirements—(1) In gen-
eral. If a taxpayer fails to ensure that all
laborers and mechanics employed by the
taxpayer or any contractor or subcontrac-
tor in the construction, alteration, or repair
of a qualified facility are paid wages at
rates not less than those set forth in the
applicable wage determination(s), such
taxpayer will be deemed to have satisfied
the Prevailing Wage Requirements with
respect to such facility for any year if the
taxpayer makes the correction and penalty
payments provided in paragraphs (c)(1)(i)
and (ii) of this section.
(i) Correction payment. The taxpayer
must pay any laborer or mechanic who
was paid wages at a rate below the rate
described in paragraph (b) of this section
for any pay period during such year an
amount equal to the sum of:
(A) The difference between the amount
of wages paid to such laborer or mechanic
for all hours worked during such period
and the amount of wages required to be
paid to such laborer or mechanic pursu-
ant to paragraph (a) of this section for all
hours worked during such period; and
(B) Interest on the amount determined
under paragraph (c)(1)(i)(A) of this sec-
tion at the Federal short-term rate as deter-
mined under section 6621 but substituting
“6 percentage points” for “3 percentage
points” in section 6621(a)(2).
(ii) Penalty payment. The taxpayer
must pay a penalty equal to $5,000 mul-
tiplied by the total number of laborers and
mechanics who were paid wages at a rate
below the rate described in paragraph (b)
of this section for any period during such
year.
(iii) Correction and penalty payments
not required if taxpayer ineligible for
increased credit amount under section
45(b)(6)(B)(iii). If the taxpayer claims
the increased credit amount under sec-
tion 45(b)(6)(B)(iii) and does not satisfy
the Prevailing Wage Requirements for the
claimed increased credit amount, then the
obligation to make correction and pen
-
alty payments under paragraphs (c)(1)
(i) and (ii) of this section applies in order
for the taxpayer to retain the credit. If the
IRS determines that a taxpayer claiming
the increased credit amount under section
45(b)(6)(B)(iii) failed to meet the Prevail-
ing Wage Requirements and the taxpayer
does not make the correction and penalty
payments provided in paragraphs (c)(1)(i)
and (ii) of this section, then no penalty is
assessed under paragraph (c)(1)(ii) of this
section, and the taxpayer is not eligible
for the increased credit amount under sec-
tion 45(b)(6)(B)(iii). Taxpayers that are
not eligible to claim the increased credit
amount may still be eligible to claim the
base amount of the renewable electricity
production credit under section 45(a) if
they meet the requirements to claim the
credit.
(iv) Correction and penalty payments
in the event of a transfer pursuant to sec-
tion 6418. To the extent an eligible tax-
payer, as defined in section 6418(f)(2), has
determined an increased credit amount
under section 45(b)(6) and transferred
such increased credit amount as part of
a specified credit portion, the obligation
to make correction and penalty payments
under paragraphs (c)(1)(i) and (ii) of this
section remains with the eligible taxpayer.
The obligation for an eligible taxpayer to
satisfy the Prevailing Wage Requirements
becomes binding upon the earlier of the fil-
ing of the eligible taxpayer’s return for the
taxable year for which the specified credit
portion is determined with respect to the
eligible taxpayer, or the filing of the return
of the transferee taxpayer for the year in
which the specified credit portion is taken
into account. If the IRS determines that
the eligible taxpayer failed to meet the
Prevailing Wage Requirements and the
eligible taxpayer does not then make the
correction and penalty payments provided
in paragraphs (c)(1)(i) and (ii) of this sec-
tion, then no penalty is assessed under
paragraph (c)(1)(ii) of this section, and
the eligible taxpayer is not eligible for the
increased credit amount determined under
section 45(b)(6)(B)(iii). Section 6418 and
the regulations under section 6418 control
for determining the impact of an eligible
taxpayer’s failure to cure on any trans-
feree taxpayer. The eligible taxpayer that
is not eligible to claim the increased credit
amount may still be eligible to claim the
base amount of the renewable electricity
production credit under section 45(a) if
they meet the requirements to claim the
credit.
(v) Special rule for laborers and
mechanics who cannot be located. A tax-
payer will be deemed to have paid a cor-
rection payment, under this paragraph (c)
(1), to a laborer or mechanic who cannot
be located if the taxpayer can establish
that correction payments have been made.
A taxpayer may establish that correction
payments have been made by demonstrat-
ing compliance with the applicable State
unclaimed property law and all Federal

August 19, 2024 494 Bulletin No. 2024–34
and State withholding and information
reporting requirements with respect to the
payments.
(vi) Examples. The provisions of this
paragraph (c)(1) are illustrated by the fol-
lowing examples, which do not take into
account any possible application of the
enhanced correction and penalty payment
requirements in the case of intentional dis-
regard under paragraph (c)(3) of this sec-
tion, the exception for wages paid before
a determination by the U.S. Department
of Labor under paragraph (c)(5) of this
section, or the penalty waiver under para-
graph (c)(6) of this section. In each exam-
ple, assume that the taxpayer uses the cal-
endar year as the taxpayer’s taxable year.
(A) Example 1. Taxpayer A starts construction
of a qualified facility on February 3, 2023. The
facility is placed in service on October 10, 2023,
and Taxpayer A claims the increased credit amount
under section 45(b)(6)(B)(iii) on its 2023 tax return.
Laborer X was employed in the construction,
alteration, or repair of the facility in calendar year
2023 for 20 weeks and was paid on a weekly basis.
Laborer X was paid wages below the prevailing
wage rate for all pay periods in calendar year 2023.
All other laborers and mechanics were paid wages
at the prevailing wage rate. The aggregate difference
between the amount of wages Laborer X was paid
and the amount required to be paid under paragraph
(a) of this section is $400 (that is, Laborer X worked
20 weeks during the year and was underpaid by $20
in each of those weeks). The amount of the correc-
tion payment Taxpayer A must make to Laborer X
is equal to $400 plus interest from the date of each
underpayment at the rate as determined under sec-
tion 6621 but substituting “6 percentage points” for
“3 percentage points” in section 6621(a)(2). The
total number of laborers underpaid for any period in
2023 was one, so the total amount of the penalty pay-
ment that Taxpayer A must pay to the IRS to retain
the increased credit amount is $5,000.
(B) Example 2. Taxpayer B starts construction of
a qualified facility on January 30, 2023. The facility
is placed in service on February 2, 2024. Taxpayer
B claims the increased credit amount under section
45(b)(6)(B)(iii) on its 2024 tax return. Taxpayer
B paid workers on a biweekly basis. Five laborers
employed in the construction of the facility were
paid wages at rates below the prevailing wage rates
in 2023, with the difference between the amount
they were paid and the amount of wages required
to be paid under paragraph (a) of this section being
$500 per laborer. One of those laborers remained
employed in the construction of the facility in 2024
and was paid wages below the prevailing wage rate
in 2024, with the difference between the amount the
laborer was paid and the amount of wages required
to be paid under paragraph (a) of this section being
$100. All other laborers and mechanics involved in
the construction, alteration, or repair of the facility
were paid wages at the prevailing wage rates. Tax-
payer B must make correction payments of $500 plus
interest from the date of each underpayment at the
rate as determined under section 6621 but substitut-
ing “6 percentage points” for “3 percentage points”
in section 6621(a)(2) to each of the five laborers that
were underpaid in 2023, and a correction payment of
$100 plus interest from the date of each underpay-
ment at the rate as determined under section 6621 but
substituting “6 percentage points” for “3 percentage
points” in section 6621(a)(2) to the laborer that was
underpaid in 2024. The total amount of the penalty
payment that Taxpayer B must pay to the IRS to
retain the increased credit amount is $30,000, which
includes $5,000 for each laborer underpaid in 2023
and $5,000 for the laborer underpaid in 2024.
(C) Example 3. Taxpayer C starts construction of
a qualified facility on January 30, 2023. The facility
is placed in service on February 2, 2024. Taxpayer
C claims the increased credit amount under section
45(b)(6)(B)(iii) on its 2024 tax return. Taxpayer C
paid workers on a biweekly basis. Laborer Y was
employed in the construction of the facility for 22
weeks in 2023 and was paid wages at rates below
the prevailing wage rates for the first 20 weeks of her
employment in the amount of $500 (that is, Laborer
Y was underpaid $50 in each of the 10 biweekly
periods). For the last biweekly pay period, Tax-
payer C paid Laborer Y the correct prevailing rate
for the work performed during the period, plus $500
for the amounts that were underpaid in the first 10
periods. All other laborers and mechanics involved
in the construction, alteration, or repair of the facility
were paid at the prevailing wage rates. Taxpayer C
is required to make a correction payment to Laborer
Y in the amount of the interest from the date of each
underpayment at the rate as determined under sec-
tion 6221 but substituting “6 percentage points” for
“3 percentage points” in section 6221(a)(2) to the
laborer that was underpaid in 2023. To retain the
increased credit amount, Taxpayer C must make a
penalty payment of $5,000 to the IRS with respect
to Laborer Y.
(2) Deficiency procedures not to apply.
The penalty payment required by para-
graph (c)(1)(ii) of this section may be
assessed and collected without regard to
the deficiency procedures provided by
subchapter B of chapter 63 of the Code.
Any determination by the IRS disallowing
a claim for the increased credit amount
under section 45(b)(6) will be subject to
the deficiency procedures of subchapter B
of chapter 63.
(3) Intentional disregard—(i) Applica-
tion of section 45(b)(7)(B)(iii). If the IRS
determines that any failure to satisfy the
Prevailing Wage Requirements in para-
graph (a) of this section is due to inten-
tional disregard of the requirements—
(A) The correction payment under para-
graph (c)(1)(i) of this section is increased
to three times the sum determined in para-
graph (c)(1)(i) of this section; and
(B) The penalty payment under para-
graph (c)(1)(ii) of this section is increased
to $10,000 multiplied by the total number
of laborers and mechanics who were paid
wages at a rate below the rate described
in paragraph (b) of this section for any
period during such year.
(ii) Meaning of intentional disregard.
A failure to ensure that any laborer or
mechanic employed in the construction,
alteration, or repair of a qualified facility
is paid wages at the prevailing wage rate is
due to intentional disregard if it is know-
ing or willful.
(iii) Facts and circumstances consid-
ered. The facts and circumstances that
are considered in determining whether
a failure to satisfy the Prevailing Wage
Requirements is due to intentional disre-
gard include, but are not limited to—
(A) Whether the failure was part of a
pattern of conduct that includes repeated
or systemic failures to ensure that the
laborers and mechanics were paid wages
at rates not less than the applicable pre-
vailing wage rate, including failures to
pay prevailing wages as required under
other applicable laws;
(B) Whether the taxpayer took steps to
determine or review the applicable classi-
fications of laborers and mechanics, such
as through a quarterly, or more frequent,
review of the applicable classifications of
laborers and mechanics according to the
actual duties performed by those laborers
and mechanics;
(C) Whether the taxpayer took steps
to determine or review the applicable
prevailing wage rate(s) for laborers and
mechanics to ensure usage of correct rates
by all contractors and subcontractors, such
as through a quarterly, or more frequent,
review of the prevailing wage rates;
(D) Whether the taxpayer promptly
cured any failures to ensure that laborers
and mechanics were paid wages at rates
not less than the applicable prevailing
rates;
(E) Whether the taxpayer has been
required to make a penalty payment under
paragraph (c)(1)(ii) of this section in pre-
vious years;
(F) Whether the taxpayer undertook
(or engaged an independent third party
to aid in conducting) a quarterly, or more
frequent, review of wages paid to mechan-
ics and laborers to ensure that wages at
rates not less than the applicable prevail-
ing wage rates were paid (including by
reviewing payroll information of contrac-

Bulletin No. 2024–34 495 August 19, 2024
tors and subcontractors or by requiring
contractors and subcontractors to regu-
larly provide payroll information to the
taxpayer or a third party acting on behalf
of the taxpayer);
(G) Whether the taxpayer included pro-
visions in any contracts entered into with
contractors that required the contractors
and any subcontractors retained by the
contractors to pay laborers and mechanics
wages at rates not less than the prevailing
wage rates and maintain records to ensure
the taxpayer’s compliance with record-
keeping requirements set forth in §1.45-
12;
(H) Whether the taxpayer posted in a
prominent place at the qualified facility
or otherwise provided written notice to
laborers and mechanics during the con-
struction, alteration, or repair of the qual-
ified facility, the applicable wage rate(s)
as determined by the U.S. Department of
Labor for all classifications of work to be
performed for the construction, alteration,
or repair of the facility, that in order to
be eligible to claim certain tax benefits,
employers must ensure that laborers and
mechanics are paid wages at rates not less
than such wage rates, and instructions on
how laborers and mechanics may contact
the taxpayers’ personnel departments or
taxpayers’ managers to report suspected
failures to pay prevailing wages and/or
suspected failures to classify workers in
accordance with applicable wage deter-
minations, employment tax violations,
or violations of workplace standard laws
without retaliation or adverse action;
(I) Whether laborers and mechanics
were given the opportunity to acknowl-
edge notice provided by the taxpayer,
contractor, or subcontractor that in order
to be eligible to claim certain tax bene-
fits, taxpayers must ensure that laborers
and mechanics employed by the taxpayer,
contractor, or subcontractor in the con-
struction of a qualified facility are paid
wages at rates not less than prevailing
wage rates;
(J) Whether the taxpayer had in place
procedures whereby laborers and mechan-
ics could report suspected failures to pay
prevailing wages and/or suspected failures
to classify workers in accordance with the
wage determination of workers, employ-
ment tax violations, or violations of work-
place standard laws to appropriate per-
sonnel departments or managers without
retaliation or adverse action, and whether
the taxpayer investigated such reports by
laborers and mechanics and had internal
controls to prevent failures to pay prevail-
ing wages and classify workers in accor-
dance with the wage determination of
workers, employment tax violations, and
violations of workplace standard laws;
(K) Whether all laborers and mechan-
ics were provided with a written notice of
the rights conferred by the whistleblower
provisions of the Taxpayer First Act in
section 7623(d);
(L) Whether all laborers and mechanics
were provided with paystubs (or access to
individual payroll records) reflecting the
amount they were paid per pay period
(including the specific hourly rate and all
deductions from wages);
(M) Whether the taxpayer investigated
any complaints of retaliation or adverse
action resulting from, reports of suspected
failures to pay prevailing wages and/or
classify workers in accordance with appli-
cable wage determinations, employment
tax violations, or violations of workplace
standard laws and took appropriate actions
to remedy any retaliation or adverse action
and prevent it from reoccurring;
(N) Whether the taxpayer, contractor,
or subcontractor contracted with contrac-
tors who, at the time the work was per-
formed, was known by the taxpayer, con-
tractor, or subcontractor to be debarred by
a municipality, State, or the U.S. Depart-
ment of Labor for violations related to the
underpayment of local, State, or Federal
prevailing wages; and
(O) Whether the taxpayer failed to
maintain and preserve records in accor-
dance with §1.45-12 sufficient to estab-
lish compliance with the prevailing wage
requirements for relevant tax years.
(iv) Examples. The provisions of this
paragraph (c)(3) are illustrated by the fol-
lowing examples, which take into account
certain facts and circumstances described
in paragraph (c)(3)(iii) of this section, that
are considered in applying the enhanced
correction and penalty payment require
-
ments in the case of intentional disregard.
These examples do not take into account
any possible application of the exception
for wages paid before a determination by
the U.S. Department of Labor under para-
graph (c)(5) of this section, or the pen-
alty waiver under paragraph (c)(6) of this
section. In each example, assume that the
taxpayer uses the calendar year as the tax-
payer’s taxable year.
(A) Example 1. Taxpayer D failed to satisfy the
Prevailing Wage Requirements with respect to the
construction of a qualified facility. Taxpayer D did
not include contract language that requires the pay-
ment of prevailing wages in the contract executed
with the contractor nor did it require similar contract
provisions in any subcontracts. Taxpayer D did not
post in a prominent place at the qualified facility
or otherwise notify any laborers or mechanics that
in order to claim certain tax benefits (the increased
credit amount described in section 45(b)(6)(B)(iii))
taxpayers must ensure that laborers and mechan-
ics are paid wages at rates not less than prevailing
wage rates for construction of the qualified facility.
Taxpayer D did not have a process for laborers and
mechanics to report suspected failures to pay pre-
vailing wages and/or suspected failures to classify
workers in accordance with applicable wage determi-
nations. Additionally, Taxpayer D did not have a pro-
cedure for the review of wages paid to laborers and
mechanics to ensure that wages at rates not less than
the applicable prevailing wage rate were paid, nor
did Taxpayer D undertake any actual review of the
wages paid to any laborers and mechanics employed
in the construction of the qualified facility. Taxpayer
D failed to maintain any records documenting wages
paid to laborers and mechanics in connection with
the construction of the facility. Considering all of
the facts and circumstances, Taxpayer D’s failure to
satisfy the Prevailing Wage Requirements would be
considered due to intentional disregard for purposes
of this paragraph (c)(3) and Taxpayer D would be
subject to the enhanced correction and penalty pay-
ments described in paragraph (c)(3)(i) of this section.
(B) Example 2. Taxpayer E failed to satisfy
the Prevailing Wage Requirements with respect to
the construction of a qualified facility. Taxpayer E
included contract language that requires the pay-
ment of prevailing wages in the contract executed
with the contractor and required similar language
be included in all subcontracts. Taxpayer E posted
in a prominent place at the qualified facility that in
order to claim tax benefits (that is, the increased
credit amount described in section 45(b)(6)(B)(iii))
employers must ensure that laborers and mechanics
are paid wages at rates not less than prevailing wage
rates for the construction of the qualified facility.
Additionally, Taxpayer E created procedures for a
quarterly review of the applicable classifications
of laborers and mechanics according to the actual
duties performed by those laborers and mechanics
and the actual wages paid to laborers and mechanics.
In cases in which reviews found any instance that
a laborer or mechanic was paid wages at rates less
than the applicable prevailing wage rates, Taxpayer
E promptly cured the failure. Considering all of the
facts and circumstances, Taxpayer E’s failure to sat-
isfy the Prevailing Wage Requirements would not be
considered due to intentional disregard for purposes
of this paragraph (c)(3) and Taxpayer E would not be
subject to the enhanced correction and penalty pay-
ments described in paragraph (c)(3)(i) of this section.
Taxpayer E would be subject to the normal correc-

August 19, 2024 496 Bulletin No. 2024–34
tion and penalty payments described in paragraph (c)
(1)(i) of this section.
(v) Rebuttable presumption of no inten-
tional disregard. If a taxpayer makes the
correction and penalty payments required
by paragraphs (c)(1)(i) and (ii) of this
section before receiving notice of an
examination from the IRS with respect
to a claim for the increased credit amount
under section 45(b)(6), the taxpayer will
be presumed not to have intentionally
disregarded the Prevailing Wage Require-
ments in paragraph (a) of this section. The
IRS may rebut this presumption based on
the relevant facts and circumstances.
(4) Limitation on the availability of
cure—(i) 180-day limit. In the case of
a final determination by the IRS with
respect to any failure by the taxpayer to
satisfy the Prevailing Wage Requirements
in paragraph (a) of this section, the cure
provision in paragraph (c)(1) of this sec-
tion does not apply unless the correction
and penalty payments described in para-
graphs (c)(1)(i) and (ii) of this section are
made by the taxpayer on or before the
date that is 180 days after the date of such
determination.
(ii) Final determination. For purposes
of paragraph (c)(4)(i) of this section, a
final determination occurs on the date the
IRS sends to the taxpayer a notice stat-
ing that the taxpayer has failed to satisfy
the Prevailing Wage Requirements under
paragraph (a) of this section.
(5) Exception for wages paid before
a supplemental wage determination or
additional classification and wage rate is
issued by the U.S. Department of Labor
Wage and Hour Division. If a taxpayer
has requested a supplemental wage deter-
mination or an additional classification
and wage rate from the Wage and Hour
Division in accordance with paragraph
(b)(3)(ii) of this section and the Wage
and Hour Division makes a wage deter-
mination or issues an additional classifi-
cation and wage rate determination after
the construction, alteration, or repair of a
qualified facility has started, the taxpayer
will not be considered to have failed to
meet the Prevailing Wage Requirements
under paragraph (a) of this section with
respect to wages paid to any mechanic or
laborer whose wage rate was subject to
the request and who was paid below the
prevailing wage rate before the determina-
tion by the Wage and Hour Division if the
taxpayer makes a payment within 30 days
of the determination to each laborer or
mechanic equal to the difference between
the amount of wages paid to such laborer
or mechanic before the determination and
the amount of wages required to be paid
to such laborer or mechanic pursuant to
paragraph (a) of this section during such
period.
(6) Waiver of the penalty—(i) Avail-
ability of waiver. The penalty payment
required by paragraph (c)(1)(ii) of this
section to cure a failure to satisfy the Pre-
vailing Wage Requirements in paragraph
(a) of this section is waived with respect
to a laborer or mechanic employed in the
construction, alteration, or repair of a qual-
ified facility during a calendar year if the
taxpayer makes the correction payment
required by paragraph (c)(1)(i) of this sec-
tion by the last day of the first month that
follows the end of the calendar quarter in
which the failure occurred, and:
(A) The laborer or mechanic is paid
wages at rates less than the amount
required to be paid under paragraph (b) of
this section for not more than 10 percent
of all pay periods of the calendar year (or
part thereof) during which the laborer or
mechanic was employed in the construc-
tion, alteration, or repair of the qualified
facility; or
(B) The difference between the amount
the laborer or mechanic was paid during
the calendar year (or part thereof) and the
amount required to be paid under para-
graph (b) of this section is not greater than
5 percent of the amount required to be
paid under paragraph (b) of this section.
(ii) Project labor agreements. The
penalty payments required by paragraphs
(c)(1)(ii) and (c)(3)(i)(B) of this section
to cure a failure to satisfy the Prevailing
Wage Requirements in paragraph (a) of
this section do not apply with respect to
a laborer or mechanic employed in the
construction, alteration, or repair work of
a qualified facility if the work is done pur-
suant to a pre-hire collective bargaining
agreement with one or more labor orga-
nizations that establishes the terms and
conditions of employment for a specific
construction project (Qualifying Project
Labor Agreement) and any correction
payment owed to any laborer or mechanic
is paid on or before the date on which the
increased credit amount is claimed under
section 45(b)(6). In order to be considered
a Qualifying Project Labor Agreement,
such agreement must at a minimum:
(A) Bind all contractors and sub-
contractors on the construction project
through the inclusion of appropriate spec-
ifications in all relevant solicitation provi-
sions and contract documents;
(B) Contain guarantees against strikes,
lockouts, and similar job disruptions;
(C) Set forth effective, prompt, and
mutually binding procedures for resolving
labor disputes arising during the term of
the project labor agreement;
(D) Contain provisions to pay wages at
rates not less than the prevailing rates in
accordance with subchapter IV of chapter
31 of title 40 of the United States Code;
(E) Contain provisions for referring
and using qualified apprentices consistent
with section 45(b)(8)(A) through (C) and
guidance issued thereunder; and
(F) Be a collective bargaining agree-
ment with one or more labor organizations
(as defined in 29 U.S.C. 152(5)) of which
building and construction employees
are members, as described in 29 U.S.C.
158(f).
(iii) Transition Waiver. The penalty
payment required by paragraph (c)(1)(ii)
of this section to cure a failure to satisfy
the Prevailing Wage Requirements in
paragraph (a) of this section is waived
with respect to a laborer or mechanic
who performed work in the construction,
alteration, or repair of a qualified facility
on or after January 29, 2023, and prior to
June 25, 2024, if the taxpayer relied upon
Notice 2022-61, 2022-52 I.R.B. 560, or
the Proposed Regulations (REG-100908-
23) (88 FR 60018), corrected in 88 FR
73807 (Oct. 27, 2023), corrected in 89 FR
25550 (April 11, 2024), to determine when
the activities of any laborer or mechanic
became subject to the Prevailing Wage
Requirements, and the taxpayer makes
the correction payments required by para-
graph (c)(1)(i) of this section with respect
to such laborer and mechanics within 180
days of June 25, 2024.
(iv) Examples. The provisions of this
paragraph (c)(6) are illustrated by the fol-
lowing examples, which do not take into
account any possible application of the
enhanced correction and penalty payment
requirements in the case of intentional

