Prevailing wage and apprenticeship requirements

To qualify for increased credit or deduction amounts of certain clean energy tax incentives, taxpayers generally need to:

  • Pay laborers and mechanics employed in construction, alteration or repair no less than applicable prevailing wage rates
  • Employ apprentices from registered apprenticeship programs for a certain number of hours

By meeting prevailing wage and apprenticeship requirements under the Inflation Reduction Act of 2022, taxpayers can increase the base amounts of these incentives by 5 times.

There are limited exceptions where taxpayers may be eligible to claim the 5-times increase without meeting prevailing wage and apprenticeship requirements:

  • Certain small facilities that produce clean energy under 1 megawatt
  • Facilities that began construction before Jan. 29, 2023

Taxpayers must meet specific recordkeeping requirements to claim these increased amounts.

The U.S. Department of Labor determines the applicable prevailing wage requirements for each class of laborers and mechanics in a prescribed geographic area for a particular type of construction. For more information about prevailing wage and apprenticeship requirements, please visit the Department of Labor's website.

Eligible credits and deductions

Prevailing wage and apprenticeship requirements apply to:

Only the prevailing wage requirement applies to:

Find details at the Department of Labor's website.

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Note: These items may contain information that has been superseded by newer guidance.

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