The prevailing wages and apprenticeship credit is a provision within the Inflation Reduction Act that offers significant tax savings to organizations involved in the construction of eligible clean energy facilities or properties. To qualify for this credit, all laborers working on the project must be paid a prevailing wage, and a certain percentage of the labor must be performed by apprentices.

In essence, by ensuring fair wages for workers and providing opportunities for apprenticeship programs, organizations can benefit from tax incentives and contribute to the growth and development of skilled labor in the clean energy sector. This credit encourages both fair employment practices and the training of new talent, ultimately supporting the goals of the Act to promote environmental sustainability and economic growth.

How to Leverage Savings Opportunities

If your project meets prevailing wage and apprenticeship requirements, you could qualify for an increased tax credit or deduction five times greater than the base rate offered for non-compliant projects. For eligible investment tax credits, that’s an increase to 30% from 6%, on the cost to construct the clean energy project, with similar increases for eligible clean energy production credits or energy improvement deductions.

Support to Navigate and Maintain Compliance

Documenting prevailing wage and apprenticeship compliance requires tracking down, analyzing, and organizing a substantial volume of information and could result in potential penalties should gaps be identified.

Taking a proactive approach before project contracts are established and construction begins can provide a strong foundation for your claims—allowing you to incorporate contractual obligations with contractors and subcontractors to not only comply with prevailing wage and apprentice requirements but establish processes for tracking, reporting, and documenting their compliance to support your increased credit claim.

Monitoring for compliance during construction and promptly correcting any errors may also qualify your project for waiver of some or even all related penalties under the current proposed rules. A combination of proactive planning and active monitoring will help you retain the biggest net value of the enhanced credit.

How the Process Works

Our professionals provide end-to-end support throughout the active construction of your project and the claims process:

• Set Up. Identify the scope of the project and provide customized, automated analytic tools to assess and organize data throughout the project.  

• Onboarding. Provide training to contractors and subcontractors on prevailing wage and apprenticeship requirements and recommended practices for reporting and documentation to establish a foundation for project success.

• Contract Compliance. Review contractor and subcontractor records for accuracy and completeness.

• PWA Compliance. Review of contract and subcontractor reporting and documentation for compliance with PWA requirements utilizing our analytical software.

• Documentation. Compile final report and support documentation.

• Recapture Services. Provide ongoing support during the recapture period.