Bulletin No. 2024–34 497 August 19, 2024
disregard under paragraph (c)(3) of this
section or the exception for wages paid
before a determination by the U.S. Depart-
ment of Labor under paragraph (c)(5) of
this section. In each example, assume that
the taxpayer uses the calendar year as the
taxpayer’s taxable year.
(A) Example 1. Taxpayer F starts construction of
a qualified facility on February 1, 2023. The facility
is placed in service on October 10, 2023, and Tax-
payer F claims the increased credit amount under
section 45(b)(6)(B)(iii) on its 2023 tax return filed
on April 15, 2024. Taxpayer F employs Laborer Z
in the construction of the facility for a total of 36
weekly pay periods. Taxpayer F pays Laborer Z
wages at the prevailing wage rate for all pay peri-
ods except for the pay periods ending on April 8,
April 22, and May 20. Under the applicable prevail-
ing wage rate, Laborer Z should have been paid a
total of $35,000 in 2023, but was instead paid only
$30,000. Taxpayer F ensures that all other laborers
and mechanics employed in the construction, alter-
ation, or repair of the facility are paid wages at the
prevailing wage rate. Taxpayer F becomes aware
of the failure on June 1, 2023. On June 19, 2023,
Taxpayer F pays Laborer Z the correction payment
required by paragraph (c)(1)(i) of this section. The
penalty waiver applies to Taxpayer F. Although the
difference between the amount Laborer Z was paid
in 2023 and the amount required to be paid under the
applicable prevailing wage rate was greater than five
percent ($5,000/$35,000 = 14.29%), Laborer Z was
paid below the prevailing wage rate for only three
out of 36 pay periods, or 8.3% of the applicable pay
periods. Furthermore, Taxpayer F made the correc-
tion payment before the last day of the first month
that follows the end of the calendar quarter in which
the failure occurred.
(B) Example 2. Taxpayer G starts construction of
a qualified facility on February 1, 2024. The facility
is placed in service on October 10, 2024, and Tax-
payer G claims the increased credit under section
45(b)(6)(B)(iii) on its 2024 tax return filed on April
15, 2025. Taxpayer G hires Contractor M to assist in
the construction, and Contractor M employs Laborer
Y in the construction of the facility for a total of 36
pay periods. Contractor M pays Laborer Y wages at
the prevailing wage rate for all pay periods except
for the pay periods ending on February 24 and March
2 of 2024. Under the applicable prevailing wage rate,
Laborer Y should have been paid a total of $50,000
in 2024, but was instead paid only $49,000. All
other laborers and mechanics employed in the con-
struction, alteration, or repair of the facility are paid
wages at the prevailing wage rate. Taxpayer G learns
on January 1, 2025, that Laborer Y was paid wages
at rates that were less than the prevailing wage rates,
and on January 19, 2025, Taxpayer G pays Laborer
Y the correction payment required by paragraph (c)
(1)(i) of this section. The penalty waiver does not
apply to Taxpayer G. Laborer Y was paid wages at
rates below the prevailing wage rate for two out of
36 pay periods, or 5.5% of the applicable pay peri-
ods, and the difference between the amount Laborer
Y was paid in 2024 and the amount required to be
paid under the applicable prevailing wage rate was
$1,000, which is only 2% of the amount required to
be paid under the applicable prevailing wage rate.
However, because Taxpayer G did not make the cor-
rection payments until January 19, 2025, which was
later than the last day of the first month that followed
the end of the calendar quarter in which the failure
occurred, Taxpayer G does not qualify for the pen-
alty waiver. Taxpayer G must pay a penalty of $5,000
with respect to the failure.
(C) Example 3. Taxpayer H starts the construc-
tion of a qualified facility on April 8, 2024. The
facility is placed in service on December 1, 2024,
and Taxpayer H claims the increased credit amount
under section 45(b)(6)(B)(iii) on its 2024 tax return
filed on April 15, 2025. Taxpayer H employs Laborer
X in the construction of the facility for a total of 34
pay periods. Due to a failure to classify workers in
accordance with the wage determination, Taxpayer
H pays Laborer X wages at rates below the prevail-
ing wage rates for the first 12 pay periods. Under the
applicable prevailing wage rate, Laborer X should
have been paid $20,000 during those 12 pay periods,
but was instead paid only $17,000. All other laborers
and mechanics employed in the construction, alter-
ation, or repair of the facility were paid wages at the
prevailing wage rates. Taxpayer H becomes aware of
the failure on July 15, 2024, and on July 30, 2024,
Taxpayer H pays Laborer X the correction pay-
ments required by paragraph (c)(1)(i) of this section.
For the 22 pay periods from July 1, 2024, through
December 1, 2024, Taxpayer H pays Laborer X the
correct prevailing wage rate in amounts that total
$41,000. The penalty waiver applies to Taxpayer H.
Taxpayer H made the correction payment on July
30, 2024, which was before the last day of the first
month that followed the end of the quarter in which
the failures occurred. Although Laborer X was paid
wages at a rate below the prevailing wage rate for
35% (12 pay periods with underpayments/34 total
pay periods) of the applicable pay periods, the differ-
ence between the total amount Laborer X was paid
in 2024 and the amount required to be paid under the
applicable prevailing wage rate was $3,000, which is
only 4.9% of the total amount required to be paid to
Laborer X under the applicable prevailing wage rate
($3,000/$61,000).
(D) Example 4. Taxpayer I begins construc-
tion of a qualified facility on August 29, 2024. The
facility is placed in service on June 30, 2025, and
Taxpayer I claims the increased credit amount under
section 45(b)(6)(B)(iii) on its 2025 tax return. Tax-
payer I employs Laborer W in the construction of
the facility for a total of 25 weekly pay periods in
2025. Taxpayer I pays Laborer W wages at or above
the prevailing wage rate for all pay periods except
for the pay periods ending on April 12, May 10,
and June 14. Under the applicable prevailing wage
rate, Laborer W should have been paid $25,000 in
2025, but was instead paid only $20,000. Taxpayer
I ensures that all other laborers and mechanics
employed in the construction, alteration, or repair
of the facility are paid at the prevailing wage rate.
Taxpayer I has in place a pre-hire collective bargain-
ing agreement, but the agreement does not contain a
provision for referring and using qualified appren-
tices. Taxpayer I becomes aware of the failure to pay
Laborer W at the prevailing wage rate on June 30,
2025, and on July 4, 2025, Taxpayer I pays Laborer
W the correction payment required by paragraph (c)
(1)(i) of this section. The penalty waiver does not
apply to Taxpayer I. The difference between the
amount Laborer W was paid in 2025 and the amount
required to be paid under the applicable prevailing
wage rate was $5,000, which is 20% of the amount
required to be paid under the applicable prevailing
wage rate. Laborer W was paid below the prevailing
wage rate for three out of 25 pay periods, or 12%
of the applicable pay periods. Taxpayer I does not
have in place a Qualifying Project Labor Agreement
because the pre-hire collective bargaining agree-
ment does not contain a provision for referring and
using qualified apprentices as required by paragraph
(c)(6)(ii)(E) of this section.
(E) Example 5. Taxpayer J intends to construct
a qualified facility and claim the increased credit
amount under section 45(b)(6)(B)(iii). Taxpayer J
executes a contract for the construction of the facil-
ity and engages in construction activities as defined
in paragraph (d)(3) of this section starting August 1,
2023. Taxpayer J began construction as of Septem-
ber 1, 2023, pursuant to the Physical Work Test in
Notice 2022-61. During the period of August 1 to
September 1 of 2023, Taxpayer J paid all laborers
and mechanics wages at rates below the applicable
prevailing wage rates in reliance on Notice 2022-61
regarding when construction began for purposes of
satisfying the requirements of section 45(b)(7). After
September 1, 2023, Taxpayer J paid all laborers and
mechanics wages at the prevailing wage rate for the
appropriate classification for work performed on the
facility. Within 180 days of June 25, 2024, Taxpayer
J makes correction payments to all affected laborers
and mechanics for the period of August 1, 2023, to
September 1, 2023, equal to the amount described in
paragraph (c)(1)(i) of this section. Pursuant to para-
graph (c)(6)(iii) of this section, the penalty under
paragraph (c)(1)(ii) of this section is waived.
(d) Definitions. Solely for purposes
of this section, the following definitions
apply:
(1) Apprentice. The term apprentice
has the same meaning as qualified appren-
tice in §1.45-8(g)(8).
(2) Bona fide fringe benefits. The term
bona fide fringe benefits means fringe
benefits described in 29 CFR part 5. Bona
fide fringe benefits include medical or
hospital care, pensions on retirement or
death, compensation for injuries or illness
resulting from occupational activity, or
insurance to provide any of the foregoing;
unemployment benefits; life insurance,
disability insurance, sickness insurance,
or accident insurance; vacation or holi-
day pay; defraying costs of apprenticeship
or other similar programs; or other bona
fide fringe benefits (each as described in
29 CFR part 5 and other U.S. Department
of Labor guidance). Consistent with 29
CFR 5.29, bona fide fringe benefits do not
include benefits required by other Federal,
State, or local law.

August 19, 2024 498 Bulletin No. 2024–34
(3) Construction, alteration, or repair.
The term construction, alteration, or
repair generally means those activities,
described in 29 CFR 5.2 as being con-
struction, prosecution, completion, or
repair that are performed with respect to a
qualified facility as defined under section
45. Construction, alteration, or repair does
not include any activities that are excluded
from the requirement to pay prevailing
wages under the definitions described in 29
CFR 5.2. Repair work normally includes
an activity that improves the facility, either
by fixing something that is not functioning
properly or by improving upon the facili-
ty’s existing condition; involves the cor-
rection of individual problems or defects
as separate and segregable incidents and is
not continuous or recurring; or improves
the facility’s structural strength, stability,
safety, capacity, efficiency, or usefulness.
Construction, alteration, or repair does not
include work that is ordinary and regu-
lar in nature that is designed to maintain
and preserve existing functionalities of a
facility after it is placed in service. Work
designed to maintain and preserve func-
tionality of a facility after it is placed in
service includes basic maintenance such
as regular inspections of the facility, reg-
ular cleaning and janitorial work, regu-
lar replacement of materials with limited
lifespans such as filters and light bulbs,
and the regular calibration of equipment.
However, such work that occurs before
the facility is placed in service may con-
stitute construction for which prevailing
wages must be paid in order to claim the
increased credit amount. Maintenance
generally includes work that is needed to
keep the facility in its current condition so
that it may continue to be used and work
that does not improve the current condi-
tion or function of a facility. Maintenance
is routinely scheduled and continuous or
recurring. Ultimately, the determination of
whether an activity can be categorized as
construction, alteration, or repair is depen-
dent on the facts and circumstances. This
definition has no bearing on any other sec-
tions of the Code, including any determi-
nation of construction, alteration, repair,
or maintenance under sections 162 or 263
of the Code, unless specified otherwise in
the Code or in this chapter.
(4) Contractor. The term contractor
means any person that enters into a con-
tract directly with the taxpayer (or the tax-
payer’s designee, assignee, or agent) for
the construction, alteration, or repair of a
qualified facility.
(5) Employed. The term employed
means performing the duties of a laborer
or mechanic for the taxpayer, contractor,
or subcontractor (as applicable), regard-
less of whether the individual would be
characterized as an employee or an inde-
pendent contractor for other Federal tax
purposes.
(6) General wage determination. The
term general wage determination means
a wage determination issued by the U.S.
Department of Labor and published on the
approved website. A general wage deter-
mination provides the minimum hourly
wage rates (both the basic hourly rate of
pay and bona fide fringe benefit rates)
that the U.S. Department of Labor has
determined are prevailing for laborers and
mechanics in specified types of construc-
tion in a given geographic area.
(7) Geographic area and locality. The
terms geographic area and locality mean
the county, independent city, or other
civil subdivision of the State in which a
qualified facility is located. The terms
geographic area and locality also include
areas located offshore of the United States
and within the outer continental shelf of
the United States and the U.S. territo-
ries. If construction, alteration, or repair
work is performed in multiple counties,
independent cities, or other civil subdivi-
sions, the geographic area may include all
counties, independent cities, or other civil
subdivisions in which the work will be
performed. The locality in which a facility
is located is defined as the physical place
or places where the facility will be placed
in service and remain. The locality of the
facility also includes secondary locations
where a significant portion of the facility is
constructed, altered, or repaired provided
that such construction is for specific use
at that facility and does not simply reflect
the manufacture or construction of a prod-
uct made available to the general public,
and provided further that the site is either
established specifically for, or dedicated
exclusively for a specific period of time
to, the construction, alteration, or repair
of the facility. A significant portion means
one or more entire portion(s) or module(s)
of the facility, such as a completed room or
structure, with minimal construction work
remaining other than the installation and/
or final assembly of the portions or mod-
ules at the place where the facility will be
placed in service and remain. A significant
portion does not include materials or pre-
fabricated component parts delivered to
the location of a facility. A specific period
of time means a period of weeks, months,
or more, and does not include circum-
stances in which a site at which multiple
facilities are in progress is shifted exclu-
sively to a single facility for a few hours
or days in order to meet a deadline. The
locality of the facility also includes any
adjacent or virtually adjacent dedicated
support sites, including job headquarters,
tool yards, batch plants, borrow pits, and
similar facilities of a taxpayer, contractor,
or subcontractor that are established spe-
cifically for or dedicated exclusively to
the construction, alteration, or repair of
the facility, and adjacent or virtually adja-
cent to either a primary construction site
or a secondary construction site.
(8) Laborer and mechanic—(i) In gen-
eral. The terms laborer and mechanic
mean those individuals whose duties are
manual or physical in nature (includ-
ing those individuals who use tools or
who are performing the work of a trade).
The terms laborer and mechanic include
apprentices and helpers. The terms do not
apply to individuals whose duties are pri-
marily administrative, executive, or cleri-
cal, rather than manual. Persons employed
in a bona fide executive, administrative,
or professional capacity as defined in 29
CFR part 541 are not deemed to be labor-
ers or mechanics. Working forepersons
who devote more than 20 percent of their
time during a workweek to laborer or
mechanic duties, and who do not meet the
criteria for exemption of 29 CFR part 541,
are considered laborers and mechanics
for the time spent conducting laborer and
mechanic duties.
(ii) Examples—(A) Individual work-
ing in professional capacity. Taxpayer
hires an architect (Architect) to design a
qualified facility and general layout of the
site including access roads and ancillary
buildings to support the facility. Taxpayer
engages a general contractor (Contractor)
to construct the qualified facility based on
the drafting plans of Architect. Contrac-
tor hires an electrical engineer (Engineer)

Bulletin No. 2024–34 499 August 19, 2024
to assist Architect and Contractor with
design and placement of the electrical
systems necessary to support the qualified
facility. Engineer oversees and inspects
construction of the electrical systems to
ensure the systems conform to the facil-
ity’s specifications and Architect’s draft-
ing plans. Architect and Engineer do not
perform any actual duties of a laborer or
mechanic during their employment with
Taxpayer and Contractor. Architect and
Engineer are working in a professional
capacity as defined under 29 CFR part
541 and are exempt employees under the
DBA. Architect and Engineer are not con-
sidered laborers and mechanics for the
duration of their employment for purposes
of this section and Taxpayer does not need
to ensure they are paid wages at rates not
less than the prevailing wage rates for
purposes of claiming the increased credit
amount under section 45(b)(6)(B)(iii).
(B) Working foreperson. A supervi-
sory employee who is a working foreper-
son (Foreperson) spends 60% of the time
during the workweek (24 hours of a 40
hour workweek) performing adminis-
trative functions such as preparing time-
cards, supervising work on the qualified
facility and arranging for deliveries.
Foreperson spends the remaining 40% (16
hours) of the time performing the duties of
an electrician with respect to construction
of a qualified facility. Because Foreper-
son devoted more than 20% of their
time during the workweek to laborer or
mechanic duties, Foreperson must be paid
wages at rates not less than the electri-
cian’s applicable prevailing wage rate for
the 16 hours spent doing the duties of an
electrician for purposes of the Prevailing
Wage Requirements.
(9) Subcontractor. The term subcon-
tractor means any person that enters into
a contract with a contractor for the con-
struction, alteration, or repair of a quali-
fied facility. The term subcontractor also
includes any person that agrees to perform
or be responsible for the performance of
any part of a contract entered into between
the taxpayer (or the taxpayer’s designee,
assignee, or agent) and a contractor (or
between a contractor and another subcon-
tractor) with respect to the construction,
alteration, or repair of a qualified facility.
(10) Taxpayer. The term taxpayer
means any taxpayer as defined in section
7701(a)(14), including applicable entities
described in section 6417(d)(1)(A). In the
case of a credit transferred under section
6418, the term taxpayer means the eligi-
ble taxpayer that determines the eligible
credit to be transferred and makes a trans-
fer election under section 6418 to transfer
any specified credit portion (including 100
percent) of an eligible credit determined
with respect to any eligible credit property
of such eligible taxpayer for any taxable
year.
(11) Type of construction. The type of
construction is the general category of
construction as established by the U.S.
Department of Labor for the publication
of general wage determinations as defined
in 29 CFR 1.2.
(12) Wages. The term wages generally
means wages as defined in 29 CFR 5.2.
In general, wages means the basic hourly
rate of pay; any contribution irrevocably
made by a taxpayer, contractor, or sub-
contractor to a trustee or to a third person
pursuant to a bona fide fringe benefit fund,
plan, or program; and the rate of costs to
the taxpayer, contractor, or subcontractor
that may be reasonably anticipated in pro-
viding bona fide fringe benefits to laborers
and mechanics pursuant to an enforceable
commitment to carry out a financially
responsible plan or program, provided the
commitment was communicated in writ-
ing to the laborers and mechanics affected.
Whether amounts are wages for prevailing
wage purposes is not relevant in determin-
ing whether amounts are wages or com-
pensation for other Federal tax purposes.
(e) Applicability date. This section
applies to qualified facilities placed in
service in taxable years ending after June
25, 2024, and the construction of which
begins after June 25, 2024. Taxpayers may
apply this section to qualified facilities
placed in service in taxable years ending
on or before June 25, 2024, and qualified
facilities placed in service in taxable years
ending after June 25, 2024, the construc-
tion of which begins before June 25, 2024,
provided that taxpayers follow this section
in its entirety and in a consistent manner.
§1.45-8 Apprenticeship requirements.
(a) Apprenticeship requirements—(1)
In general. Except as provided in para-
graphs (a)(2) and (f) of this section, a
taxpayer claiming or transferring (under
section 6418) the increased credit amount
under section 45(b)(6)(B)(iii) with respect
to any qualified facility must satisfy the
requirements of section 45(b)(8) and this
section with respect to the construction
of such facility (Apprenticeship Require-
ments). The taxpayer is solely responsi-
ble for ensuring that the Apprenticeship
Requirements are satisfied. See paragraph
(g) of this section for definitions of terms
used in this section.
(2) Transition relief. Taxpayers
are excepted from the Apprenticeship
Requirements with respect to any activ-
ities that would be considered construc-
tion, alteration, or repair of the qualified
facility and that occurred prior to January
29, 2023.
(b) Labor hours requirement—(1) Per-
centage of total labor hours. A taxpayer
claiming or transferring (under section
6418) the increased credit amount under
section 45(b)(6) must ensure that quali-
fied apprentices (hired by the taxpayer,
contractor, or subcontractor) perform
not less than the applicable percentage
of the total labor hours of the construc-
tion, alteration, or repair work (includ-
ing work performed by any contractor or
subcontractor) with respect to any qual-
ified facility prior to the facility being
placed in service, subject to the appren-
tice-to-journeyworker ratio described in
paragraph (c) of this section. The per-
centage of total labor hours is calculated
on a per qualified facility basis, aggregat-
ing all hours worked by all laborers and
mechanics (including the hours of qual-
ified apprentices) during construction of
the facility and dividing the total hours
worked by all laborers and mechanics by
the hours of the qualified apprentices.
(2) Applicable percentage. For pur-
poses of paragraph (b)(1) of this section,
and subject to paragraph (b)(3) of this sec-
tion, the applicable percentage is—
(i) 10 percent in the case of a qualified
facility, the construction of which begins
before January 1, 2023;
(ii) 12.5 percent in the case of a qual-
ified facility, the construction of which
begins after December 31, 2022, and
before January 1, 2024; and
(iii) 15 percent in the case of a qualified
facility, the construction of which begins
after December 31, 2023.

August 19, 2024 500 Bulletin No. 2024–34
(3) Transition rule. Taxpayers may
apply the rules set forth in Notice 2022-
61, 2022-52 I.R.B. 560, or these regula-
tions for determining when construction
began for purposes of the applicable per-
centage of labor hours performed by qual-
ified apprentices required under section
45(b)(8)(A) and paragraph (b)(2) of this
section.
(c) Ratio requirement—(1) In gen-
eral. The labor hours requirement under
paragraph (b) of this section is subject to
any applicable requirements for appren-
tice-to-journeyworker ratios of the U.S.
Department of Labor or the applicable
State apprenticeship agency.
(2) Ratio. The allowable ratio of
apprentices to journeyworkers on the job
site in any occupation and its correspond-
ing classification on any day must comply
with the applicable apprentice-to-jour-
neyworker ratio of the registered appren-
ticeship program in accordance with 29
CFR part 29. If a taxpayer, contractor, or
subcontractor is performing construction,
alteration, or repair work on a qualified
facility in a geographic area other than
the geographic area in which an appren-
ticeship program is registered, the tax-
payer, contractor, or subcontractor must
comply with the apprentice-to-journey-
worker ratios applicable within the geo-
graphic area in which the construction,
alteration, or repair work is being per-
formed. If there is no applicable ratio for
the geographic area of the qualified facil-
ity, the ratio specified in the registered
apprenticeship program standard must be
observed.
(3) Failure to meet ratio requirements.
For purposes of section 45(b)(8)(B) and
paragraph (b) of this section, if on any
day the ratio of apprentices to journey-
workers exceeds the ratio established in
accordance with paragraph (c)(2) of this
section, subject to the requirements of the
registered apprenticeship program, the
labor hours performed by any qualified
apprentice in excess of the ratio may not
be counted as hours performed by quali-
fied apprentices for purposes of the labor
hours requirement. The hours devoted to
the performance of construction, alter-
ation, or repair work by any qualified
apprentice in excess of the ratio will be
counted towards the total labor hours, but
will not be counted as hours performed by
qualified apprentices for purposes of the
labor hours requirement under paragraph
(b) of this section.
(d) Participation requirement. Each
taxpayer, contractor, or subcontractor
who employs four or more individuals to
perform construction, alteration, or repair
work with respect to the construction of a
qualified facility must employ one or more
qualified apprentices to perform work with
respect to the construction, alteration, or
repair of the qualified facility prior to the
facility being placed in service. The partic-
ipation requirement applies if a taxpayer,
contractor, or subcontractor employs four
or more individuals in the construction of
the qualified facility over the entire course
of the construction, regardless of whether
they are employed at the same location or
at the same time.
(e) Examples. The provisions of para-
graphs (b) through (d) of this section are
illustrated by the following examples.
For purposes of the following examples,
assume that each taxpayer has a calendar
year taxable year.
(i) Example 1. Taxpayer A starts construction of a
qualified facility on April 1, 2023. Accordingly, Tax-
payer A must ensure that at least 12.5% of the total
labor hours are performed by qualified apprentices.
The facility is placed in service on April 1, 2025,
and Taxpayer A claims the increased credit amount
under section 45(b)(6)(B)(iii) on its 2025 tax return.
A total of eight individuals performed construction,
alteration, or repair work during the construction of
the facility, all of whom were employed directly by
Taxpayer A. Taxpayer A employed four journey-
workers and no qualified apprentices from April 1,
2023 through October 31, 2024. Taxpayer A hired
four qualified apprentices and retained three journey-
workers to perform construction on the facility for
the period of November 1, 2024 through March 31,
2025. The registered apprenticeship program from
which Taxpayer A requested the apprentices required
a ratio of one journeyworker for every apprentice. In
the first year of construction, a total of 10,000 labor
hours were performed on construction, alteration,
or repair work of the facility, with each journey-
worker working 2,500 hours. In the second year of
construction, 7,000 labor hours were performed on
construction, alteration, or repair work of the facility,
with each qualified apprentice and journeyworker
working 1,000 hours during this time. On each day
of work during the second year of construction, the
three journeyworkers oversaw the work of the four
qualified apprentices. A total of 17,000 labor hours
were spent on the construction, alteration, or repair
work of the facility, requiring that 2,125 labor hours
be performed by qualified apprentices. Only 3,000
labor hours performed by qualified apprentices count
towards the labor hours requirement because the
ratio requirement was only satisfied with respect to
the work of three qualified apprentices. Taxpayer
A satisfied the labor hours requirement under para-
graph (b)(2) of this section because more than 12.5%
(3,000 qualified apprentice hours/17,000 total labor
hours = 17.6%) of the total labor hours were per-
formed by qualified apprentices. Taxpayer A was also
subject to the participation requirement because four
or more individuals employed by Taxpayer A per-
formed construction work on the facility. Taxpayer A
satisfied the participation requirement because Tax-
payer A hired at least one qualified apprentice to per-
form construction, alteration, or repair with respect
to the facility.
(ii) Example 2. Taxpayer B intends to construct
a qualified facility to claim the increased credit
amount under section 45(b)(6)(B)(iii) and executes
a contract for the construction of the facility. On
December 31, 2023, Taxpayer B expends sufficient
funds to meet the 5 Percent Safe Harbor for begin-
ning of construction in reliance on Notice 2022-61.
Construction activities as defined in paragraph (d)(3)
of this section start on January 1, 2024. In reliance
on Notice 2022-61, Taxpayer B employs qualified
apprentices for 12.5% of the total construction hours
to complete the qualified facility. Because Taxpayer
B applies the 12.5% applicable percentage in reli-
ance on Notice 2022-61 for construction beginning
before January 1, 2024, but after December 31, 2022,
Taxpayer B has satisfied the Labor Hours Require-
ment, assuming all other provisions of the Labor
Hours Requirement are also satisfied.
(iii) Example 3. Taxpayer C starts construction
of a qualified facility on April 1, 2023, and com-
plies with the Labor Hours Requirement, the Ratio
Requirement, and the Participation Requirement
with respect to the construction of the facility before
it is placed in service on April 1, 2025. Taxpayer C
claims the increased credit amount under section
45(b)(6)(B)(iii) on its 2025 tax return. The quali-
fied facility was repaired from September 1, 2025,
through October 31, 2025. No qualified apprentices
were employed for the repairs. Taxpayer C did not
fail the Apprenticeship Requirements because the
Apprenticeship Requirements do not apply after the
qualified facility is placed in service.
(iv) Example 4. Taxpayer D starts construction
of a qualified facility on April 1, 2023. Accordingly,
Taxpayer D must ensure that at least 12.5% of the
total labor hours are performed by qualified appren-
tices. The facility is placed in service on April 1,
2025, and Taxpayer D claims the increased credit
amount under section 45(b)(6)(B)(iii) on its 2025
tax return. Taxpayer D employed 12 individuals to
perform the construction, alteration, and repair work
on the qualified facility. Taxpayer D is subject to
the participation requirement. For the first year of
construction, a total of 25,000 labor hours were per-
formed on the construction, alteration, or repair of
the facility, 3,000 of which were performed by quali-
fied apprentices. For the second year of construction,
an additional 25,000 labor hours were performed on
the construction, alteration, or repair of the facility,
3,250 of which were performed by qualified appren-
tices. The ratio requirement was satisfied for all labor
hours performed by qualified apprentices. Taxpayer
D has satisfied the labor hours requirement because
12.5% (6,250 labor hours divided by 50,000 labor
hours) of the total labor hours were performed by
qualified apprentices.

