Federal Register / Vol. 89, No. 207 / Friday, October 25, 2024 / Proposed Rules 85099 

international sales of items that are 

prohibited from being trafficked under 

Federal law, and collaborating with the 

Native Working Group, the NAGPRA 

Review Committee, and the Cultural 

Heritage Coordinating Committee. 

Subpart G—Native Working Group 

§ 1194.601 What is the relationship 

between the Office and the Native Working 

Group? 

The Office will provide 

administrative support to the Native 

Working Group. 

§ 1194.602 What is the membership of the 

Native Working Group? 

(a) The Native Working Group is 

composed of representatives of Indian 

Tribes and Native Hawaiian 

organizations with relevant expertise. 

(b) There are thirteen members of the 

Native Working Group: one representing 

Indian Tribes in each Bureau of Indian 

Affairs Region, and one representing 

Native Hawaiian organizations. 

(c) The members of the Native 

Working Group are appointed by the 

Secretary for an initial term of four 

years. A member may be reappointed for 

a term of two years. 

(d) Any Indian Tribe or Native 

Hawaiian organization may nominate a 

person from a particular BIA Region or 

Hawai1i for membership, even if that 

Indian Tribe or Native Hawaiian 

organization is not in that Region or in 

Hawai1i. The Office will recommend a 

list of candidates to the Secretary, in 

coordination with the Interagency 

Working Group convened under subpart 

F of this part. 

§ 1194.603 What are the duties of the 

Native Working Group? 

(a) The Native Working Group may 

provide recommendations for Federal 

agency action regarding: 

(1) The voluntary return of tangible 

cultural heritage by collectors, dealers, 

and other individuals and non-Federal 

organizations that hold such tangible 

cultural heritage; and 

(2) The elimination of illegal 

commerce of cultural items and 

archaeological resources in the United 

States and foreign markets. 

(b) Such recommendations shall be 

considered fully by affected agencies, 

but shall not be binding upon any 

affected agency. 

(c) The Office of Tribal Justice shall 

represent the Department of Justice with 

regard to relevant matters before the 

Native Working Group including 

receiving formal requests to initiate 

agency actions and to provide 

information and assistance to the Native 

Working Group. Requests to initiate 

litigation will be directed by the Office 

of Tribal Justice to the appropriate 

litigation component within the 

Department of Justice. 

(d) Upon request from the Native 

Working Group, the Department of 

State, in coordination with the 

Department of Justice when judicial 

proceedings are initiated either 

domestically or abroad, may initiate 

dialog through U.S. missions abroad, in 

coordination with the Department of 

State’s Cultural Heritage Center, with 

appropriate foreign government offices. 

(e) The Native Working Group may 

also request information or assistance 

from: 

(1) The Department of the Interior; 

(2) The Department of Justice; 

(3) The Department of Homeland 

Security; 

(4) The Department of State; 

(5) The Review Committee established 

under section 8(a) of NAGPRA; 

(6) The Cultural Heritage 

Coordinating Committee established 

pursuant to section 2 of the Protect and 

Preserve International Cultural Property 

Act; or 

(7) Any other relevant Federal agency, 

committee, or working group. 

Bryan Newland, 

Assistant Secretary—Indian Affairs. 

[FR Doc. 2024–24332 Filed 10–24–24; 8:45 am] 

BILLING CODE 4337–15–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–118264–23] 

RIN 1545–BR27 

Energy Efficient Home Improvement 

Credit 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and notice of public hearing. 

SUMMARY: This document contains 

proposed regulations regarding the 

energy efficient home improvement 

credit as modified by the Inflation 

Reduction Act of 2022 (IRA). The 

proposed regulations would affect 

manufacturers of specified property 

who want to become qualified 

manufacturers and eligible taxpayers 

who place in service certain home 

improvement property. The proposed 

regulations would provide rules for 

manufacturers of specified property to 

register to be qualified manufacturers 

and satisfy certain other requirements, 

and rules for taxpayers to calculate the 

credit. 

DATES: Written or electronic comments 

must be received by December 24, 2024. 

A public hearing on these proposed 

regulations is scheduled to be held on 

January 21, 2025, at 10 a.m. ET. 

Requests to speak and outlines of topics 

to be discussed at the public hearing 

must be received by December 24, 2024. 

If no outlines are received by December 

24, 2024, the public hearing will be 

cancelled. Requests to attend the public 

hearing must be received by 5 p.m. ET 

on January 17, 2025. The public hearing 

will be made accessible to people with 

disabilities. Requests for special 

assistance during the hearing must be 

received by January 16, 2025. 

ADDRESSES: Commenters are strongly 

encouraged to submit public comments 

electronically. Submit electronic 

submissions via the Federal 

eRulemaking Portal at https://

www.regulations.gov (indicate IRS and 

REG–118264–23) by following the 

online instructions for submitting 

comments. Once submitted to the 

Federal eRulemaking Portal, comments 

cannot be edited or withdrawn. The 

Department of the Treasury (Treasury 

Department) and the IRS will publish 

for public availability any comments 

submitted to the IRS’s public docket. 

Send paper submissions to: 

CC:PA:01:PR (REG–118264–23), Room 

5203, Internal Revenue Service, P.O. 

Box 7604, Ben Franklin Station, 

Washington, DC 20044. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

contact the Office of Associate Chief 

Counsel (Passthroughs & Special 

Industries) at (202) 317–6853 (not a tollfree number). Concerning submissions 

of comments and requests for a public 

hearing, contact the Publications and 

Regulations Section of the Office of 

Associate Chief Counsel (Procedure and 

Administration) by email at 

publichearings@irs.gov (preferred) or by 

telephone at (202) 317–6901 (not a tollfree number). 

SUPPLEMENTARY INFORMATION: 

Authority 

This notice of proposed rulemaking 

contains proposed amendments to the 

Income Tax Regulations (26 CFR part 1) 

that would implement section 25C of 

the Internal Revenue Code (Code), as 

amended by section 13301 of Public 

Law 117–169, 136 Stat. 1818, 1941 

(August 16, 2022), commonly known as 

the Inflation Reduction Act of 2022 

(IRA). The proposed additions are 

issued by the Secretary of the Treasury 


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85100 Federal Register / Vol. 89, No. 207 / Friday, October 25, 2024 / Proposed Rules 

or her delegate (Secretary) under the 

authority granted under sections 

25C(b)(6)(B) and (h)(3), and 7805(a) of 

the Code (proposed regulations). 

Section 25C(b)(6)(B) provides a 

specific delegation of authority related 

to the substantiation requirement for 

home energy audits: ‘‘No credit shall be 

allowed under this section by reason of 

subsection (a)(3) unless the taxpayer 

includes with the taxpayer’s return of 

tax such information or documentation 

as the Secretary may require.’’ Section 

25C(h)(3), as applicable to property 

placed in service after December 31, 

2024, provides specific delegations of 

authority to the Secretary related to the 

product identification number 

requirement that must be satisfied by 

qualified manufacturers, including the 

authority to enter into an agreement 

with a manufacturer that provides ‘‘that 

such manufacturer will . . . assign a 

product identification number to each 

item of specified property produced by 

such manufacturer utilizing a 

methodology that will ensure that such 

number (including any alphanumeric) is 

unique to each such item (by utilizing 

numbers or letters which are unique to 

such manufacturer or by such other 

method as the Secretary may provide), 

. . . label such item with such number 

in such manner as the Secretary may 

provide, and . . . make periodic written 

reports to the Secretary (at such times 

and in such manner as the Secretary 

may provide) of the product 

identification numbers so assigned and 

including such information as the 

Secretary may require with respect to 

the item of specified property to which 

such number was so assigned.’’ Finally, 

section 7805(a) authorizes the Secretary 

to prescribe all needful rules and 

regulations for the enforcement of the 

Code. 

Background 

I. IRA Amendments to Section 25C 

Congress originally enacted section 

25C of the Code in section 1333(a) of the 

Energy Policy Act of 2005, Public Law 

109–58, 119 Stat. 594, 1026 (August 8, 

2005), to provide a ‘‘nonbusiness energy 

property credit’’ for the purchase and 

installation of certain energy efficient 

improvements in a taxpayer’s principal 

residence. Congress has amended 

section 25C several times, most recently 

by section 13301 of the IRA, which 

renamed this provision the ‘‘energy 

efficient home improvement credit.’’ 

Former section 25C expired with 

respect to any property placed in service 

after December 31, 2021. Section 

13301(i) of the IRA provides that except 

as otherwise provided in section 

13301(i)(2) and (3), the IRA 

amendments to section 25C apply to 

property placed in service after 

December 31, 2022. Section 13301(i)(2) 

of the IRA provides that the 

amendments made by section 13301(a) 

of the IRA apply to property placed in 

service after December 31, 2021. Section 

13301(a) of the IRA extended the credit 

allowed under section 25C with respect 

to any property placed in service 

through December 31, 2032. Section 

13301(i)(3) of the IRA provides that the 

amendments made by section 13301(g) 

of the IRA apply to property placed in 

service after December 31, 2024. Section 

13301(g) of the IRA amended section 

25C by redesignating former subsection 

(h) as subsection (i) and inserting a new 

subsection (h) (described in part I.C. of 

this Background). 

Section 25C, as amended by section 

13301(b) and (f) of the IRA, allows an 

individual taxpayer (taxpayer) a credit 

for the taxable year (section 25C credit) 

equal to 30 percent of the total amount 

paid or incurred by the taxpayer during 

such taxable year for qualified energy 

efficiency improvements installed 

during such taxable year, residential 

energy property expenditures, and home 

energy audits. 

A. Credit Amount and Limitations 

As amended by section 13301(c) of 

the IRA, the amount of the section 25C 

credit generally is limited under section 

25C(b)(1) to $1,200 with respect to any 

taxpayer for any taxable year. Within 

this $1,200 limitation, section 25C(b) 

sets forth further annual limitations for 

certain categories of improvements. 

Section 25C(b)(2) provides that the 

credit allowed under section 25C(a)(2) is 

limited to $600 with respect to any 

taxpayer for any taxable year with 

respect to any item of qualified energy 

property. Section 25C(b)(3) provides 

that the credit allowed under section 

25C(a)(1) with respect to any taxpayer 

for any taxable year is limited to $600 

in the aggregate with respect to all 

exterior windows and skylights. Section 

25C(b)(4) provides that the credit 

allowed under section 25C(a)(1) with 

respect to any taxpayer for any taxable 

year is limited to $250 in the case of any 

exterior door and $500 in the aggregate 

with respect to all exterior doors. 

Section 25C(b)(6) limits the credit 

allowed under section 25C(a)(3) for a 

home energy audit to $150. 

Additionally, notwithstanding the 

general $1,200 annual limitation (and its 

internal limitations), section 25C(b)(5) 

provides that the credit allowed under 

section 25C(a)(2) with respect to any 

taxpayer for any taxable year is limited 

to $2,000 in the aggregate with respect 

to amounts paid or incurred for an 

electric or natural gas heat pump water 

heater described in section 

25C(d)(2)(A)(i), an electric or natural gas 

heat pump described in section 

25C(d)(2)(A)(ii), and a biomass stove or 

boiler described in section 25C(d)(2)(B). 

Therefore, a taxpayer could claim a 

total section 25C credit of $3,200, if the 

taxpayer has sufficient expenditures in 

categories of property (or a home energy 

audit) subject to the $1,200 limitation 

and in categories of property subject to 

the $2,000 limitation. 

B. Overview of Qualified Energy 

Efficiency Improvements and 

Residential Energy Property 

Expenditures 

Section 25C(c)(1) provides that the 

term ‘‘qualified energy efficiency 

improvements’’ means any ‘‘energy 

efficient building envelope component’’ 

if such component is installed in or on 

a dwelling unit located in the United 

States and owned and used by the 

taxpayer as the taxpayer’s principal 

residence (within the meaning of 

section 121 of the Code), the original 

use of such component commences with 

the taxpayer, and such component 

reasonably can be expected to remain in 

use for at least 5 years. Section 25C(c)(2) 

provides that the term ‘‘energy efficient 

building envelope component’’ means a 

building envelope component that 

meets certain energy efficiency 

requirements. Section 25C(c)(3) 

provides that the term ‘‘building 

envelope component’’ means any 

insulation material or system, including 

air sealing material or system, which is 

specifically and primarily designed to 

reduce the heat loss or gain of a 

dwelling unit when installed in or on 

such dwelling unit, exterior windows 

(including skylights), and exterior 

doors. 

Section 25C(d)(1) provides that the 

term ‘‘residential energy property 

expenditures’’ means expenditures 

made by the taxpayer for ‘‘qualified 

energy property’’ that is installed on or 

in connection with a dwelling unit 

located in the United States and used as 

a residence by the taxpayer, and that is 

originally placed in service by the 

taxpayer. Section 25C(d)(1) also 

provides that residential energy 

property expenditures include 

expenditures for labor costs properly 

allocable to the onsite preparation, 

assembly, or original installation of the 

property. Section 25C(d)(2) provides 

that the term ‘‘qualified energy 

property’’ means several categories of 

property that satisfy certain energy 

efficiency standards and other 

requirements. 


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C. Qualified Product Identification 

Number; Qualified Manufacturers; 

Specified Property 

Section 25C(h) provides that no 

section 25C credit is allowed with 

respect to any item of specified property 

(as further described in part II.D. of this 

Background) that is placed in service 

after December 31, 2024, unless the item 

of specified property is produced by a 

‘‘qualified manufacturer’’ (QM) and the 

taxpayer includes the ‘‘qualified 

product identification number’’ (PIN) of 

the item of specified property on the tax 

return for the taxable year (PIN 

requirements). Section 25C(h)(2) 

provides that the term ‘‘qualified 

product identification number’’ means, 

with respect to any item of specified 

property, the product identification 

number assigned to such item by the 

QM pursuant to the methodology 

referred to in section 25C(h)(3). 

