On May 12, 2023, the Department of Treasury issued guidance and a notice of intent to promulgate regulations addressing the requirements to qualify for the domestic content bonus that increases the production and investment tax credits (PTC and ITC) under sections 45, 45Y, 48, and 48E of the Internal Revenue Code. The PTC is enabled by sections 13101 and 13701 of the IRA, while the ITC is enabled by sections 13102 and 13702 of the IRA.
The IRA stipulates that ITC- or PTC-eligible clean energy projects and facilities may also be eligible to receive up to a 10% bonus if the project meets American manufacturing and sourcing requirements. The bonuses are intended to boost American manufacturing, especially iron and steel, as well as create a vibrant clean energy economy.