Bulletin No. 2024–34 501 August 19, 2024
(v) Example 5. Taxpayer E starts construction of
a qualified facility on January 1, 2024. Accordingly,
Taxpayer E must ensure that at least 15% of the total
labor hours are performed by qualified apprentices.
The facility is placed in service on June 1, 2026.
Taxpayer E claims the increased credit amount under
section 45(b)(6)(B)(iii) on its 2026 tax return. All
individuals who performed the construction, alter-
ation, or repair work were employed directly by
Taxpayer E. A total of 50,000 labor hours were spent
on the construction, alteration, or repair work of the
facility, 7,000 of which were performed by qualified
apprentices and the ratio requirement was met for all
7,000 labor hours. Qualified apprentices also spent
500 hours in classroom training at a location other
than the location of the qualified facility in prepara-
tion for the performance of construction, alteration,
or repair work at the qualified facility. Taxpayer E
did not satisfy the labor hours requirement under
paragraph (b)(2) of this section because less than
15% of the total labor hours were performed by
qualified apprentices. The hours spent on classroom
training at a location other than the location of the
qualified facility in preparation for the construction,
alteration, or repair of the facility are not considered
labor hours performed by qualified apprentices.
(f) Exceptions to the apprenticeship
requirements. If a taxpayer fails to sat-
isfy the Apprenticeship Requirements in
paragraph (a) of this section with respect
to the construction, alteration, or repair of
any qualified facility prior to the facility
being placed in service, the taxpayer will
nonetheless be deemed to have satisfied
the Apprenticeship Requirements if the
taxpayer has made a good faith effort to
meet the Apprenticeship Requirements
as described in paragraph (f)(1) of this
section (Good Faith Effort Exception) or
made the penalty payment provided in
paragraph (f)(2) of this section (Appren-
ticeship Cure Provision) for any failures
to which the Good Faith Effort Exception
does not apply.
(1) Good faith effort exception—(i) In
general. A taxpayer is deemed to have sat-
isfied the Apprenticeship Requirements of
this section with respect to a request for
qualified apprentices if the taxpayer meets
the following requirements:
(A) Request for qualified apprentices.
The taxpayer, contractor, or subcontractor
must submit a written request for quali-
fied apprentices to at least one registered
apprenticeship program that has a geo-
graphic area of operation that includes
the location of the qualified facility; trains
qualified apprentices in the occupation(s)
needed to perform construction, alter-
ation, or repair with respect to the facility;
and has a usual and customary business
practice of entering into agreements with
employers for the placement of qualified
apprentices in the occupation for which
they are training, consistent with the
standards and requirements set forth in
29 CFR parts 29 and 30, and any subse-
quent guidance issued by the Department
of Labor. Such request must be in writing
and sent electronically or by registered
mail. The initial request to a registered
apprenticeship program for qualified
apprentices must be made no later than
45 days before the qualified apprentices
are requested to start work. Any subse-
quent requests for qualified apprentices
made to the same registered apprentice-
ship program after the initial request must
be made no later than 14 days before the
qualified apprentices are requested to start
work. If there is no registered apprentice-
ship program that has a geographic area
of operation that includes the location
of the qualified facility; trains qualified
apprentices in the occupation(s) needed to
perform construction, alteration, or repair
with respect to the facility; and has a usual
and customary business practice of enter-
ing into agreements with employers for
the placement of qualified apprentices in
the occupation for which they are training,
consistent with the standards and require-
ments set forth in 29 CFR parts 29 and 30,
and any subsequent guidance issued by
the Department of Labor, the taxpayer will
be deemed to satisfy the Good Faith Effort
Exception with respect to the qualified
apprentices that the taxpayer, contractor,
or subcontractor would have requested.
(1) Content of valid request. The
request of the taxpayer, contractor, or
subcontractor must include the proposed
dates of employment, occupation of qual-
ified apprentices needed, location of the
work to be performed, number of quali
-
fied apprentices needed, the number of
labor hours expected to be performed by
the qualified apprentices, and the name
and contact information of the taxpayer,
contractor, or subcontractor requesting
employment of qualified apprentices from
the registered apprenticeship program.
Reasonable estimates of the foregoing
information are permissible. The request
must also state that the request for quali-
fied apprentices is made with an intent to
employ qualified apprentices in the occu-
pation for which they are being trained
and in accordance with the requirements
and standards of the registered appren-
ticeship program and to employ qualified
apprentices consistent with the expected
number of hours and dates of employment
specified in the request. If the employer
of the requested qualified apprentices is
not the same as the taxpayer, contractor,
or subcontractor submitting the request
for qualified apprentices, then the request
must include the name of the employer.
(2) Duration of request. If the taxpayer,
contractor, or subcontractor submits a
request in accordance with paragraph (f)
(1)(i)(A) of this section and the request is
denied or not responded to, the taxpayer
will be deemed to have exercised a Good
Faith Effort with respect to the request for
the period described in the request but not
exceeding 365 days (366 days in case of
a leap year). For requests that are denied
or not responded to and include a period
of employment for qualified apprentices
that exceeds 365 days (366 days in case
of a leap year), the taxpayer, contractor,
or subcontractor must submit one or more
additional requests with respect to the
period of such request in excess of 365
days (366 days in case of a leap year). The
taxpayer will not be deemed to have exer-
cised a Good Faith Effort beyond 365 days
(366 days in case of a leap year) of a pre-
viously denied request unless the taxpayer
submits an additional request. There is no
limit on the number of requests a taxpayer,
contractor, or subcontractor may submit
to one or more registered apprenticeship
programs for purposes of the Good Faith
Effort Exception and the taxpayer, con-
tractor, or subcontractor is not required
to make subsequent requests to the same
registered apprenticeship program in
order to qualify for the Good Faith Effort
Exception. The 365 day (366 days in case
of a leap year) duration of requests for
qualified apprentices also applies in cir-
cumstances in which there is no registered
apprenticeship program with a geographic
area of operation that includes the loca-
tion of the facility at the time a taxpayer,
contractor, or subcontractor attempts to
requests qualified apprentices from a reg-
istered apprenticeship program.
(B) Denial of request. If a taxpayer,
contractor, or subcontractor submits a
request in accordance with paragraph (f)
(1)(i)(A) of this section and the request is

August 19, 2024 502 Bulletin No. 2024–34
denied (including after an initial accep-
tance and before the scheduled qualified
apprentice work starts), the taxpayer will
be deemed to satisfy the requirements
of section 45(b)(8)(A) through (C), and
paragraphs (b) through (d) of this section,
provided that such denial is not the result
of a refusal by the taxpayer or any con-
tractors or subcontractors engaged in the
performance of construction, alteration,
or repair work with respect to such quali-
fied facility to comply with the established
standards and requirements of the regis-
tered apprenticeship program. The denial
of a request is only valid for purposes
of establishing a Good Faith Effort with
respect to the portion(s) of the request that
were denied. In the case of a partial denial,
a taxpayer, contractor, or subcontrac-
tor must accept the qualified apprentices
offered in response to the request to sat-
isfy the Good Faith Effort with respect to
the portion of the request that was denied.
If a request is partially denied, the qual-
ified apprentice labor hours specified in
the request that were denied that qualify
for the Good Faith Effort Exception are
considered to be labor hours performed
by qualified apprentices. Subject to the
requirements of paragraph (f)(1)(i)(A)(2)
of this section, the taxpayer, contractor,
or subcontractor does not need to follow
up with the registered apprenticeship pro-
gram after the initial request or after the
receipt of a non-substantive response. The
date on which a registered apprenticeship
program received a request for qualified
apprentices is determined by the date the
electronic request is sent to the registered
apprenticeship program or the date of
delivery shown on a receipt from the reg-
istered mail delivery.
(C) Response to a valid request. A
response to a valid request for qualified
apprentices is a substantive written reply
to the request that agrees, in whole or in
part, to the specific requirements in the
taxpayer’s, contractor’s, or subcontrac-
tor’s request. If the registered apprentice-
ship program fails to provide a response
to a request submitted in accordance with
paragraph (f)(1)(i)(A) of this section
within five business days after the date
on which such registered apprenticeship
program received the taxpayer’s (or its
contractor or subcontractor) request, then
such request is deemed to be denied.
(D) Employer sponsored apprentice-
ship programs. A taxpayer, contractor,
or subcontractor that sponsors one or
more internal registered apprenticeship
programs and that is unable to employ
a sufficient number of qualified appren-
tices through such programs to meet the
Apprenticeship Requirements must sub-
mit a request for qualified apprentices to
at least one registered apprenticeship pro-
gram that it does not sponsor in order to
satisfy the Good Faith Effort Exception.
(ii) Examples. The provisions of this
paragraph (f)(1) are illustrated by the fol-
lowing examples.
(A) Example 1. Taxpayer F submits a request to
a registered apprenticeship program by email. The
registered apprenticeship program responds three
days later indicating that it has qualified apprentices
ready to start work, but the reply email from the
registered apprenticeship program is automatically
forwarded to Taxpayer F’s spam or junk mail folder,
and Taxpayer F does not see the email response. Tax-
payer F would not qualify for the Good Faith Effort
Exception with respect to this request because the
registered apprenticeship program provided a sub-
stantive reply to the request that agreed to the spe-
cific requirements in Taxpayer F’s request within five
business days.
(B) Example 2. Contractor G submits a request
for qualified apprentices from a registered appren-
ticeship program with an area of operation outside
of the geographic area of the qualified facility. Con-
tractor G’s request is denied because the registered
apprenticeship program does not operate in the geo-
graphic area where the qualified facility is located.
Contractor G’s request would not qualify for the
Good Faith Effort Exception because the registered
apprenticeship program does not have a geographic
area of operation that includes the location of the
qualified facility.
(C) Example 3
. Contractor H submits a request
for qualified apprentices to a registered apprentice-
ship program. Under its established standards and
requirements, the registered apprenticeship program
requires contractors to enter into an agreement to
partner with that registered apprenticeship program.
Contactor H refuses to enter into the agreement, and
as a result, the registered apprenticeship program
denies Contractor H’s request for qualified appren-
tices. The requirement to enter into the agreement to
partner with the registered apprenticeship program
applies to all employers who request apprentices
from the registered apprenticeship program. Nei-
ther the Department of Labor nor a recognized State
apprenticeship agency has found the requirement
to enter into such an agreement to be contrary to
Department of Labor guidance regarding the admin-
istration of registered apprenticeship programs. Con-
tractor H’s request would not qualify for the Good
Faith Effort Exception because Contractor H refused
to comply with the established standards and require-
ments of the registered apprenticeship program.
(D) Example 4. Contractor I submits a request
for qualified apprentices from a registered appren-
ticeship program on November 15, 2024. Contractor
I’s request states that it seeks to employ four quali-
fied apprentices for the period starting on January 2,
2025, and ending June 30, 2025, for a total of 4,160
hours (1,040 hours x four qualified apprentices). On
November 18, 2024, the registered apprenticeship
program informs Contractor I that it can supply four
qualified apprentices for the requested time period.
On December 29, 2024, the registered apprentice-
ship program informs Contractor I that it is only able
to supply two of the four qualified apprentices. Con-
tractor I does not submit any additional requests for
qualified apprentices from a registered apprentice-
ship program. Contractor I’s request would qualify
for the Good Faith Effort Exception for 2,080 hours
(1,040 hours for each of the two requested qualified
apprentices that were denied after the request was
initially accepted), provided Contractor I accepted
the two qualified apprentices that were offered for
the requested period.
(E) Example 5. Contractor J submits a written
request for qualified apprentices from a registered
apprenticeship program on June 1, 2025. Contrac-
tor J’s request states that it seeks to employ three
qualified apprentices for a period starting September
1, 2025, and ending December 31, 2026. The reg-
istered apprenticeship program denies the request
on June 2, 2025. Contractor J’s request satisfies the
Good Faith Effort Exception with respect to the three
qualified apprentices that were denied for the period
beginning September 1, 2025, and ending August
31, 2026. Contractor J’s request does not satisfy
the Good Faith Effort Exception with respect to the
period beginning September 1, 2026, and ending
December 31, 2026, because that is the portion of the
denied request that exceeded 365 days (366 days in
case of a leap year) and Contractor J did not submit
an additional valid request for that period.
(2) Apprenticeship cure provision—(i)
In general. A taxpayer that fails to satisfy
the Apprenticeship Requirements in para-
graph (a) of this section with respect to the
construction, alteration, or repair of any
qualified facility prior to the facility being
placed in service, will be deemed to sat-
isfy the Apprenticeship Requirements if
the taxpayer pays the IRS a penalty equal
to $50 multiplied by the total labor hours
for which the requirements described in
paragraph (b) or (d) of this section were
not satisfied with respect to the construc-
tion, alteration, or repair work on such
qualified facility.
(A) Total labor hours for which the
labor hours requirement is not met. For
failures to meet the percentage of the total
labor hours requirement in paragraph (b)
(1) of this section, the total labor hours for
which the requirement was not satisfied is
calculated as the difference between the
total labor hours performed by qualified
apprentices that would be required to meet
the applicable percentage under paragraph

Bulletin No. 2024–34 503 August 19, 2024
(b)(2) of this section and the sum of the
labor hours actually worked by all quali-
fied apprentices consistent with the appli-
cable ratio of apprentices to journeywork-
ers and the hours qualifying for the Good
Faith Effort Exception.
(B) Total labor hours for which the
participation requirement is not met. For
failures to meet the participation require-
ment in paragraph (d) of this section, the
total labor hours for which the require-
ment was not satisfied is calculated as
the total labor hours of construction,
alteration, or repair work with respect
to the facility performed by all laborers
or mechanics employed by the taxpayer,
contractor, or subcontractor that failed to
meet the participation requirement of the
qualified facility divided by the number of
laborers or mechanics employed by such
taxpayer, contractor, or subcontractor that
performed construction, alteration, or
repair work on the facility.
(C) Penalty payment not required if
taxpayer ineligible for increased credit
amount under section 45(b)(6)(B)(iii). If
the taxpayer claims the increased credit
amount under section 45(b)(6)(B)(iii)
and does not satisfy the Apprenticeship
Requirements for the claimed increased
credit amount, then the obligation to make
the penalty payment under paragraph (f)
(2)(i) of this section applies. If the IRS
determines that a taxpayer claiming the
increased credit amount under section
45(b)(6)(B)(iii) failed to meet the Appren-
ticeship Requirements and the taxpayer
does not make the penalty payment
required under paragraph (f)(2)(i) of this
section, then no penalty is assessed under
paragraph (f)(2)(i) of this section, and the
taxpayer is not eligible for the increased
credit amount under section 45(b)(6)(B)
(iii). Taxpayers that are not eligible to
claim the increased credit amount may
still be eligible to claim the base amount
of the renewable electricity production
credit under section 45(a) if they meet the
requirements to claim the credit.
(D) Examples. The provisions of para-
graph (f)(2)(i) of this section are illus-
trated by the following examples, which
do not take into account any possible
application of the exception for Good
Faith Effort Exception under paragraph (f)
(1) of this section, the enhanced penalty
payment requirement in the case of inten-
tional disregard under paragraph (f)(2)
(ii) of this section, or the inapplicability
of the penalty in the case of a Qualifying
Project Labor Agreement under paragraph
(f)(2)(v) of this section. In each example,
assume that the taxpayer uses the calendar
year as the taxpayer’s taxable year.
(1) Example 1. Taxpayer K starts construction
of a qualified facility on April 1, 2023. Accordingly,
Taxpayer K must ensure that at least 12.5% of the
total labor hours are performed by qualified appren-
tices. The facility is placed in service on April 1,
2025, and Taxpayer K claims the increased credit
amount under section 45(b)(6)(B)(iii) on its 2025
tax return. All individuals who performed the con-
struction, alteration, or repair work were employed
directly by Taxpayer K, including two qualified
apprentices. Taxpayer K employed enough journey-
workers to satisfy the Ratio Requirement. A total of
50,000 labor hours were spent on the construction,
alteration, or repair work of the facility, 6,000 of
which were performed by qualified apprentices. Tax-
payer K has satisfied the participation requirement
because Taxpayer K has employed at least one quali-
fied apprentice. Taxpayer K failed to satisfy the labor
hours requirement under paragraph (b)(2) of this sec-
tion because less than 12.5% of the total labor hours
were performed by qualified apprentices. Qualified
apprentices must have performed at least 6,250 labor
hours (50,000 x 12.5%), so the total labor hours by
which the labor hours requirement was not satisfied
is 250 (6,250-6,000). To cure Taxpayer K’s failure to
meet the labor hours requirement, Taxpayer K must
pay a penalty of $12,500 (250 x $50).
(2) Example 2. Taxpayer L starts construction of
a qualified facility on February 10, 2023. Accord-
ingly, Taxpayer L must ensure that at least 12.5%
of the total labor hours are performed by qualified
apprentices. The facility is placed in service on Feb
-
ruary 10, 2026, and Taxpayer L claims the increased
credit amount under section 45(b)(6)(B)(iii) on its
2026 tax return. Taxpayer L employs 10 individuals
to perform construction, alteration, or repair work of
the facility, two of whom are qualified apprentices.
Taxpayer L employed enough journeyworkers to
satisfy the Ratio Requirement. Taxpayer L also hires
Contractor M, who employs five individuals to per-
form construction, alteration, or repair work of the
facility, none of whom are qualified apprentices. A
total of 50,000 labor hours were spent on the con-
struction, alteration, or repair work of the facility,
6,500 of which were performed by qualified appren-
tices. Of the total 50,000 labor hours, 33,000 labor
hours were performed by individuals employed by
Taxpayer L and 17,000 labor hours were performed
by individuals employed by Contractor M. Taxpayer
L has satisfied the labor hours requirement under
paragraph (b)(2) of this section because more than
12.5% of the total labor hours were performed by
qualified apprentices. However, Taxpayer L failed to
satisfy the participation requirement under paragraph
(d) of this section because Contractor M employed
five individuals but no qualified apprentices. The
total labor hours for which the participation require-
ment was not satisfied is equal to the total labor hours
performed by individuals employed by Contractor
M (17,000) divided by the number of individuals
employed by Contractor M (5) on the construc-
tion of the qualified facility, which is 3,400 hours
(17,000/5). To cure the failure to meet the Appren-
ticeship Requirements, Taxpayer L must pay a pen-
alty of $170,000 (3,400 x $50).
(3) Example 3. Taxpayer N starts construction of
a qualified facility on January 1, 2024. Accordingly,
Taxpayer N must ensure that at least 15% of the total
labor hours are performed by qualified apprentices.
The facility is placed in service on January 1, 2025,
and Taxpayer N claims the increased credit amount
under section 45(b)(6)(B)(iii) on its 2025 tax return.
Taxpayer N employs 15 individuals to perform con-
struction, alteration, or repair work of the facility,
none of whom is a qualified apprentice. Taxpayer N
also hires Contractor O, who employs five individu-
als to perform construction, alteration, or repair work
of the facility, one of whom is a qualified apprentice.
At the time Taxpayer N claims the increased credit
amount, a total of 20,000 labor hours were spent
on the construction, alteration, or repair work of
the facility, 1,000 of which were performed by the
qualified apprentice. Of the 20,000 total labor hours,
15,000 labor hours were performed by individuals
employed by Taxpayer N and 5,000 labor hours were
performed by individuals employed by Contractor O.
Taxpayer N failed to satisfy the labor hours require-
ment under paragraph (b)(2) of this section because
less than 15% of the total labor hours were per-
formed by qualified apprentices. Qualified appren-
tices must have performed at least 3,000 labor hours,
so the total labor hours by which the labor hours
requirement was not satisfied is 2,000. Taxpayer N
also failed to satisfy the participation requirement
under paragraph (d) of this section because Taxpayer
N employed 15 individuals but no qualified appren-
tices. The total labor hours for which the participa-
tion requirement was not satisfied is 1,000, which
is equal to the total labor hours performed by indi-
viduals employed by Taxpayer N (15,000) divided
by the number of individuals employed by Taxpayer
N (15), which is 1,000 (15,000/15). The total labor
hours by which Taxpayer N failed to meet the labor
hours and participation requirements is 3,000 (2,000
+ 1,000). To cure Taxpayer N’s failure to meet the
Apprenticeship Requirements, Taxpayer N must pay
a penalty of $150,000 (3,000 x $50).
(4) Example 4. Taxpayer P starts construction of a
qualified facility on April 1, 2023. Accordingly, Tax-
payer P must ensure that at least 12.5% of the total
labor hours are performed by qualified apprentices.
The facility is placed in service on January 5, 2024,
and Taxpayer P claims the increased credit amount
under section 45(b)(6)(B)(iii) on its 2024 tax return.
Taxpayer P hires Contractors Q, R, and S to perform
the construction, alteration, and repair of the quali-
fied facility. Contractor Q employs 10 journeywork-
ers who work 10,000 hours and one qualified appren-
tice who works 400 hours. Contractor R employs
four journeyworkers who work 4,000 hours and five
qualified apprentices who work 2,000 hours. Con-
tractor S employs three journeyworkers who work
3,000 hours and one qualified apprentice who works
400 hours. The registered apprenticeship program for
all of the qualified apprentices has prescribed a 1:1
apprentice-to-journeyworker ratio. For each day, all
journeyworkers and qualified apprentices employed
by the contractors are on the job site. The contrac-

August 19, 2024 504 Bulletin No. 2024–34
tors have satisfied the participation requirement
under paragraph (d) of this section because they each
employed one or more qualified apprentices. The
total labor hours are 19,800 hours, and the total hours
worked by qualified apprentices are 2,800. However,
Contractor R employed one qualified apprentice in
excess of the apprentice-to-journeyworker ratio (five
qualified apprentices: four journeyworkers) that was
prescribed by the apprenticeship program. Because
Contractor R employed one qualified apprentice in
excess of the apprentice-to-journeyworker ratio on
each day that Contractor R performed work on the
facility, 400 of the qualified apprentice hours worked
by Contractor R do not count towards the labor hour
requirement. Thus, Taxpayer P has failed to meet
the labor hours requirement under paragraph (b)(2)
of this section because only 2,400 hours worked by
qualified apprentices are counted for purposes of
the labor hours requirement. The total labor hours
by which Taxpayer P failed to meet the labor hours
requirement is 75 (2,475 required hours (19,800 x
12.5%) – 2,400 qualified apprentice hours worked).
To cure Taxpayer P’s failure to meet the Apprentice-
ship Requirements, Taxpayer P must pay a penalty of
$3,750 (75 x $50).
(ii) Intentional disregard—(A)
Application of section 45(b)(8)(D)(iii).
If the IRS determines that any failure to
satisfy the Apprenticeship Requirements
in paragraph (b) or (d) of this section
is due to intentional disregard of those
requirements, the amount of the penalty
payment under paragraph (f)(2) of this
section is increased to $500 multiplied
by the total labor hours for which the
requirements described in paragraph (b)
or (d) of this section were not satisfied
with respect to the construction, alter-
ation, or repair work on such qualified
facility.
(B) Meaning of intentional disregard.
A failure to satisfy the Apprenticeship
Requirements of paragraph (b) or (d) of
this section is due to intentional disregard
if it is knowing or willful.
(C) Facts and circumstances consid-
ered. The facts and circumstances that are
considered in determining whether a fail-
ure to satisfy the Apprenticeship Require-
ments is due to intentional disregard
include, but are not limited to—
(1) Whether the failure was part of a
pattern of conduct that includes repeated
or systemic failures to ensure compliance
with the Apprenticeship Requirements;
(2) Whether the taxpayer took steps to
determine or review the applicable per-
centage of labor hours required to be per-
formed by qualified apprentices;
(3) Whether the taxpayer sought to
promptly cure any failures;
(4) Whether the taxpayer has been
required to make a penalty payment under
paragraph (f)(2) of this section in previous
years;
(5) Whether the taxpayer included pro-
visions in any contracts entered into with
contractors that required the employment
of qualified apprentices by the contractor
and any subcontractors consistent with the
labor hour requirement of section 45(b)(8)
(A) and the participation requirement of
section 45(b)(8)(C) and whether taxpayers
regularly reviewed contractors’ and sub-
contractors’ use of qualified apprentices;
(6) Whether the taxpayer required con-
tractors and subcontractors to forward to
the taxpayer requests to registered appren-
ticeship programs within five business
days of when requests were made;
(7) Whether the taxpayer made no
attempt to comply with the Apprentice-
ship Requirements;
(8) Whether the taxpayer developed
and used a plan to utilize qualified appren-
tices in the construction, alteration, or
repair of the qualified facility;
(
9) Whether the taxpayer, contractor,
or subcontractor regularly followed up
with registered apprenticeship programs
regarding requests for qualified appren-
tices;
(10) Whether the taxpayer, contractor,
or subcontractor contacted the Depart-
ment of Labor’s Office of Apprenticeship
or relevant State apprenticeship agency
for assistance in locating a registered
apprenticeship program;
(11) Whether the taxpayer had in place
procedures whereby individuals could
report suspected failures to comply with
the Apprenticeship Requirements, with-
out retaliation or adverse action, whether
taxpayer investigated such reports by
individuals, and whether the taxpayer had
internal controls to prevent the failures to
comply with the Apprenticeship Require-
ments;
(12) Whether the taxpayer investi-
gated complaints of retaliation or adverse
action resulting from reports of suspected
failures to comply with the Apprentice-
ship Requirements, and took appropri-
ate actions to remedy any retaliation or
adverse action and prevent it from reoc-
curring; and
(13) Whether taxpayer failed to main-
tain and preserve records sufficient to
establish compliance with the Apprentice-
ship Requirements for relevant tax years.
(D) Examples. The provisions of para-
graph (f)(2)(ii) of this section are illus-
trated by the following examples, which
take into account certain facts and circum-
stances described in paragraph (f)(2)(ii)
(C) of this section, that are considered in
applying the enhanced penalty payment
requirement in the case of intentional dis-
regard. These examples do not take into
account any possible application of the
exception for Good Faith Effort Excep-
tion under paragraph (f)(1) of this section
or the inapplicability of the penalty in the
case of a Qualifying Project Labor Agree-
ment under paragraph (f)(2)(v) of this
section. In each example, assume that the
taxpayer uses the calendar year as the tax-
payer’s taxable year.
(1) Example 1. Taxpayer T failed to satisfy the
labor hours requirement of section 45(b)(8)(A), the
participation requirement of section 45(b)(8)(C), and
the requirements described in paragraphs (b) and
(d) of this section. Taxpayer T did not create a plan
to utilize qualified apprentices in the construction,
alteration, or repair of the qualified facility. Taxpayer
T did not include contract provisions that require the
hiring of qualified apprentices and the compliance
with the labor hours requirement described in sec-
tion 45(b)(8)(A) and the participation requirement
described in section 45(b)(8)(C), nor did Taxpayer T
require those contract provisions in any subcontracts.
Neither Taxpayer T nor any contractors or subcon-
tractors made any requests to a registered appren-
ticeship program for qualified apprentices. Taxpayer
T also did not have procedures in place to audit
whether contractors or subcontractors made a request
to a registered apprenticeship program. Taxpayer T’s
failures to satisfy the labor hours requirement of sec-
tion 45(b)(8)(A), the participation requirement of
section 45(b)(8)(C), and the requirements described
in paragraphs (b) and (d) of this section would be
considered due to intentional disregard for purposes
of paragraph (f)(2)(ii) of this section. After consid-
ering all of the facts and circumstances, Taxpayer T
would be subject to the enhanced penalty payment
described in paragraph (f)(2)(ii)(A) of this section.
(2) Example 2. Taxpayer U failed to satisfy the
labor hours requirement of section 45(b)(8)(A), the
participation requirement of section 45(b)(8)(C), and
the requirements described in paragraphs (b) and (d)
of this section. Taxpayer U created a plan to utilize
qualified apprentices in the construction, alteration,
or repair of a qualified facility. Taxpayer U included
contract provisions that required the hiring of qual-
ified apprentices and the compliance with the labor
hours requirement described in section 45(b)(8)(A)
and the participation requirement described in section
45(b)(8)(C) and required those contract provisions
in any subcontracts. Taxpayer U and all contractors
and subcontractors of Taxpayer U requested relevant
qualified apprentices from registered apprenticeship
programs. Taxpayer U also created procedures to

