Low-Income Communities Bonus Credit 48(e) & 48E(h)

An application based federal tax credit to provide an additional incentive for small-scale solar and wind facilities on Indian land and in low-income communities.

The following investments on Indian land, in federally subsidized housing, in low-income communities, or as a qualified economic benefit project.

• 48(e): a small-scale solar, wind, and/or energy storage facility that generates less than 5 MW bonus credit for 2023 and 2024.
• 48E(h): a small-scale technology-neutral clean electricity generation bonus credit for facilities with a less than 5 MW net output from 2025 to 2032.

This credit stacks on top of 48 and 48E and provides an added credit of 6% for qualified investments.

• Credit is increased by 10% for projects located in low-income communities or on Tribal land.
• Credit is increased by 20% for projects that are part of certain federally subsidized housing programs or that offer at least 50% of the financial benefits of the electricity produced to low-income households. This bonus amount will require an application by the taxpayer.

The tax credit is an adder to 48 and 48E and is stacked on top of these tax credits.

Direct pay is available for tax-exempt organizations. You may transfer the credit by selling all or a portion of the tax credit to an unrelated taxpayer.

Owners of eligible facilities, including tax-exempt organizations.

48(e) is available for projects that come online through December 31, 2024. 48E(h) Clean Electricity Investment Tax Credit is available from 2025 through 2032.

Applications for 48(e) open annually, and most recently opened on May 28, 2024. This is a competitive application-based tax credit. Additional guidance may come on applying for 48E(h).