Section 25C(h)(3) provides that the 

term ‘‘qualified manufacturer’’ means 

any manufacturer of specified property 

that enters into an agreement with the 

Secretary that provides that such 

manufacturer will: (1) assign a product 

identification number to each item of 

specified property produced by such 

manufacturer, using a methodology that 

will ensure that such number (including 

any alphanumeric) is unique to each 

such item, by using numbers or letters 

unique to such manufacturer or by such 

other method as the Secretary may 

provide (PIN assignment requirement); 

(2) label such item with such product 

identification number in such manner 

as the Secretary may provide (PIN 

labeling requirement); and (3) make 

periodic written reports to the Secretary 

(at such times and in such manner as 

the Secretary may provide) of the 

product identification numbers so 

assigned and including such 

information as the Secretary may 

require with respect to the items of 

specified property to which such 

product identification numbers were so 

assigned (periodic written report 

requirement). The PIN assignment 

requirement, the PIN labeling 

requirement, and the periodic written 

report requirement are collectively 

referred to as the ‘‘QM PIN 

requirements’’ in this preamble. 

The proposed regulations aim to 

provide certainty to manufacturers that 

want to become QMs and taxpayers who 

want to claim the section 25C credit, to 

provide flexibility to manufacturers 

complying with the QM PIN 

requirements and taxpayers including 

PINs on their tax returns, and to 

facilitate effective administrability of 

these requirements by the IRS. 

D. Specified Property 

Section 25C(h)(4) provides that the 

term ‘‘specified property’’ means any 

qualified energy property and any 

property described in section 

25C(c)(3)(B) (exterior windows, 

including skylights) or (C) (exterior 

doors). 

Section 25C(d)(2) provides that the 

term ‘‘qualified energy property’’ means 

any of the following: 

(A) Any of the following that meet or 

exceed the highest efficiency tier (not 

including any advanced tier) established 

by the Consortium for Energy Efficiency 

that is in effect as of the beginning of the 

calendar year in which the property is 

placed in service: (i) an electric or 

natural gas heat pump water heater, (ii) 

an electric or natural gas heat pump, 

(iii) a central air conditioner, (iv) a 

natural gas, propane, or oil water heater, 

and (v) a natural gas, propane, or oil 

furnace or hot water boiler. 

(B) A biomass stove or boiler that (i) 

uses the burning of biomass fuel to heat 

a dwelling unit located in the United 

States and used as a residence by the 

taxpayer, or to heat water for use in 

such a dwelling unit, and (ii) has a 

thermal efficiency rating of at least 75 

percent (measured by the higher heating 

value of the fuel). 

(C) Any oil furnace or hot water boiler 

that (i) is placed in service after 

December 31, 2022, and before January 

1, 2027, and (I) meets or exceeds 2021 

Energy Star certified efficiency criteria, 

and (II) is rated by the manufacturer for 

use with fuel blends at least 20 percent 

of the volume of which consists of an 

eligible fuel (defined in section 

25C(d)(3)) (eligible fuel), or (ii) is placed 

in service after December 31, 2026, and 

(I) achieves an annual fuel utilization 

efficiency rate of not less than 90, and 

(II) is rated by the manufacturer for use 

with fuel blends at least 50 percent of 

the volume of which consists of an 

eligible fuel. 

(D) Any improvement to, or 

replacement of, a panelboard, subpanelboard, branch circuits, or feeders 

that (i) is installed in a manner 

consistent with the National Electric 

Code, (ii) has a load capacity of not less 

than 200 amps, (iii) is installed in 

conjunction with (I) any qualified 

energy efficiency improvements, or (II) 

any qualified energy property described 

in section 25C(d)(2)(A) through (C) for 

which a credit is allowed under section 

25C for expenditures with respect to 

such property, and (iv) enables the 

installation and use of any qualified 

energy efficiency improvements or any 

qualified energy property described in 

section 25C(d)(2)(A) through (C) for 

which a credit is allowed under section 

25C for expenditures with respect to 

such property. 

II. Prior Guidance and Requests for 

Comments 

A. Notice 2022–48 

On October 24, 2022, the Treasury 

Department and the IRS published 

Notice 2022–48, 2022–43 I.R.B. 316, 

which included requests for comments 

on the amendments to section 25C by 

section 13301 of the IRA. Specific to 

section 25C(h), Notice 2022–48 

requested comments on what the 

Treasury Department and the IRS 

should consider (1) in determining the 

manner of agreements between the IRS 

and a QM, (2) in developing a 

methodology to ensure that each PIN is 

unique to each item of specified 

property, (3) in prescribing the manner 

by which specified property must be 

labeled with a unique PIN, and (4) in 

developing the requirements for QM 

periodic written reports. 

B. Notice 2023–59 

On August 21, 2023, the Treasury 

Department and the IRS published 

Notice 2023–59, 2023–34 I.R.B. 564, 

which provided, in part, requirements 

related to home energy audits under 

section 25C(a)(3) intended to be 

included in forthcoming proposed 

regulations. Section 1 of Notice 2023–59 

provided that until the issuance of the 

forthcoming proposed regulations, 

taxpayers may rely on the rules 

described in sections 3 through 6 of 

Notice 2023–59. As discussed further in 

part II of the Explanation of Provisions 

section of this preamble, taxpayers may 

continue to rely on the rules described 

in section 3 through 6 of Notice 2023– 

59 after the issuance of the proposed 

regulations to satisfy the substantiation 

requirement of section 25C(b)(6)(B). 

C. Notice 2024–13 

On January 9, 2024, the Treasury 

Department and the IRS published 

Notice 2024–13, 2024–05 I.R.B. 618. 

Notice 2024–13 discussed comments 

related to the PIN requirements received 

in response to Notice 2022–48. 

Some commenters to Notice 2022–48 

suggested using existing numbering 

systems to satisfy the QM PIN 

requirements. For example, commenters 

suggested that manufacturers could use 

existing product serial numbers to 

satisfy the PIN assignment requirement. 

Manufacturers routinely assign serial 

numbers to specific items, which 

purportedly achieves the specificity 

suggested by the statutory text. 

However, as Notice 2024–13 explained, 


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the systems that manufacturers employ 

to assign serial numbers are insufficient 

for the QM PIN requirements because 

they are not uniform by product or 

manufacturer in length, format, or in 

other respects. These differences would 

create processing challenges for the IRS 

and could cause confusion for 

consumers claiming the section 25C 

credit. Additionally, some 

manufacturers change their serial 

numbers for products over time. 

Some commenters to Notice 2022–48 

suggested that manufacturers could 

employ stock-keeping unit numbers 

(SKUs) to satisfy the QM PIN 

requirements. However, as Notice 2024– 

13 explained, SKUs generally reflect the 

product line of a merchant or 

manufacturer but are not specific to the 

unique items of property themselves. 

Accordingly, serial numbers and SKUs 

would not constitute satisfactory PINs 

for the QM PIN requirements. 

Similarly, certain categories of 

products, such as exterior windows, 

skylights, and exterior doors currently 

do not have unique serial numbers for 

each such product manufactured but 

instead are assigned numbers that 

identify multiple windows, skylights, or 

doors as belonging to a specific product 

line of such items. 

Other commenters to Notice 2022–48 

suggested using product line numbers or 

universal product codes (UPCs) to 

satisfy the QM PIN requirements. 

Regarding product line numbers, some 

commenters pointed to the National 

Fenestration Rating Council’s (NFRC) 

Certified Product Directory for exterior 

windows, doors, and skylights. 

However, as explained in Notice 2024– 

13, because the NFRC system assigns 

the same number to multiple (or all) 

items in a specific product line, these 

numbers would not provide the 

specificity needed to satisfy the QM PIN 

requirements. Similarly, UPCs are a 

multi-character code assigned to 

products by manufacturers. 

Manufacturers and others employ UPCs 

for tracking and selling inventory. Like 

the NFRC numbers, however, UPCs 

generally are assigned per product type, 

and not per specific item. While UPCs 

can vary based on product differences, 

they too would not provide the 

specificity required by the statute. In 

addition, because many products would 

bear the same UPC or NFRC number, 

these numbering conventions would not 

satisfy the purposes of section 25C(h), 

which aims to prevent duplicate or 

fraudulent claims for the section 25C 

credit for the same item of specified 

property. 

Notice 2024–13 outlined a proposed 

PIN system that would require 

manufacturers to register with the IRS as 

QMs and to assign 17-digit PINs (made 

up of four parts, discussed further in 

part IV.B. of the Explanation of 

Provisions of this preamble) to specified 

property. Under Notice 2024–13, QMs 

also would be required to label their 

products with a unique individual PIN, 

furnish the PINs (directly or indirectly) 

to consumers to report on their tax 

returns when claiming a section 25C 

credit, and file with the IRS periodic 

lists of PINs assigned by the QM. 

Finally, Notice 2024–13 requested 

comments on several questions to help 

inform the development of rules 

governing the QM PIN requirements. 

Notice 2024–13 asked manufacturers to 

detail the different items of specified 

property that they produce and whether 

they maintain a universal system for 

assigning unique identification numbers 

to items of property. The notice also 

requested comments on a proposed PIN 

assignment system. 

All comments to Notice 2024–13 have 

been considered in developing the 

proposed regulations. 

III. Revenue Procedure 2024–31 

The proposed regulations would 

provide general guidance on the section 

25C credit, including what property 

qualifies for the section 25C credit and 

what limitations apply. The proposed 

regulations would also provide a safe 

harbor for certain property that is 

installed in conjunction with, and 

enables the installation and use of, other 

property (see the discussion of enabling 

property and enabled property in part 

I.A. of the Explanation of Provisions 

section of this preamble). 

In addition to the proposed 

regulations, the Treasury Department 

and the IRS are issuing Revenue 

Procedure 2024–31, which provides the 

procedures that manufacturers must 

follow to become QMs and requirements 

to comply with the QM PIN 

requirements. See part IV of the 

Explanation of Provisions section of this 

preamble for further discussion of 

Revenue Procedure 2024–31. 

Explanation of Provisions 

I. Overview 

Proposed § 1.25C–1(a) would provide 

an overview of the proposed 

regulations. Proposed § 1.25C–1(b) 

would provide definitions that apply for 

purposes of section 25C and the 

proposed regulations. While most of the 

definitions would mirror those in the 

statute, proposed § 1.25C–1(b) also 

would provide definitions of additional 

key terms. These terms are described in 

this section. 

A. Enabling and Enabled Property 

Proposed § 1.25C–1(b)(5) and (6) 

would introduce and define the terms 

‘‘enabled property’’ and ‘‘enabling 

property,’’ which are derived from 

section 25C(d)(2)(D)(iv). Qualified 

energy property under section 

25C(d)(2)(D) includes any improvement 

to, or replacement of, a panelboard, subpanelboard, branch circuits, or feeders, 

that, among other requirements, is 

installed in conjunction with any 

qualified energy efficiency 

improvements or any other type of 

qualified energy property for which a 

section 25C credit is allowed, and 

enables the installation and use of such 

property. To simplify these rules, the 

proposed regulations would refer to 

such improvement to, or replacement of, 

a panelboard, sub-panelboard, branch 

circuits, or feeders under section 

25C(d)(2)(D) as ‘‘enabling property,’’ 

and the property the enabling property 

is installed in conjunction with as 

‘‘enabled property.’’ 

B. Energy Star and International Energy 

Conservation Code Standard 

Section 25C(c)(2)(A), (B), and 

(d)(2)(C)(i)(I) refer to ‘‘Energy Star,’’ and 

section 25C(c)(2)(C) refers to the 

‘‘International Energy Conservation 

Code standard.’’ Under section 

25C(c)(2)(A), exterior windows and 

skylights are not qualified energy 

efficiency improvements unless they 

meet Energy Star certified most efficient 

certification requirements. Under 

section 25C(c)(2)(B), exterior doors are 

not qualified energy efficiency 

improvements unless they meet 

applicable Energy Star certified 

requirements. Under section 

25C(d)(2)(C)(i)(I), oil furnaces and hot 

water boilers are not qualified energy 

property unless they meet or exceed 

2021 Energy Star certified efficiency 

criteria. Under section 25C(c)(2)(C), 

building envelope components other 

than exterior windows, skylights, and 

exterior doors are not qualified energy 

efficiency improvements unless they 

meet the prescriptive criteria for such 

components established by the most 

recent International Energy 

Conservation Code standard in effect as 

of the beginning of the calendar year 

that is 2 years prior to the calendar year 

in which such component is placed in 

service. 

Proposed § 1.25C–1(b)(8) and (11) 

would define Energy Star and the 

International Energy Conservation Code 

standard. Energy Star is a labeling and 

rating program administered by the U.S. 

Environmental Protection Agency (EPA) 

that helps consumers identify energyVerDate Sep<11>2014 16:18 Oct 24, 2024 Jkt 265001 PO 00000 Frm 00031 Fmt 4702 Sfmt 4702 E:\FR\FM\25OCP1.SGM 25OCP1

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efficient property. Taxpayers can find 

out more about Energy Star, including 

the specific climate zones, at https://

www.energystar.gov. 

