Compliance Guidebook: PWA, FEOC and BoC

Navigate the Complexities of the IRA and OBBBA Tax Credit Compliance Requirement

The clean energy tax credit landscape is constantly evolving, with the Inflation Reduction Act (IRA) and the more recent One Big Beautiful Bill Act (OBBBA) introducing complex requirements for developers looking to take advantage of clean energy tax credits. Don't risk losing out on valuable incentives due to non-compliance.

3 Critical Areas Covered in the Guidebook:

1. Prevailing Wage and Apprenticeship (PWA) Requirements

Achieve your maximum tax credit benefit—five times the base credit rate—by ensuring your projects are fully PWA-compliant:

• Prevailing Wages: Understand when to start paying prevailing wages and how to determine the correct wage rates using the SAM website or by requesting a supplemental wage determination from the DOL.
• Apprenticeship Rules: Familiarize yourself with the apprentice labor hours requirement, the apprentice-to-journeyworker ratio requirement, and the apprentice participation requirement.
• Duration & Exceptions: Get clarity on the duration of the post-construction prevailing wage requirement and critical exemptions, like those for projects under one megawatt or those that began construction before January 29, 2023.
• Remedies: Discover the steps to cure deficiencies, including paying back wages with interest and penalties, and when and how to claim the Good-Faith Effort Exception for apprenticeship requirements.

2. Foreign Entity of Concern (FEOC) Restrictions

Ensure your projects and supply chains are compliant with the new OBBBA rules, which are aimed at preventing foreign entities of concern from benefiting from clean energy tax credits.

• Taxpayer-Level Restrictions: Identify Prohibited Foreign Entities (PFEs) (Specified Foreign Entities and Foreign-Influenced Entities) that cannot claim or receive a transfer of covered tax credits.
• Effective Control: Avoid arrangements that grant a Specified Foreign Entity contractual rights that constitute "effective control" over your project or components, a restriction that can extend the recapture risk for §48E ITCs to ten years.
• Material Assistance: Navigate the cost-ratio compliance thresholds for manufactured products and components used in §45Y, §48E, and §45X projects.

3. Beginning of Construction (BoC)

Secure your tax credit rate and eligibility by properly establishing a project’s BoC date:

• Traditional Methods: Review the established methods for determining BoC: Physical Work of a Significant Nature or the Five Percent Safe Harbor.
• New Rules for Wind & Solar: Understand the recent changes under Notice 2025-42 for §45Y and §48E credits:

Ready to simplify compliance? Download the Reunion Compliance Guidebook now and streamline your project's compliance journey.

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