n-15-25.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

1

Beginning of Construction for Sections 45 and 48

Notice 2015-25

SECTION 1. PURPOSE
On December 19, 2014, the Tax Increase Prevention Act of 2014, Pub. L. No.
113-295, 128 Stat. 4010 (TIPA), extended by one year the date by which construction of
a qualified facility (as described in section 45(d) of the Internal Revenue Code) must
begin. Accordingly, a taxpayer will be eligible for the renewable electricity production
tax credit under section 45 (PTC), or the energy investment tax credit under section 48
(ITC) in lieu of the PTC, with respect to such a facility if construction of such facility
began before January 1, 2015.
This notice updates the guidance provided in Notice 2013-29, 2013-1 C.B. 1085,
Notice 2013-60, 2013-2 C.B. 431, and Notice 2014-46, 2014-36 I.R.B. 520 (collectively
“the prior IRS notices”) consistent with this statutory extension. The Internal Revenue
Service (Service) will not issue private letter rulings to taxpayers regarding the
application of this notice or the application of the beginning of construction requirement
under sections 45(d) and 48(a)(5).
SECTION 2. EXTENSION OF BEGINNING OF CONSTRUCTION DATE
Prior to TIPA, sections 45(d) and 48(a)(5) required that construction of a qualified
facility begin before January 1, 2014 for the facility to be eligible for the PTC or ITC.

2

Based on sections 45 and 48 as in effect before the enactment of TIPA, the prior IRS
notices provide guidance to determine whether construction has begun on a qualified
facility prior to January 1, 2014. Because TIPA extended the date by which construction
of a qualified facility must begin to January 1, 2015, this notice updates all references to
“January 1, 2014” in the prior IRS notices as they relate to the date by which
construction must begin on a facility by replacing “January 1, 2014” with “January 1,
2015.” Except as otherwise specified in this notice, the guidance provided in the prior
IRS notices continues to apply.
SECTION 3. CONTINUOUS CONSTRUCTION/CONTINUOUS EFFORTS TESTS
The prior IRS notices provide that a taxpayer may establish the beginning of
construction by either (1) starting physical work of a significant nature (Physical Work
Test) or (2) paying or incurring five percent or more of the total cost of facility (Safe
Harbor). Both methods require that a taxpayer make continuous progress towards
completion once construction has begun (as set forth in section 4.06 (Continuous
Construction Test) and section 5.02 (Continuous Efforts Test) of Notice 2013-29,
respectively). Section 3.02 of Notice 2013-60 further provides that if a facility is placed
in service before January 1, 2016, the facility will be considered to satisfy the
Continuous Construction Test (for purposes of satisfying the Physical Work Test) or the
Continuous Efforts Test (for purposes of satisfying the Safe Harbor).
Consistent with the one-year extension of the beginning of construction date, this
notice extends the placed in service date provided in section 3.02 of Notice 2013-60 to

3

January 1, 2017. Thus, if a taxpayer begins construction on a facility prior to
January 1, 2015, and places the facility in service before January 1, 2017, the facility
will be considered to satisfy the Continuous Construction Test (for purposes of
satisfying the Physical Work Test) or the Continuous Efforts Test (for purposes of
satisfying the Safe Harbor), regardless of the amount of physical work performed or the
amount of costs paid or incurred with respect to the facility after December 31, 2014
and before January 1, 2017.
SECTION 4. DRAFTING INFORMATION
The principal author of this notice is Jennifer C. Bernardini of the Office of Associate
Chief Counsel (Passthroughs & Special Industries). For further information regarding
this notice contact Ms. Bernardini on (202) 317-6853 (not a toll-free call).