The term ‘‘International Energy 

Conservation Code standard’’ as used in 

section 25C(c)(2)(C) refers to the version 

of the International Energy Conservation 

Code in effect for a particular year. The 

International Energy Conservation Code 

is a building code established by the 

International Code Council that sets 

minimum conservation requirements for 

new buildings. The version in effect as 

of the beginning of the calendar year 2 

years prior to the 2023 calendar year 

(i.e., the first year to which the IRA 

amendments to section 25C apply) 

would be the 2021 version. The 2021 

and later versions of the International 

Energy Conservation Code can be found 

at https://iccsafe.org (select ‘‘Codes’’ at 

the top of the home page). Subsequent 

versions of the International Energy 

Conservation Code will take effect two 

years after their publication and 

following a positive determination from 

the U.S. Secretary of Energy, which can 

be found at https://

www.energycodes.gov/determinations. 

C. Biomass Stove or Boiler; Higher 

Heating Value of the Fuel 

Section 25C(d)(2)(B) provides that 

qualified energy property includes a 

biomass stove or boiler that (i) uses the 

burning of biomass fuel to heat a 

dwelling unit located in the United 

States and used as a residence by the 

taxpayer, or to heat water for use in 

such a dwelling unit, and (ii) has a 

thermal efficiency rating of at least 75 

percent (measured by the higher heating 

value of the fuel). Proposed § 1.25C– 

1(b)(17) would describe a biomass stove 

or boiler under the definition of 

qualified energy property exactly as 

provided in section 25C(d)(2)(B), but 

with the addition of ‘‘as determined by 

the U.S. Environmental Protection 

Agency for wood stoves.’’ This addition 

would explain how a taxpayer must 

determine the thermal efficiency rating 

under section 25C(d)(2)(B)(ii). The EPA 

maintains an online database that 

provides information regarding the 

thermal efficiency of wood stoves. 

Adopting this source as a means of 

determining the thermal efficiency 

rating of biomass stoves or boilers 

would provide uniformity and 

simplicity for such measurements. 

D. Placed in Service, Originally Placed 

in Service and Original Use 

Section 25C includes the terms 

‘‘placed in service,’’ ‘‘originally placed 

in service,’’ and ‘‘original use.’’ 

Under section 25C(c)(2)(C), building 

envelope components other than 

exterior windows, skylights, and 

exterior doors are not qualified energy 

efficiency improvements unless they 

meet the prescriptive criteria for such 

components established by the most 

recent International Energy 

Conservation Code standard in effect as 

of the beginning of the calendar year 

that is 2 years prior to the calendar year 

in which such components are placed in 

service. Whether certain types of 

property are qualified energy property 

under section 25C(d)(2)(A) and (C) 

depends in part on when such property 

is placed in service. The PIN 

requirements under section 25C(h) 

apply to specified property placed in 

service after December 31, 2024. More 

broadly, the IRA extended the section 

25C credit with respect to any property 

placed in service through December 31, 

2032. 

Under section 25C(d)(1)(B), 

residential energy property 

expenditures must be for qualified 

energy property originally placed in 

service by the taxpayer. Under section 

25C(c)(1)(B), the original use of any 

energy efficient building envelope 

component must commence with the 

taxpayer. 

In considering the definition of the 

term ‘‘placed in service’’ under section 

25C, two sets of rules were considered. 

First, § 1.167(a)–10(b) generally 

provides that the period for depreciation 

of an asset begins when the asset is 

placed in service and ends when the 

asset is retired from service. Section 

1.167(a)–11 provides general 

depreciation rules based on class lives 

and asset depreciation ranges for 

property placed in service after 

December 31, 1970. Many of the 

depreciation rules in § 1.167(a)–11 

apply when the property is ‘‘first placed 

in service.’’ Section 1.167(a)–11(e)(1) 

defines the term ‘‘first placed in 

service,’’ in part, as the time the 

property is ‘‘first placed in a condition 

or state of readiness and availability for 

a specifically assigned function,’’ 

including in a personal activity. Section 

1.167(a)–11(e)(1) provides that the 

provisions of § 1.46–3(d)(1)(ii) and (2), 

relating to the investment credit, 

generally apply for the purpose of 

determining the date on which property 

is ‘‘placed in service.’’ Section 1.46– 

3(d)(1)(ii) and (2) provides, in part, that 

property is considered placed in service 

in the taxable year in which the 

property is placed in a condition or state 

of readiness and availability for a 

specifically assigned function, including 

in a personal activity. 

Second, recently published 

regulations under section 25E (relating 

to previously-owned clean vehicles) and 

section 30D (relating to new clean 

vehicles) define ‘‘placed in service’’ as 

the date the taxpayer takes possession of 

the vehicle. See §§ 1.25E–1(b)(10) and 

1.30D–2(b)(36). This possession-based 

standard is not appropriate for the 

definition of placed in service for 

purposes of the section 25C credit. 

Defining ‘‘placed in service’’ as the date 

the taxpayer takes possession of 

qualified energy efficiency 

improvements or qualified energy 

property (together, section 25C 

property) is contrary to the intent of 

section 25C, because the energy 

efficiency of a dwelling unit cannot be 

improved until the section 25C property 

is installed. Accordingly, proposed 

§ 1.25C–1(b)(15) would adopt the 

definition of placed in service in § 1.46– 

3(d)(1)(ii) as the date on which the 

section 25C property is placed in a 

condition or state of readiness and 

availability for its specifically assigned 

function. 

The determination of whether 

property is in a condition or state of 

readiness and availability for its 

specifically designed function is factual 

and has been the subject of many 

administrative rulings and court cases 

concerning other Code sections. Because 

installing section 25C property usually 

will result in the property being ready 

and available for its specifically 

assigned function, it is anticipated that 

installation and placed in service will 

be synonymous in most cases. 

Nonetheless, comments are requested 

on potential circumstances under which 

installation of section 25C property may 

be insufficient to consider it placed in 

service. 

Regarding the requirement that 

qualified energy property be ‘‘originally 

placed in service’’ by the taxpayer for 

purposes of residential energy property 

expenditures under section 

25C(d)(1)(B), § 1.167(a)–11(e)(1) clarifies 

that the term ‘‘first placed in service’’ 

refers to the time the property is first 

placed in service by the taxpayer, not to 

the first time the property is placed in 

service. In contrast, section 25C uses the 

terms ‘‘originally placed in service’’ and 

‘‘original use.’’ Section 25C property can 

only be ‘‘originally’’ placed in service, 

or ‘‘originally’’ used, once; thus, such 

property must be new. Accordingly, 

proposed § 1.25C–1(b)(13) would define 

‘‘originally placed in service’’ to refer to 

the first time property is placed in 

service, whether or not by the taxpayer, 

and ‘‘original use’’ to refer to the first 

use to which the property is put or will 

be put, whether or not that use 


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corresponds or will correspond to the 

use of property by the taxpayer. 

The definitions of the terms 

‘‘originally placed in service’’ and 

‘‘original use’’ in the proposed 

regulations are intended to require that 

section 25C property be new and not 

used. These definitions would provide 

simplicity and clarity for taxpayers and 

manufacturers. 

The Treasury Department and the IRS 

request comments on the definitions in 

the proposed regulations. 

II. General Rules 

Proposed § 1.25C–2 would provide 

general rules regarding the section 25C 

credit, including how to calculate the 

credit, what limitations apply, and the 

effect of certain cross-referenced Code 

sections on the credit. 

Proposed § 1.25C–2(a) would provide 

the general rule that, subject to certain 

limitations and rules, section 25C 

allows a taxpayer a credit for the taxable 

year equal to 30 percent of the total 

amount paid or incurred by the taxpayer 

during such taxable year for qualified 

energy efficiency improvements 

installed during such taxable year, 

residential energy property 

expenditures, and home energy audits. 

Proposed § 1.25C–2(b) would provide 

limitations on the amount of the section 

25C credit. Consistent with section 

25C(b)(1), proposed § 1.25C–2(b)(1) 

would provide that the section 25C 

credit generally is limited to $1,200 

with respect to any taxpayer for any 

taxable year. Consistent with section 

25C(b)(2), (3), and (4), the proposed 

regulations would provide additional 

annual limits for certain categories of 

property within this $1,200 limit. 

Proposed § 1.25C–2(b)(2)(i) would 

provide that the credit allowed under 

section 25C(a)(2) is limited to $600 with 

respect to any taxpayer for any taxable 

year with respect to any item of 

qualified energy property. Proposed 

§ 1.25C–2(b)(3) and (4) would provide 

that the credit allowed under section 

25C(a)(1) with respect to any taxpayer 

for any taxable year is limited to $600 

in the aggregate with respect to all 

exterior doors and skylights, $250 in the 

case of any exterior door, and $500 in 

the aggregate with respect to all exterior 

doors. Consistent with section 25C(b)(6), 

proposed § 1.25C–2(b)(5) would provide 

that the credit allowed under section 

25C(a)(3) for a home energy audit is 

limited to $150. Concerning the 

substantiation requirement of section 

25C(b)(6)(B), taxpayers may continue to 

rely on the rules described in section 3 

through 6 of Notice 2023–59. 

Consistent with section 25C(b)(5), and 

notwithstanding the general $1,200 

annual limitation (and its internal, 

lower limitations), proposed § 1.25C– 

2(b)(2)(ii) would provide that the credit 

allowed under section 25C(a)(2) with 

respect to any taxpayer for any taxable 

year is limited to $2,000 in the aggregate 

with respect to amounts paid or 

incurred for an electric or natural gas 

heat pump water heater described in 

section 25C(d)(2)(A)(i), an electric or 

natural gas heat pump described in 

section 25C(d)(2)(A)(ii), and a biomass 

stove or boiler described in section 

25C(d)(2)(B). 

Proposed § 1.25C–2(c) would provide 

examples that illustrate the operations 

of proposed § 1.25C–2(a) and (b). 

Proposed § 1.25C–2(d) would provide 

rules consistent with section 25C(f)(1), 

which provides that rules similar to the 

rules in section 25D(e)(4) through (8) 

apply for purposes of section 25C. 

Proposed § 1.25C–2(d) would provide 

that, consistent with sections 25C(f)(1) 

and 25D(e)(8)(A), a taxpayer’s 

expenditure for an item of property 

would be treated as made when the 

original installation of the item is 

completed. 

Proposed § 1.25C–2(e)(1) would 

provide rules consistent with sections 

25C(f)(1) and 25D(e)(8) regarding 

expenditures made in connection with 

the reconstruction of or an addition to 

a dwelling unit. In general, such 

expenditures would be treated as paid 

or incurred when the taxpayer’s use of 

the reconstructed or post-addition 

dwelling unit begins. These rules also 

would require taxpayers to maintain 

records that itemize the amount paid or 

incurred for each item of section 25C 

property in connection with the 

reconstruction or addition. 

Proposed § 1.25C–2(e)(1) would not 

allow expenditures made in connection 

with the original construction of a 

dwelling unit to be eligible for the 

section 25C credit. Section 25C allows 

a credit for improving a dwelling unit 

by adding section 25C property to it or 

preparing a home energy audit with 

respect to the dwelling unit. The 

dwelling unit must be owned and used 

by the taxpayer as the principal 

residence under section 25C(a)(1), 

owned or used by the taxpayer as the 

principal residence under section 

25C(a)(3), or used by the taxpayer as a 

residence under section 25C(a)(2). 

Section 25C property must be installed 

in or on a dwelling unit under section 

25C(c)(1)(A) or installed on or in 

connection with a dwelling unit under 

section 25C(d)(1)(A). Section 25C 

property must be originally placed in 

service under section 25C(d)(1)(B) or 

originally used by the taxpayer under 

section 25C(c)(1)(B). The language used 

in these provisions to refer to the 

dwelling unit supports the Treasury 

Department and the IRS’s view that the 

best reading of section 25C is to allow 

a credit only for improvements to an 

existing dwelling unit. Section 25C 

property must be installed on or in (or 

in connection with) the taxpayer’s 

‘‘residence,’’ and a dwelling unit cannot 

be a taxpayer’s residence until the 

taxpayer resides in it. As the final 

requirement for section 25C property, 

the taxpayer must originally place in 

service or originally use section 25C 

property; the taxpayer is the person who 

owns or uses the dwelling unit, which 

in most cases would not be the person 

who originally constructed the dwelling 

unit. This interpretation is consistent 

with the description of former section 

25C by the Joint Committee on Taxation 

in Description Of Energy Tax Changes 

Made By Public Law 117–169, which 

refers to the section 25C credit being 

available ‘‘for the purchase of qualified 

energy efficiency improvements to 

existing homes.’’ JCX–5–23, 36 (April 

17, 2023). This interpretation is also 

consistent with prior guidance provided 

by the IRS. See Notice 2013–70, 2013– 

47 I.R.B. 528 (‘‘A taxpayer can claim the 

§ 25C credit only for qualifying 

expenditures incurred for an existing 

home or for an addition or renovation to 

an existing home, and not for a newly 

constructed home’’); Notice 2009–53, 

2009–25 I.R.B. 1095, 1097 (‘‘[T]he 

[section 25C] credit is only available for 

existing homes.’’). Comments are 

requested on the proposed exclusion of 

expenditures made in connection with 

the original construction of a dwelling 

unit for purposes of the section 25C 

credit. 

Proposed § 1.25C–2(f) would provide 

rules governing joint occupancy of a 

dwelling unit, tenant-stockholders in 

cooperative housing, and members of a 

condominium management association. 

