September 24, 2021

Volume XI, Number 267

Advertisement

September 23, 2021

Subscribe to Latest Legal News and Analysis

September 22, 2021

Subscribe to Latest Legal News and Analysis

September 21, 2021

Subscribe to Latest Legal News and Analysis

IRS Further Extends Continuity Safe Harbor for ITC, PTC Projects

On June 29th, the IRS released Notice 2021-41 (which may be found here), which retroactively extends the Continuity Safe Harbor to six years.  This follows the release of Notice 2020-41 (discussed here) on May 27, 2020, which extended the then four-year Continuity Safe Harbor to five years in response to the COVID-19 pandemic.  As such, under Notice 2021-41, the Continuity Safe Harbor will be met for property that began construction in calendar year 2016, 2017, 2018 or 2019 if it is placed in service within six years after the year during which construction started.  For property that began construction in calendar year 2020, the five-year Continuity Safe Harbor remains intact.

Prior to issuance of Notice 2021-41, if the Continuity Safe Harbor did not apply to a project, the taxpayer was required to satisfy the Continuous Construction Test (if using the Physical Work Test) or the Continuous Efforts test (if using the 5% Safe Harbor).  Now, if the time period to satisfy the Continuity Safe Harbor has passed, the Continuity Requirement is satisfied if the taxpayer demonstrates satisfaction of either the Continuous Construction Test or the Continuous Efforts Test, regardless of whether the Physical Work Test or the 5% Safe Harbor was used to establish the beginning of construction. 

© 2021 Foley & Lardner LLPNational Law Review, Volume XI, Number 181
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Tori Roessler, Foley Lardner Law Firm, Washington DC, Securities Law Attorney
Associate

Tori Roessler is an associate with Foley & Lardner LLP and a member of the Transactional & Securities Practice.

Ms. Roessler previously served as a summer associate with Foley at the firm’s Washington, DC office, where she participated in projects concerning mergers and acquisitions, securities law, and false claims act investigations. Prior to joining Foley, Ms. Roessler gained experience with several Birmingham-based law firms, where she served as a summer associate.

202-672-5498
David B. Weisblat, Foley Lardner, Transactional Tax Lawyer, Project Finance Attorney,
Of Counsel

David Weisblat is of counsel and a transactional tax lawyer with Foley & Lardner LLP focusing on federal and state tax issues arising in representing financial institutions, developers, utilities and other participants in energy, project finance and leveraged lease transactions. Mr. Weisblat regularly advises clients on renewable energy projects, including solar, wind and biomass projects. He is familiar with current tax equity structures with an emphasis on sale-leaseback and partnership-flip transactions and advises on utility, commercial and residential projects...

202.295.4176
Advertisement
Advertisement
Advertisement