Treasury Department, IRS Release Section 45V Clean Hydrogen PTC Final Regulations

Highlights

• The U.S. Department of the Treasury and IRS on Jan. 3, 2025, released Final Regulations regarding the production tax credit (PTC) for hydrogen under Section 45V of the Internal Revenue Code, as enacted by the Inflation Reduction Act.
• Generally, Section 45V provides a credit for the production of qualified clean hydrogen at a qualified clean hydrogen production facility, with the credit amount for any taxable year calculated as the product of the kilograms of qualified clean hydrogen produced during the taxable year by the "applicable amount," which varies based on the lifecycle greenhouse gas emissions of the process used to produce the hydrogen.
• This Holland & Knight alert takes a look at the recently issued regulations and how taxpayers can qualify for the Section 45V PTC.