Section 25C(f)(2)(A) generally provides 

that any expenditure otherwise 

qualifying as an expenditure under 

section 25C will not be treated as failing 

to so qualify merely because such 

expenditure was made with respect to 

two or more dwelling units. Consistent 

with sections 25C(f)(1) and 25D(e)(4), 

proposed § 1.25C–2(f)(1) would provide 

that, in the case of any dwelling unit 

that is jointly occupied and used during 

the calendar year as a principal 

residence by two or more taxpayers, the 

expenditures allocated to any taxpayer 

for the taxable year in which such 

calendar year ends is the amount paid 

or incurred by such taxpayer for section 

25C property with respect to such 


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dwelling unit during such calendar 

year. 

Consistent with sections 25C(f)(1) and 

25D(e)(5), proposed § 1.25C–2(f)(2) 

would provide that in the case of a 

taxpayer who is an individual tenantstockholder in a cooperative housing 

corporation, for purposes of the section 

25C credit, such taxpayer would be 

treated as having paid or incurred the 

taxpayer’s proportionate share of any 

amounts paid or incurred by such 

corporation for section 25C property. 

Non-individual tenant-stockholders may 

not claim the section 25C credit. 

Proposed § 1.25C–2(f)(2) looks to section 

216(b)(3) to determine each tenantstockholder’s proportionate share, 

which generally would be the 

proportion which the stock of the 

cooperative housing corporation owned 

by the tenant-stockholder is of the total 

outstanding stock of the corporation 

(including any stock held by the 

corporation). 

Consistent with sections 25C(f)(1) and 

25D(e)(6), proposed § 1.25C–2(f)(3) 

would provide that a taxpayer who is a 

member of a condominium management 

association with respect to a 

condominium dwelling unit owned by 

the taxpayer would be treated as having 

paid or incurred the taxpayer’s 

proportionate share of the condominium 

management association’s expenditures 

for section 25C property. Proposed 

§ 1.25C–2(f)(3) would provide a 

reasonableness standard to determine 

each individual’s proportionate share. 

While section 25D uses the term 

‘‘proportionate share’’ for both 

cooperatives and condominiums, the 

definition of ‘‘proportionate share’’ in 

section 216(b)(3) that applies to 

cooperative housing corporations 

cannot apply to condominiums because 

they do not have shares of stock to 

determine proportionate shares. 

Sections 25C, 25D, and 528 do not 

otherwise define proportionate share for 

condominiums. 

The Treasury Department and the IRS 

recognize that condominiums are 

governed largely by boards of directors 

(or similar bodies) that are subject to 

State and local laws, and generally 

operate according to organizational 

documents. Accordingly, proposed 

§ 1.25C–2(f)(3) would provide that an 

individual dwelling unit owner’s 

proportionate share of condominium 

expenses is determined using any 

reasonable and consistent method. The 

proposed regulations would further 

require that the condominium’s 

governing body must develop 

reasonable procedures to notify 

individuals of their allocable shares of 

these expenditures, and of the PINs 

associated with the specified property. 

The Treasury Department and the IRS 

request comments on the definition of 

proportionate share for condominiums. 

Finally, proposed § 1.25C–2(g) would 

provide, consistent with sections 

25C(f)(1) and 25D(e)(7), that if less than 

80 percent of the use of an item of 

property is for nonbusiness purposes, 

only that portion of the expenditures 

with respect to such item that is 

properly allocable to use for 

nonbusiness purposes can be taken into 

account for purposes of calculating the 

section 25C credit. 

III. Special Rules 

Proposed § 1.25C–3 would provide a 

special rule regarding enabling property 

and the requirement that it be installed 

in conjunction with, and enable the 

installation and use of, enabled property 

under section 25C(d)(2)(D)(iii) and (iv). 

The Treasury Department and the IRS 

understand that there may be 

circumstances where enabling and 

enabled property cannot be installed in 

the same taxable year. For example, a 

taxpayer or third-party installer may not 

know of the need for an upgrade to a 

panelboard at the time that enabled 

property is installed. Alternatively, the 

installer may not have enabling property 

available when the enabled property is 

installed (but the enabled property is 

otherwise functional). 

Proposed § 1.25C–3 would provide a 

general rule and a safe harbor. Proposed 

§ 1.25C–3(b)(1) would provide that 

enabling property would be considered 

to have been installed in conjunction 

with enabled property if it was installed 

in the same taxable year as the enabled 

property was installed. Proposed 

§ 1.25C–3(b)(2) would provide a safe 

harbor providing that if enabling 

property and enabled property are 

installed in consecutive taxable years, 

then the taxpayer may treat the enabling 

property and the enabled property as 

installed in the same taxable year 

(deemed taxable year), provided that the 

deemed taxable year is the later of the 

taxable year in which the enabling 

property or the enabled property was 

installed, regardless of which is 

installed first. The safe harbor would 

allow flexibility for taxpayers while 

adhering to the statutory requirement 

that enabling property enable the 

installation and use of, enabled 

property. 

If a taxpayer chooses not to apply the 

safe harbor, and the taxpayer, for 

example, installs the enabled property 

in the first taxable year and the enabling 

property in the second taxable year, 

then the taxpayer might still be eligible 

for the section 25C credit with respect 

to the enabled property installed in the 

first taxable year. However, the taxpayer 

would not be eligible for the section 25C 

credit with respect to the enabling 

property installed in the second taxable 

year because it could not enable the 

installation and use of the enabled 

property under section 25C(d)(2)(D)(iv) 

and would not meet the general rule of 

proposed § 1.25C–3(b)(1). 

The safe harbor would impose no 

burden on taxpayers because no 

additional reporting requirements are 

required for its use. However, in order 

to be entitled to the section 25C credit, 

taxpayers who rely on the safe harbor 

must meet all other applicable 

requirements of section 25C and the 

proposed regulations, including the 

requirement to provide PINs for both 

enabling property and enabled property, 

as provided in section 25C(h), Revenue 

Procedure 2024–31 (discussed in part IV 

of this Explanation of Provisions), and 

any other applicable guidance. 

The Treasury Department and the IRS 

request comments on the safe harbor 

under proposed § 1.25C–3(b)(2). 

IV. QMs and PIN Requirements 

Proposed § 1.25C–4 would provide 

rules regarding the PIN requirements 

under section 25C(h) that apply to 

specified property placed in service 

after December 31, 2024. Most of the 

requirements pertain to QMs. Under 

section 25C(h)(1)(B), a taxpayer’s sole 

obligation with respect to a PIN is to 

include the PIN of any item of specified 

property placed in service after 

December 31, 2024, on the taxpayer’s 

tax return for the taxable year (Taxpayer 

PIN requirement). 

The proposed regulations would refer 

manufacturers to Revenue Procedure 

2024–31, for procedures on how to 

register and apply to become a QM and 

how to comply with the QM PIN 

requirements. The procedures of 

Revenue Procedure 2024–31 were 

derived in part from comments received 

in response to Notice 2024–13. 

A. Manufacturer Registration 

Notice 2024–13 proposed that 

manufacturers would need to register 

with the IRS to become QMs but did not 

describe a registration process. The 

Treasury Department and the IRS 

received no comments about the need 

for manufacturers to register with the 

IRS or the process for such registration. 

1. General Rules and Registration 

Process 

Proposed § 1.25C–4(a) would provide 

the general rule, pursuant to section 

25C(h)(1), that no section 25C credit is 

allowed with respect to any item of 


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specified property placed in service 

after December 31, 2024, unless such 

item is produced by a QM and the 

taxpayer includes the PIN of such item 

on the return of tax for the taxable year. 

Proposed 1.25C–4(a) also would 

summarize the remaining paragraphs in 

the section, which would provide rules 

for manufacturers of specified property 

to meet the QM PIN requirements. 

Proposed § 1.25C–4(b)(1) would 

provide, pursuant to section 25C(h)(3), 

that for a manufacturer of specified 

property to become a QM, the 

manufacturer must, in accordance with 

§ 1.25C–4(b) and guidance published in 

the Internal Revenue Bulletin, register 

with the IRS and enter into an 

agreement with the IRS, certifying under 

penalties of perjury that the 

manufacturer will meet the QM PIN 

requirements. Revenue Procedure 2024– 

31 provides that this registration and 

agreement process is conducted through 

the IRS Energy Credits Online Portal. 

Proposed § 1.25C–4(b)(2) would 

clarify that only manufacturers 

producing specified property at the time 

of registration may register with the IRS 

to become QMs. Allowing 

manufacturers that are not producing 

specified property at the time of 

registration could create confusion for 

taxpayers and would impose 

administrative burdens on the IRS. 

2. Special Registration Rule for 2025 

Multiple commenters to Notice 2024– 

13 expressed a need for additional time 

for manufacturers to comply with the 

registration and QM PIN requirements 

effective for property placed in service 

after December 31, 2024. In response to 

these requests, Revenue Procedure 

2024–31 allows manufacturers of 

specified property until April 30, 2025, 

to submit their QM Registration 

Application and Agreement (as defined 

in the revenue procedure). Under 

Revenue Procedure 2024–31, any 

manufacturer that submits its QM 

Registration Application and Agreement 

by April 30, 2025, will be deemed to 

have been a QM as of December 31, 

2024, provided such QM Registration 

Application and Agreement is validated 

by the IRS (as described in the revenue 

procedure). Accordingly, for a 

manufacturer that meets the 

requirements of the Special Registration 

Rule for 2025, any specified property 

produced by such manufacturer on or 

after January 1, 2025, and on or before 

April 30, 2025, will be deemed to have 

been produced by a QM. 

3. Rule for Multiple Manufacturers 

One commenter to Notice 2024–13 

requested clarification as to which 

manufacturer would bear the 

responsibility to register with the IRS 

and meet the QM PIN requirements if 

more than one manufacturer 

participates in the production of the 

same product that is specified property, 

or if under a private labeling 

arrangement, one manufacturer labels 

and sells the same product of specified 

property that was produced by a third 

party. Proposed § 1.25C–4(b)(2) would 

provide that if there are multiple 

manufacturers in the chain of 

production of the same product of 

specified property, only one 

manufacturer may be the QM with 

respect to such product. Proposed 

§ 1.25C–4(b)(2) would require that, 

absent an agreement otherwise, where 

more than one manufacturer 

participates in the production of the 

same product that is specified property, 

only the manufacturer whose 

production results in the product 

becoming specified property must 

register with the IRS to become a QM 

with respect to such property. Proposed 

§ 1.25C–4(b)(2) would provide 

manufacturers working together to 

produce the same product of specified 

property the flexibility to negotiate 

which among them would bear 

responsibility as a QM with respect to 

such property. Revenue Procedure 

2024–31 contains procedures 

corresponding to proposed § 1.25C– 

4(b)(2). The Treasury Department and 

the IRS request comments on proposed 

§ 1.25C–4(b)(2) and how the rules 

should apply to products with multiple 

manufacturers. 

4. Special Rules for Manufacturers of 

Enabling Property and Certain 

Manufacturers of Heat Pumps 

Revenue Procedure 2024–31 provides 

certain exceptions to the QM PIN 

requirements with respect to enabling 

property and the indoor units of heat 

pumps. Despite those exceptions, which 

are discussed later in this preamble, a 

manufacturer of such products (even if 

it only produces no other type of 

specified property other than one or 

both of such products) must register 

using the IRS Energy Credits Online 

Portal and enter into an agreement with 

the IRS to become a QM. 

5. Validation and Rejection of QM 

Registration Application and 

Agreement; Revocation and Suspension 

of QM Registration Status; 

Administrative Review 

Proposed § 1.25C–4(b)(3) and (4) 

would provide that the IRS will validate 

and may reject a QM Registration 

Application and Agreement, taking into 

account a manufacturer’s North 

American Industry Classification 

System (NAICS) code, and may revoke 

or suspend a QM’s registration status for 

failure to comply with the QM PIN 

requirements. Proposed § 1.25C–4(b)(3) 

and (4) would provide that if the IRS 

rejects a QM Registration Application 

and Agreement, or revokes or suspends 

a QM’s registration status, then the 

manufacturer will be afforded 

administrative review, but any such 

rejection, revocation, or suspension 

would not be reviewable by the IRS 

Independent Office of Appeals. Revenue 

Procedure 2024–31 contains procedures 

corresponding to proposed § 1.25C– 

4(b)(3) and (4). 

6. Voluntary Discontinuance of QM 

Status 

One commenter to Notice 2024–13 

suggested that the guidance provide that 

a manufacturer registered as a QM is not 

required to remain a QM if it determines 

that compliance with the QM PIN 

requirements is too burdensome or 

otherwise unsuitable. Similarly, another 

commenter to Notice 2024–13 requested 

that the regulations permit 

manufacturers to register as QMs at any 

time of their choosing and to 

discontinue participation in the QM 

program or the assignment, labeling, or 

reporting of PINs at any time. 

Proposed § 1.25C–4(b)(5) would allow 

a QM to discontinue its QM registration 

status by following the procedures 

provided in guidance published in the 

Internal Revenue Bulletin. Revenue 

Procedure 2024–31 provides procedures 

corresponding to proposed § 1.25C– 

4(b)(5), including for the date on which 

the QM’s status is discontinued. A QM 

that discontinues its QM registration 

status will no longer be included on the 

list of QMs published by the IRS, and 

the IRS will publicize QMs that have 

discontinued their QM status. 

B. PIN Assignment Requirement 

Notice 2024–13 proposed a PIN 

assignment system that would have 

required QMs to assign to each item of 

specified property a 17-digit PIN 

consisting of four parts: (1) a unique 

‘‘QM Number’’ specific to the QM, (2) a 

‘‘Product Number’’ specific to the 

product line of specified property, (3) a 

number reflecting the year of 

manufacture, and (4) an ‘‘Item number’’ 

unique to each item of specified 

property. 

