Treasury and IRS Issue Proposed Regulations With Respect to Clean Hydrogen Credits

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On December 22, 2023, the Department of the Treasury and the Internal Revenue Service (IRS) released a notice of proposed rulemaking and notice of public hearing containing proposed regulations (Proposed Regulations) with respect to Internal Revenue Code of 1986, as amended (the Code), Section 45V, Credit for Production of Clean Hydrogen and Code Section 48(a)(15), Election to Treat Clean Hydrogen Production Facilities as Energy Property. The long-awaited Proposed Regulations provide critical guidance with respect to qualification for, and implementation of, the credits under Code Sections 45V and 48(a)(15). Taxpayers may rely on the Proposed Regulations for taxable years beginning after December 31, 2022, and before the date the final regulations are published, provided that taxpayers follow the Proposed Regulations in their entirety and in a consistent manner.