Bulletin No. 2024–34 505 August 19, 2024
audit whether contractors or subcontractors made a
request to a registered apprenticeship program and
ensured that the registered apprenticeship programs
were contacted in writing. In cases in which a reg-
istered apprenticeship program replied to a proper
request described in paragraph (f)(1)(i)(A)(1) of this
section with a non-substantive response, Taxpayer
U encouraged follow-ups to the registered appren-
ticeship program. Additionally, Taxpayer U con-
tacted and encouraged contractors and subcontrac-
tors to contact the Department of Labor’s Office of
Apprenticeship and the State apprenticeship agency
in cases in which Taxpayer U, or any contractors or
subcontractors, experienced difficulty in locating
a registered apprenticeship program. After consid-
ering all of the facts and circumstances, Taxpayer
U’s failure to satisfy the labor hours requirement of
section 45(b)(8)(A), the participation requirement of
section 45(b)(8)(C), and the requirements described
in paragraphs (b) and (d) of this section would not be
considered due to intentional disregard for purposes
of paragraph (f)(2)(ii) of this section.
(E) Rebuttable presumption of no
intentional disregard. If a taxpayer makes
the penalty payment required by this para-
graph (f)(2) before receiving notice of an
examination from the IRS with respect to
a claim for the increased credit amount
under section 45(b)(6), the taxpayer will
be presumed not to have intentionally
disregarded the Apprenticeship Require-
ments in paragraphs (b) and (d) of this
section. The IRS may rebut this presump-
tion based on the relevant facts and cir-
cumstances.
(iii) Deficiency procedures to apply.
The penalty payment required by this
paragraph (f)(2) is subject to deficiency
procedures of subchapter B of chapter 63
of the Code.
(iv) Penalty payments in the event of
a transfer pursuant to section 6418. To
the extent an eligible taxpayer, as defined
in section 6418(f)(2), has determined an
increased credit amount under section
45(b)(6) and transferred such increased
credit amount as part of a specified credit
portion, the obligation to make a penalty
payment under paragraph (f)(2)(i) of this
section remains with the eligible taxpayer.
The obligation for an eligible taxpayer to
satisfy the Apprenticeship Requirements
becomes binding upon the earlier of the
filing of the eligible taxpayer’s return for
the taxable year for which the specified
credit portion is determined with respect
to the eligible taxpayer, or the filing of the
return of the transferee taxpayer for the
year in which the specified credit portion
is taken into account. If the IRS determines
that the eligible taxpayer failed to meet
the Apprenticeship Requirements and the
eligible taxpayer does not then make the
penalty payments provided in paragraph
(f)(2)(i) of this section, then no penalty is
assessed under paragraph (f)(2)(i) of this
section, and the eligible taxpayer is not
eligible for the increased credit amount
determined under section 45(b)(6)(B)(iii).
Section 6418 and the regulations under
section 6418 control for determining the
impact of an eligible taxpayer’s failure to
cure on any transferee taxpayer.
(v) Project labor agreements. The pen-
alty payment required by this paragraph (f)
(2) to cure a failure to satisfy the Appren-
ticeship Requirements in paragraphs (b)
and (d) of this section does not apply with
respect to the construction, alteration, or
repair work of a qualified facility if the
work is done pursuant to a Qualifying
Project Labor Agreement as defined in
§1.45-7(c)(6)(ii).
(g) Definitions. Solely for purposes
of this section, the following definitions
apply:
(1) Construction, alteration, or repair.
The term construction, alteration, or
repair has the same meaning as in §1.45-
7(d)(3).
(2) Contractor. The term contractor
has the same meaning as in §1.45-7(d)(4).
(3) Employed. The term employed has
the same meaning as in §1.45-7(d)(5).
(4) Established standards and require-
ments. The term
established standards
and requirements means those standards
of apprenticeship required by 29 CFR
parts 29 and 30 for registered apprentice-
ship programs, as well as any additional
requirements established by the registered
apprenticeship program for the place-
ment of apprentices and applicable to all
employers participating in the registered
apprenticeship program. Such require-
ments must not be found by the U.S.
Department of Labor’s Office of Appren-
ticeship or a recognized State apprentice-
ship agency to be contrary to Department
of Labor guidance regarding the adminis-
tration of registered apprenticeship pro-
grams.
(5) Geographic area. The term geo-
graphic area for purposes of determin-
ing the geographic area of operation of
a registered apprenticeship program has
the same meaning as the term geographic
area and locality defined in §1.45-7(d)(7).
(6) Journeyworker. The term jour-
neyworker means an individual who has
attained a level of skill, abilities, and com-
petencies recognized within an industry as
having mastered the skills and competen-
cies required for the occupation. Use of
the term may also refer to a mentor, tech-
nician, specialist, or other skilled individ-
ual who has documented sufficient skills
and knowledge of an occupation, either
through formal apprenticeship or through
practical on-the-job experience and for-
mal training.
(7) Labor hours. The term labor hours
means the total number of hours devoted
to the performance of construction, alter-
ation, or repair work by any individ-
ual employed by the taxpayer or by any
contractor or subcontractor. Labor hours
do not include hours worked by fore-
men, superintendents, owners, or persons
employed in bona fide executive, admin-
istrative, or professional capacities (as
defined in 29 CFR part 541).
(8) Qualified apprentice. The term
qualified apprentice means an individual
who is employed by the taxpayer or by
any contractor or subcontractor and who
is participating in a registered apprentice-
ship program. An individual is participat-
ing in a registered apprenticeship program
if, the individual has entered into a written
agreement with a registered apprentice-
ship program containing the terms and
conditions of the employment and training
of the apprentice and has been registered
as an apprentice with the U.S. Department
of Labor’s Office of Apprenticeship or a
recognized State apprenticeship agency
during the time period in which work is
performed by the apprentice for the tax-
payer, contractor, or subcontractor, or the
individual is in the first 90 days of proba-
tionary employment as an apprentice in a
registered apprenticeship program and the
individual has been certified by the U.S.
Department of Labor’s Office of Appren-
ticeship or a recognized State apprentice-
ship agency as eligible for probationary
employment as an apprentice.
(9) Registered apprenticeship pro-
gram. A registered apprenticeship pro-
gram means a program that has been reg-
istered by the U.S. Department of Labor’s
Office of Apprenticeship or a recognized
State apprenticeship agency, pursuant to
the National Apprenticeship Act and its

August 19, 2024 506 Bulletin No. 2024–34
implementing regulations for registered
apprenticeship at 29 CFR parts 29 and
30, as meeting the basic standards and
requirements of the Department of Labor
for approval of such program for Federal
purposes. Registration of a program is
evidenced by a Certificate of Registra-
tion or other written indicia. Registered
apprenticeship programs include those
that taxpayers, contractors, or subcontrac-
tors sponsor, create, or partner with and
include joint and non-joint programs (as
those terms are used in 29 CFR part 29).
(10) State apprenticeship agency. The
term State apprenticeship agency means
an agency of a State government that
has responsibility and accountability for
apprenticeship within the State and that
has been recognized and authorized by
the U.S. Department of Labor’s Office
of Apprenticeship to register and oversee
apprenticeship programs and agreements
for Federal purposes.
(11) Subcontractor. The term subcon-
tractor has the same meaning as in §1.45-
7(d)(10).
(12) Taxpayer. The term taxpayer has
the same meaning as in §1.45-7(d)(11).
(h) Applicability date. This section
applies to qualified facilities placed in
service in taxable years ending after June
25, 2024, and the construction of which
begins after June 25, 2024. Taxpayers may
apply this section to qualified facilities
placed in service in taxable years ending
on or before June 25, 2024, and qualified
facilities placed in service in taxable years
ending after June 25, 2024, the construc-
tion of which begins before June 25, 2024,
provided that taxpayers follow this section
in its entirety and in a consistent manner.
§§1.45-9 - 1.45.11 [Reserved]
§1.45-12 Recordkeeping and reporting.
(a) In general. The increased credit
amount determined under section 45(b)(6)
must be claimed in such form and manner
as may be prescribed in IRS forms, instruc-
tions, publications, or guidance published
in the Internal Revenue Bulletin. See
§601.601 of this chapter. Consistent with
sections 45 and 6001 and §1.6001-1(e), a
taxpayer claiming or transferring (under
section 6418) an increased credit amount
under section 45(b)(6)(A) must maintain
and preserve records sufficient to estab-
lish compliance with the requirements of
sections 45(b)(6)(B), (b)(7), and (8), as
applicable. In the case of any credit trans-
ferred under section 6418 reflecting an
increased credit amount, the requirement
to maintain and preserve sufficient records
demonstrating compliance with the appli-
cable prevailing wage and apprenticeship
requirements remains with the eligible
taxpayer that determined and transferred
the credit. For definitions of terms used in
this section, see §1.45-7(d) with respect
to the prevailing wage requirements, and
§1.45-8(g) with respect to the apprentice-
ship requirements.
(b) Recordkeeping for the prevailing
wage and apprenticeship requirements.
With respect to each qualified facility for
which a taxpayer is claiming or transfer-
ring (under section 6418) a credit reflect-
ing an increased credit amount under sec-
tion 45(b)(6)(A)(iii), the taxpayer must
maintain and preserve records sufficient
to demonstrate compliance with the appli-
cable prevailing wage and apprenticeship
requirements in sections 45(b)(7) and (8)
and §§1.45-7 and 1.45-8, respectively. At
a minimum, those records include payroll
records for each laborer and mechanic
(including each qualified apprentice)
employed by the taxpayer, contractor, or
subcontractor in the construction, alter-
ation, or repair of the qualified facility.
If work is done pursuant to a Qualifying
Project Labor Agreement as defined in
§1.45-7(c)(6)(ii), the taxpayer should also
maintain and preserve records related to
that Qualifying Project Labor Agreement.
(c) Recordkeeping for the prevailing
wage requirements. In addition to payroll
records otherwise maintained by the tax
-
payer, records sufficient to demonstrate
compliance with the applicable prevailing
wage requirements in section 45(b)(7) and
§1.45-7 may include Forms WH-347 com-
pleted fully and correctly with information
for each laborer and mechanic (including
each qualified apprentice) employed by
the taxpayer, a contractor, or subcontrac-
tor with respect to each qualified facility.
Records sufficient to demonstrate com-
pliance with the applicable prevailing
wage requirements in section 45(b)(7) and
§1.45-7 may also include the following
other documents and records with respect
to each qualified facility:
(1) Identifying information for each
laborer and mechanic who worked on the
construction, alteration, or repair of the
qualified facility, including the name, the
last four digits of a social security or tax
identification number, address, telephone
number, and email address;
(2) The location and type of construc-
tion of the qualified facility;
(3) The labor classification(s) the
taxpayer applied to each laborer and
mechanic for determining the prevailing
wage rate and documentation supporting
the applicable classification, including the
applicable wage determination and copies
of executed contracts for construction,
alteration, or repair of the qualified facility
with any contractor or subcontractor;
(4) The hourly rate(s) of wages paid
(including rates of contributions or costs
for bona fide fringe benefits or cash equiv-
alents thereof) for each applicable labor
classification described in paragraph (c)
(3) of this section;
(5) Records to support any contribu-
tion irrevocably made on behalf of each
laborer or mechanic to a trustee or other
third person pursuant to a bona fide fringe
benefit program, and the rate of costs that
were reasonably anticipated in providing
bona fide fringe benefits to laborers and
mechanics pursuant to an enforceable
commitment to carry out a plan or pro-
gram described in 40 U.S.C. 3141(2)(B),
including records demonstrating that the
enforceable commitment was provided
in writing to the laborers and mechanics
affected;
(6) The total number of hours worked
by each laborer and mechanic per pay
period;
(7) The total wages paid to each laborer
and mechanic for each pay period (includ-
ing identifying any deductions from
wages);
(8) Records to support wages paid to
any qualified apprentices at less than the
applicable prevailing wage rates, includ-
ing records reflecting an individual’s par-
ticipation in a registered apprenticeship
program and the applicable wage rates
and apprentice- to-journeyworker ratios
prescribed by the registered apprentice-
ship program;
(9) The amount and timing of any cor-
rection and penalty payments and docu-
mentation reflecting the calculation of the

Bulletin No. 2024–34 507 August 19, 2024
correction and penalty payments, includ-
ing records to demonstrate eligibility for
the penalty waiver in §1.45-7(c)(6);
(10) Records to document any failures
to pay prevailing wages and the actions
taken to prevent, mitigate, or remedy the
failure (for example, records demonstrat-
ing that the taxpayer (or an independent
third party engaged by the taxpayer) regu-
larly reviewed payroll practices, included
requirements to pay prevailing wages in
contracts with contractors, and posted pre-
vailing wage rates in a prominent place on
the job site); and
(11) Records related to any complaints
received by the taxpayer, contractor, or
subcontractor that the taxpayer, contrac-
tor, or subcontractor was paying wages
less than the applicable prevailing wage
rate for work performed by laborers and
mechanics with respect to the qualified
facility.
(d) Recordkeeping for the apprentice-
ship requirements. Records sufficient to
demonstrate compliance with the applica-
ble apprenticeship requirements in section
45(b)(8) and §1.45-8 may include the fol-
lowing information with respect to each
qualified facility:
(1) Any written requests for the employ-
ment of qualified apprentices from regis-
tered apprenticeship programs, including
any contacts with the U.S. Department
of Labor’s Office of Apprenticeship or a
State apprenticeship agency regarding
requests for qualified apprentices from
registered apprenticeship programs;
(2) Any agreements entered into with
registered apprenticeship programs with
respect to the construction, alteration, or
repair of the facility;
(3) Documents reflecting the standards
and requirements of all registered appren-
ticeship programs from which taxpayers,
contractors, or subcontractors employed
qualified apprentices with respect to the
construction, alteration, or repair of the
facility (including the applicable ratio
requirement prescribed by each registered
apprenticeship program);
(4) The total number of labor hours
worked with respect to the construc-
tion, alteration, or repair of the qualified
facility, including and identifying hours
worked by each qualified apprentice;
(5) Records reflecting the daily ratio of
apprentices to journeyworkers;
(6) Records demonstrating compliance
with the Good Faith Effort Exception in
§1.45-8(f)(1) (including requests for qual-
ified apprentices, correspondence with
registered apprenticeship programs, and
denials of requests);
(7) The amount and timing of any pen-
alty payments and documentation reflect-
ing the calculation of the penalty pay-
ments;
(8) Records to document any failures
to satisfy the apprenticeship requirements
under section 45(b)(8) and §1.45-8 and
the actions taken to prevent, mitigate, or
remedy the failure; and
(9) Records related to any complaints
received by the taxpayer, contractor, or
subcontractor that the taxpayer, contrac-
tor, or subcontractor was not satisfying the
apprenticeship requirements under section
45(b)(8) and §1.45-8.
(e) Satisfaction of the recordkeeping
requirements. Taxpayers may satisfy the
recordkeeping requirements in this section
as follows:
(1) Taxpayers may collect and phys-
ically retain relevant records from every
contractor and subcontractor. The records
may have personally identifiable informa-
tion (PII) redacted to comply with appli-
cable privacy laws. Unredacted informa-
tion must be made available to the IRS
upon request;
(2) Taxpayers, contractors, and subcon-
tractors may provide relevant records to a
third party vendor to physically retain on
behalf of the taxpayer. The records may
have PII redacted to comply with appli-
cable privacy laws. Unredacted records
must be made available to the IRS upon
request; or
(3) Taxpayers, contractors, and sub-
contractors may each physically retain the
relevant unredacted records for their own
employees. Unredacted records must be
made available to the IRS upon request.
(f)
Applicability date. This section
applies to qualified facilities placed in
service in taxable years ending after June
25, 2024, and the construction of which
begins after June 25, 2024. Taxpayers may
apply this section to qualified facilities
placed in service in taxable years ending
on or before June 25, 2024, and qualified
facilities placed in service in taxable years
ending after June 25, 2024, the construc-
tion of which begins before June 25, 2024,
provided that taxpayers follow this section
in its entirety and in a consistent manner.
Par. 4. Sections 1.45L-1 through
1.45L-3 are added to read as follows:
§§1.45L-1 - 1.45L-2 [Reserved]
§1.45L-3 Rules relating to the
increased credit amount for prevailing
wage.
(a) In general. With respect to a quali-
fied residence described in section 45L(a)
(2)(B), the credit determined under sec-
tion 45L(a)(2)(B)(i) is $2,500 and the
credit determined under section 45L(a)(2)
(B)(ii) is $5,000 if the qualified residence
described in section 45L(a)(2)(B)—
(1) Meets the requirements under sec-
tion 45L(c)(1)(A) or 45L(c)(1)(B), as
applicable;
(2) Is constructed by an eligible con-
tractor;
(3) Is acquired by a person for use as a
residence during the taxable year; and
(4) Satisfies the prevailing wage
requirements of section 45(b)(7) and
§1.45-7, and the recordkeeping and report-
ing requirements of §1.45-12, with respect
to the construction of the qualified resi-
dence before such residence is acquired
by a person for use as a residence.
(b) Definitions—(1) Qualified resi-
dence. For purposes of this section, a
qualified residence means a qualified new
energy efficient home as defined in section
45L(b)(2).
(2) Eligible contractor. For purposes of
this section, an eligible contractor means
an eligible contractor as defined in section
45L(b)(1).
(c) Applicability date. This section
applies to any qualified new energy effi-
cient home acquired for use as a resi-
dence in taxable years ending after June
25, 2024, and the construction of which
begins after June 25, 2024. Taxpayers may
apply this section to any qualified new
energy efficient home acquired for use as
a residence in taxable years ending on or
before June 25, 2024, and any qualified
new energy efficient home acquired for
use as a residence in taxable years ending
after June 25, 2024, the construction of
which begins before June 25, 2024, pro-
vided that taxpayers follow this section in
its entirety and in a consistent manner.

August 19, 2024 508 Bulletin No. 2024–34
Par. 5. Section 1.45Q-6 is added to
read as follows:
§1.45Q-6 Rules relating to the
increased credit amount for prevailing
wage and apprenticeship.
(a) In general. If the requirements in
paragraph (b) of this section are satis-
fied with respect to any qualified facility
or any carbon capture equipment placed
in service at that facility, then the credit
determined under section 45Q(a) is mul-
tiplied by five.
(b) Qualified facility and carbon cap-
ture equipment requirements. The require-
ments of this paragraph (b) are satisfied
if any of the following requirements are
met—
(1) With respect to a qualified facil-
ity within the meaning of section 45Q the
construction of which begins on or after
January 29, 2023, and any carbon capture
equipment within the meaning of section
45Q placed in service at such facility, the
taxpayer meets the prevailing wage require-
ments of section 45(b)(7) and §1.45-7 with
respect to the construction of such facility
and equipment and with respect to the alter-
ation or repair of such facility and equip-
ment for any taxable year, for any portion
of such taxable year that is within the
period described in section 45Q(3)(A) or
(4)(A) after the facility or equipment was
originally placed in service, the apprentice-
ship requirements of section 45(b)(8) and
§1.45-8, and the recordkeeping and report-
ing requirements of §1.45-12;
(2) With respect to any carbon capture
equipment within the meaning of section
45Q the construction of which begins
on or after January 29, 2023, and that is
installed at a qualified facility the con-
struction of which began prior to January
29, 2023, the taxpayer meets the prevail-
ing wage requirements of section 45(b)(7)
and §1.45-7 with respect to the construc-
tion of such equipment and with respect to
the alteration or repair of such equipment
for any taxable year, for any portion of
such taxable year that is within the period
described in section 45Q(3)(A) or (4)(A)
after the equipment was originally placed
in service, the apprenticeship requirements
of section 45(b)(8) and §1.45-8, and the
recordkeeping and reporting requirements
of §1.45-12; or
(3) Carbon capture equipment within
the meaning of section 45Q the construc-
tion of which began prior to January 29,
2023, and such equipment is installed at a
qualified facility the construction of which
began prior to January 29, 2023.
(c) Applicability date. This section
applies to qualified facilities and carbon
capture equipment placed in service in
taxable years ending after June 25, 2024,
and the construction of which begins after
June 25, 2024. Taxpayers may apply this
section to qualified facilities and carbon
capture equipment placed in service in
taxable years ending on or before June 25,
2024, and qualified facilities and carbon
capture equipment placed in service in
taxable years ending after June 25, 2024,
the construction of which begins before
June 25, 2024, provided that taxpayers
follow this section in its entirety and in a
consistent manner.
Par. 6. Sections 1.45U-1 through
1.45U-3 are added to read as follows:
§§1.45U-1 - 1.45U-2 [Reserved]
§1.45U-3 Rules relating to the
increased credit amount for prevailing
wage.
(a) In general. If a qualified nuclear
power facility satisfies the prevailing wage
requirements of section 45(b)(7) and §1.45-7
for any alteration or repair with respect to
such qualified nuclear power facility within
the meaning of section 45U(b)(1), and the
recordkeeping and reporting requirements of
§1.45-12, then the amount of the zero-emis-
sion nuclear power production credit for the
taxable year is equal to the credit amount
determined under section 45U(a) multiplied
by five.
(b) Qualifying Project Labor Agree-
ment for a qualified nuclear power facil-
ity. For the purposes of section 45U and
§1.45-7(c)(6)(ii), in order to be a Qualify-
ing Project Labor Agreement, such agree-
ment must, at a minimum:
(1) Be a collective bargaining agree
-
ment with one or more labor organizations
(as defined in 29 U.S.C. 152(5)) of which
employees of the qualified nuclear power
facility are members and such agreement
establishes the terms and conditions of
employment at the qualified nuclear
power facility;
(2) Contain guarantees against strikes,
lockouts, and similar job disruptions;
(3) Set forth effective, prompt, and
mutually binding procedures for resolv-
ing labor disputes arising during the term
of the collective bargaining agreement;
and
(4) Contain provisions to pay wages at
rates not less than the prevailing rates in
accordance with subchapter IV of chapter
31 of title 40 of the United States Code.
(c) Applicability date. This section
applies to alterations and repairs of qual-
ified nuclear power facilities that are
performed after June 25, 2024, for tax-
able years beginning after June 25, 2024.
Taxpayers may apply this section to alter-
ations and repairs of qualified nuclear
power facilities that are performed prior
to June 25, 2024, provided that taxpayers
follow this section in its entirety and in a
consistent manner.
Par. 7. Sections 1.45V-1 through
1.45V-3 are added to read as follows:
§§1.45V-1 - 1.45V-2 [Reserved]
§1.45V-3 Rules relating to the
increased credit amount for prevailing
wage and apprenticeship.
(a) In general. If any qualified clean
hydrogen production facility (as defined
in section 45V(c)(3)) satisfies the require-
ments in paragraph (b) of this section,
then the amount of the credit for produc-
ing qualified clean hydrogen determined
under section 45V(a) with respect to qual-
ified clean hydrogen described in section
45V(b)(2) is equal to the credit amount
determined under section 45V(a) multi-
plied by five.
(b) Qualified clean hydrogen produc-
tion facility requirements. A qualified
clean hydrogen production facility satis-
fies the requirements of this paragraph (b)
if it is one of the following –
(1) A facility the construction of which
began prior to January 29, 2023, and that
meets the prevailing wage requirements of
section 45(b)(7) and §1.45-7 with respect
to alterations or repairs of a qualified facil-
ity within the meaning of section 45V that
occur after January 29, 2023 (to the extent
applicable), and that meets the record-
keeping and reporting requirements of
§1.45-12; or

Bulletin No. 2024–34 509 August 19, 2024
(2) A facility that meets the prevailing
wage requirements of section 45(b)(7)
and §1.45-7, the apprenticeship require-
ments of section 45(b)(8) and §1.45-8,
and the recordkeeping and reporting
requirements of §1.45-12 with respect to
the construction, alteration, or repair of
a qualified facility within the meaning of
section 45V.
(c) Applicability date. This section
applies to qualified clean hydrogen pro-
duction facilities placed in service in
taxable years ending after June 25, 2024,
and the construction of which begins
after June 25, 2024. Taxpayers may apply
this section to qualified clean hydrogen
production facilities placed in service in
taxable years ending on or before June
25, 2024, and qualified clean hydrogen
production facilities placed in service in
taxable years ending after June 25, 2024,
the construction of which begins before
June 25, 2024, provided that taxpayers
follow this section in its entirety and in a
consistent manner.
Par. 8. Sections 1.45Y-1 through
1.45Y-3 are added to read as follows:
§§1.45Y-1 - 1.45Y-2 [Reserved]
§1.45Y-3 Rules relating to the
increased credit amount for prevailing
wage and apprenticeship.
(a) In general. If any qualified clean
electricity production facility satisfies
the requirements in paragraph (b) of this
section, the amount of the credit for pro-
ducing clean electricity determined under
section 45Y(a) is the alternative amount
described in section 45Y(a)(2)(B), sub-
ject to adjustment provided by section
45Y(c).
(b) Qualified clean electricity pro-
duction facility requirements. A qualified
facility satisfies the requirements of this
paragraph (b) if it is one of the follow-
ing—
(1) A facility with a maximum net out-
put of less than one megawatt (as mea-
sured in alternating current);
(2) A facility the construction of which
began prior to January 29, 2023; or
(3) A facility that meets the prevailing
wage requirements of section 45(b)(7) and
§1.45-7, the apprenticeship requirements
of section 45(b)(8) and §1.45-8, and the
recordkeeping and reporting requirements
of §1.45-12 with respect to the construc-
tion, alteration, or repair of a qualified
clean electricity production facility within
the meaning of section 45Y.
(c) Applicability date. This section
applies to qualified clean electricity pro-
duction facilities placed in service in
taxable years ending after June 25, 2024,
and the construction of which begins
after June 25, 2024. Taxpayers may apply
this section to qualified clean electricity
production facilities placed in service in
taxable years ending on or before June
25, 2024, and qualified clean electricity
production facilities placed in service in
taxable years ending after June 25, 2024,
the construction of which begins before
June 25, 2024, provided that taxpayers
follow this section in its entirety and in a
consistent manner.
Par. 9. Sections 1.45Z-1 through
1.45Z-3 are added to read as follows:
§§1.45Z-1 - 1.45Z-2 [Reserved]
§1.45Z-3 Rules relating to the
increased credit amount for prevailing
wage and apprenticeship.
(a) In general. If any qualified facility
(as defined in section 45Z(d)(4)) satisfies
the requirements in paragraph (b) of this
section, the applicable amount used to
calculate the clean fuel production credit
determined under section 45Z(a) is the
alternative amount described in section
45Z(a)(2)(B) or 45Z(a)(3)(A)(ii), as appli-
cable, subject to the inflation adjustment
provided by section 45Z(c).
(b) Qualified facility for clean fuel pro-
duction requirements. A qualified facility
(as defined in section 45Z(d)(4)) satisfies
the requirements of this paragraph (b) if it
is one of the following—
(1) A qualified facility that is placed
in service after December 31, 2024, that
meets the prevailing wage requirements of
section 45(b)(7) and §1.45-7, the appren-
ticeship requirements of section 45(b)(8)
and §1.45-8, and the recordkeeping and
reporting requirements of §1.45-12 with
respect to the construction, alteration, or
repair of such qualified facility; or
(2) A qualified facility that is placed in
service before January 1, 2025, that meets
the prevailing wage requirements of sec-
tion 45(b)(7) and §1.45-7 with respect to
any alteration or repair of such qualified
facility that is performed in taxable years
beginning after December 31, 2024, the
apprenticeship requirements of section
45(b)(8) and §1.45-8 with respect to the
construction of such qualified facility, and
the recordkeeping and reporting require-
ments of §1.45-12.
(3) Special transition rule for facilities
placed in service before January 1, 2025.
Solely for purposes of the apprentice-
ship requirements of section 45(b)(8) and
§1.45-8, taxpayers that place a qualified
facility in service before January 1, 2025,
must satisfy the apprenticeship require-
ments with respect to construction of the
facility that occurs 90 days after June 25,
2024.
(c) Applicability date. This section
applies to qualified facilities for clean
fuel production placed in service in tax-
able years ending after June 25, 2024,
and the construction of which begins
after June 25, 2024. Taxpayers may
apply this section to qualified facilities
for clean fuel production placed in ser-
vice in taxable years ending on or before
June 25, 2024, and qualified facilities for
clean fuel production placed in service in
taxable years ending after June 25, 2024,
the construction of which begins before
June 25, 2024, provided that taxpayers
follow this section in its entirety and in a
consistent manner.
Par. 10. Sections 1.48C-1 through
1.48C-3 are added to read as follows:
§§1.48C-1 - 1.48C-2 [Reserved]
§1.48C-3 Rules relating to the
increased credit amount for prevailing
wage and apprenticeship.
(a) In general. If any qualifying
advanced energy project (as defined in
section 48C(c)(1)(A)) satisfies the pre-
vailing wage requirements of section
45(b)(7) and §1.45-7, the apprentice-
ship requirements of section 45(b)(8)
and §1.45-8, and the recordkeeping and
reporting requirements of §1.45-12, with
respect to the re-equipping, expansion, or
establishment of a qualifying advanced
energy project within the meaning of
section 48C, the qualifying advanced
energy project credit determined under