1. General Rule 

Several commenters generally 

addressed the proposed PIN assignment 

system from Notice 2024–13. Some 

commenters expressed concerns that the 

system would be burdensome for 


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manufacturers and taxpayers. These 

commenters asserted that it would be 

difficult and costly for manufacturers to 

assign PINs and ensure that consumers 

receive the PINs, because in many cases 

there would be one or more 

intermediaries, such as retailers and 

contractors, between manufacturers and 

consumers. These commenters also 

noted that it could be burdensome for 

consumers to determine a product’s PIN 

and then retain it to include on their tax 

returns. According to these commenters, 

the PIN assignment system proposed in 

Notice 2024–13 would increase 

manufacturers’ production costs, and 

consequently increase the cost of 

specified property, thereby deterring 

consumers from acquiring the energy 

efficient products that the section 25C 

credit aims to promote. 

Some commenters asserted that the 

specifics of the PIN assignment system 

proposed in Notice 2024–13 would not 

be workable. Commenters asserted that 

it would be impractical for 

manufacturers to adopt this system, 

particularly those that already have in 

place longstanding and varied 

numbering systems for their product 

lines and individual items. Another 

commenter recommended that 

manufacturers of exterior windows and 

doors be exempt from QM PIN 

requirements because they produce 

larger quantities of such items than 

manufacturers of other types of 

specified property. 

Several commenters suggested 

allowing manufacturers to employ 

existing numbering systems, such as 

serial numbers, NFRC numbers, or 

SKUs. One commenter asserted that 

using existing serial numbers would not 

lead to significant duplication. This 

commenter further stated that even 

though window and door manufacturers 

do not employ serial numbers, the 

assignment rules should still permit 

manufacturers of other specified 

property to employ existing serial 

numbers. Another commenter suggested 

that the IRS create a template 

application on which manufacturers 

could provide details about their 

existing serial numbering systems, so 

that a product’s model number and 

serial number could together constitute 

its PIN. 

The Treasury Department and the IRS 

acknowledge that the PIN assignment 

requirement presents certain 

compliance challenges for 

manufacturers and taxpayers. However, 

section 25C(h) requires unique PINs as 

an integral safeguard to assure that 

taxpayers entitled to claim the section 

25C credit can do so efficiently, without 

concern that such claim will be rejected 

by the IRS for a duplicative or otherwise 

incorrect PIN. The unique PINs also 

reduce the risk to the fisc by preventing 

multiple claims for the section 25C 

credit for the same item of specified 

property. 

In addition, the variety of existing 

product numbering systems warrants a 

uniform PIN assignment system. A 

manufacturer’s serial numbers may be 

unique to individual items of property 

it produces, but different manufacturers 

use different forms of serial numbers. 

While manufacturers generally assign 

the same SKU to all items within a 

product line, the SKU would not be 

unique to each item within such line. 

Proposed § 1.25C–4(c) would require 

a QM to assign PINs unique to each item 

of specified property it produces, using 

the PIN Assignment System described 

in guidance published in the Internal 

Revenue Bulletin. Revenue Procedure 

2024–31 requires a system similar to the 

one described in Notice 2024–13 in that 

QMs must assign a 17-character PIN 

unique to each item of specified 

property. In response to commenter 

requests, to reduce complexity and 

burdens, the 17-character PIN in 

Revenue Procedure 2024–31 consists of 

three components, not the four 

proposed in Notice 2024–13: (1) a fourcharacter ‘‘QM Code’’ that is specific to 

the QM and is assigned by the IRS once 

the QM’s registration is validated, (2) a 

one-character ‘‘Product Code’’ that 

represents category of specified property 

and, if applicable, its relevant 

geographic climate zone, that is 

published by the IRS, and (3) a twelvedigit ‘‘Item Number’’ that is assigned by 

the QM that is unique to each item of 

specified property. For the Item 

Number, a QM may choose any twelve 

alphanumeric characters (including the 

common digits 0 to 9 and capital letters 

A to Z, other than I or O, but not special 

characters such as *, &, @, etc.), 

provided that the result is a unique Item 

Number, and provided that the Item 

number does not employ leading zeroes. 

A QM may use its own SKUs or serial 

numbers (or parts thereof) in the Item 

Number, provided that the Item Number 

is unique to each item of specified 

property. Revenue Procedure 2024–31 

encourages QMs to employ 

nonsequential characters. 

A commenter questioned why the 

letters I and O should not be allowed in 

PINs. The similarity of the letters I and 

O to the numbers one and zero could 

lead taxpayers to make mistakes when 

including a PIN on their tax returns or 

cause the IRS’s processing systems to 

misread a PIN that a taxpayer submits, 

and cause the IRS to incorrectly 

disallow (or allow) a credit. 

Accordingly, Revenue Procedure 2024– 

31 does not allow the use of the letters 

I and O in PINs. 

The PIN Assignment System set forth 

in Revenue Procedure 2024–31 ensures 

that each unique item of specified 

property will have a unique PIN, and 

that each PIN will employ the same 

format and the same number of 

characters. This uniformity is necessary 

for the IRS to process taxpayer claims 

for the section 25C credit efficiently. 

While the Treasury Department and 

the IRS appreciate the concerns raised 

by the commenters, exterior windows 

and exterior doors cannot be exempted 

from the QM PIN requirements because 

section 25C expressly requires PINs to 

be assigned to exterior windows and 

exterior doors. However, the PIN 

Assignment System allows for a variety 

of digits in the Item Number such that 

a large volume of specified property can 

be accommodated. 

One commenter asserted that it would 

be overly burdensome for manufacturers 

to assign PINs to products that 

manufacturers intend to export. The 

Treasury Department and the IRS agree 

that PINs only need to be assigned to 

products placed in service in the United 

States, because the definition of 

specified property itself includes 

requirements that can only be met in the 

United States, and because the section 

25C credit is only allowed with respect 

to dwelling units located in the United 

States. The definitions of the products 

that comprise specified property 

(qualified energy property and exterior 

windows and exterior doors) each 

include requirements that can only be 

met in the United States. Qualified 

energy property under section 

25C(d)(2)(A) must meet or exceed the 

highest efficiency tier established by the 

Consortium for Energy Efficiency, the 

requirements for which are based in part 

on United States climate zones. 

Qualified energy property under section 

25C(d)(2)(B) must heat a dwelling unit 

located in the United States. Qualified 

energy property under section 

25C(d)(2)(C) must be rated for use with 

fuel blends including eligible fuel under 

section 25C(d)(3), which under section 

40 is limited to fuel produced and used 

in the United States and under section 

40A excludes, in part, fuel produced 

outside the United States for use outside 

the United States. Qualified energy 

property under section 25C(d)(2)(D) 

comprises qualified energy efficiency 

improvements (which must be installed 

in the United States under section 

25C(c)(1)(A)) and qualified energy 

property under section 25C(d)(2)(A) 

through (C), described in this paragraph, 

and must enable the installation and use 


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of property installed in the United 

States under section 25C(d)(2)(d)(iv). 

Finally, exterior windows (including 

skylights) and exterior doors, as 

qualified energy efficiency 

improvements, must be installed in the 

United States under section 

25C(c)(1)(A). Exterior windows and 

skylights also must meet Energy Star 

most efficient certification requirements 

under section 25C(c)(2)(A), and exterior 

doors must meet applicable Energy Star 

requirements under section 25C(c)(2)(B), 

each of which is based in part on United 

States climate zones. Accordingly, the 

definition of specified property in 

proposed § 1.25C–2(b)(25) would 

provide that any property placed in 

service outside of the United States is 

not specified property. 

Revenue Procedure 2024–31 also 

contains procedures regarding the time 

for assigning PINs to specified property. 

For property produced on or after 

January 1, 2026, the QM must assign a 

17-digit PIN to the specific property 

while it is in the QM’s possession. This 

timing rule will assist QMs in meeting 

the requirement to timely provide the 

PIN to the taxpayer. For items of 

specified property produced before 

January 1, 2026, the QM may, but is not 

required to, assign a 17-digit PIN to 

specified property after the property has 

left the QM’s possession, provided that 

the rules regarding the time to provide 

the PIN are satisfied (see the discussion 

later). 

2. Transition Relief for Specified 

Property Placed in Service During the 

2025 Calendar Year 

Commenters to Notice 2024–13 

expressed concern that manufacturers 

(as well as distributors, contractors, and 

consumers) could not implement the 

proposed PIN assignment system before 

the PIN requirements take effect on 

January 1, 2025. They requested that the 

IRS adopt a transition rule that would 

delay or relax the PIN assignment 

requirement for at least the 2025 

calendar year. 

The Treasury Department and the IRS 

agree that transition relief is 

appropriate. Accordingly, for all 

specified property placed in service in 

the 2025 calendar year, Revenue 

Procedure 2024–31 provides that a QM 

can satisfy the PIN assignment 

requirement by furnishing its fourcharacter ‘‘QM Code’’ to consumers, 

who can satisfy the Taxpayer PIN 

requirement by including the QM Code 

on their tax returns. Thus, for specified 

property placed in service during 

calendar year 2025, taxpayers may claim 

the section 25C credit based on the QM 

Code in lieu of the PIN for such 

specified property. This transition relief 

affords QMs an additional year to 

implement the full PIN Assignment 

System. 

3. Special Rules for Enabling Property 

and Certain Heat Pumps 

Two commenters to Notice 2024–13 

asserted that the PIN assignment 

requirement would present unique 

challenges and burdens to 

manufacturers of enabling property 

described in section 25C(d)(2)(D), such 

as panelboards. These commenters 

noted that enabling property is eligible 

for the section 25C credit only if it is 

installed ‘‘in conjunction with’’ 

property that is itself eligible for the 

credit (enabled property, discussed 

previously). The commenters 

maintained that because, in most cases, 

taxpayers do not install the enabling 

property in conjunction with enabled 

property, it would saddle manufacturers 

of enabling properties with a 

disproportionate cost and burden to 

assign a PIN to each item of enabling 

property, without knowing if this was 

necessary. The commenters noted that 

because enabling property often costs 

significantly less than enabled property, 

full compliance with the QM PIN 

requirements would have a higher cost 

per item relative to other categories of 

specified property. Commenters also 

noted similar issues for manufacturers 

of heat pumps, which generally have 

two units—an indoor and an outdoor 

unit—with little likelihood one such 

unit could qualify for the section 25C 

credit without the other unit being 

installed. 

The Treasury Department and the IRS 

agree that relief is appropriate to 

address these two concerns. 

Accordingly, Revenue Procedure 2024– 

31 addresses these issues. Regarding 

enabling property, section 4.01(5) of 

Revenue Procedure 2024–31 provides 

that a QM can satisfy the PIN 

assignment requirement with its QM 

Code in lieu of its PIN, instead of 

meeting the 17-digit PIN requirements, 

regardless of when the enabling 

property is placed in service. For 

taxpayers claiming the section 25C 

credit with respect to enabling property, 

the IRS will accept the QM Code in lieu 

of the PIN for the enabling property. 

QMs that produce enabling property 

must meet all other QM PIN 

requirements, including using the 17- 

digit PIN for enabled property placed in 

service on or after January 1, 2026. 

Regarding heat pumps, section 5.05 of 

Revenue Procedure 2024–31 provides 

that only the outdoor unit of a heat 

pump must be assigned a PIN. A QM 

that produces heat pumps must meet all 

other applicable QM PIN requirements. 

For example, if a manufacture only 

produces indoor units of a heat pump, 

it must still register as a QM. 

4. Additional Comments to Notice 

2024–13 

Some commenters suggested that a 

trade association of manufacturers of 

certain categories of specified property 

could create a product directory of 

specified properties that its members 

produce. They further suggested that the 

trade association could carry out all of 

the QM PIN requirements (assignment, 

labeling and reporting) on behalf of its 

members. Nothing in Revenue 

Procedure 2024–31 prohibits, and 

nothing in the proposed regulations 

would prohibit, a trade association from 

doing so. However, each manufacturer 

member must register to be a QM, and 

the PINs must follow all of the 

requirements provided in Revenue 

Procedure 2024–31. 

One commenter asked how 

manufacturers should assign PINs to 

products made up of a combination of 

product lines. The PIN Assignment 

System described in Revenue Procedure 

2024–31 does not require QMs to 

reference a product’s product line in its 

PIN. The Product Code character in the 

PIN Assignment System represents the 

category of specified property. The 

Product Code is assigned by the QM in 

accordance with a list of Product Codes 

on https://www.irs.gov, on the IRS 

Energy Credits Online Portal, or in 

future published guidance. A QM has 

discretion to reference one product line, 

multiple product lines, or no product 

lines in the Item Number of a PIN with 

respect to a product that combines more 

than one product line. 

Another commenter suggested that 

the proposed regulations allow 

manufacturers to use the proposed PIN 

system for products that do not qualify 

for the section 25C credit. According to 

this commenter, such a rule could allow 

manufacturers to obtain more value 

from the PIN system, which could 

potentially mitigate their compliance 

costs arising from the QM PIN 

requirements. Nothing in these 

proposed regulations or Revenue 

Procedure 2024–31 prohibits a 

manufacturer from assigning PINs using 

the requirements described in Revenue 

Procedure 2024–31 to products that do 

not qualify for the section 25C credit, 

particularly because QMs have 

flexibility in assigning Item Numbers. 

