ARRA allows a taxpayer that is eligible to claim the PTC for a wind energy project to claim an investment-based tax credit (“ITC”) in lieu of the PTC. This election can apply to wind energy facilities that are placed in service from January 1, 2009 to January 1, 2012. The entire amount of the ITC is available for the year in which a qualifying facility is placed in service. The credit equals 30% and applies to most of the cost of the facility. Any unused portion of the credit can be carried back one tax year and carried forward up to 20 tax years. The owner of a qualifying facility can elect to claim either the ITC or the PTC, but not both. The tax basis of the facility must be reduced by one-half of the credit claimed.
ARRA also eliminates the reduction of a project’s tax basis (for the purposes of calculating the ITC) if it was financed through subsidies or tax-exempt bonds.
Benson, David, Greg Jenner, and Debra Frimerman. SHOW ME THE MONEY: The Law Of The Stimulus Package. 2009.