August 19, 2024 510 Bulletin No. 2024–34
section 48C(a) for any taxable year with
respect to credits allocated pursuant to
section 48C(e) is an amount equal to 30
percent of the qualified investment for
the taxable year. For purposes of this sec-
tion, the term re-equipping, expansion,
or establishment means those activities
described in §§1.45-7(d)(3) and 1.45-
8(g)(1) that are performed with respect
to a qualifying advanced energy project
within the meaning of section 48C before
such project is placed in service.
(b) Applicability date. This section
applies to qualifying advanced energy
projects placed in service in taxable
years ending after June 25, 2024, and
the re-equipping, expansion, or estab-
lishment of which begins after June 25,
2024. Taxpayers may apply this section
to qualifying advanced energy projects
placed in service in taxable years ending
on or before June 25, 2024, and qualify-
ing advanced energy projects placed in
service in taxable years ending after June
25, 2024, the re-equipping, expansion, or
establishment of which begins before June
25, 2024, provided that taxpayers follow
this section in its entirety and in a consis-
tent manner.
Par. 11. Sections 1.179D-1 through
1.179D-3 are added to read as follows:
§§1.179D-1 - 1.179D-2 [Reserved]
§1.179D-3 Rules relating to the
increased deduction for prevailing
wage and apprenticeship.
(a) In general. If any energy efficient
commercial building property (as defined
in section 179D(c)(1)), energy efficient
building retrofit property (as defined in
section 179D(f)(3)), or property installed
pursuant to a qualified retrofit plan (as
defined in section 179D(f)(2)) satisfies the
requirements in paragraph (b) of this sec-
tion, the applicable dollar value for deter-
mining the maximum amount of the deduc-
tion determined under section 179D(b)(2)
is the increased amount described in sec-
tion 179D(b)(3)(A). For purposes of this
section, installation means those activities
described in §§1.45-7(d)(3) and 1.45-
8(g)(1) that are performed with respect
to energy efficient commercial building
property, energy efficient building retrofit
property, or property installed pursuant to
a qualified retrofit plan within the mean-
ing of section 179D before such property
is placed in service.
(b) Certain energy efficient commercial
building property requirements. Energy
efficient commercial building property,
energy efficient building retrofit property,
or property installed pursuant to a qualified
retrofit plan satisfies the requirements of this
paragraph (b) if it is one of the following—
(1) Property the installation of which
began prior to January 29, 2023; or
(2) Property that meets the prevailing
wage requirements of section 45(b)(7) of
the Code and §1.45-7, the apprenticeship
requirements of section 45(b)(8) of the
Code and §1.45-8, and the recordkeeping
and reporting requirements of §1.45-12,
all with respect to the installation of any
property.
(c) Applicability date. This section
applies to energy efficient commer-
cial building property, energy efficient
building retrofit property, or property
installed pursuant to a qualified retro-
fit plan installed in taxable years ending
after June 25, 2024, and the installation
of which begins after June 25, 2024. Tax-
payers may apply this section to energy
efficient commercial building property,
energy efficient building retrofit prop-
erty, or property installed pursuant to a
qualified retrofit plan installed in taxable
years ending on or before June 25, 2024,
and energy efficient commercial building
property, energy efficient building retrofit
property, or property installed pursuant to
a qualified retrofit plan installed in tax-
able years ending after June 25, 2024, the
installation of which begins before June
25, 2024, provided that taxpayers follow
this section in its entirety and in a consis-
tent manner.
Douglas W. O’Donnell,
Deputy Commissioner.
Approved: June 9, 2024
Aviva R. Aron-Dine,
Acting Assistant Secretary of
the Treasury (Tax Policy).
(Filed by the Office of the Federal Register June 18,
2024, 8:45 a.m., and published in the issue of the
Federal Register for June 25, 2024, 89 FR 53184)
26 CFR 1.430(h)(3)-2
T.D. 10005
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Plan-Specific Substitute
Mortality Tables for
Determining Present Value
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document sets forth
final regulations that update the require-
ments that a plan sponsor of a single-em-
ployer defined benefit plan must meet to
obtain IRS approval to use mortality tables
specific to the plan in calculating present
value for minimum funding purposes (as
a substitute for the generally applicable
mortality tables). These regulations affect
participants in, and beneficiaries of, cer-
tain retirement plans and employers main-
taining those plans.
DATES: Effective date: These regulations
are effective July 31, 2024.
Applicability date: These regulations
apply for plan years beginning on or after
January 1, 2025.
FOR FURTHER INFORMATION
CONTACT: Arslan Malik or Linda S. F.
Marshall, Office of Associate Chief Coun-
sel (Employee Benefits, Exempt Organi-
zations, and Employment Taxes) at (202)
317-6700 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
Section 412 of the Internal Revenue
Code (Code) prescribes minimum funding
requirements for defined benefit pension
plans. Section 430 specifies the minimum
funding requirements that apply generally

Bulletin No. 2024–34 511 August 19, 2024
to defined benefit plans that are single-em-
ployer plans (that is, not multiemployer
plans).
1
For a plan subject to section
430, section 430(a) defines the minimum
required contribution for a plan year by
reference to the plan’s funding target for
the plan year. Under section 430(d)(1), a
plan’s funding target for a plan year gen-
erally is the present value of all benefits
accrued or earned under the plan as of the
first day of that plan year.
Section 430(h)(3) provides rules
regarding the mortality tables to be used
under section 430. Under section 430(h)
(3)(A), except as provided in section
430(h)(3)(C) or (D), the Secretary is to
prescribe by regulation mortality tables to
be used in determining any present value
or making any computation under section
430. Section 430(h)(3)(C) prescribes rules
for a plan sponsor’s use of substitute mor-
tality tables reflecting the specific mor-
tality experience of a plan’s population
instead of using the generally applicable
mortality tables. Under section 430(h)(3)
(C), the plan sponsor may request the Sec-
retary’s approval to use plan-specific sub-
stitute mortality tables that meet require-
ments specified in section 430(h)(3)(C)
(iii). If the Secretary determines that the
proposed tables meet the statutory stan-
dards and approves the request, the substi-
tute mortality tables are used to determine
present values and make computations
under section 430 during the period of
consecutive plan years (not to exceed 10)
specified in the request.
Under section 430(h)(3)(C)(iii), a sub-
stitute mortality table may be used for a
plan only if: (1) the plan has a sufficient
number of plan participants and has been
maintained for a sufficient period of time
to have credible mortality information
necessary to create a substitute mortality
table; and (2) the table reflects the actual
mortality experience of the plan’s par-
ticipants and projected trends in general
mortality experience. Except as provided
by the Secretary, a plan sponsor may not
use substitute mortality tables for any
plan unless substitute mortality tables are
established and used for each plan main-
tained by the plan sponsor or a member of
its controlled group.
Final regulations (TD 9826) under
section 430(h)(3) were published in the
Federal Register on October 5, 2017 (82
FR 46388). The final regulations issued
in 2017 include rules regarding generally
applicable mortality tables under sec-
tion 430(h)(3)(A), which are set forth in
§1.430(h)(3)-1, as well as rules regard-
ing substitute mortality tables under sec-
tion 430(h)(3)(C), which are set forth in
§1.430(h)(3)-2. Section 1.430(h)(3)-2(d)
(2) provides that substitute mortality
tables must be based on the plan’s mortal-
ity experience during an experience study
period that consists of 2, 3, 4, or 5 con-
secutive 12-month periods. In conjunction
with the 2017 issuance of §1.430(h)(3)-2,
the Department of the Treasury (Treasury
Department) and the IRS issued Rev.
Proc. 2017-55, 2017-43 IRB 373, which
sets forth the procedure by which a plan
sponsor of a defined benefit plan may
request and obtain approval for the use of
plan-specific substitute mortality tables.
Beginning in 2020 and extending into
the first part of 2023, for many defined
benefit pension plans, the mortality expe-
rience of the plan participants was sig-
nificantly higher than expected due to
the COVID-19 pandemic. The Treasury
Department and the IRS are concerned
that, if a plan sponsor applied for approval
of plan-specific substitute mortality tables
using an experience study period that
reflects the actual mortality experience for
the plan’s population during those years,
then unless there is a change in the rules
that are used for generating those tables,
the resulting plan-specific substitute mor-
tality tables would overstate the expected
future mortality for the plan’s population.
This is because §1.430(h)(3)-2(d)(4)(i)
provides that substitute mortality tables
are constructed using a mortality ratio cal-
culated for the plan’s population, which
is determined by dividing the amounts-
weighted number of actual deaths for plan
participants during the experience study
period by the amounts-weighted number
of expected deaths for those participants
under the generally applicable mortal-
ity tables. In the absence of any changes
to the rules and procedures for gener-
ating plan-specific substitute mortality
tables, a mortality ratio developed using
an experience study period that includes
the period in which the COVID-19 pan-
demic occurred (COVID-19 pandemic
period) will likely be unusually high, as
the numerator of the mortality ratio will
reflect the actual number of deaths for the
plan population during this period, while
the denominator of that ratio will be based
on the expected number of deaths from
the generally applicable mortality tables
(which reflect only a small fraction of the
significant short-term increase in mortality
rates that occurred during the COVID-19
pandemic period). The Treasury Depart-
ment and the IRS are concerned that if
a substitute mortality table constructed
using that mortality ratio is used for a
plan’s actuarial valuation, then the plan’s
liabilities will be understated.
To address this concern, proposed reg-
ulations that provide rules regarding the
use of mortality experience data for the
COVID-19 pandemic period in the con-
struction of substitute mortality tables
were published in the Federal Register on
October 20, 2023 (88 FR 72409) (the pro-
posed regulations). On the same date that
the proposed regulations were issued, the
Treasury Department and the IRS issued
final regulations amending §1.430(h)(3)-1
to update the generally applicable mortal-
ity tables under section 430(h)(3)(A) (88
FR 72357) (2023 final mortality regula-
tions).
Under §1.430(h)(3)-2(c)(6)(ii)(E),
approval to use a previously approved
substitute mortality table terminates in
conjunction with the replacement of the
generally applicable mortality tables
under section 430(h)(3)(A) and §1.430(h)
(3)-1 as of the date specified in guidance
published in the Internal Revenue Bulle-
tin. The preamble to the 2023 final mortal-
ity regulations indicated that the Treasury
Department and the IRS will not require
that the use of any previously approved
plan-specific substitute mortality tables be
1
Section 302 of the Employee Retirement Income Security Act of 1974, Public Law No. 93-406, 88 Stat. 829 (1974), as amended (ERISA), sets forth funding rules that are parallel to those in
section 412 of the Code, and section 303 of ERISA sets forth additional funding rules for defined benefit plans (other than multiemployer plans) that are parallel to those in section 430 of the
Code. Pursuant to section 101 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App., as amended, the Secretary of the Treasury has interpretive jurisdiction over the subject matter addressed
in these regulations for purposes of ERISA, as well as the Code. Thus, these regulations issued under section 430 of the Code also apply for purposes of section 303 of ERISA.

August 19, 2024 512 Bulletin No. 2024–34
terminated in conjunction with the replace-
ment of the generally applicable mortality
tables until amendments to the substitute
mortality regulations are finalized and an
updated revenue procedure that reflects
those final regulations is issued.
Four comments on the proposed reg-
ulations were received. No commenters
requested to speak at a public hearing. The
Treasury Department and IRS considered
the comments that were received and are
finalizing the proposed regulations with
certain revisions, as explained in the fol-
lowing summary of comments and expla-
nation of revisions. In addition, the Trea-
sury Department and IRS are issuing Rev.
Proc. 2024-32, 2024-34 IRB __, which
updates the procedures set forth in Rev.
Proc. 2017-55 to reflect the amendments
to §1.430(h)(3)-2 made by this Treasury
decision.
Summary of Comments and
Explanation of Revisions
These regulations provide rules regard-
ing the use of mortality experience data
for the COVID-19 pandemic period that
supplement the methodology for develop-
ing substitute mortality tables provided in
§1.430(h)(3)-2. These rules have the same
structure as the rules that were included
in the proposed regulations (under
which the expected probability of death
must be adjusted to reflect the generally
higher mortality that occurred during the
COVID-19 pandemic period) but elimi-
nate the adjustment for 2023 and provide
for a different adjustment for 2022.
To develop a mortality ratio that is
more accurately predictive of future mor-
tality experience for a plan population,
these regulations provide that the expected
deaths for the plan population used in
determining the denominator in the mor-
tality ratio are calculated by adjusting the
mortality rates in the generally applicable
mortality tables. Specifically, the regu-
lations provide that, for each 12-month
period that is included in the experience
study period and that begins after 2019
and before 2023, the expected mortality
rate for an individual is determined by
multiplying the expected mortality rate for
that individual from the standard mortality
tables by an adjustment factor.
The proposed regulations provided for
an adjustment factor for each 12-month
period that is included in the experience
study period and that began after 2019 and
before 2024. The proposed adjustment fac-
tor for each of those years approximated
the ratio (as reported by the National Cen-
ter for Health Statistics, which is part of
the Centers for Disease Control and Pre-
vention) of (1) the actual number of deaths
for the general population for the year to
(2) the expected number of deaths for the
general population for that year.
2
Under
the proposed regulations, the adjustment
factor for a 12-month period beginning
in 2020 or 2021 was 1.15, for a 12-month
period beginning in 2022 was 1.10, and
for a 12-month period beginning in 2023
was 1.05.
The Treasury Department and IRS
received four comments regarding the
adjustment factors set forth in the pro-
posed regulations. The four comment-
ers stated that a single adjustment factor
for each year inadequately captured the
age, gender, and regional variances in
excess mortality during the COVID-19
pandemic. In addition, three comment-
ers suggested that the adjustment factor
for 2023 be eliminated (because prelimi-
nary data from 2023 showed a decline in
excess mortality such that no adjustment
may be needed for 2023), and that the
adjustment factor for 2022 be reduced.
After considering these comments and
the most recent mortality data avail-
able, the Treasury Department and IRS
are eliminating the adjustment for 2023
and reducing the adjustment for 2022.
However, the Treasury Department and
IRS concluded that providing adjustment
factors based on age would be inconsis-
tent with the overall model for develop-
ing substitute mortality tables, and that
providing separate adjustment factors
based on gender or geography would add
a degree of complexity that would out-
weigh any potential increase in precision
that these adjustment factors may pro-
vide.
The four commenters also suggested
that, as an alternative to applying the
adjustment factors, plan sponsors be per-
mitted to construct substitute mortality
tables without taking into account any
mortality experience from the COVID-19
pandemic period. The Treasury Depart-
ment and IRS have considered this
approach but rejected it because providing
for such an approach would mean that the
mortality experience used to construct the
substitute mortality table could be so out
of date that it would be less reliable in pre-
dicting future mortality for the plan popu-
lation. For example, if a plan sponsor was
applying for approval of a substitute mor-
tality table in 2024 using calendar year
mortality experience without taking into
account mortality experience for 2020,
2021, and 2022, the most recent mortality
experience would be from 2019, which is
more than 4 years prior to the application
for approval.
Under a transition rule in the proposed
regulations, substitute mortality tables
that were previously approved for use for
a plan year beginning in 2025 would be
treated as satisfying the rules for develop-
ing substitute mortality tables that apply
for that plan year. This transition rule,
which is included in these regulations,
addresses plans with previously approved
substitute mortality tables that were based
on a mortality experience study that
included data from the COVID-19 pan-
demic period (and therefore do not satisfy
the requirements specified in these regu-
lations).
One commenter requested clarification
as to the extent to which other previously
approved substitute mortality tables may
continue to be used for the remainder of
their approval period even if that approval
period extends beyond 2025. The Trea-
sury Department and IRS considered this
comment and decided to continue to allow
the use of previously approved substi-
tute mortality tables that were developed
based on an experience study that did not
include data from the COVID-19 pan-
demic period for the original duration of
the approval, provided that there has not
been a significant change in plan cover-
2
See Excess Deaths Associated with Covid-19 at https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm

Bulletin No. 2024–34 513 August 19, 2024
age, as described in the first sentence of
§1.430(h)(3)-2(c)(6)(iii)(A).
3
Thus, if the
experience study for a substitute mortality
table that has been approved for use for
a plan year beginning in 2025 includes
mortality data from 2020, 2021, or 2022
(or the number of individuals covered by
the substitute mortality table is less than
80 percent or more than 120 percent of
the average number of individuals in that
population over the years covered by the
experience study), then the substitute
mortality table may be used for a plan year
beginning in 2025 (but may not be used
for later years).
These regulations also include a tran-
sition rule that applies to requests for
approval to use substitute mortality tables
for a plan year beginning in 2025. Under
that rule, a request for approval to use sub-
stitute mortality tables for that plan year
will be considered timely if it is submitted
on or before October 31, 2024, provided
that the plan sponsor agrees to a 90-day
extension under §1.430(h)(3)-2(b)(2)
(iv) of the 180-day review period under
§1.430(h)(3)-2(b)(2)(iii).
Applicability Date
These regulations apply for plan years
beginning on or after January 1, 2025.
Statement of Availability of IRS
Documents
IRS Revenue Rulings, Revenue Pro-
cedures, and Notices cited in this docu-
ment are published in the Internal Reve-
nue Bulletin (or Cumulative Bulletin) and
are available from the Superintendent of
Documents, U.S. Government Publishing
Office, Washington, DC 20402, or by vis-
iting the IRS website at www.irs.gov.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum of
Agreement, Review of Treasury Regula-
tions under Executive Order 12866 (June
9, 2023), tax regulatory actions issued by
the IRS are not subject to the requirements
of section 6 of Executive Order 12866, as
amended. Therefore, a regulatory impact
assessment is not required.
II. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibil-
ity Act (5 U.S.C. chapter 6), it is hereby
certified that this rule will not have a sig-
nificant economic impact on a substantial
number of small entities. Small employers
generally cannot use plan-specific substi-
tute mortality tables because their defined
benefit pension plans do not have credible
mortality experience (which is defined as
a minimum number of deaths during the
experience study period) as is required to
use substitute mortality tables. Therefore,
a regulatory flexibility analysis under the
Regulatory Flexibility Act is not required.
Pursuant to section 7805(f), the notice
of proposed rulemaking preceding these
regulations was submitted to the Chief
Counsel for Advocacy of the Small Busi-
ness Administration for comment on their
impact on small business, and no com-
ments were received.
III. Unfunded Mandates Reform Act
Section 202 of the Unfunded Man-
dates Reform Act of 1995 requires that
agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result in
expenditures in any one year by a State,
local, or Tribal government, in the aggre-
gate, or by the private sector, of $100
million in 1995 dollars, updated annually
for inflation. These regulations do not
include any rule that include any Federal
mandate that may result in expenditures
by State, local, or Tribal governments,
or by the private sector in excess of that
threshold.
IV. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding
requirements of section 6 of the Executive
order. These regulations do not include
rules that have federalism implications,
impose substantial direct compliance
costs on State and local governments, or
preempt State law within the meaning of
the Executive order.
V. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs des-
ignated this rule as not a major rule, as
defined by 5 U.S.C. 804(2).
Drafting Information
The principal authors of these regu-
lations are Arslan Malik and Linda S. F.
Marshall of the Office of Associate Chief
Counsel (Employee Benefits, Exempt
Organizations, and Employment Taxes).
However, other personnel from Treasury
and the IRS participated in the develop-
ment of these regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
Amendments to the Regulations
Accordingly, the Treasury Department
and the IRS amend 26 CFR part 1 as fol-
lows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read, in part, as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.430(h)(3)-2 is
amended by:
a. In paragraph (a), removing the lan-
guage “§ 601.601(d)(2)(ii)(b)” and add-
3
The termination of the use of previously approved substitute mortality tables is described in section 12 of Rev. Proc. 2024-32. Under that revenue procedure, if there has been a significant
change in plan coverage, a previously approved substitute mortality table cannot be used for a plan year that begins on or after January 1, 2026, even if the plan actuary certifies that the table
continues to be accurately predictive of future mortality of the plan population.

August 19, 2024 514 Bulletin No. 2024–34
ing the language “§ 601.601(d)(2)” in its
place;
b. In paragraph (d)(2)(ii)(B), removing
the language “January 1, 2019 year is”
and adding the language “January 1, 2019
is” in its place;
c. Revising paragraphs (d)(4)(iii) and
(g).
The revisions read as follows:
§1.430(h)(3)-2 Plan-specific substitute
mortality tables used to determine
present value.
* * * * *
(d) * * *
(4) * * *
(iii) Standard mortality table—(A)
Projection of base table. Except as other-
wise provided in this paragraph (d)(4)(iii),
the standard mortality table for a year is
the mortality table determined by applying
cumulative mortality improvement fac-
tors determined under §1.430(h)(3)-1(b)
(2)(ii) to the base mortality table under
§1.430(h)(3)-1(d) for the period begin-
ning with the base year for that mortality
table and ending in the base year for the
base substitute mortality table determined
under paragraph (c)(3)(ii) of this section.
For purposes of the preceding sentence,
the cumulative mortality improvement
factors are determined using the mortality
improvement rates described in §1.430(h)
(3)-1(b)(1)(iii) that apply for the calendar
year during which the plan sponsor sub-
mits the request for approval to use substi-
tute mortality tables.
(B) Adjustments to standard mortal-
ity table for 2020, 2021, and 2022. If a
12-month period in the experience study
period begins after December 31, 2019,
and before January 1, 2023, the probabil-
ity of death for an individual under para-
graph (d)(4)(ii)(A)(2)(i) of this section is
determined as the mortality rate for the
individual’s age (at the beginning of the
year) and gender from the standard mor-
tality table determined under paragraph
(d)(4)(iii)(A) of this section multiplied by
the adjustment factor in Table 1 for the
calendar year that includes the first day of
the 12-month period. For example, for an
experience study period that begins April
1, 2019, and ends March 31, 2023, the
probability of death for the year beginning
April 1, 2022, for a male annuitant who
is age 65 as of that date is the probabil-
ity of death from the base mortality table
(0.01087), multiplied by the cumulative
mortality improvement factor for the
period from 2012 to 2021 (1.02292) and
by the adjustment factor for the 2022 cal-
endar year of 1.075, resulting in a proba-
bility of death of 0.01195.
Table 1 to paragraph (d)(4)(iii)(B):
Calendar YearAdjustment Factor
20201.15
20211.15
20221.075
(C) Selection of base table. If the pop-
ulation consists solely of annuitants, the
annuitant base mortality table set forth in
§ 1.430(h)(3)-1(d) must be used for pur-
poses of paragraph (d)(4)(iii)(A) of this
section. If the population consists solely
of nonannuitants, the nonannuitant base
mortality table set forth in § 1.430(h)
(3)-1(d) must be used for that purpose. If
the population includes both annuitants
and nonannuitants, a combination of the
annuitant and nonannuitant base tables
set forth in § 1.430(h)(3)-1(d) must be
used for that purpose. The combined table
is constructed using the weighting fac-
tors for small plans that are set forth in §
1.430(h)(3)-1(d). The weighting factors
are applied to develop the combined table
using the following equation: Combined
mortality rate = [nonannuitant rate * (1
− weighting factor)] + [annuitant rate *
weighting factor].
* * * * *
(g) Applicability date—(1) General
rule. This section applies for plan years
beginning on or after January 1, 2025.
Except as provided in paragraph (g)(2) or
(3) of this section, the substitute mortality
table used for a plan for such a plan year
must comply with the rules of paragraphs
(a) through (f) of this section.
(2) Transition rule for previously
approved substitute mortality tables. If a
plan sponsor has received approval from
the Commissioner to use substitute mor-
tality tables for a plan year beginning in
2025, then the plan’s base substitute mor-
tality tables that were approved are treated
as satisfying the requirements of para-
graph (d) or (e) of this section, as applica-
ble, for that plan year.
(3) Transition rule for requests for
approval to use substitute mortality tables.
A written request described in paragraph
(b)(1)(i) of this section to use substitute
mortality tables for a plan year that begins
during 2025 does not fail to satisfy the tim-
ing requirement of paragraph (b)(1)(ii) of
this section if it is submitted no later than
October 31, 2024, provided that the plan
sponsor agrees to a 90-day extension of
the 180-day review period in accordance
with paragraph (b)(2)(iv) of this section.
Douglas W. O’Donnell,
Deputy Commissioner.
Approved: July 8, 2024
Aviva R. Aron-Dine,
Acting Assistant Secretary of the Trea-
sury (Tax Policy).
(Filed by the Office of the Federal Register July 30,
2024, 8:45 a.m., and published in the issue of the
Federal Register for July 31, 2024, 89 FR 61343)

Bulletin No. 2024–34 515 August 19, 2024
Part III
Required Procedures to
Claim a Section 45Q Credit
for Utilization of Carbon
Oxide
Notice 2024-60
SECTION 1. PURPOSE
This notice describes the informa-
tion that must be included in a written
report described in § 1.45Q-4(c)(2) of the
Income Tax Regulations (LCA Report)
and provides the procedures a taxpayer
must follow to submit the LCA Report
and required supporting information to the
Internal Revenue Service (IRS) and the
Department of Energy (DOE) for review
under § 1.45Q-4(c)(5) before any credit
for carbon oxide sequestration allowed
under § 45Q(a)(2)(B)(ii) or (a)(4)(B)(ii)
of the Internal Revenue Code (Code) is
determined for qualified carbon oxide
utilized by the taxpayer in the manner
described in § 45Q(f)(5) (§ 45Q utiliza-
tion credit).
1
As required by § 1.45Q-4(c)
(6), the IRS must approve the lifecycle
analysis (LCA) of greenhouse gas emis-
sions (as defined in § 1.45Q-4(c)(1)) doc-
umented in the LCA Report with respect
to carbon capture equipment placed in ser-
vice on or after February 9, 2018, before
any § 45Q utilization credit otherwise
satisfying the applicable requirements
of § 45Q and §§ 1.45Q-1, 1.45Q-2, and
1.45Q-4 is determined. Accordingly, the
IRS must approve the taxpayer’s LCA
before the taxpayer may claim any § 45Q
utilization credit determined with respect
to a taxpayer on any federal income tax
return for a taxable year beginning on or
after January 13, 2021 (that is, the taxable
years to which § 1.45Q-4 applies).
2
The Department of the Treasury (Trea-
sury Department) and the IRS anticipate
issuing proposed regulations to update
§§ 1.45Q-1 through 1.45Q-4 for amend-
ments made by § 13104 of Public Law
117–169, 136 Stat. 1818 (August 16,
2022), commonly known as the Inflation
Reduction Act of 2022 (IRA), as well
as to adopt certain aspects of the guid-
ance provided by this notice. The Trea-
sury Department and the IRS published
final regulations (REG-101607-23) in
the Federal Register (89 FR 17546)
under §§ 1.6417-1 through 1.6417-6 with
respect to any § 45Q utilization credit
determined with respect to a taxable year
beginning after December 31, 2022, as
an applicable credit for purposes of mak-
ing an elective payment election under
§ 6417. Additionally, on June 21, 2023,
the Treasury Department and the IRS
published a notice of proposed rulemak-
ing (REG-101610-23) in the Federal
Register (88 FR 40496), with respect to
any § 45Q utilization credit determined
with respect to a taxable year beginning
after December 31, 2022, as an eligible
credit for purposes of making an election
under § 6418.
3

SECTION 2. BACKGROUND
.01 Congress enacted the credit for
the sequestration of carbon dioxide under
§ 45Q in § 115 of the Energy Improve-
ment and Extension Act of 2008, Public
Law 110-343, Div. B, Title I, 122 Stat.
3765, 3829 (October 3, 2008). Congress
amended § 45Q several times thereafter,
including significantly by § 41119 of the
Bipartisan Budget Act of 2018, Public
Law 115-123, Div. D, Title II, 132 Stat.
64, 162 (February 9, 2018), to apply to
all carbon oxides, and most recently on
August 16, 2022, by § 13104 of the IRA,
136 Stat. 1924.