However, QMs should only report to the 

IRS the PINs for those products that are 

eligible for the section 25C credit. QMs 

may not advise or otherwise suggest to 

consumers that the PINs for products 


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that do not meet the requirements under 

section 25C render those products 

eligible for the section 25C credit. 

One commenter suggested that 

manufacturers should have the option of 

using a PIN that is longer than 17 

characters to accommodate production 

runs that may exceed this limit. The 

Treasury Department and the IRS have 

considered the number of possible QMs 

and the number of possible products 

that are specified property. The system 

must be developed to last for many 

years. Based on available information, 

the 17 digits in the PIN Assignment 

System should suffice. 

C. PIN Labeling Requirement; Time To 

Make the PIN Available 

Commenters to Notice 2024–13 asked 

that manufacturers be given flexibility 

in complying with the PIN labeling 

requirement. Several commenters 

requested that guidance not require 

QMs to affix PINs physically to items of 

specified property, as this would 

involve significant costs. Another 

commenter suggested that guidance 

require QMs to ensure that taxpayers 

can easily locate and report a product’s 

PIN. This commenter specifically 

suggested requiring manufacturers to 

clearly label the PIN as the ‘‘Section 25C 

Energy Efficient Home Improvement 

Tax Credit PIN.’’ 

One commenter noted that many 

biomass appliances already have EPA 

labeling requirements and that it could 

be difficult to add a PIN to such labels. 

Another commenter pointed out that 

manufacturers may already have 

produced specified property that will be 

placed in service in 2025, and that it 

may be too late to affix PINs to these 

products. Finally, a commenter 

suggested allowing QMs to furnish PINs 

through their websites. 

Having considered these comments, 

the Treasury Department and the IRS 

propose to allow QMs maximum 

flexibility in meeting the PIN labeling 

requirement and providing PINs to 

consumers to ensure that taxpayers have 

the information needed to claim the 

section 25C credit. Proposed § 1.25C– 

4(d) would direct manufacturers to 

guidance published in the Internal 

Revenue Bulletin. Revenue Procedure 

2024–31 provides that manufacturers 

generally may choose the method by 

which to label products. QMs would not 

be required to affix PINs physically to 

items of specified property, provided 

that QMs make such PINs available to 

taxpayers within the required time 

frame. Revenue Procedure 2024–31 

allows QMs to meet the PIN labeling 

requirement in various ways, such as by 

including PINs on documents inside a 

product’s packaging, or furnishing PINs 

to consumers through QM websites. In 

accordance with the special requirement 

for enabling property, Revenue 

Procedure 2024–31 provides that a QM 

can meet the PIN labeling requirement 

for enabling property by providing its 

QM Code to consumers. In accordance 

with the special requirement for heat 

pumps, Revenue Procedure 2024–31 

provides that QMs are not required to 

label the indoor unit of a heat pump. 

Revenue Procedure 2024–31 also 

provides flexible procedures regarding 

when a QM must make PINs available 

to consumers. For specified property 

placed in service on or after January 1, 

2025, and before January 1, 2026, in 

order to comply with the PIN labeling 

requirement, a QM must provide its QM 

Code to taxpayers who purchase items 

of specified property by no later than 

the date—(i) when the taxpayer places 

the specified property in service, (ii) 

when the taxpayer requests a PIN from 

the QM, or (iii) when the manufacturer 

becomes a QM, whichever is latest. This 

is in accord with the requirements for 

registration and PIN assignment for 

specified property placed in service in 

calendar year 2025. For specified 

property placed in service on or after 

January 1, 2026, in order to comply with 

the PIN labeling requirement, a QM 

must make its PINs available to taxpayer 

no later than the date when the taxpayer 

either places the specified property in 

service, or requests a PIN from the QM, 

whichever is later. For any specified 

property produced in calendar year 

2025 and placed in service on or after 

January 1, 2026, and to which only a 

QM Code has been assigned, the QM 

must make the full 17-digit PIN 

available to the taxpayer upon request 

by the taxpayer. Revenue Procedure 

2024–31 also provides that a QM may 

not establish prerequisites to a taxpayer 

obtaining a PIN unless such prerequisite 

is required to verify the taxpayer’s 

purchase of the specified property. For 

example, a QM cannot require taxpayers 

to sign up for promotional emails as a 

condition of obtaining a PIN for 

specified property they purchase. These 

PIN delivery rules provide flexibility for 

QMs to determine which method of 

delivery works best for their business 

while ensuring that taxpayers have 

access to PINs when needed. 

D. Periodic Written Report Requirement 

Section 25C(h)(3)(C) provides the 

Secretary with authority to require QMs 

to provide periodic reporting of PINs 

assigned to specified property and other 

information that the Secretary may 

require with respect to such property. 

1. QM Reports 

Proposed § 1.25C–4(e) would direct 

QMs to guidance published in the 

Internal Revenue Bulletin regarding the 

format and timing of the periodic 

written report. Revenue Procedure 

2024–31 provides that to meet the 

periodic written report requirement, a 

QM must submit periodic reports (QM 

Reports) electronically, using a template 

on the IRS Energy Credits Online Portal. 

Each QM Report must be signed under 

penalties of perjury, and include general 

information such as the QM’s name and 

address, and information about each 

item of specified property for which a 

PIN was assigned, including such items 

month and year of manufacture. 

For purposes of a QM Report, 

Revenue Procedure 2024–31 defines the 

year of manufacture as the year in 

which the property becomes specified 

property for purposes of the section 25C 

credit. This definition is intended for 

the convenience of QMs and to assist in 

determining whether certain energy 

efficiency standards imposed by section 

25C have been met. This definition also 

comports with the rule for multiple 

manufacturers under proposed § 1.25C– 

4(b)(2). Nothing in Revenue Procedure 

2024–31 regarding the year of 

manufacture applies to Code sections 

other than section 25C. The Treasury 

Department and the IRS request 

comments on the definition of year of 

manufacture in Revenue Procedure 

2024–31. 

In accordance with the transition 

relief provided for calendar year 2025, 

Revenue Procedure 2024–31 provides 

that for specified property placed in 

service on or after January 1, 2025, and 

before January 1, 2026, a QM Report 

need only include the QM Code 

provided to taxpayers, instead of the full 

17-digit PIN. 

In accordance with the special rules 

for manufacturers of enabling property 

and certain manufacturers of heat 

pumps, Revenue Procedure 2024–31 

provides that QMs are not required to 

file QM Reports with respect to enabling 

property or indoor units of heat pumps. 

2. Time To File QM Reports 

Notice 2024–13 did not propose a rule 

for the required frequency of QM 

Reports. A commenter to Notice 2024– 

13 suggested that guidance require QMs 

to file QM Reports annually. The 

Treasury Department and the IRS 

recognize that the regular submission of 

QM Reports could pose a potential 

burden to some QMs, particularly for 

specified property placed in service on 

or after January 1, 2025, and before 

January 1, 2026. However, the Treasury 


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Department and the IRS have 

determined that annual QM Reports 

would not be frequent enough to give 

the IRS time to address errors and to 

effectively administer the section 25C 

credit. 

Therefore, Revenue Procedure 2024– 

31 provides transition relief and 

requires that for items of specified 

property that leave a QM’s control and 

enter the stream of commerce on or after 

January 1, 2025, and before January 1, 

2026, only one QM Report is required, 

and it must be submitted by January 15, 

2026. For specified property placed in 

service on or after January 1, 2026, 

Revenue Procedure 2024–31 requires a 

QM to file QM Reports on a quarterly 

basis, specifically by the fifteenth day of 

the calendar month following the end of 

the calendar quarter in which an item of 

specified property leaves the QM’s 

control and enters the stream of 

commerce (January 15, April 15, July 15, 

and October 15). A QM may choose to 

submit QM Reports more frequently 

than once per quarter. 

Revenue Procedure 2024–31 also 

provides procedures for updating or 

rescinding QM Reports, which must be 

done through the IRS Energy Credits 

Online Portal as soon as possible after 

the original submission. 

E. Lessees of a Dwelling Unit 

A lessee may not claim the section 

25C credit for qualified energy 

efficiency improvements, as a lessee 

uses but does not own a dwelling unit. 

A lessee of a dwelling unit may claim 

the section 25C credit for residential 

energy property expenditures, provided 

that the dwelling unit is used as a 

residence by the lessee. A lessee may 

claim the section 25C credit for a home 

energy audit, provided that the dwelling 

unit is used by the lessee as the lessee’s 

principal residence. 

F. Additional Comments Received 

Two commenters to Notice 2024–13 

suggested that a public database of 

specified products and their PINs would 

present privacy concerns. One 

commenter also suggested that the IRS 

treat manufacturer data and PIN 

information as confidential business 

information. The Treasury Department 

and the IRS understand these concerns, 

but want to ensure that consumers have 

some information as they search for 

products that are specified property. A 

QM Code assigned to a manufacturer by 

the IRS does not constitute confidential 

business information and its publication 

should not pose any inherent risk to 

QMs. Nonetheless, the IRS will publish 

a list of QMs, which will provide 

consumers with helpful information in 

determining which QMs offer products 

that are specified property, but to ensure 

privacy for QMs, the IRS will not 

publish any QM Codes. 

One commenter suggested that the 

IRS create an online directory of 

products eligible for the credit. The IRS 

declines to adopt this proposal because 

the statute already provides guidelines 

for products that qualify for the credit. 

However, the IRS will publish a list of 

Product Codes that sets forth each 

category of specified property. Some 

commenters asked whether reporting 

rules would change due to section 25C 

having been amended. Form 5695, 

Residential Energy Credits, is being 

revised to allow reporting of PINs. 

When available, the revised draft form 

will be available for comment on 

https://www.irs.gov/draftforms. 

Proposed Applicability Dates 

These regulations are proposed to 

apply to taxable years ending after 

[DATE OF PUBLICATION OF FINAL 

REGULATIONS IN THE FEDERAL 

REGISTER]. 

Taxpayers may rely on the proposed 

regulations for specified property placed 

in service prior to the date these 

regulations are published as final 

regulations in the Federal Register, 

provided the taxpayer follows the 

proposed regulations in their entirety, 

and in a consistent manner. 

Statement of Availability for IRS 

Documents 

For copies of recently issued Revenue 

Procedures, Revenue Rulings, Notices, 

and other guidance published in the 

Internal Revenue Bulletin, please visit 

the IRS website at https://www.irs.gov. 

Special Analyses 

I. Regulatory Planning and Review— 

Economic Analysis 

Pursuant to the Memorandum of 

Agreement, Review of Treasury 

Regulations under Executive Order 

12866 (June 9, 2023), tax regulatory 

actions issued by the IRS are not subject 

to the requirements of section 6 of 

Executive Order 12866, as amended. 

Therefore, a regulatory impact 

assessment is not required. 

II. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520) (PRA) requires 

that a Federal agency obtain the 

approval of the Office of Management 

and Budget (OMB) before collecting 

information from the public, whether 

such collection of information is 

mandatory, voluntary, or required to 

obtain or retain a benefit. A Federal 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information unless the 

collection of information displays a 

valid control number. 

The collections of information in the 

proposed regulations contain reporting, 

third-party disclosure and 

recordkeeping requirements that are 

necessary to ensure that specified 

property meets the requirements for the 

energy efficient home improvement 

credit under section 25C. These 

collections of information generally 

would be used by the IRS for tax 

compliance purposes and by taxpayers 

to ensure the property qualifies for the 

credit. 

The reporting requirements include 

that manufacturers register with the IRS 

to become QMs (as detailed proposed 

§ 1.25C–4(b)) and provide IRS with 

periodic reports (as detailed in proposed 

§ 1.25C–4(e)). Additionally, in the event 

a manufacturer is disqualified, the 

manufacturer will have the opportunity 

to appeal the IRS determination by 

requesting an administrative review. 

The third-party disclosure requirement 

includes the requirement that 

manufacturers provide taxpayers with a 

PIN number that identifies the specified 

property as qualified under section 25C 

(as detailed in proposed § 1.25C–4(d)). 

The likely respondents are businesses 

and other for-profit entities. The burden 

for these requirements is as follows: 

Registration: 

Estimated number of respondents: 

2,100. 

Estimated frequency of responses: 1. 

Estimated average annual burden per 

response: 2 hours. 

Estimated total annual reporting 

burden: 4,200 hours. 

Periodic Reporting: 

Estimated number of respondents: 

2,100. 

Estimated frequency of responses: 1. 

Estimated average annual burden per 

response: 15 minutes (0.25 hours). 

Estimated total annual reporting 

burden: 525 hours. 

PIN Labeling: 

Estimated number of respondents: 

2,100. 

Estimated frequency of responses: 

varies*. 

* The IRS anticipates that 1 

manufacturer may have multiple 

products that qualify and will be 

labeled. For calculation purposes, the 

IRS is estimating that 1 manufacturer 

could have 2,000 products that qualify. 

Estimated average annual burden per 

response: 15 minutes (0.25 hours). 

Estimated total annual reporting 

burden: 1,050,000 hours. 

Appeals: 

Estimated number of respondents: 21. 


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Federal Register / Vol. 89, No. 207 / Friday, October 25, 2024 / Proposed Rules 85111 

Estimated frequency of responses: 1. 

Estimated average annual burden per 

response: 1 hour. 

Estimated total annual reporting 

burden: 21 hours. 

The collections of information 

contained in this notice of proposed 

rulemaking have been submitted to the 

Office of Management and Budget for 

review in accordance with the 

Paperwork Reduction Act under OMB 

Control Number 1545–NEW. 

Commenters are strongly encouraged to 

submit public comments electronically. 

