Baker Tilly launches compliance solution for IRA wage & apprenticeship requirements
Workers place a NineDot Energy battery in the Bronx (courtesy: NineDot Energy)
Advisory CPA firm Baker Tilly has launched an end-to-end compliance solution to help clean energy projects earn enhanced credits under the Inflation Reduction Act (IRA) by meeting Prevailing Wage & Apprenticeship (PW&A) requirements.
The new solution provides organizations implementing clean energy projects with technology, processes, and resources to establish, monitor, and document the three pillars of compliance: prevailing wage, apprenticeship, and penalties. Taxable and tax-exempt organizations can receive tax credit benefits for implementing clean energy solutions, and projects that comply with PW&A are eligible for a 5x enhanced credit through sections 45 and 48 of the IRA.
“Managers of clean energy projects are either unaware of the IRA PW&A incentive or struggling to access and leverage the credits that could save them millions of dollars because of the complicated regulatory requirements,” said Tom Unke, Baker Tilly partner and practice leader for energy, industrial, and consumer products. “Baker Tilly brings unmatched assurance of IRA PW&A incentives. We developed this end-to-end technology solution to make compliance as straightforward and effortless as possible.”
The solution includes:
- Facilitating a compliance program with general contractors, contractors, and subcontractors.
- Monitoring the overall project compliance and supporting contractors through education and resources to adhere to requirements.
- Reviewing and curing contractor non-compliance, which can result in project penalties for the credit seeker at the time of filing.
- Establishing and maintaining apprentice hours, overall budget, and contractor-specific targets.
“Projects that comply with IRA PW&A are eligible for a 5x enhanced credit that could mean hundreds of millions of dollars in savings,” Unke said. “This is a substantive, complex tax compliance process that can’t be written off as a ‘check the box’ formality. Baker Tilly’s solution provides organizations with the technology, processes, and resources to establish, monitor, and document every step of the way.”
The platform includes project-specific dashboards, summarizing weekly contractor prevailing wage and apprenticeship performance, that update tax credit seekers on project compliance and projected penalties. Monthly reports on prevailing wage and apprenticeship compliance are generated for each project and retained for reporting and filing purposes. Additionally, documentation is created when contractors cure non-compliance events, which serves as substantiation of the credit filing.
“There is a misunderstanding in the market that these new requirements are similar to other federal rules such as Davis-Bacon and related acts,” Unke said. “IRA requirements have specific complexities and features that are not incorporated into Davis-Bacon prevailing wage projects. Additionally, the ramifications of being non-compliant could be financially devastating to asset owners. Given the high value and visibility of these credits, we anticipate that the filings and documentation will be scrutinized, especially in light of recent credit programs that faced fraudulent claims. It is important that organizations work with a service provider that they can trust with the specific complexities of IRA PW&A compliance and will help them manage.”