.02 Section 45Q(a)(2)(B)(ii) allows a
§ 45Q utilization credit of $10 per metric
ton of qualified carbon oxide captured by
the taxpayer using carbon capture equip-
ment that is originally placed in service
at a qualified facility before February 9,
2018, and utilized by the taxpayer in a
manner described in § 45Q(f)(5).
.03 Section 45Q(a)(4)(B)(ii) allows
a § 45Q utilization credit of the applica-
ble dollar amount (as determined under §
45Q(b)(1)) per metric ton of qualified car-
bon oxide captured by the taxpayer using
carbon capture equipment that is origi-
nally placed in service at a qualified facil-
ity on or after February 9, 2018, during
the 12-year period beginning on the date
the equipment was originally placed in
service, and utilized by the taxpayer in a
manner described in § 45Q(f)(5).
.04 Section 45Q(f)(5)(A) provides that
“utilization of qualified carbon oxide”
means (i) the fixation of such qualified car-
bon oxide through photosynthesis or che-
mosynthesis, such as through the growing
of algae or bacteria; (ii) the chemical con-
version of such qualified carbon oxide to a
material or chemical compound in which
such qualified carbon oxide is securely
stored; or (iii) the use of such qualified
carbon oxide for any other purpose for
which a commercial market exists (with
the exception of use as a tertiary injectant
in a qualified enhanced oil or natural gas
recovery project), as determined by the
Secretary of the Treasury or her delegate
(Secretary).
.05 Section 45Q(f)(5)(B)(i) provides a
methodology to determine the amount of
qualified carbon oxide utilized by the tax-
payer. Such amount is equal to the metric
tons of qualified carbon oxide that the tax-
payer demonstrates, based upon an LCA
of greenhouse gas emissions and subject
to such requirements as the Secretary, in
consultation with the Secretary of Energy
and the Administrator of the Environmen-
tal Protection Agency (EPA), determines
appropriate, were (i) captured and per-
manently isolated from the atmosphere,
1
Unless otherwise specified, all “Section” or “§” references are to sections of the Code or the Income Tax Regulations (26 CFR part 1).
2
Pursuant to § 1.45Q-4(e), taxpayers may choose to apply the rules in § 1.45Q-4 for taxable years beginning on or after January 1, 2018, provided the taxpayer applies §§ 1.45Q-1, 1.45Q-
2, 1.45Q-3, 1.45Q-4, and 1.45Q-5 in their entirety and in a consistent manner. Alternatively, taxpayers may choose to rely on the rules in § 1.45Q-4 as contained in the notice of proposed
rulemaking (REG-112339-19) published in the Federal Register (85 FR 34050) on June 20, 2020 (2020 proposed regulations), for taxable years beginning on or after February 9, 2018, and
before January 15, 2021, provided the taxpayer follows proposed §§ 1.45Q-1, 1.45Q-2, 1.45Q-3, 1.45Q-4, and 1.45Q-5 of the 2020 proposed regulations in their entirety and in a consistent
manner.
3
Pursuant to § 13801(g) of the IRA, §§ 6417 and 6418 apply to taxable years beginning after December 31, 2022. See 136 Stat. at 2013.

August 19, 2024 516 Bulletin No. 2024–34
or (ii) displaced from being emitted into
the atmosphere, through use of a process
described in § 45Q(f)(5)(A).
.06 Section 45Q(f)(5)(B)(ii) provides
that for purposes of determining the
amount of qualified carbon oxide utilized
by the taxpayer for purposes of § 45Q(a)
(2)(B)(ii) or (a)(4)(B)(ii), the term “life-
cycle greenhouse gas emissions” has the
same meaning given such term under
§ 21 1(o)(1)(H) of the Clean Air Act (42
U.S.C. 7545(o)(1)(H)), as in effect on
February 9, 2018, except that “product” is
substituted for “fuel” each place it appears
in 42 U.S.C. 7545(o)(1)(H).
.07 On June 2, 2020, the Treasury
Department and the IRS published a
notice of proposed rulemaking under §
45Q (REG-112339-19, 85 FR 34050)
(proposed regulations). After consider-
ation of all comments received in response
to the proposed regulations, on January
15, 2021, the Treasury Department and
the IRS published final regulations under
§ 45Q in the Federal Register (T.D. 9944;
86 FR 4728).
.08 For purposes of § 45Q(a)(2)(B)
(ii) or (a)(4)(B)(ii) and § 1.45Q-1(b)(ii)
and (c)(2)(ii), § 1.45Q-4(b)(2) provides
that the amount of qualified carbon oxide
determined to be utilized by the taxpayer
for purposes of computing the § 45Q uti-
lization credit cannot exceed the amount
of qualified carbon oxide measured at the
source of capture.
.09 Section 1.45Q-4(c)(1) provides that
for purposes of determining the amount of
qualified carbon oxide utilized by the tax-
payer, the term “lifecycle greenhouse gas
emissions” means the aggregate quantity
of greenhouse gas emissions (including
direct emissions and significant indirect
emissions such as significant emissions
from land use changes)
4
related to the full
product life cycle, including all stages
of product and feedstock production and
distribution, from feedstock generation
or extraction through the distribution and
delivery and use of the finished product
to the ultimate consumer, with the mass
values for all greenhouse gases adjusted
to account for their relative global warm-
ing potential according to Table A-1 of 40
CFR Part 98 subpart A. Such emissions
are expressed in carbon dioxide equiva-
lent (CO
2
-e).
.10 Section 1.45Q-4(c)(2) provides
that the taxpayer verifies the amount of
qualified carbon oxide utilized through an
LCA. An LCA must demonstrate that the
proposed system, inclusive of the taxpay-
er’s process, results in a net reduction of
CO
2
-e compared to a comparison system.
SECTION 3. LCA REPORT
STANDARDS AND REQUIREMENTS
.01 LCA Report. Section 1.45Q-4(c)
(2) requires that the results of a taxpay-
er’s LCA be documented in a written LCA
Report. In the case of a taxpayer that owns
multiple qualified facilities for which it
wishes to claim a § 45Q utilization credit,
a separate LCA Report is required for each
qualified facility.
.02 LCA Report Standards. Section
1.45Q-4(c)(3) requires that an LCA
Report be prepared in conformity with
and contain documentation that conforms
with International Organization for Stan-
dardization (ISO) 14040:2006, Environ-
mental management – Life cycle assess-
ment – Principles and framework and ISO
14044:2006, Environmental management
— Life cycle assessment — Requirements
and guidelines. To ensure conformity with
these ISO standards, the LCA Report must
be completed in accordance with the most
current revision, as of the beginning of the
year in which the LCA is submitted, of the
DOE’s National Energy Technology Lab-
oratory’s (NETL) Carbon Dioxide Utili-
zation (CO2U) Life Cycle Analysis Guid-
ance for the U.S. DOE Office of Fossil
Energy and Carbon Management and 45Q
Addendum to the CO2U LCA Guidance
Document: https://www.netl.doe.gov/
LCA/CO2U (NETL CO2U LCA Guid-
ance Document) and https://www.netl.
doe.gov/LCA/CO2U/45Q (NETL 45Q
Addendum).
5
Section 1.45Q-4(c)(3) fur-
ther provides that an LCA may consist of
direct and indirect data in conformity with
ISO 14040:2006 and 14044:2006. Direct
and indirect data are also generally known
within ISO standards as primary and sec-
ondary data. For purposes of § 45Q, an
LCA must rely upon direct, or primary,
data to address the actual operational per-
formance of the taxpayer’s system for the
taxable year for which the LCA Report is
submitted.
.03 Independent Third-Party State-
ment
. Section 1.45Q-4(c)(4) provides
that an LCA Report must be performed or
verified by an independent third party. If
an independent third-party review is con-
ducted, then it must include an assessment
of an LCA model and supporting data
and be performed in accordance with ISO
14071:2014, Environmental management
— Life cycle assessment — Critical review
processes and reviewer competencies:
Additional requirements and guidelines
to ISO 14044:2006. An LCA Report also
must provide a statement documenting
the qualifications of the independent third
party, including proof of appropriate U.S.
or foreign professional license, and an
affidavit from the third party stating that
it is independent from the taxpayer. If a §
45Q(f)(3)(B) election has been made, then
the affidavit must state that the third party
is independent from both the electing tax-
payer and the credit claimant. In addition,
the statement must be made under penal-
ties of perjury.
.04 LCA Report Cover Page Require-
ments. The LCA Report must include a
cover page that includes the following
information:
(1) Name and location of the facility
where the qualified carbon oxide is uti-
lized (utilization facility);
(2) Name and Taxpayer Identification
Number (TIN) (for example, Employer
Identification Number (EIN)) of the tax-
payer claiming the credit based on the
LCA Report;
(3) Name and TIN (for example, EIN)
of the operator of the utilization facility (if
other than the taxpayer);
(4) Taxable year for which the LCA
Report is being submitted;
(5) Name, relationship to the taxpayer,
mailing address, email address, and phone
number of a person whom the IRS can
contact regarding the LCA Report. If this
person is not an employee of the taxpayer,
an IRS Form 2848, Power of Attorney
and Declaration of Representative, must
accompany the LCA Report;
4
See 42 U.S.C. 7545(o)(1)(H) (Clean Air Act).
5
See the preamble to T.D 9944, 89 FR 4728, 4745.

Bulletin No. 2024–34 517 August 19, 2024
(6) An attestation that the applicable
requirements of § 45Q and §§ 1.45Q-1,
1.45Q-2, and 1.45Q-4 are satisfied. Such
attestation must include confirmation of
the following:
(a) the carbon oxide for which the
§ 45Q utilization credit is being claimed is
qualified carbon oxide within the meaning
of § 45Q(c);
(b) the qualified carbon oxide for
which the § 45Q utilization credit is being
claimed is captured by a qualified facility
within the meaning of § 45Q(d);
(c) the qualified carbon oxide for
which the § 45Q utilization credit is
being claimed was captured in the United
States (within the meaning of § 638(1)),
or a U.S. territory (within the meaning
of the term “possession” set forth in
§ 638(2));
(d) in the case of a resubmission of
an LCA Approval Request under section
6.02 of this notice, that there has been no
Material Change (within the meaning of
section 6.04 of this notice) since the prior
LCA was approved; and
(7) A declaration, applicable to the
LCA Approval Request (including the
LCA and the cover page information
required by section 3.04 of this notice)
signed by a person currently authorized to
bind the taxpayer in these matters, in the
following form:
“Under penalties of perjury, I declare
that I have examined the information
contained in this affirmative statement
and the documents that substantiate
this affirmative statement, and to the
best of my knowledge and belief, it is
true, correct, and complete.”
SECTION 4. LCA APPROVAL
REQUEST PROCEDURES
.01 Overview. A taxpayer satisfies
the procedural requirements of § 1.45Q-
4(c)(5) by submitting an LCA Approval
Request to the IRS and a duplicate to the
DOE for its technical review. An LCA
Approval Request must include:
(1) An LCA Report meeting all appli-
cable requirements of section 3 of this
notice;
(2) Supplemental information that sup-
ports the LCA Report data (as described in
section 4.02 of this notice);
(3) An Independent Third-Party State-
ment (as defined in section 3.03 of this
notice); and
(4) If an independent third party has
performed the LCA analysis and prepared
the LCA Report, an LCA model.
.02 Supplemental Information. For pur-
poses of section 4.01(2) of this notice, the
supplemental information that supports
the LCA Report data must contain all nec-
essary details supporting the LCA Report
data, calculations, and conclusions. For
example, supplemental information may
include (as applicable) the proposed sys-
tem’s production and maintenance sched-
ules, periods of other stoppages and inter-
ruptions, the actual throughput while in
production, changes in the supplied input
energy and materials and ingredients
(such as chemical composition, concen-
tration, and system-poisoning impurities),
and deviations from the actual process
technology from the description in the
LCA Report. Additionally, a taxpayer
must disclose (to the IRS only) whether
any previously-filed claim for the § 45Q
utilization credit was adjusted and why it
was adjusted.
.03 Submission of the LCA Approval
Request. The IRS and the DOE will accept
LCA Approval Requests submitted by tax-
payers on a rolling basis. A taxpayer must
submit a LCA Approval Request to the
IRS and a copy to the DOE using the pro-
cedures provided in this section 4.
(1) Submissions to the IRS. Taxpayers
must mail the LCA Approval Request
(including the model if the LCA Report
was not verified by an independent third
party) on a USB thumb drive, to:
Internal Revenue Service
Office of Associate Chief Counsel
(PSI)
1111 Constitution Ave, N.W.
Branch 6 (CC:PSI:6), Room 5114
Washington, DC 20224
Taxpayers also must fax or e-fax a
complete LCA Approval Request to the
IRS at (844) 255-4817.
(2) Submissions to the DOE. When
a taxpayer submits an LCA Approval
Request to the IRS, the taxpayer also must
send an email to the DOE at LCA45Q@
hq.doe.gov indicating the taxpayer’s
intent to submit an LCA for DOE tech-
nical review. The DOE will respond with
instructions for submitting a copy of the
LCA Approval Request and any subse-
quent information directly to the DOE.
SECTION 5. LCA APPROVAL
REQUEST REVIEW
.01 Overview of LCA Approval Request
Review. The IRS will first review the
LCA Approval Request for completeness
and adequacy of the materials provided.
This review is based on (i) the mate-
rial provided in the LCA Report and (ii)
any other materials provided by the tax-
payer as required under sections 3 and
4 of this notice. If the IRS finds that the
LCA Approval Request is complete, then
the IRS will request a technical review
by DOE (DOE Technical Review). The
LCA Approval Request Review generally
will be completed within four (4) months
of the date of receipt of a complete LCA
Approval Request (Review Period). If the
LCA Approval Request is incomplete, or
either the DOE or the IRS need to request
any additional or clarifying information
from the taxpayer, then the LCA Approval
Request Review may not be completed
within the Review Period.
.02 Incomplete LCA Approval Request.
(1) If any required information is miss-
ing from an LCA Approval Request, then
the IRS will contact the taxpayer directly
by fax, e-fax, or phone. The taxpayer will
have forty-five (45) calendar days from
the date of this request by the IRS to pro-
vide the required information to both the
IRS and DOE.
(2) Taxpayers should submit any sup-
plemental information requested by the
IRS by fax or e-fax at (844) 255-4817.
(3) If the taxpayer does not furnish the
supplemental information to the IRS and
DOE within forty-five (45) calendar days
from the date of the IRS request, then the
IRS generally will deny the taxpayer’s
LCA Approval Request in writing. The
IRS may grant an extension to the 45-day
response period on a case-by-case basis
if a taxpayer experienced a force majeure
event. The taxpayer must request an
extension in writing before the end of the
45-day period and provide an explanation
of why an extension is necessary.
(4) Taxpayers should also submit any
supplemental information requested by
the IRS to the DOE at LCA45Q@hq.doe.
gov.

August 19, 2024 518 Bulletin No. 2024–34
.03 DOE Technical Review Process.
Section 1.45Q-4(c)(6) provides that an
LCA Report will be subject to a DOE
Technical Review. The DOE Technical
Review may be either a Conformance
Review or a Critical Review.
(1) Conformance Review.
(a) Defined. A Conformance Review
is a type of DOE Technical Review con-
ducted to ensure that an LCA conforms
to applicable ISO 14040:2006 and ISO
14044:2006 standards and the latest revi-
sion, as of the beginning of the year in
which the LCA is submitted, of NETL’s
Carbon Dioxide Utilization (CO2U) Life
Cycle Analysis Guidance for the U.S.
DOE Office of Fossil Energy and Carbon
Management and 45Q Addendum to the
CO2U LCA Guidance Document.
(b) Procedure. The DOE will perform
a Conformance Review if a taxpayer’s
LCA Approval Request includes an LCA
Report that has been verified by an inde-
pendent third party as adhering to appli-
cable standards and best practices. Upon
performing a Conformance Review,
the DOE may determine that a Critical
Review is warranted.
(2) Critical Review.
(a) Defined. A Critical Review is a type
of DOE Technical Review conducted to
ensure that an LCA Approval Request
conforms to applicable ISO 14040:2006
and ISO 14044:2006 standards and the
NETL’s Carbon Dioxide Utilization
(CO2U) Life Cycle Analysis Guidance for
the U.S. DOE Office of Fossil Energy and
Carbon Management and 45Q Adden-
dum to the CO2U LCA Guidance Docu-
ment. The scope of the Critical Review is
expanded beyond the scope of the Confor-
mance Review to include a detailed tech-
nical assessment of the LCA model and
supporting data.
(b) Procedure. The DOE will per-
form a Critical Review if a taxpayer’s
LCA Approval Request includes an LCA
Report that has not been verified by an
independent third party. Additionally, the
DOE may perform a Critical Review if
the DOE determines that further review
is warranted after performing a Confor-
mance Review.
(3) DOE Requests for Supplemental
Information. Upon receipt of an LCA
Approval Request, the DOE will review
the LCA Approval Request for complete-
ness and identify any questions for the
taxpayer. The DOE will contact the tax-
payer if additional or clarifying informa-
tion is needed to complete the Technical
Review and will send questions directly
to the taxpayer by email to expedite the
review process. In response to the DOE’s
request for additional information, tax-
payers must provide all supplemental
information to both the DOE and the IRS
within forty-five (45) calendar days from
the date of the DOE request (in the man-
ner described in section 4 of this notice).
If the taxpayer does not furnish the sup-
plemental information to the DOE and
to the IRS (in the manner described in
section 4 of this notice) within forty-five
(45) calendar days from the date of the
DOE request, then the IRS generally
will deny the taxpayer’s LCA Approval
Request in writing. The IRS may grant
an extension to the 45-day response
period on a case-by-case basis if a tax-
payer experienced a force majeure event.
The taxpayer must request an extension
in writing before the end of the 45-day
period and provide an explanation of
why an extension is necessary. The DOE
will not otherwise communicate with
taxpayers about the status of a pending
LCA Approval Request.
(4) Upon completion of its Techni-
cal Review, the DOE will notify the IRS
whether it concurs with the results of the
Taxpayer’s LCA Report.
.04
IRS Determination – (1) In Gen-
eral. Section 1.45Q-4(c)(6) provides that
the IRS will determine whether to approve
the LCA and will notify the taxpayer.
The taxpayer must receive approval of
the taxpayer’s LCA prior to claiming the
§ 45Q utilization credit on any federal
income tax return. The IRS will determine
whether to approve a complete LCA based
on its review and the results of the DOE
Technical Review.
(2) Effect of LCA Review and Determi-
nation. Review of the LCA is neither an
examination nor an inspection of books
for purposes of § 7605(b) and will not
preclude or impede (under § 7605(b) or
any administrative provisions adopted by
the IRS) the IRS from later examining a
return or inspecting books or records with
respect to any taxable year for which the §
45Q utilization credit is claimed. Approval
of the LCA does not mean that the IRS has
determined that all of the requirements of
§ 45Q have been satisfied.
.05 Notification of Approval or Denial
of LCA. The IRS will notify the taxpayer
of the approval or denial of the taxpayer’s
LCA in writing.
.06 Resubmission after Denial of LCA.
(1) Allowance. If an LCA is denied, and
the deficiencies in the LCA can be cured,
then the taxpayer may revise the taxpay-
er’s LCA Approval Request and resub-
mit it to the IRS and DOE (in the manner
described in section 4 of this notice).
(2) Procedures for Resubmission After
Denial. A resubmission under this sec-
tion 5.06 must state in the cover page
of its LCA Report (described in sec-
tion 3.04 of this notice) that the LCA
Approval Request is being resubmitted
after a denial by the IRS. The resubmitted
LCA Approval Request should explain in
detail the reasons why the original LCA
Approval Request was denied and how
the resubmitted LCA Approval Request
differs from the original LCA Approval
Request.
.07 IRS Administrative Review. If an
LCA is denied solely on the basis of the
IRS review in section 5.01 of this notice
(excluding a denial on the basis of com-
pleteness), then the taxpayer will have an
opportunity to request an IRS administra-
tive review of that denial.
SECTION 6. REQUIREMENTS FOR
REAPPROVAL OF AN APPROVED
LCA
.01 Overview. Except as provided in
sections 6.03 and 6.04 of this notice, a
taxpayer may treat an approved LCA as
approved for the taxable year for which
the LCA Report was submitted and the
following two taxable years (three-year
approval period). Alternatively, a tax-
payer may choose to submit a new LCA
Approval Request to the IRS and the DOE
(in the manner described in section 4 of
this notice) for any taxable year.
.02 Periodic Resubmissions. A tax-
payer wishing to claim the § 45Q utiliza-
tion credit after the three-year approval
period must submit a new LCA Approval
Request to the IRS and the DOE (in the
manner described in section 4 of this
notice). If the IRS approves this LCA,
then a new three-year approval period will

Bulletin No. 2024–34 519 August 19, 2024
apply (unless the LCA analyzes a period
of less than six months or there is a Mate-
rial Change (as defined in section 6.04(1)
of this notice)).
(1) Example. X, a calendar year tax-
payer, utilizes qualified carbon oxides
in 2022 in the manufacture of a product
for which a commercial market exists.
In 2023, X submits an LCA Approval
Request to the IRS and the DOE analyzing
X’s utilization data for all twelve months
of 2022. The IRS approves the LCA in
2023. X claims a § 45Q utilization credit
on X’s 2022 tax return. X may rely on the
LCA to claim a § 45Q utilization credit
for 2023 and 2024 provided that it follows
the requirements in section 6.04(3) of this
notice. If X wishes to claim a § 45Q utili-
zation credit for 2025, it will need to sub-
mit a new LCA Approval Request to the
IRS and the DOE for 2025.
(2) Procedures for Periodic Resub-
missions. A resubmission under this sec-
tion 6.02 must state in its cover report
(described in section 3.04 of this notice)
that the LCA Approval Request is being
resubmitted under section 6.02 of this
notice.
.03 Resubmission after Limited Initial
Period. If a taxpayer submits the taxpay-
er’s initial LCA Approval Request for an
LCA that analyzes a period of less than six
(6) months, then the taxpayer may treat the
approved LCA as approved for the taxable
year for which the LCA Report is submit-
ted and the following taxable year (two-
year approval period). A taxpayer wishing
to claim the § 45Q utilization credit after
the two-year approval period must submit
a new LCA Approval Request to the IRS
and the DOE (in the manner described
in section 4 of this notice). If the IRS
approves this new LCA, then a new three-
year approval period will apply (unless
the LCA analyzes a period of less than six
months or there is a Material Change (as
defined in section 6.04(1) of this notice)).
(1) Example. X, a calendar year tax-
payer, begins utilizing qualified carbon
oxides in August 2022 in the manufac-
ture of a product for which a commercial
market exists. In 2023, X submits an LCA
Approval Request to the IRS and the DOE
analyzing X’s utilization data for five
months of 2022. The IRS approves the
LCA in 2023. X claims a § 45Q utilization
credit on X’s 2022 tax return. X may rely
on the LCA to claim a § 45Q utilization
credit for 2023 provided that it follows
the requirements in section 6.04(3) of this
notice. If X wishes to claim a § 45Q utili-
zation credit for 2024, then it will need to
submit a new LCA Approval Request to
the IRS and the DOE for 2024. Thereafter,
X will be subject to the periodic resubmis-
sion requirements in section 6.02 of this
notice.
(2) Procedures for Resubmissions after
Limited Initial Period. A resubmission
under this section 6.03 must state in the
cover page of its LCA Report (described
in section 3.04 of this notice) that the LCA
Approval Request is being resubmitted
under section 6.03 of this notice.
.04 Resubmission due to Material
Change.
(1) Material Change Defined. A Mate-
rial Change is any change to the taxpay-
er’s process described in the LCA that
reduces the “Life Cycle Displacement
Factor” (DF) by an amount greater than
0.05 from the value of that metric from
the taxable year in which the original LCA
was approved by the IRS (Original DF).
(a) Life Cycle Displacement Fac-
tor. The value of the DF is a ratio that
measures the amount of carbon dioxide
equivalents displaced per unit of carbon
oxide captured and utilized as defined in
the NETL’s 45Q Addendum to the CO2U
LCA Guidance Document. The change
in the DF is calculated separately for
each of the two subsequent taxable years
after the Original DF is determined. The
change in the DF is calculated as the dif-
ference between the Original DF and the
DF for the applicable subsequent taxable
year (DF
n
). A Material Change occurs if
the Original DF exceeds the DF for the
applicable subsequent taxable year by an
amount greater than 0.05 of the Original
DF as shown in the following formula:
Original DF – DF
n

(subsequent taxable year 1 or 2)
>
0.05
(b) Calculation of Displacement
Factor in Taxable Years Subsequent to
Approval of Original LCA for Determi-
nation of Material Change. The taxpayer
must calculate DFs for subsequent taxable
years using only the changes that have
affected the per unit carbon oxide utili-
zation product direct inputs and outputs
(and the associated emissions) for the tax-
payer’s process described in the proposed
system in the original LCA to determine
whether there has been a Material Change.
This Material Change determination will
be subject to review by the IRS and the
DOE.
(2) Procedures for Resubmission
due to Material Change. If a Material
Change (as defined in section 6.04(1) of
this notice) occurs, then a taxpayer must
resubmit the taxpayer’s LCA to the IRS
and the DOE (in the manner described
in section 4 of this notice). The taxpayer
must receive approval of the taxpayer’s
resubmitted LCA from the IRS and DOE
before a § 45Q utilization credit may be
determined for any additional taxable year
on Form 8933, Carbon Oxide Seques-
tration Credit. A resubmission under this
section 6.04 must state in the cover page
of its LCA Report (described in section
3.04 of this notice) that the LCA is being
resubmitted due to a Material Change and
explain the Material Change.
(3) Procedures if no Material Change
Exists. A taxpayer must calculate DFs
as provided in section 6.04(1)(b) of this
notice to determine whether a Material
Change has occurred during each taxable
year between required resubmissions to
the IRS and the DOE. Based on this annual
self-assessment, if the taxpayer finds that
no Material Change has occurred, the
taxpayer may treat the approved LCA as
approved for the remainder of the three-
year approval period in section 6.01 of
this notice or the two-year approval period
in section 6.03 of this notice as long as the
taxpayer continues to use the Original DF
in that approved LCA for calculating the
taxpayer’s § 45Q utilization credit. The
taxpayer must make an affirmative state-
ment that no Material Change has occurred
within the taxable year and append the
statement to the Form 8933 on which the
§ 45Q utilization credit is claimed. The
taxpayer must satisfy the recordkeeping
requirements of § 6001 and § 1.6001–1 to
support the taxpayer’s determination that
no Material Change has occurred. After
review of the affirmative statement, the
IRS may contact the taxpayer stating that
an updated LCA submission is necessary.
The affirmative statement must provide
the following information:

August 19, 2024 520 Bulletin No. 2024–34
(a) The date on which the LCA was
previously approved by the IRS;
(b) A statement that the taxpayer has
determined that no Material Change (as
defined in section 6.04(1) of this notice)
has occurred;
(c) A penalty of perjury statement that
provides the following:
“Under penalties of perjury, I declare
that I have examined the information con-
tained in this affirmative statement and
the documents that substantiate this affir-
mative statement, and to the best of my
knowledge and belief, it is true, correct,
and complete.”
(d) The following additional statement:
“I further declare that I have authority
to sign this document on behalf of the
taxpayer.”
SECTION 7. APPLICABILITY DATE
This notice applies with respect to
LCA Reports submitted on or after [the
date that this notice is published in the
Internal Revenue Bulletin]. Taxpay-
ers that received an approval of an LCA
Report submitted before [the date that
this notice is published in the Internal
Revenue Bulletin] may rely on the pro-
visions of section 6 of this notice (includ-
ing the three-year approval period in sec-
tion 6.01 of this notice and the two-year
approval period in section 6.03 of this
notice) if they follow all of the provisions
of that section.
SECTION 8. PAPERWORK
REDUCTION ACT
The collection of information con-
tained in this notice has been reviewed
and approved by the Office of Manage-
ment and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C. §
3507) under control numbers 1545-2132,
1545-0074, and 1545-0123.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collections of information in this
notice are in sections 3, 4, 5, and 6 of this
notice. This information is required to
obtain an approval of an LCA, which is
required before a § 45Q utilization credit
may be determined for a taxpayer. This
information will be used by the IRS and
the DOE to verify that the taxpayer is eli-
gible for the § 45Q utilization credit. The
collection of information is required to
obtain a benefit. The likely respondents
are businesses or other for-profit institu-
tions.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by § 6103.
SECTION 9. DRAFTING
INFORMATION
The principal authors of this notice
are David Selig and Maggie Stehn of
the Office of Associate Chief Counsel
(Passthroughs & Special Industries). For
further information regarding this notice
contact Mr. Selig or Ms. Stehn at (202)
317-6853 (not a toll-free number).
2024 Section 43 Inflation
Adjustment
Notice 2024-61
Section 43(a) of the Internal Revenue
Code provides that for purposes of sec-
tion 38, the enhanced oil recovery credit
for any taxable year is an amount equal
to 15 percent of the taxpayer’s qualified
enhanced oil recovery costs for such tax-
able year.
Section 43(b)(1) provides that the
amount of the credit determined under
subsection (a) for any taxable year shall
be reduced by an amount which bears the
same ratio to the amount of such credit
(determined without regard to this para-
graph) as — (A) the amount by which
the reference price for the calendar year
preceding the calendar year in which the
taxable years begins exceeds $28, bears to
(B) $6.
Section 43(b)(3)(B) requires the Sec-
retary to publish an inflation adjustment
factor. The enhanced oil recovery credit
under § 43 for any taxable year is reduced
if the “reference price,” determined under
§ 45K(d)(2)(C), for the calendar year pre-
ceding the calendar year in which the tax-
able year begins is greater than $28 multi-
plied by the inflation adjustment factor the
current calendar year.
The term “inflation adjustment factor”
means, with respect to any calendar year,
a fraction the numerator of which is the
GNP implicit price deflator for the preced-
ing calendar year and the denominator of
which is the GNP implicit price deflator
for 1990.
Because the reference price for the
2023 calendar year ($76.10) exceeds $28
multiplied by the inflation adjustment fac-
tor for the 2024 calendar year ($28 multi-
plied by 2.0615= $57.72) by $18.38, the
enhanced oil recovery credit for qualified
costs paid or incurred in 2024 is phased
out completely.