Written comments and 

recommendations for the proposed 

information collection should be sent to 

https://www.reginfo.gov/public/do/ 

PRAMain, with copies to the IRS. Find 

this particular information collection by 

selecting ‘‘Currently under Review— 

Open for Public Comments,’’ and then 

by using the search function. Submit 

electronic submissions for the proposed 

information collection to the IRS via 

email at pra.comments@irs.gov (indicate 

REG–118264–23 on the Subject line). 

Comments on the collection of 

information must be received by 

December 24, 2024. Comments are 

specifically requested concerning: 

whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the IRS, 

including whether the information will 

have practical utility; the accuracy of 

the estimated burden associated with 

the proposed collection of information; 

how the quality, utility, and clarity of 

the information to be collected may be 

enhanced; how the burden of complying 

with the proposed collection of 

information may be minimized, 

including through the application of 

automated collection techniques or 

other forms of information technology; 

and estimates of capital or start-up costs 

and costs of operation, maintenance, 

and purchase of services to provide 

information. 

III. Regulatory Flexibility Act 

Pursuant to the Regulatory Flexibility 

Act (5 U.S.C. chapter 6) (RFA), the 

Secretary hereby certifies that the 

proposed regulations will not have a 

significant economic impact on a 

substantial number of small entities 

within the meaning of section 601(6) of 

the RFA. Pursuant to section 7805(f), 

this notice of proposed rulemaking has 

been submitted to the Chief Counsel for 

the Office of Advocacy of the Small 

Business Administration for comment 

on their impact on small business. 

The proposed regulations would 

affect QMs of specified property and 

eligible taxpayers who place such 

property in service during a taxable 

year. The Treasury Department and the 

IRS estimate the number of QMs to be 

2,100. Data are not readily available on 

the number of small entities among the 

QMs, but it is likely that a substantial 

number may be affected. Although a 

substantial number of small entities may 

be affected, the economic impact of the 

rule is not expected to be significant. 

Any burden imposed in the proposed 

regulations on a manufacturer that 

wants to register as a QM, and any 

subsequent burden of assigning a PIN, 

labeling the specified property, and 

making periodic written reports to the 

IRS, would be voluntarily assumed by 

such QM, as manufacturers of specified 

property are not required to register as 

QMs under section 25C. Section 25C 

provides an indirect financial benefit to 

manufacturers who choose to register as 

QMs in the form of credits available to 

eligible taxpayers that subsidize the 

purchase of specified property 

manufactured by the QMs. The different 

credit amounts allowed under section 

25C for different types of specified 

property allow manufacturers 

considering whether to register as QMs 

to make an informed decision regarding 

the potential financial benefit in doing 

so. The proposed regulations also 

provide flexibility for QMs in meeting 

the previously described burdens. 

Accordingly, the Secretary certifies that 

the proposed regulations will not have 

a significant economic impact on a 

substantial number of small entities. 

The Treasury Department and the IRS 

request comments that provide data, 

other evidence, or models that provide 

insight on this issue. 

IV. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies assess anticipated costs 

and benefits and take certain other 

actions before issuing a final rule that 

includes any Federal mandate that may 

result in expenditures in any one year 

by a State, local, or Tribal government, 

in the aggregate, or by the private sector, 

of $100 million in 1995 dollars, updated 

annually for inflation. In 2023, that 

threshold is approximately $198 

million. This rule does not include any 

Federal mandate that may result in 

expenditures by State, local, or Tribal 

governments, or by the private sector in 

excess of that threshold. 

V. Executive Order 13132: Federalism 

Executive Order 13132 (Federalism) 

prohibits an agency (to the extent 

practicable and permitted by law) from 

promulgating any regulation that has 

federalism implications, unless the 

agency meets the consultation and 

funding requirements of section 6 of the 

Executive Order, if the rule either 

imposes substantial, direct compliance 

costs on State and local governments, 

and is not required by statute, or 

preempts State law. This proposed rule 

does not have federalism implications 

and does not impose substantial direct 

compliance costs on State and local 

governments or preempt State law 

within the meaning of the Executive 

Order. 

Comments and Requests for a Public 

Hearing 

Before the proposed regulations are 

adopted as final regulations, 

consideration will be given to any 

comments that are submitted timely to 

the IRS as prescribed in this preamble 

under the ADDRESSES heading. The 

Treasury Department and the IRS 

request comments on all aspects of the 

proposed regulations, including their 

economic impact and any alternative 

approaches that should be considered 

during the rulemaking process. In 

addition, the Treasury Department and 

the IRS request comments on the 

specific issues noted in the preamble to 

the proposed regulations. Any 

comments submitted, whether 

electronically or on paper, will be made 

available at https://www.regulations.gov 

or upon request. 

A public hearing has been scheduled 

for January 21, 2025, beginning at 10 

a.m. ET, in the Auditorium at the 

Internal Revenue Building, 1111 

Constitution Avenue NW, Washington, 

DC. Due to building security 

procedures, visitors must enter at the 

Constitution Avenue entrance. In 

addition, all visitors must present photo 

identification to enter the building. 

Because of access restrictions, visitors 

will not be admitted beyond the 

immediate entrance area more than 30 

minutes before the hearing starts. 

Participants may alternatively attend the 

public hearing by telephone. 

The rules of 26 CFR 601.601(a)(3) 

apply to the hearing. Persons who want 

to present oral comments at the hearing 

must submit an outline of the topics to 

be discussed and the time to be devoted 

to each topic by December 24, 2024. A 

period of 10 minutes will be allotted to 

each person for making comments. An 

agenda showing the scheduling of the 

speakers will be prepared after the 

deadline for receiving outlines has 

passed. Copies of the agenda will be 

available free of charge at the hearing. 

If no outlines of topics to be discussed 

at the hearing are received by December 

24, 2024, the public hearing will be 

cancelled. If the public hearing is 

cancelled, a notice of cancellation of the 


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85112 Federal Register / Vol. 89, No. 207 / Friday, October 25, 2024 / Proposed Rules 

public hearing will be published in the 

Federal Register. 

Individuals who want to testify in 

person at the public hearing must send 

an email to publichearings@irs.gov to 

have your name added to the building 

access list. The subject line of the email 

must contain the regulation number 

REG–118264–23 and the language 

TESTIFY in Person. For example, the 

subject line may say: Request to 

TESTIFY in Person at Hearing for REG– 

118264–23. 

Individuals who want to testify by 

telephone at the public hearing must 

send an email to publichearings@irs.gov 

to receive the telephone number and 

access code for the hearing. The subject 

line of the email must contain the 

regulation number REG–118264–23 and 

the language TESTIFY Telephonically. 

For example, the subject line may say: 

Request to TESTIFY Telephonically at 

Hearing for REG–118264–23. 

Individuals who want to attend the 

public hearing in person without 

testifying must also send an email to 

publichearings@irs.gov to have your 

name added to the building access list. 

The subject line of the email must 

contain the regulation number REG– 

118264–23 and the language ATTEND 

In Person. For example, the subject line 

may say: Request to ATTEND Hearing in 

Person for REG–118264–23. Requests to 

attend the public hearing must be 

received by 5 p.m. ET on January 17, 

2025. 

Individuals who want to attend the 

public hearing by telephone without 

testifying must also send an email to 

publichearings@irs.gov to receive the 

telephone number and access code for 

the hearing. The subject line of the 

email must contain the regulation 

number REG–118264–23 and the 

language ATTEND Hearing 

Telephonically. For example, the 

subject line may say: Request to 

ATTEND Hearing Telephonically for 

REG–118264–23. Requests to attend the 

public hearing must be received by 5 

p.m. ET on January 17, 2025. 

Hearings will be made accessible to 

people with disabilities. To request 

special assistance during a hearing 

please contact the Publications and 

Regulations Branch of the Office of 

Associate Chief Counsel (Procedure and 

Administration) by sending an email to 

publichearings@irs.gov (preferred) or by 

telephone at (202) 317–6901 (not a tollfree number) by at least January 16, 

2025. 

Drafting Information 

The principal author of the proposed 

regulations is the Office of Associate 

Chief Counsel (Passthroughs & Special 

Industries). However, other personnel 

from the Treasury Department and the 

IRS participated in the development of 

the proposed regulations. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Proposed Amendments to the 

Regulations 

Accordingly, the Treasury Department 

and the IRS propose to amend 26 CFR 

part 1 as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 is amended by adding entries 

in numerical order for §§ 1.25C–1 

through 1.25C–4 to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

* * * * * 

Section 1.25C–1 also issued under 26 

U.S.C. 25C(b)(6)(B) and (h)(3). 

Section 1.25C–2 also issued under 26 

U.S.C. 25C(b)(6)(B), (f)(1), and (h)(3). 

Section 1.25C–3 also issued under 26 

U.S.C. 25C(h)(3). 

Section 1.25C–4 also issued under 26 

U.S.C. 25C(h)(3). 

* * * * * 

■ Par. 2. Sections 1.25C–0 through 

1.25C–4 are added to read as follows: 

Sec. 

* * * * * 

1.25C–0 Table of contents. 

1.25C–1 Credit for energy efficient home 

improvements. 

1.25C–2 General rules. 

1.25C–3 Special rules. 

1.25C–4 Qualified Product Identification 

Number Requirements for Specified 

Property Placed in Service After 

December 31, 2024. 

§ 1.25C–0 Table of contents. 

This section lists the major captions 

contained in §§ 1.25C–1 through 1.25C– 

4. 

§ 1.25C–1 Credit for Energy Efficient Home 

Improvements. 

(a) In general. 

(b) Definitions. 

(1) Building envelope component. 

(2) Code. 

(3) Consortium for Energy Efficiency (CEE). 

(4) Dwelling unit. 

(5) Enabled property. 

(6) Enabling property. 

(7) Energy efficient building envelope 

component. 

(8) Energy Star. 

(9) Guidance. 

(10) Home energy audit. 

(11) International Energy Conservation 

Code standard. 

(12) IRS. 

(13) Originally placed in service; Original 

use. 

(14) Paid or incurred. 

(15) Placed in service. 

(16) Qualified energy efficiency 

improvements. 

(17) Qualified energy property. 

(18) Qualified manufacturer. 

(19) Qualified product identification 

number (PIN). 

(20) Residential energy property 

expenditures. 

(21) Secretary. 

(22) Section 25C credit. 

(23) Section 25C property. 

(24) Section 25C regulations. 

(25) Specified property. 

(c) Applicability date. 

§ 1.25C–2 General Rules. 

(a) General rule. 

(b) Limitations. 

(1) General limitation. 

(2) Limitation for qualified energy 

property. 

(3) Limitation for exterior windows and 

skylights. 

(4) Limitation for exterior doors. 

(5) Limitation for home energy audits. 

(c) Examples. 

(d) When expenditures are treated as made. 

(e) Expenditures in connection with 

reconstruction or addition; Substantiation. 

(1) In general. 

(2) New construction. 

(3) Substantiation. 

(f) Rules for joint occupancy, tenantstockholders in cooperative housing, and 

members of a condominium management 

association. 

(1) Joint occupancy. 

(2) Tenant-stockholders in cooperative 

housing corporations. 

(3) Condominium management association. 

(g) Allocation for nonbusiness purposes in 

certain cases. 

(h) Applicability date. 

§ 1.25C–3 Special Rules. 

(a) In general. 

(b) Enabling property; Taxable year of 

installation. 

(1) In general. 

(2) Safe harbor. 

(3) Example. 

(c) Applicability date. 

§ 1.25C–4 Qualified Product Identification 

Number Requirements for Specified 

Property Placed in Service After 

December 31, 2024. 

(a) In general. 

(b) Qualified manufacturer registration and 

agreement. 

(1) General rule. 

(2) Manufacturers that can register to 

become qualified manufacturers. 

(3) Validation and administrative review of 

agreements. 

(4) Revocation and suspension. 

(5) Voluntary discontinuance. 

(c) PIN assignment requirement. 

(d) PIN Labeling requirement; Time to 

provide PIN to taxpayers. 

(1) In general. 

(2) Time to furnish PINs to taxpayers. 

(e) Periodic written report requirement. 

(1) In general. 

(2) Increased frequency of filing written 

reports. 

(3) Updating and rescinding written 

reports. 


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(f) Applicability date. 

§ 1.25C–1 Credit for energy efficient home 

improvements. 

(a) In general. With respect to 

property placed in service after 

December 31, 2022, and subject to the 

requirements and limitations set forth in 

section 25C of the Internal Revenue 

Code (Code) as implemented by the 

section 25C regulations (as defined in 

paragraph (b)(24) of this section), 

section 25C of the Code allows as a 

credit against the tax imposed by 

chapter 1 of the Code for the taxable 

year 30 percent of certain amounts paid 

or incurred by an individual taxpayer 

(taxpayer) during such taxable year for 

qualified energy efficiency 

improvements (as defined in paragraph 

(b)(16) of this section) installed during 

such taxable year, residential energy 

property expenditures (as defined in 

paragraph (b)(20) of this section) 

(together, section 25C property), and 

home energy audits (as defined in 

paragraph (b)(10) of this section). 

Paragraph (b) of this section provides 

definitions that apply for purposes of 

the section 25C credit and the section 

25C regulations. Section 1.25C–2 

provides general rules and limitations 

regarding the section 25C credit. Section 

1.25C–3 provides special rules regarding 

the section 25C credit. Section 1.25C–4 

provides rules regarding the qualified 

product identification number (PIN) 

requirements under section 25C(h) for 

specified property placed in service 

after December 31, 2024, and other 

requirements that manufacturers must 

satisfy in order for their products to 

become eligible for the section 25C 

credit. 

