Let’s Talk About Tax

The Treasury Department and IRS have released Notice 2025-42, overhauling the rules for determining the Beginning of Construction (BOC) of a project for purposes of the §45Y production tax credit and §48E investment tax credit as it applies to wind and solar facilities. 

Since the passage of the Inflation Reduction Act in August 2022, the U.S. Department of the Treasury and the IRS have issued seemingly nonstop guidance. Even with the Supreme Court’s recent reversal of the Chevron deference principle, Treasury and the IRS continue their work. The two federal agencies have gone to great lengths to listen, respond, and even occasionally adopt public comments.

In August 2021, we published a short blog post on how the Internal Revenue Service and the Minnesota Department of Revenue determine worker classification for tax purposes. However, the risk of misclassification discussed in that post extends well beyond payroll taxes. It applies to unemployment insurance, workers’ compensation, fair labor and wage laws, third-party lawsuits, and much more.

Most employers or retirement plan administrators are required to file annual informational returns with the U.S. Department of Labor called Form 5500, Annual Return/Report of Employee Benefit Plan.

With a changing planet and generous federal tax incentives, renewable energy projects are increasing in both number and size. So naturally, states want their fair share of tax revenue.

Companies that hire independent contractors are not obligated to withhold income taxes or employment taxes (such as Social Security and Medicare) or pay the employer share of employment taxes and unemployment insurance. But, just because an employer labels its workers “independent contractors,” as opposed to “employees,” doesn’t make it so.