The Inflation Reduction Act of 2022
The Inflation Reduction Act (IRA) was introduced into U.S. legislation to address supply chain shortages and to help bolster American economic growth. A cornerstone of the IRA focuses on stimulating domestic manufacturing and job creation, while simultaneously reducing America’s reliance on foreign products and supply chains. Under the IRA, homeowners and business owners alike can claim a 30% tax credit for eligible expenses related to solar installations.
Domestic Content Bonus Credit
The IRA also includes the Domestic Content Bonus Credit, an incentive for projects that use clean energy sources, such as rooftop solar. The Domestic Content Credit provides additional tax credits to renewable energy projects that meet domestic manufacturing requirements by using American-made products and product components in their construction.
The Domestic Content Bonus Credit offers businesses an additional 10% tax credit if at least 40% of the project’s cost comes from domestic sources. This credit is not available to homeowners. The eligibility requirements for the Domestic Content Bonus Credit will increase annually, so be sure to consult your tax advisor for the most current rules and regulations.
New Elective Safe Harbor
The New Elective Safe Harbor guidelines under the IRA provide clear categorization for determining whether a project meets domestic content requirements to qualify for the Domestic Content Bonus Credit. Businesses can rely on American manufacturers to verify the origins of its source materials, products and product components.
How Does S-5! Figure Into the Equation?
Made in the USA, S-5! manufactures its products in its own manufacturing facility in Iowa Park, Texas, making our components eligible for the Domestic Content Bonus Tax Credit. S-5! domestically made products and components can contribute to the federal requirement to obtain the 10% bonus adder.
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