Bulletin No. 2024–34 521 August 19, 2024
Table 1 contains the GNP implicit price deflator used for the 2023 calendar year, as well as the previously published GNP implicit
price deflators used for the 1991 through 2022 calendar years.
Notice 2024-61 TABLE 1
GNP IMPLICIT PRICE DEFLATORS
Calendar Year GNP Implicit Price Deflator
1990 112.9 (used for 1991)
1991 117.0 (used for 1992)
1992 120.9 (used for 1993)
1993 124.1 (used for 1994)
1994 126.0 (used for 1995)*
1995 107.5 (used for 1996)
1996 109.7 (used for 1997)**
1997 112.35 (used for 1998)
1998 112.64 (used for 1999)***
1999 104.59 (used for 2000)
2000 106.89 (used for 2001)
2001 109.31 (used for 2002)
2002 110.63 (used for 2003)
2003 105.67 (used for 2004)****
2004 108.23 (used for 2005)
2005 112.129 (used for 2006)
2006 116.036 (used for 2007)
2007 119.656 (used for 2008)
2008 122.407 (used for 2009)
2009 109.764 (used for 2010)*****
2010 110.654 (used for 2011)
2011 113.347 (used for 2012)******
2012 115.387 (used for 2013)
2013 106.710 (used for 2014)*******
2014 108.407 (used for 2015)********
2015 109.868 (used for 2016)
2016 111.528 (used for 2017)
2017 113.500 (used for 2018)
2018 110.308 (used for 2019)*********
2019 112.257 (used for 2020)
2020 113.586 (used for 2021)
2021 118.586 (used for 2022)**********
2022 127.194 (used for 2023)
2023 122.179 (used for 2024)***********
* Beginning in 1995, the GNP implicit price deflator was rebased relative to 1992. The 1990 GNP implicit price deflator used to compute the 1996 § 43 inflation adjustment factor is 93.6.
** Beginning in 1997, two digits follow the decimal point in the GNP implicit price deflator. The 1990 GNP price deflator used to compute the 1998 § 43 inflation adjustment factor is 93.63.
*** Beginning in 1999, the GNP implicit price deflator was rebased relative to 1996. The 1990 GNP implicit price deflator used to compute the 2000 § 43 inflation adjustment factor is 86.53.
**** Beginning in 2003, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2004 § 43 inflation adjustment factor is 81.589.
***** Beginning in 2009, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2010 § 43 inflation adjustment factor is 72.199.
****** Beginning in 2011, the 1990 GNP implicit price deflator used to compute the 2012 § 43 inflation adjustment factor is 72.260.
******* Beginning in 2013, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2014 § 43 inflation adjustment factor is 66.803.
******** Beginning in 2014, the 1990 GNP implicit price deflator used to compute the 2015 § 43 inflation adjustment factor is 66.732.
********* Beginning in 2018, the 1990 GNP implicit price deflator used to compute the 2019 § 43 inflation adjustment factor is 63.637.
********** Beginning in 2021, the 1990 GNP implicit price deflator used to compute the 2022 § 43 inflation adjustment factor is 63.604.
*********** Beginning in 2023, the 1990 GNP implicit price deflator used to compute the 2024 § 43 inflation adjustment factor is 59.266.

August 19, 2024 522 Bulletin No. 2024–34
Table 2 contains the inflation adjustment factor and the phase-out amount for taxable years beginning in the 2024 calendar year as
well as the previously published inflation adjustment factors and phase-out amounts for taxable years beginning in the 1991 through
2023 calendar years.
Notice 2024-61 TABLE 2
INFLATION ADJUSTMENT FACTORS AND
PHASE-OUT AMOUNTS
Calendar Year Inflation Adjustment Factor Phase-out Amount
19911.00000
19921.03630
19931.07080
19941.09920
19951.11600
19961.14850
19971.17200
19981.19990
19991.20300
20001.20870
20011.23530
20021.26330
20031.27850
20041.29520
20051.32660
20061.3743100 percent
20071.4222100 percent
20081.4666100 percent
20091.5003100 percent
20101.5203100 percent
20111.5326100 percent
20121.5686100 percent
20131.5968100 percent
20141.5974100 percent
20151.6245100 percent
20161.64640
20171.67130
20181.70081.069 percent
20191.7334100 percent
20201.7640100 percent
20211.78490
20221.8607100 percent
20231.9998100 percent
20242.0615100 percent
DRAFTING INFORMATION
The principal author of this notice is
Whitney Brady of the Office of Asso-
ciate Chief Counsel (Passthroughs and
Special Industries). For further informa-
tion regarding this notice, contact Ms.
Brady at (202) 317-6853 (not a toll-free
number).

Bulletin No. 2024–34 523 August 19, 2024
Rev. Proc. 2024-32
SECTION 1. PURPOSE
.01 This revenue procedure sets forth
the procedure by which the sponsor of a
defined benefit plan that is subject to the
funding requirements of § 430 of the Inter-
nal Revenue Code (Code) may request
approval from the Internal Revenue Ser-
vice (IRS) for the use of plan-specific sub-
stitute mortality tables in accordance with
§ 430(h)(3)(C) and § 1.430(h)(3)-2 of the
Treasury Regulations.
1
.02 This revenue procedure updates the
procedures set forth in Rev. Proc. 2017-
55, 2017-43 IRB 373, and reflects the
amendments to § 1.430(h)(3)-2 that were
published in the Federal Register on July
31, 2024 (TD 10005, 89 FR 61343).
.03 In accordance with § 1.430(h)(3)-
2(c)(6)(ii)(E), this revenue procedure also
specifies the date by which the use of a
previously approved substitute mortality
table must be terminated in conjunction
with the replacement of the generally
applicable mortality tables specified in §
430(h)(3)(A) and § 1.430(h)(3)-1.
SECTION 2. BACKGROUND
INFORMATION
.01 Statutory background. Section
412 sets forth minimum funding require-
ments for defined benefit pension plans.
In accordance with § 412(a)(2)(A), § 430
specifies the minimum funding require-
ments for a defined benefit plan (other
than a multiemployer plan or a CSEC
plan). Section 430(h)(3)(A) sets forth
rules regarding the use of generally appli-
cable mortality tables for purposes of
§ 430, and § 430(h)(3)(B) requires the
Secretary to make periodic revisions (at
least every 10 years) to those mortality
tables. Section 430(h)(3)(C) provides that
the Secretary may approve plan-specific
substitute mortality tables to be used for a
plan for a period not to exceed 10 years in
determining any present value or making
any computation under § 430. Substitute
mortality tables meet the requirements for
approval if the pension plan has enough
participants and has been maintained for a
long enough period of time to have credi-
ble mortality experience, and those tables
reflect the actual experience of the plan
and projected trends in general mortality
experience. Except as provided by the
Secretary, a plan sponsor may not use sub-
stitute mortality tables for any plan unless
substitute mortality tables are established
and used for each plan subject to § 430
that is maintained by the plan sponsor or
a member of the plan sponsor’s controlled
group.
.02 Regulations regarding substitute
mortality tables. Under § 1.430(h)(3)-2(c)
(2), substitute mortality tables must reflect
the actual mortality experience of the pen-
sion plan for which the tables are to be
used, and that mortality experience must
be credible. Separate mortality tables must
be established for each gender under the
plan and, in general, substitute mortality
tables are permitted to be established for a
gender only if the plan has credible mor-
tality experience (including partially cred-
ible mortality experience) with respect
to that gender. The regulations provide
an option for determining the credibility
of mortality experience using the plan’s
combined mortality experience for both
genders (and using that combined experi-
ence to develop separate substitute mor-
tality tables for each gender).
(1) Use of mortality ratios. Under §
1.430(h)(3)-2(c)(3), development of sub-
stitute mortality tables under the regula-
tions requires creation of a base substitute
mortality table (“Substitute Base Table”)
with an associated base year, which
is used in conjunction with mortality
improvement factors to construct genera-
tional mortality tables. Under § 1.430(h)
(3)-2(d), the Substitute Base Table must
be constructed in a multiple-step process
based on (a) a projection of the gener-
ally applicable mortality table to the base
year for the Substitute Base Table, and
(b) an amounts-weighted mortality ratio
calculated from the experience study for
the population. In the case of a plan with
partially credible mortality experience, §
1.430(h)(3)-2(e) requires the application
of a weighting factor based on the credi-
bility of the plan’s experience.
(2) Controlled group consistency
requirement. The regulations provide cer-
tain exceptions to the general rule under
§ 430(h)(3)(C)(iv) and § 1.430(h)(3)-2(c)
(1)(i), under which a plan sponsor may not
use substitute mortality tables for any plan
for a plan year unless substitute mortality
tables are established and used for each
other plan subject to § 430 that is main-
tained by the plan sponsor or a member
of the plan sponsor’s controlled group (as
defined in § 1.430(h)(3)-2(c)(1)(i)) for that
plan year. Under § 1.430(h)(3)-2(c)(1)(ii),
the use of substitute mortality tables for
one plan is not prohibited merely because
another plan maintained by the plan spon-
sor (or by a member of the plan sponsor’s
controlled group) may not use substitute
mortality tables because neither the males
nor the females under that other plan have
credible mortality information for a plan
year. In addition, under § 1.430(h)(3)-2(f),
the regulations provide a transition period
for newly affiliated plans.
(3) Treatment of disabled individuals.
If separate mortality tables are used for
disabled individuals pursuant to § 430(h)
(3)(D), then those individuals are disre-
garded for all purposes under this revenue
procedure.
(4) Treatment of multiple-employer
plans. A multiple-employer plan for
which the proportion of the plan’s funding
target attributable to employees and for-
mer employees of the employer and mem-
bers of the employer’s controlled group is
greater than 50 percent is treated as main-
tained by that employer for purposes of
the controlled group consistency require-
ment pursuant to § 1.430(h)(3)-2(c)(7)(ii).
By contrast, any other multiple-employer
plan in which the employer or a member
of the employer’s controlled group partic-
ipates is not treated as maintained by the
employer for purposes of the controlled
group consistency requirement and is dis-
regarded under this revenue procedure.
.03 Amendments to regulations relating
to substitute mortality tables. TD 10005
includes amendments to the rules used to
construct substitute mortality tables under
1
Section 302 of the Employee Retirement Income Security Act of 1974, Pub. L. 93-406, as amended (ERISA) sets forth funding rules that are parallel to those in § 412 of the Code, and section
303 of ERISA sets forth additional funding rules for defined benefit plans (other than multiemployer plans) that are parallel to those in § 430 of the Code. Section 303(h)(3)(C) of ERISA
requires the approval of the Secretary of the Treasury for the use of substitute mortality tables, and this revenue procedure applies for that purpose.

August 19, 2024 524 Bulletin No. 2024–34
§ 1.430(h)(3)-2. Under those amend-
ments, in determining the mortality ratio
used to develop plan-specific substitute
mortality tables, certain adjustments to
the probability of death must be made to
the mortality rates from the standard mor-
tality table. These adjustments, which are
specified in § 1.430(h)(3)-2(d)(4)(iii)(B),
apply for 12-month periods beginning in
2020, 2021, or 2022.
.04 Revenue Procedure 2017-55. Rev-
enue Procedure 2017-55 provides the
procedures for the approval of substitute
mortality tables.
SECTION 3. GENERAL
ADMINISTRATIVE PROCEDURES
.01 In general. A request for approval
to use substitute mortality tables for a plan
that would first apply for a plan year begin-
ning on or after January 1, 2025, must sat-
isfy the requirements of § 1.430(h)(3)-2
and this revenue procedure. Except as
provided in this revenue procedure, the
procedures set forth in Rev. Proc. 2024-4
(or its successors) apply to a request for
approval to use substitute mortality tables.
.02 Address and user fee for applica-
tion. A request for approval to use substi-
tute mortality tables must be submitted to
the address specified in section 31 of Rev.
Proc. 2024-4, 2024-1 IRB 160 (or the cor-
responding section of its successors).
The user fee required by section
6.02(15) of Rev. Proc. 2024-4 (or the cor-
responding section of its successors) must
be sent with the request.
.03 Necessary procedural documents.
A request will not be considered for
approval unless it complies with this sec-
tion 3.03.
(1) The request (and any subsequently
provided additional information) must be
signed by the plan sponsor (“applicant”) or
an authorized representative of the appli-
cant who is described in section 6.02(11)
(a), (b), (c), (d) or (e) of Rev. Proc. 2024-4
(or the corresponding sections of its suc-
cessors).
2
If an authorized representative
signs the request or will appear before the
IRS in connection with the request, a prop-
erly signed and dated Form 2848, Power
of Attorney and Declaration of Represen-
tative, must be submitted with the request.
An individual is not an authorized repre-
sentative of the applicant merely because
the individual is the administrator or a
trustee of the plan.
(2) The request must include a declara-
tion in the following form: “Under penal-
ties of perjury, I declare that I have exam-
ined this request, or this modification to
the request, including accompanying doc-
uments, and, to the best of my knowledge
and belief, the request or the modification
includes all the relevant facts relating to
the request, and such facts are true, cor-
rect, and complete.” This declaration must
be signed by the applicant (for example,
by an authorized officer of a corporate
applicant), in compliance with section
6.02(14) of Rev. Proc. 2024-4 (or the cor-
responding section of its successors). The
signature of an individual with a power of
attorney will not satisfy the requirements
of this section 3.03(2).
(3) Because a request for approval to
use substitute mortality tables constitutes
a request for a ruling, compliance with
§ 6110 of the Code is required. Section
601.201 of the Statement of Procedural
Rules sets forth the requirements appli-
cable to requests for rulings and determi-
nation letters that are subject to § 6110.
Section 601.201(e) provides specific
instructions to applicants.
The applicant must include with the
request either a statement of proposed
deletions and the statutory basis for each
proposed deletion, or a statement that no
information other than names, addresses,
and taxpayer identifying numbers need be
deleted.
(4) The checklist set forth in Appendix
A of this revenue procedure must be com-
pleted, signed, and dated by the applicant
or authorized representative, and included
at the front of the request.
.04 Optional use of electronic format
for certain information. In addition to pro-
viding the submission in written format,
an applicant may provide the information
required under sections 7.04 and 7.05 of
this revenue procedure and section 10.02
or 10.03 of this revenue procedure, as
applicable, in electronic format (such as a
spreadsheet on a USB drive). An applicant
may also include Form 15314 (TE/GE
Secure Messaging Taxpayer Agreement
Authorization of Disclosure to Designated
Users) with their application which pro-
vides permission by the taxpayer to allow
for the digital exchange of information
with the IRS. Providing that information
in electronic format may expedite the IRS
review of the applicant’s request.
SECTION 4. TIMING PROVISIONS
RELATED TO REQUESTS FOR
APPROVAL TO USE SUBSTITUTE
MORTALITY TABLES
.01 In general. A request for approval
to use substitute mortality tables generally
must be submitted at least 7 months before
the first day of the first plan year for which
the substitute mortality tables are to apply.
Thus, for example, if the first plan year
to which substitute mortality tables are to
apply is the plan year that begins January
1, 2026, then the deadline for submitting a
request for approval to use substitute mor-
tality tables is June 1, 2025.
.02 Incomplete requests. An incom-
plete request for approval to use substitute
mortality tables will be denied unless the
IRS and the applicant mutually agree to
extend the 180-day period specified under
§ 430(h)(3)(C)(v)(II). If the request does
not include substantially all of the appli-
cable information specified in sections
5 through 11 of this revenue procedure,
the IRS will ordinarily reject the request
without considering the substance of the
request (rather than agree to extend the
180-day period for review of the request)
and refund the user fee.
.03 Request for delay for other plans.
If other plans subject to § 430 maintained
by the applicant (or members of the appli-
cant’s controlled group) have credible
mortality information and a request for
approval to use substitute mortality tables
will be made for those plans in one or more
separate applications, the applicant must
request that the 180-day review period be
extended by 90 days. Upon receiving the
request for extension of the review period,
2
It is recommended that an actuary who is able to answer technical questions about the construction of the substitute mortality tables be designated as an authorized representative. Not having
an actuary available to discuss these tables with the IRS may cause a delay in the processing of a request for approval.

Bulletin No. 2024–34 525 August 19, 2024
except as provided in section 4.02 of this
revenue procedure, the IRS will agree to
that extension and give the applicant 90
days to submit those additional applica-
tions (which must be submitted no later
than the deadline that applies to each such
separate request under section 4.01 or
4.04 of this revenue procedure). The IRS
will summarily reject the initial applica-
tion if it does not include a request for a
90-day extension of the 180-day review
period, or if any of the additional appli-
cations are not submitted within 90 days
after the submission of the initial applica-
tion (on the grounds that at least one plan
with credible mortality information main-
tained by the applicant (or a member of
the applicant’s controlled group) would
not be using substitute mortality tables).
Example. Employer E maintains Plans
A and B, each of which have credible mor-
tality information. Plan A’s plan year is the
calendar year and Plan B’s plan year runs
from July 1 through June 30. Employer E
submits a request for approval to use sub-
stitute mortality tables for Plan A for the
2026 plan year on May 31, 2025 (“Plan
A Request”). To avoid denial of the Plan
A Request on the grounds that substitute
mortality tables would not be used for all
plans with credible mortality information
maintained by the applicant, Employer E
requests that the 180-day review period
for the Plan A Request be extended by 90
days to provide Employer E additional
time to submit a separate request for
approval to use substitute mortality tables
for Plan B for the 2026 plan year. The IRS
agrees to this extension in accordance with
this section 4.03. The IRS will summarily
reject the Plan A Request unless Employer
E submits a separate request for approval
to use substitute mortality tables for Plan
B no later than August 29, 2025.
.04 Transition rule for submissions for
plan years beginning in 2025. Notwith-
standing the generally applicable deadline
in section 4.01 of this revenue procedure,
a request for approval to use substitute
mortality tables for a plan year begin-
ning in 2025 will be considered timely if
it is submitted on or before October 31,
2024, provided that the applicant requests
a 90-day extension of the 180-day review
period. Except as provided in section 4.02
of this revenue procedure, the IRS will
agree to such a request.
SECTION 5. GENERAL RULES
.01 Contents of request. A request for
approval to use substitute mortality tables
must include the general information
described in this section 5, the plan iden-
tification information described in section
6 of this revenue procedure, the credible
mortality information demonstrations
described in section 7 of this revenue pro-
cedure, the population stability demon-
strations described in section 8 of this rev-
enue procedure, the information regarding
other plans in the applicant’s controlled
group described in section 9 of this rev-
enue procedure, the Substitute Base Table
construction information described in sec-
tion 10 of this revenue procedure, and the
demonstrations described in section 11 of
this revenue procedure.
.02 General standard for approval. The
IRS will approve a request for approval to
use substitute mortality tables that meet
the requirements of § 1.430(h)(3)-2 and
this revenue procedure unless the IRS
determines that the Substitute Base Table
does not sufficiently reflect the mortality
experience of the applicable plan popula-
tion.
.03 Proposed period of use. A sepa-
rate request must be made with respect
to each plan (“Plan”), or group of plans
that are aggregated under § 1.430(h)(3)-
2(c)(5) (“Aggregated Group”), for which
approval to use substitute mortality tables
is requested. The request must state the
first day of the first plan year for which the
substitute mortality tables are to be appli-
cable (“Requested Effective Plan Year”)
and must state the term of years (not more
than 10) for which the tables would be
used.
.04 Description of populations. The
request must include a description of the
populations within the Plan (or the Aggre-
gated Group) covered by the request for
approval to use substitute mortality tables
and a description of the populations, if
any, for which the generally applicable
mortality tables will be used.
For example, if approval to use sub-
stitute mortality tables is requested for
nondisabled female individuals (but no
other individuals) under a plan for which
the mortality tables set forth in Rev. Rul.
96-7, 1996-1 CB 59, are used for disabled
individuals pursuant to § 430(h)(3)(D),
then the population covered by the request
for approval to use substitute mortality
tables would be described as “Nondis-
abled Females” and the population for
whom the generally applicable mortality
tables will be used would be described as
“Nondisabled Males.”
Similarly, if approval to use substi-
tute mortality tables is requested for male
annuitants (but not male nonannuitants)
and for females on a combined annuitant/
nonannuitant basis, in each case includ-
ing disabled individuals, then the popula-
tions covered by the request for approval
to use substitute mortality tables would
be described as “Male Annuitants” and
“Females,” and the population for whom
the generally applicable mortality tables
will be used would be described as “Male
Nonannuitants.”
SECTION 6. IDENTIFICATION OF
PLANS
.01 Information for plan for which
approval to use substitute mortality tables
is requested. The following plan informa-
tion must be provided for the Plan (or for
each plan within the Aggregated Group)
for which approval to use substitute mor-
tality tables is requested:
(1) Plan name;
(2) Plan number;
(3) Plan year (calendar year, or if a fis-
cal year, the first and last day of the plan
year);
(4) Employer identification number;
(5) Date of plan establishment; and
(6) Copies of the actuarial valuation
reports for each plan year that begins or
ends during the Experience Study Period
as defined in section 7.01 of this revenue
procedure.
.02 Plans for which substitute mortality
tables are not intended to be used. The fol-
lowing information must be provided for
each plan that is subject to § 430 covering
employees of the applicant, or a member
of the applicant’s controlled group, for
which substitute mortality tables are not
intended to be used:
(1) Plan name;
(2) Plan number;
(3) Plan year (calendar year, or if a fis-
cal year, the first and last day of the plan
year);
(4) Employer identification number;

