Treasury Guidance on Prevailing Wage and Apprenticeship Requirements for Tax Credits

Treasury releases initial guidance to provide clarity on prevailing wage and apprenticeship requirements for the enhancement of clean energy tax credits under the Inflation Reduction Act.

On November 29, the U.S. Department of the Treasury (Treasury) released initial guidance on the prevailing wage and apprenticeships requirements for energy tax credits authorized under the Inflation Reduction Act (IRA). A recipient must fulfill these requirements to qualify for credit enhancements for certain clean energy tax incentives under the IRA and apply to qualifying projects, facilities, property or equipment if construction starts on or after January 30, 2023.

According to NACo’s analysis:

Both the prevailing wage and apprenticeship enhancement requirements apply to the following tax credits:

  • Advanced Energy Project Credit
  • Alternative Fuel Refueling Property Credit
  • Credit for Carbon Oxide Sequestration
  • Clean Fuel Production Credit
  • Credit for Production of Clean Hydrogen
  • Energy Efficient Commercial Buildings Deduction
  • Renewable Energy Production Tax Credit
  • Renewable Energy Property Investment Tax Credit

Only the prevailing wage enhancement requirements apply to the following tax credits:

  • New Energy Efficient Home Credit
  • Zero-Emission Nuclear Power Production Credit


To benefit from an enhanced credit amount, those claiming the credit must ensure that any laborer or mechanic employed in the construction, alteration or repair of a facility, property, project or equipment are paid a prevailing wage.

A prevailing wage is the hourly wage and fringe benefits paid to a worker in a specific category within a certain geographical area, as defined by the U.S. Department of Labor.


To meet the apprenticeship requirements, those claiming the credit must meet certain standards related to labor hours, ratio and participation. Those claiming the credit must ensure that the “applicable percentage” (12.5 percent for facilities that begin construction on or after January 30, 2023 and before January 1, 2024, and 15 percent thereafter) of the total hours of construction are performed by apprentices and any entity claiming the credit, as well as any contractor or subcontractor that employs four or more individuals to perform construction, alteration or repair work, must employ at least one apprentice.

Additionally, Treasury included a “Good Faith Effort Exception” where the entity claiming the credit will not be deemed to have failed to meet their apprenticeship requirements if they submit a request to a registered apprenticeship program and are denied an apprentice or if the apprenticeship program fails to respond within five business days.

NACo will continue to monitor any new proposed regulations or guidance with respect to the prevailing wage requirements, apprenticeship requirements and all other provisions relevant to counties as they begin to implement the IRA.