IRS Issues FAQs on the Low-Income Communities Bonus Credit Program for Clean Power Projects

The Internal Revenue Service on Nov. 13, 2026 issued frequently asked questions about the Low-Income Communities Bonus Credit Amount Program. The release is numbered IR-2026-139. The questions and answers are in Fact Sheet 2026-15.

The program sits under section 48E(h) of the tax code. It lets the Treasury Secretary award capacity-limitation allocations that increase the clean electricity investment credit for eligible property in an applicable facility. For owners of business property who build or buy energy projects, the FAQs set out who can apply and how an allocation behaves if a project changes hands.

What the IRS Released

The news release itself is short. It says the FAQs in Fact Sheet 2026-15 are incorporated into the release by reference. The questions and answers are in the fact sheet, titled “Questions and answers about the Low-Income Communities Bonus Credit Amount Program.”

The IRS describes the FAQs as general information. They are not published in the Internal Revenue Bulletin, so the agency will not use them to resolve a case. A taxpayer who reasonably relies on them in good faith is protected from certain penalties, but the law still controls.

The fact sheet is dated November 2026. Its six questions and answers (Q1 to Q6) carry an “added” date of Nov. 16, 2026, which is later than the Nov. 13 release date.

Size Cutoff
A facility qualifies for the Low-Income Communities Bonus Credit Amount Program only if its maximum net output is below 5 MW (AC), according to the IRS fact sheet.

The Legal Background

Section 13702 of Public Law 117-169, dated Aug. 16, 2022, added section 48E(h) to the tax code. It authorizes a program, starting with calendar year 2025, that awards capacity-limitation allocations to increase the clean electricity investment credit.

Final regulations (Treasury Decision 10025) and Revenue Procedure 2025-11 were both released Jan. 8, 2025. The revenue procedure sets the administrative and procedural requirements for the program.

The new FAQs address eligibility and ownership.

Size Limits, Inverters and Business Property

A facility must have a maximum net output of less than 5 MW (AC). A facility at 5 MW (AC) or greater does not qualify.

For 2026 allocations, one exception applies to inverter settings. A facility with inverters rated at 5 MW (AC) or greater may still qualify if the manufacturer has permanently limited the settings to below 5 MW (AC).

Applicants must prove that limit with one of two documents. One is a manufacturer letter certifying locked, firmware-level limits. The other is a professional engineer’s stamped design documentation certifying the permanent limit.

The FAQs also address individuals. A homeowner cannot apply for a personal residence, because the property must be business property that is subject to depreciation or amortization.

An allocation applies only to the taxpayer who received it.

What Happens When a Project Changes Owners

An allocation applies only to the taxpayer who received it. If ownership changes after the allocation but before the facility is placed in service, the new owner must submit an Allocation Transfer Request in the Applicant Portal. Only the owner at the time the facility is placed in service can report it.

Transfers are not available if the original owner has already placed the facility in service. They are also limited to entities regarded for federal tax purposes, so an allocation cannot go to a disregarded entity.

The fact sheet makes one allowance for a facility already reported as placed in service. A transfer is permitted if ownership changed before the facility was physically placed in service and the successor is the taxpayer that placed it in service. The successor must get IRS approval of the transfer and then submit the placed-in-service report from its own account. The transfer cannot be processed once the facility is already reported as placed in service.

What Is Not in the Release

The release does not give credit percentages, application windows or deadlines, or allocation totals for 2026.

The FAQs may be updated or modified upon further review, and any later updates will be dated.