August 19, 2024 526 Bulletin No. 2024–34
(5) Date of plan establishment;
(6) If the plan is a newly-affiliated plan
under § 1.430(h)(3)-2(f)(2), the date of the
merger, acquisition, or similar transaction
described in § 1.410(b)-2(f), and the last
day of the transition period described in
§ 1.430(h)(3)-2(f)(3); and
(7) If the applicant or a member of
the applicant’s controlled group is an
employer whose employees participate
in a multiple-employer plan, whether the
portion of the multiple-employer plan’s
funding target attributable to employees
and former employees of the applicant
and the members of the applicant’s con-
trolled group is less than or equal to 50
percent (so that the multiple-employer
plan is not treated as being maintained by
the applicant or a member of the appli-
cant’s controlled group under § 1.430(h)
(3)-2(c)(7)(ii)).
.03 Other plans for which substitute
mortality tables are being used or are
intended to be used. The following infor-
mation must be provided for each plan
that is subject to § 430 covering employ-
ees of the applicant, or a member of the
applicant’s controlled group (including a
multiple-employer plan that is treated as
maintained by the applicant or a member
of the applicant’s controlled group pursu-
ant to § 1.430(h)(3)-2(c)(7)(ii)), for which
substitute mortality tables are being used
or for which a request for approval to use
substitute mortality tables has been sub-
mitted or will be submitted:
(1) Plan name;
(2) Plan number;
(3) Plan year (calendar year, or if a fis-
cal year, the first and last day of the plan
year);
(4) Employer identification number;
(5) Date of plan establishment;
(6) If the applicant has received pre-
vious approval to use substitute mortal-
ity tables for that plan, the date of that
approval;
(7) If the applicant has requested
approval to use substitute mortality
tables for that plan (but not yet received
approval), the date of that request; and
(8) If the applicant has not yet requested
approval to use substitute mortality tables
for that plan, the expected date of the sub-
mission.
.04 Special rule for multiple-employer
plans. If the applicant is the plan admin-
istrator of a multiple-employer plan
(who is treated as the plan sponsor under
§ 1.430(h)(3)-2(c)(7)(i)), the request for
approval to use substitute mortality tables
must include either:
(1) A statement that none of the
employers whose employees participate
in the plan are treated as maintaining the
plan under § 1.430(h)(3)-2(c)(7)(ii); or
(2) If one or more of the participating
employers is treated as maintaining the
plan under § 1.430(h)(3)-2(c)(7)(ii), the
information specified in section 6.02 and
6.03 of this revenue procedure, as appli-
cable, treating each such employer as the
applicant.
.05 Spun-off plans. The following
additional information must be provided
with respect to each plan that is sub-
ject to § 430 and is maintained by the
applicant or a member of the applicant’s
controlled group, that was spun off from
another plan (“original plan”) main-
tained by the applicant or a member of
the applicant’s controlled group within
the 5-year period preceding the date of
the request:
(1) The plan name and the plan number
of the spun-off plan, and the plan name
and number of the original plan;
(2) The employer identification num-
ber of the employer maintaining the spun-
off plan and the employer identification
number of the employer maintaining the
original plan;
(3) The date of the spinoff;
(4) The approximate number of indi-
viduals covered by the spun-off plan as
of the date of the spinoff and the approx-
imate number of individuals covered by
the original plan immediately before the
spinoff; and
(5) The reason for the spinoff.
SECTION 7. DEMONSTRATIONS
OF CREDIBLE MORTALITY
INFORMATION
.01 Experience Study Period. The
applicant must identify the period of
time covered by the mortality experience
study (“Experience Study Period”) used
to develop the Substitute Base Table(s)
and the base year for the Substitute Base
Table(s). See § 1.430(h)(3)-2(d)(2) and (f)
(4) (regarding the selection of an experi-
ence study period) and § 1.430(h)(3)-2(c)
(3)(ii) (regarding identification of the base
year).
.02 Full credibility threshold. The
applicant must identify the full credibility
threshold in § 1.430(h)(3)-2(d)(3) and the
number of actual deaths in the Experience
Study Period.
.03 Optional rules. (1) Simplified rule.
The applicant must identify whether it
used the simplified rule under which the
determination of whether there is credi-
ble mortality information for a gender is
made by only taking into account indi-
viduals who are at least age 50 and less
than age 100. See § 1.430(h)(3)-2(c)(2)
(ii)(B).
(2) Combined genders rule. The appli-
cant must identify whether it used the
rule under which a single mortality ratio
is developed and applied for both gen-
ders to construct Substitute Base Tables
for the Plan (or Aggregated Group). See
§ 1.430(h)(3)-2(d)(6).
04. Required information. The infor-
mation required in section 7.04(1)-(12)
of this revenue procedure must be pro-
vided in tabular form for all individuals
within each population for whom sepa-
rate approval to use substitute mortality
tables is requested, for all ages between
18 and 100 (unless the applicant is using
the simplified rule as provided in sec-
tion 7.03(1) of this revenue procedure,
in which case, only those individuals
who are at least age 50 and less than age
100 are considered). This information
must be provided separately for each
12-month period in the Experience Study
Period and also as an aggregate amount
for all 12-month periods in the Experi-
ence Study Period.
(1) The total number of individuals at
that age at the beginning of the 12-month
period, excluding individuals who left the
population during the 12-month period for
reasons other than death.
(2) The total number of individuals at
that age at the beginning of the 12-month
period who left the population for reasons
other than death.
(3) The total number of individuals at
that age at the beginning of the 12-month
period who died during the 12-month
period.
(4) The number of expected deaths for
individuals at that age determined by mul-
tiplying the mortality rate from the stan-

Bulletin No. 2024–34 527 August 19, 2024
dard mortality table described in section
7.05(1) of this revenue procedure by the
total of the individuals determined in sec-
tion 7.04(1) and (2) of this revenue proce-
dure, adjusted for exposure periods of less
than 12 months.
(5) The sum of the benefit amounts
described in § 1.430(h)(3)-2(d)(2)(iii) for
all individuals at that age at the beginning
of the 12-month period, excluding indi-
viduals who left the population during the
12-month period for reasons other than
death.
(6) The sum of the benefit amounts
described in § 1.430(h)(3)-2(d)(2)(iii) for
individuals at that age who left the popu-
lation during the 12-month period for rea-
sons other than death.
(7) The sum of the benefit amounts
described in § 1.430(h)(3)-2(d)(2)(iii) for
individuals at that age who left the pop-
ulation during the 12-month period on
account of death.
(8) The amount determined by multi-
plying the mortality rate for that age from
the standard mortality table described in
section 7.05(1) of this revenue procedure,
by the total of the amounts determined
in section 7.04(5) and (6) of this revenue
procedure, adjusted for exposure periods
of less than 12 months.
(9) The amount determined under sec-
tion 7.04(8) of this revenue procedure,
except that, if the 12-month period in the
experience study period begins in 2020,
2021, or 2022, then the mortality rate must
be from the adjusted standard mortality
table in section 7.05(2) of this revenue
procedure.
(10) The sum of the squares of the ben-
efit amounts described in § 1.430(h)(3)-
2(d)(2)(iii) for all individuals at that age
at the beginning of the 12-month period
excluding individuals who left the popu-
lation during the 12-month period for rea-
sons other than death.
(11) The sum of the squares of the
benefit amounts described in § 1.430(h)
(3)-2(d)(2)(iii) for individuals at that
age who left the population during the
12-month period for reasons other than
death.
(12) The amount determined by mul-
tiplying the mortality rate from the stan-
dard mortality table described in section
7.05(1) of this revenue procedure by the
total of the amounts determined in section
7.04(10) and (11) of this revenue proce-
dure, adjusted for exposure periods of less
than 12 months.
.05 Standard mortality table.
(1) The request must include the stan-
dard mortality table for the base year for
the Substitute Base Table, determined pur-
suant to § 1.430(h)(3)-2(d)(4)(iii).
(2) If a 12-month period in the experi-
ence study period begins in 2020, 2021, or
2022, then the request must also include
the standard mortality table for the cal-
endar year in which the 12-month period
begins reflecting the adjustment provided
for in § 1.430(h)(3)-2(d)(4)(iii)(B) for the
12-month period.
.06 Adjustment for exposure periods
of less than 12 months. The request must
include a description of the method or
methods used to make adjustments for
individuals who left the population for
reasons other than death to reflect expo-
sure periods of less than 12 months.
.07 Adjustments to make experience
study predictive of future mortality experi-
ence in light of changes to the plan popu-
lation. The request must include a descrip-
tion of any method used to adjust the
experience study data to reflect changes
in the population during the Experience
Study Period. For example, if an annuity
purchase, lump sum window or other risk
transfer activity occurred during the expe-
rience study, the request should include a
description of how those populations were
treated in the study.
.08 Other data adjustments. The
request must include a description of any
other method used to adjust experience
study data.
.09 Other relevant information. The
request should also note if any future risk
transfer activity is anticipated, and, if so,
a description of how that would affect the
population.
SECTION 8. DEMONSTRATION OF
POPULATION STABILITY
.01 Required comparison of popula-
tion count. The following information
must be provided in tabular form for each
population within the Plan (or Aggregated
Group) for which approval to use substi-
tute mortality tables is requested, aggre-
gating all plans that have the same plan
year:
(1) The average number of individuals
within the population during the Experi-
ence Study Period; and
(2) The number of individuals within
the population as of the last day of the plan
year immediately preceding the plan year
during which approval to use substitute
mortality tables is requested.
.02 Additional requirement for signif-
icant change in participant count. If the
number of individuals described in section
8.01(2) of this revenue procedure is less
than 80 percent or more than 120 percent
of the number of individuals described in
section 8.01(1) of this revenue procedure,
then the request must provide information
and analysis that shows that the mortality
experience during the Experience Study
Period (taking into account any adjust-
ments described in section 7.07 or 7.08
of this revenue procedure) is accurately
predictive of the future mortality of the
population.
SECTION 9. INFORMATION
REGARDING OTHER PLANS IN
THE APPLICANT’S CONTROLLED
GROUP
.01 General rule. Under § 1.430(h)
(3)-2(e), a population lacks credible mor-
tality information if the number of deaths
during the experience study is less than
100. For all plans maintained by the appli-
cant or a member of the applicant’s con-
trolled group (other than a plan for which
approval to use substitute mortality tables
is requested or used for all populations
or a newly-affiliated plan with respect to
which the transition period has not ended
before the first day of the Requested Effec-
tive Plan Year), the applicant must identify
the following information for any popula-
tion for which there is a lack of credible
mortality information (such that substitute
mortality tables may not be used for that
population):
(1) The period of time used to demon-
strate a lack of credible mortality informa-
tion (“Demonstration Period”), and
(2) The number of deaths during that
period.
.02 Alternative demonstrations of lack
of credible mortality information. In lieu
of the information described in section
9.01(2) of this revenue procedure, a lack
of credible mortality information may be

August 19, 2024 528 Bulletin No. 2024–34
demonstrated by providing alternative
information that demonstrates to the sat-
isfaction of the Commissioner that the
number of male and/or female deaths
did not exceed 100 during the Demon-
stration Period. For example, a year-
by-year reconciliation of the participant
population (such as might be shown in an
actuarial valuation report) might be sub-
mitted showing that the total number of
participants leaving the plan during the
Demonstration Period is less than 100, as
this would demonstrate that the number
of male and female deaths must also be
less than 100 during that period. Simi-
larly, if the total number of participants
in the Plan does not exceed 100 for any
year during the Demonstration Period,
the year-by-year number of participants
in the Plan during such period might
be submitted in lieu of the information
described in section 9.01(2) of this rev-
enue procedure, as this would show that
the number of male and female deaths
must also be less than 100 during that
period.
SECTION 10. SUBSTITUTE BASE
TABLE CONSTRUCTION
.01 Mortality ratio. For each popula-
tion for which approval to use substitute
mortality tables is requested, the appli-
cant’s request must include the mortality
ratio determined pursuant to § 1.430(h)
(3)-2(d)(4)(ii).
.02 Substitute Base Table for popula-
tion with full credibility. With respect to a
population with mortality experience that is
fully credible, the applicant’s request must
contain the Substitute Base Table con-
structed pursuant to § 1.430(h)(3)-2(d)(4).
.03 Substitute Base Table for popula-
tion with partial credibility. With respect
to a population with mortality experience
that is only partially credible, the appli-
cant’s request must include:
(1) A base substitute mortality table
constructed using the rules in § 1.430(h)
(3)-2(d)(4) as if the population had mor-
tality experience that is fully credible;
(2) The partial credibility weighting
factor for the population determined pur-
suant to § 1.430(h)(3)-2(e)(2); and
(3) The Substitute Base Table con-
structed using the rules in § 1.430(h)(3)-
2(e)(1).
SECTION 11. DEMONSTRATIONS
WITH RESPECT TO BASE TABLES
.01 Funding target comparison. For the
Plan (or each plan within the Aggregated
Group) for which approval to use sub-
stitute mortality tables is requested, the
applicant must provide a comparison of:
(1) the plan’s funding target (determined
without regard to at-risk assumptions
under § 430(i)) calculated using the gen-
erally applicable generational mortality
tables, and (2) the amount that funding
target would have been if the substitute
mortality tables had been used to deter-
mine the funding target, holding all other
assumptions constant.
These amounts must be determined
as of the valuation date for a plan year
ending no earlier than one year and one
day before the first day of the Requested
Effective Plan Year, using the data and
interest rates that were used for that val-
uation. The amounts must be provided in
total and separately for: (1) active partic-
ipants, (2) terminated vested participants,
and (3) retired participants and beneficia-
ries receiving payment.
.02 Generational mortality tables. For
each population for which approval to use
substitute mortality tables is requested,
the applicant’s request must include sam-
ple generational mortality tables, as of the
Requested Effective Plan Year, for indi-
viduals whose years of birth are 1950,
1970, and 1990, respectively, constructed
from the Substitute Base Table using the
rules of § 1.430(h)(3)-2(c)(3).
.03 Annuity factors. For each popula-
tion for which approval to use substitute
mortality tables is requested, the appli-
cant’s request must include the following
annuity factors based on the substitute
mortality table for an individual whose
year of birth is 20 years before the base
year for the Substitute Base Table, deter-
mined using the same interest rates as
those used under section 11.01 of this rev-
enue procedure.
(1) For a Substitute Base Table that is
not an annuitant Substitute Base Table,
deferred to age 55 factors at quinquennial
ages from 20 to 50.
(2) For a Substitute Base Table that is
not a nonannuitant Substitute Base Table,
immediate annuity factors at quinquennial
ages from 50 to 90.
SECTION 12. EARLY
TERMINATION OF PREVIOUSLY
APPROVED SUBSTITUTE
MORTALITY TABLES IN
CONJUCTION WITH THE
REPLACEMENT OF GENERALLY
APPLICABLE MORTALITY
TABLES
.01 Regulatory requirement to termi-
nate use of previously approved substi-
tute mortality tables. Section 1.430(h)
(3)-2(c)(6)(ii)(E) provides that guidance
published in the Internal Revenue Bul-
letin will specify the date by which the
use of a plan’s substitute mortality tables
must be terminated in conjunction with
the replacement of the generally applica-
ble mortality tables specified in § 430(h)
(3)(A) and § 1.430(h)(3)-1. The generally
applicable mortality tables were replaced
for plan years beginning on or after Jan-
uary 1, 2024, in TD 9983, 88 FR 72357.
.02 Plans with significant changes in cov-
erage. If a substitute mortality table was first
approved for use for a plan year that began
before January 1, 2025, and the number of
individuals covered by the substitute mortal-
ity table is less than 80 percent or more than
120 percent of the average number of indi-
viduals in that population over the 12-month
periods covered by the experience study,
then the substitute mortality table may not
be used for a plan year beginning on or after
January 1, 2026. This termination, which
is pursuant to § 1.430(h)(3)-2(c)(6)(ii)(E),
applies without regard to whether the actu-
ary makes the certification described in §
1.430(h)(3)-2(c)(6)(iii)(A).
.03 Other plans. If a plan is not
described in section 12.02 of this revenue
procedure, there is no early termination of
the use of previously approved substitute
mortality tables merely because of the
replacement of the generally applicable
mortality tables specified in § 430(h)(3)
(A) and § 1.430(h)(3)-1 described in sec-
tion 12.01 of this revenue procedure.
SECTION 13. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2017-55 is superseded. Sec-
tions 24.01(11), 26.02(4), and 31.01(1) of
Rev. Proc. 2024-4 are modified to refer
to this revenue procedure in lieu of Rev.
Proc. 2017-55.

Bulletin No. 2024–34 529 August 19, 2024
SECTION 14. EFFECTIVE DATE
This revenue procedure is effective for
all requests for approval to use plan-spe-
cific substitute mortality tables in accor-
dance with § 430(h)(3)(C) of the Code for
which the Requested Effective Plan Year
begins on or after January 1, 2025.
SECTION 15. PAPERWORK
REDUCTION ACT
The collection of information included
in this revenue procedure has been
reviewed and approved by the Office of
Management and Budget in accordance
with the Paperwork Reduction Act (44
U.S.C. section 3507) under control num-
ber 1545-2073.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collection of information in this rev-
enue procedure is in sections 3 through 11
of this revenue procedure. This collection of
information is required to provide sufficient
information to enable the IRS to evaluate,
process, and rule on the request for approval
to use substitute mortality tables. This infor-
mation will be used to make determinations
under § 430(h)(3) of the Code. The likely
respondents are businesses or other for-
profit institutions and nonprofit institutions.
The estimated total annual reporting/
recordkeeping burden is 4,000 hours.
The estimated burden per respondent/
recordkeeper varies from 167 to 900
hours, depending on individual circum-
stances, with an estimated average burden
of 267 hours. The estimated average num-
ber of expected respondents/recordkeep-
ers is 15 per year.
The estimated frequency of responses
is once every 10 years.
Books or records relating to a col-
lection of information must be retained
as long as their contents may become
material in the administration of any
internal revenue law. Generally, tax
returns and tax return information are
confidential, as required by 26 U.S.C.
section 6103.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Arslan Malik of the Office of
the Associate Chief Counsel, Employee
Benefits, Exempt Organizations, and
Employment Taxes (CC:EEE). For further
information regarding the submission of a
request for approval to use substitute mor-
tality tables, please contact Christopher
Denning at (202) 317-5755.

August 19, 2024 530 Bulletin No. 2024–34
Appendix A
REQUEST FOR APPROVAL TO USE SUBSTITUTE MORTALITY TABLES CHECKLIST
Instructions
You must include a completed copy of this checklist with your submission. Answer each question in the checklist by circling Yes,
No, or N/A; explanations must be provided for “No” or “N/A” responses. If a completed checklist is not included, or if explanations
are not provided for “No” and “N/A” responses, then your submission will be considered incomplete for purposes of section 4.02 of
this revenue procedure.
Sign and date the checklist (as plan sponsor or authorized representative) and place it on top of your request.
ResponseItem numberDescription of item
Page number
in application
Yes
No
N/A
1.Have you included the user fee required under Rev. Proc. 2024-4 or its
successors? (See section 3.02)
Yes
No
N/A
2.If you are designating an authorized representative, have you included a
properly executed Form 2848 (Power of Attorney)? (See section 3.03(1))
Yes
No
N/A
3.Have you satisfied all the requirements of Rev. Proc. 2024-4 or its suc-
cessors (especially concerning original signatures, penalties of perjury
statement, and statement of proposed deletions)? (See section 3.03(2)
and (3))
Yes
No
N/A
4.If any separate application for approval to use substitute mortality tables
will be made for other plans maintained within the applicant’s controlled
group, have you requested that the 180-day review period be extended?
(See section 4.03)
Yes
No
N/A
5.For a request for approval to use substitute mortality tables submitted for
a plan year beginning during 2025 less than 7 months before the first day
of the plan year, and no later than October 31, 2024, have you included
a request for a 90-day extension of the 180-day review period? (See
section 4.04)
Yes
No
N/A
6.Have you identified the first day of the first plan year for which approval
to use substitute mortality tables is requested and the number of years
for which the substitute mortality tables would be used? (See section
5.03)
Yes
No
N/A
7.Have you included a description of the populations for which approval
to use substitute mortality tables is requested? (See section 5.04)
Yes
No
N/A
8.Have you included the identification information required under section
6.01 for the Plan (or for each plan in the Aggregated Group) for which
approval to use substitute mortality tables is requested?
Yes
No
N/A
9.Have you provided the information required for each plan for which
substitute mortality tables are not intended to be used? (See section 6.02)
Yes
No
N/A
10.Have you provided the information required for each other plan for
which substitute mortality tables are being used or are intended to be
used? (See section 6.03)

Bulletin No. 2024–34 531 August 19, 2024
Yes
No
N/A
11.If the applicant is a plan sponsor of a multiple-employer plan, have
you provided either (1) a statement that none of the employers whose
employees participate in the plan are treated as maintaining the plan
under § 1.430(h)(3)-2(c)(7)(ii); or (2) if one or more of the participating
employers is treated as maintaining the plan under § 1.430(h)(3)-2(c)(7)
(ii), the information specified in section 6.02 and 6.03 of this revenue
procedure, as applicable, treating each such employer as the applicant?
(See section 6.04)
Yes
No
N/A
12.Have you provided the required information for any plans that were
spun off from another plan maintained by the applicant or a member of
the applicant’s controlled group within the past 5 years? (See section
6.05)
Yes
No
N/A
13.Have you identified the Experience Study Period and the base year for
the Substitute Base Tables? (See section 7.01)
Yes
No
N/A
14.Have you provided the full credibility threshold and the number of
actual deaths during the Experience Study Period for each population
within the Plan (or Aggregated Group) for which approval to use substi-
tute mortality tables is requested (see section 7.02)?
Yes
No
N/A
15.Have you identified whether the applicant used either or both of the
optional rules specified in section 7.03?
Yes
No
N/A
16.Have you included a table showing the required information for each
applicable population within the Plan (or Aggregated Group), for each
12-month period of the Experience Study Period and also as an aggre-
gate amount for all 12-month periods in the Experience Study Period?
(See section 7.04)
Yes
No
N/A
17.Have you included the relevant standard mortality tables (which is the
base mortality table under § 1.430(h)(3)-1(d) projected with mortality
improvement to the base year for the Substitute Base Tables)? (See
section 7.05(1))
Yes
No
N/A
18.If any 12-month period in the experience study period begins in 2020,
2021, or 2022, have you included the standard mortality table for the
calendar year in which the 12-month period begins reflecting the adjust-
ment provided for in § 1.430(h)(3)-2(d)(4)(iii)(B) for the 12-month
period? (See section 7.05(2))
Yes
No
N/A
19.Have you included a description of the methods used to reflect exposure
periods of less than 12 months? (See section 7.06)
Yes
No
N/A
20.Have you included a description of any methods used to adjust the expe-
rience study data? (See section 7.07 and 7.08)
Yes
No
N/A
21.Have you included any other relevant information? (See section 7.09)
Yes
No
N/A
22.Have you included a table showing the average number of individu-
als during the Experience Study Period and the number of individuals
within the population as of the last day of the plan year immediately pre-
ceding the date of this application, for each population within the Plan
(or Aggregated Group) for which the approval to use substitute mortality
tables is requested? (See section 8.01)

August 19, 2024 532 Bulletin No. 2024–34
Yes
No
N/A
23.Have you provided information and analysis required if the population
has had a significant change in the number of participants, as described
in section 8.02?
Yes
No
N/A
24.Have you identified the Demonstration Period for all plans maintained
by the applicant or a member of the applicant’s controlled group other
than a plan for which approval to use substitute mortality tables is
requested or used for all populations or a newly-affiliated plan with
respect to which the transition period has not ended before the first day
of the Requested Effective Plan Year? (See section 9.01(1))
Yes
No
N/A
25.Have you identified the number of deaths during the Demonstration
Period for all plans maintained by the applicant or a member of the
applicant’s controlled group (other than a plan for which approval to use
substitute mortality tables is requested or used for all populations or a
newly affiliated plan with respect to which the transition period has not
ended before the first day of the Requested Effective Plan Year) for any
population for which there is a lack of credible mortality information
(such that substitute mortality tables may not be used for that popula-
tion)? (See section 9.01(2))
Alternatively, have you provided other information for a population that
demonstrates that the number of deaths during the Demonstration Period
would not exceed 100? (See section 9.02)
Yes
No
N/A
26.Have you provided the mortality ratio for each population for which
approval to use substitute mortality tables is requested? (See section
10.01)
Yes
No
N/A
27.For each population within the Plan (or Aggregated Group) whose mor-
tality experience has full credibility, have you provided a full copy of the
Substitute Base Table? (See section 10.02)
Yes
No
N/A
28.For each population within the Plan (or Aggregated Group) for which
approval to use substitute mortality tables is requested but for which
mortality experience does not have full credibility, have you provided a
full copy of the base substitute mortality table constructed as if the popu-
lation’s mortality information had full credibility, the partial credibility
weighting factor, and a full copy of the Substitute Base Table reflecting
credibility adjustments? (See section 10.03)
Yes
No
N/A
29.Have you included a comparison of hypothetical funding targets deter-
mined using generally applicable mortality tables and the proposed
substitute mortality tables? (See section 11.01)
Yes
No
N/A
30.Have you included the required sample generational mortality tables as
of the Requested Effective Plan Year, developed from each Substitute
Base Table? (See section 11.02)
Yes
No
N/A
31.Have you included annuity factors for each Substitute Base Table based
on the substitute mortality table for an individual whose year of birth is
20 years before the base year for the Substitute Base Table? (See section
11.03)
Signature _______________________ Date __________
Title or Authority _____________________________________
Typed or printed name of person signing checklist ____________________________________

Bulletin No. 2024–34 533 August 19, 2024
Part IV
Deletions From Cumulative
List of Organizations,
Contributions to Which are
Deductible Under Section
170 of the Code
Announcement 2024-31
Table of Contents
The Internal Revenue Service has revoked
its determination that the organizations
listed below qualify as organizations
described in sections 501(c)(3) and 170(c)
(2) of the Internal Revenue Code of 1986.
Generally, the IRS will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the IRS is not pre-
cluded from disallowing a deduction for
any contributions made after an organiza-
tion ceases to qualify under section 170(c)
(2) if the organization has not timely filed
a suit for declaratory judgment under sec-
tion 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declaratory
judgment has been timely filed, contri-
butions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue
to be deductible. Protection under sec-
tion 7428(c) would begin on August 19,
2024, and would end on the date the court
first determines the organization is not
described in section 170(c)(2) as more
particularly set for in section 7428(c)(1).
For individual contributors, the maximum
deduction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were
the basis for revocation.
Name Of OrganizationEffective Date of RevocationLocation
Jordan's Way Charities, Corp1/1/2018 Safety Harbor, FL

Bulletin No. 2024–34 i August 19, 2024
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations
to show that the previous published rul-
ings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.
—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

August 19, 2024 ii Bulletin No. 2024–34
Numerical Finding List
1
Bulletin 2024–34
Announcements:
2024-26, 2024-27 I.R.B. 14
2024-27, 2024-27 I.R.B. 14
2024-28, 2024-28 I.R.B. 39
2024-29, 2024-29 I.R.B. 71
2024-31, 2024-34 I.R.B. 533
Notices:
2024-47, 2024-27 I.R.B. 1
2024-52, 2024-27 I.R.B. 2
2024-53, 2024-27 I.R.B. 4
2024-54, 2024-28 I.R.B. 24
2024-55, 2024-28 I.R.B. 31
2024-56, 2024-29 I.R.B. 64
2024-57, 2024-29 I.R.B. 67
2024-58, 2024-30 I.R.B. 120
2024-59, 2024-32 I.R.B. 348
2024-60, 2024-34 I.R.B. 515
2024-61, 2024-34 I.R.B. 520
Proposed Regulations:
REG-124593-23, 2024-28 I.R.B. 40
REG-109032-23, 2024-31 I.R.B. 332
REG-120137-19, 2024-31 I.R.B. 336
REG-119283-23, 2024-32 I.R.B. 351
REG-102161-23 2024-33 I.R.B. 502
REG-103529-23, 2024-33 I.R.B. 512
Revenue Procedures:
2024-26, 2024-27 I.R.B. 7
2024-29, 2024-30 I.R.B. 121
2024-30, 2024-30 I.R.B. 183
2024-27, 2024-31 I.R.B. 300
2024-28, 2024-31 I.R.B. 326
2024-32, 2024-34 I.R.B. 523
Revenue Rulings:
2024-13, 2024-28 I.R.B. 18
2024-14, 2024-28 I.R.B. 18
2024-15, 2024-32 I.R.B. 340
Treasury Decisions:
10002, 2024-29 I.R.B. 56
9999, 2024-30 I.R.B. 72
10000, 2024-31 I.R.B. 185
10003, 2024-32 I.R.B. 342
10001 2024-33 I.R.B. 412
10004 2024-33 I.R.B. 489
9998 2024-34 I.R.B. 412
10005 2024-34 I.R.B. 510
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin
2024–52, dated December 30, 2024.

Bulletin No. 2024–34 iii August 19, 2024
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2024–34
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2024–27 through 2024–52 is in Internal Revenue Bulletin
2024–52, dated December 30, 2024.

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Washington, DC 20224
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