(b) Definitions. The definitions in this 

paragraph (b) solely apply for purposes 

of section 25C of the Code and the 

section 25C regulations. 

(1) Building envelope component. The 

term building envelope component 

means: 

(i) Any insulation material or system, 

including air sealing material or system 

that is specifically and primarily 

designed to reduce the heat loss or gain 

of a dwelling unit when installed in or 

on such dwelling unit; 

(ii) Exterior windows, including 

skylights; and 

(iii) Exterior doors. 

(2) Code. The term Code means the 

Internal Revenue Code. 

(3) Consortium for Energy Efficiency 

(CEE). The term Consortium for Energy 

Efficiency or CEE refers to the nonprofit 

consortium, consisting primarily of 

utility efficiency program administrators 

across the United States and Canada, 

that determines energy performance 

specification Tiers for HVAC and water 

heating equipment, including the 

geographic region where each 

specification is applicable. 

(4) Dwelling unit. The term dwelling 

unit includes: 

(i) A house, apartment, condominium 

unit owned by a taxpayer who is a 

member of a condominium management 

association with respect to such unit, 

mobile home, houseboat, or similar 

property used to provide living 

accommodations in a building or 

structure, but not structures or other 

property appurtenant to such dwelling 

unit and not that portion of a unit that 

is used on a transient basis or 

exclusively as a hotel, motel, inn, or 

similar establishment, 

(ii) A manufactured home that 

conforms to the Federal Manufactured 

Home Construction and Safety 

Standards (24 CFR part 3280), and 

(iii) Any property designated as a 

dwelling unit in guidance. 

(5) Enabled property. The term 

enabled property means: 

(i) Qualified energy efficiency 

improvements described in section 

25C(c)(1) through (4), or 

(ii) Qualified energy property 

described in section 25C(d)(2)(A) 

through (C) for which a section 25C 

credit is allowed for expenditures with 

respect to such property, and 

(iii) For which an enabling property 

(as defined in paragraph (b)(6) of this 

section) enables the installation and use. 

(6) Enabling property. The term 

enabling property means property 

described in section 25C(d)(2)(D) that is 

any improvement to, or replacement of, 

a panelboard, sub-panelboard, branch 

circuits, or feeders that: 

(i) Is installed in a manner consistent 

with the National Electric Code, 

(ii) Has a load capacity of not less 

than 200 amps, 

(iii) Is installed in conjunction with 

any qualified energy efficiency 

improvements described in section 

25C(c)(1) through (4), or any qualified 

energy property described in section 

25C(d)(2)(A) through (C) for which a 

section 25C credit is allowed for 

expenditures with respect to such 

property, and 

(iv) Enables the installation and use of 

any enabled property, as defined in 

paragraph (b)(5) of this section. 

(7) Energy efficient building envelope 

component. The term energy efficient 

building envelope component means a 

building envelope component, as 

defined in section 25C(c)(3), that meets: 

(i) In the case of an exterior window 

or skylight, Energy Star certified most 

efficient certification requirements; 

(ii) In the case of an exterior door, 

applicable Energy Star certified 

requirements; and 

(iii) In the case of any other building 

envelope component, the prescriptive 

criteria for such component established 

by the most recent International Energy 

Conservation Code standard in effect as 

of the beginning of the calendar year (as 

determined by the U.S. Secretary of 

Energy) that is 2 years prior to the 

calendar year in which such component 

is placed in service. 

(8) Energy Star. The term Energy Star 

refers to the voluntary labeling and 

rating program administered by the U.S. 

Environmental Protection Agency that 

determines the applicable climate zones 

for exterior windows, skylights, and 

doors. 

(9) Guidance. The term guidance 

means guidance published in the 

Internal Revenue Bulletin. See § 601.601 

of this chapter. 

(10) Home energy audit. The term 

home energy audit means an inspection 

and written report with respect to a 

dwelling unit located in the United 

States and owned or used by the 

taxpayer as the taxpayer’s principal 

residence (within the meaning of 

section 121 of the Code) that: 

(i) Identifies the most significant and 

cost-effective energy efficiency 

improvements with respect to such 

dwelling unit, including an estimate of 

the energy and cost savings with respect 

to each such improvement, and 

(ii) Is conducted and prepared by a 

home energy auditor that meets the 

certification or other requirements 

specified in the section 25C regulations 

or guidance. 

(11) International Energy 

Conservation Code standard. The term 

International Energy Conservation Code 

standard refers to the model building 

codes developed by the International 

Code Council that sets minimum 

conservation requirements for new 

buildings in the United States. 

(12) IRS. The term IRS means the 

Internal Revenue Service. 

(13) Originally placed in service; 

Original use. The term originally placed 

in service refers to the first time the 

property is placed in service, whether or 

not by the taxpayer. The term original 

use refers to the first use to which the 

property is put or will be put, whether 

or not that use corresponds or will 

correspond to the use of the property by 

the taxpayer. 

(14) Paid or incurred. The term paid 

or incurred has the same meaning as 

provided in section 7701(a)(25) of the 

Code. 

(15) Placed in service. The term 

placed in service refers to the date on 


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which property that is eligible for the 

section 25C credit is placed in a 

condition or state of readiness and 

availability for its specifically assigned 

function. 

(16) Qualified energy efficiency 

improvements. The term qualified 

energy efficiency improvements means 

any energy efficient building envelope 

component, if: 

(i) Such component is installed in or 

on a dwelling unit located in the United 

States and owned and used by the 

taxpayer as the taxpayer’s principal 

residence (within the meaning of 

section 121); 

(ii) The original use of such 

component commences with the 

taxpayer; and 

(iii) Such component reasonably can 

be expected to remain in use for at least 

5 years. 

(17) Qualified energy property. The 

term qualified energy property means 

any of the following: 

(i) Any of the following that meet or 

exceed the highest efficiency tier (not 

including any advanced tier) established 

by the Consortium for Energy Efficiency 

(CEE) that is in effect as of the beginning 

of the calendar year in which the 

property is placed in service: 

(A) An electric or natural gas heat 

pump water heater; 

(B) An electric or natural gas heat 

pump; 

(C) A central air conditioner; 

(D) A natural gas, propane, or oil 

water heater; 

(E) A natural gas, propane, or oil 

furnace or hot water boiler; 

(ii) A biomass stove or boiler that: 

(A) Uses the burning of biomass fuel 

to heat a dwelling unit located in the 

United States and used as a residence by 

the taxpayer, or to heat water for use in 

such a dwelling unit, and 

(B) Has a thermal efficiency rating of 

at least 75 percent (measured by the 

higher heating value of the fuel, as 

determined by the U.S. Environmental 

Protection Agency for wood stoves). 

(iii) Any oil furnace or hot water 

boiler that is placed in service after 

December 31, 2022, and before January 

1, 2027, and: 

(A) Meets or exceeds 2021 Energy Star 

certified efficiency criteria, and 

(B) Is rated by the manufacturer for 

use with fuel blends at least 20 percent 

of the volume of which consists of an 

eligible fuel, as defined in section 

25C(d)(3). 

(iv) Any oil furnace or hot water 

boiler that is placed in service after 

December 31, 2026, and: 

(A) Achieves an annual fuel 

utilization efficiency rate of not less 

than 90, and 

(B) Is rated by the manufacturer for 

use with fuel blends at least 50 percent 

of the volume of which consists of an 

eligible fuel, as defined in section 

25C(d)(3). 

(v) Any enabling property. 

(18) Qualified manufacturer. The term 

qualified manufacturer means any 

manufacturer of specified property that 

has entered into an agreement with the 

IRS as described in section 25C(h)(3) 

and § 1.25C–4. 

(19) Qualified product identification 

number (PIN). The term qualified 

product identification number or PIN 

means, with respect to any item of 

specified property, the product 

identification number assigned to such 

item by the qualified manufacturer 

pursuant to the methodology referred to 

in section 25C(h)(3) and described in 

§ 1.25C–4. 

(20) Residential energy property 

expenditures. The term residential 

energy property expenditures means 

expenditures, including expenditures 

for labor costs properly allocable to the 

onsite preparation, assembly, or original 

installation of the property, made by the 

taxpayer for qualified energy property 

that is: 

(i) Installed on or in connection with 

a dwelling unit located in the United 

States and used as a residence by the 

taxpayer; and 

(ii) Originally placed in service by the 

taxpayer. 

(21) Secretary. The term Secretary 

means the Secretary of the Treasury or 

her delegate. 

(22) Section 25C credit. The term 

section 25C credit means the credit 

allowable to a taxpayer for the taxable 

year under section 25C(a) and the 

section 25C regulations. 

(23) Section 25C property. The term 

section 25C property means qualified 

energy efficiency improvements as 

defined under section 25C(c) and 

residential energy property 

expenditures as defined under section 

25C(d). 

(24) Section 25C regulations. The term 

section 25C regulations means §§ 1.25C– 

1 through 1.25C–4. 

(25) Specified property. The term 

specified property means qualified 

energy property described in section 

25C(d)(2) and paragraph (b)(17) of this 

section, and exterior windows 

(including skylights) and exterior doors 

described in section 25C(c)(3)(B) and 

(C). Any property placed in service 

outside of the United States is not 

specified property. 

(c) Applicability date. This section 

applies to taxable years ending after 

[DATE OF PUBLICATION OF FINAL 

REGULATIONS IN THE FEDERAL 

REGISTER]. 

§ 1.25C–2 General rules. 

(a) General rule. Subject to the 

limitations in paragraph (b) of this 

section, the rules in paragraphs (d) 

through (h) of this section, and the rules 

in §§ 1.25C–3 and 1.25C–4, with respect 

to property placed in service after 

December 31, 2022, the section 25C 

credit for the taxable year is an amount 

equal to 30 percent of the sum of: 

(1) The amount paid or incurred by 

the taxpayer for qualified energy 

efficiency improvements installed 

during such taxable year; 

(2) The amount of the residential 

energy property expenditures paid or 

incurred by the taxpayer during such 

taxable year; and 

(3) The amount paid or incurred by 

the taxpayer during such taxable year 

for home energy audits. 

(b) Limitations—(1) General 

limitation. Except as provided in 

paragraph (b)(2)(ii) of this section, the 

section 25C credit allowed with respect 

to any taxpayer for any taxable year is 

limited to $1,200. 

(2) Limitation for qualified energy 

property—(i) In general. Except as 

provided in paragraph (b)(2)(ii) of this 

section and in addition to the other 

limitations provided in this paragraph 

(b), the credit allowed under section 

25C(a)(2) is limited to $600 with respect 

to any taxpayer for any taxable year 

with respect to any item of qualified 

energy property. 

(ii) Limitation for heat pump water 

heaters, heat pumps, biomass stoves, 

and biomass boilers. Notwithstanding 

the general limitation described in 

paragraph (b)(1) of this section and the 

limitation for qualified energy property 

in paragraph (b)(2)(i) of this section, the 

credit allowed under section 25C(a)(2) 

with respect to any taxpayer for any 

taxable year is limited to $2,000 in the 

aggregate with respect to amounts paid 

or incurred for the following property: 

(A) An electric or natural gas heat 

pump water heater described in section 

25C(d)(2)(A)(i); 

(B) An electric or natural gas heat 

pump described in section 

25C(d)(2)(A)(ii); and 

(C) A biomass stove or boiler 

described in section 25C(d)(2)(B). 

(3) Limitation for exterior windows 

and skylights. In addition to the general 

limitation in paragraph (b)(1) of this 

section and the other limitations 

provided in this paragraph (b), the 

credit allowed under section 25C(a)(1) 

with respect to any taxpayer for any 

taxable year is limited to $600 in the 


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aggregate with respect to all exterior 

windows and skylights. 

(4) Limitation for exterior doors. In 

addition to the general limitation in 

paragraph (b)(1) of this section and the 

other limitations provided in this 

paragraph (b), the credit allowed under 

section 25C(a)(1) with respect to any 

taxpayer for any taxable year is limited 

to $250 in the case of any exterior door 

and $500 in the aggregate with respect 

to all exterior doors. 

(5) Limitation for home energy audits. 

In addition to the general limitation in 

paragraph (b)(1) of this section and the 

other limitations provided in this 

paragraph (b), the credit allowed under 

section 25C(a)(3) for a home energy 

audit is limited to $150. 

(c) Examples. The following examples 

demonstrate the rules of paragraphs (a) 

and (b) of this section. 

(1) Example 1. In taxable year 2024, 

Taxpayer A paid $600 for a home energy 

audit of A’s principal residence and 

purchased three exterior windows at a 

cost of $800 per window. Before 

applying the limitations of this section, 

the credit amount under section 

25C(a)(3) for the home energy audit 

would be $180 ($600 × 0.3), and the 

credit amount under section 25C(a)(1) 

for the three exterior windows would be 

$720 ($800 × 3 × 0.3). The $180 amount 

is limited to $150 under paragraph (b)(5) 

of this section. The $720 amount is 

limited to $600 in the aggregate with 

respect to all exterior windows under 

paragraph (b)(3) of this section. 

Therefore, the total section 25C credit 

allowable to A, assuming A meets all 

applicable requirements of section 25C, 

is limited to $750 ($150 for the home 

energy audit + $600 for the three 

exterior windows) for taxable year 2024. 

(2) Example 2. In taxable year 2024, 

Taxpayer B paid $800 and $900, 

respectively, for two exterior doors, and 

$2,500 for a natural gas hot water boiler. 

Before applying the limitations of this 

section, the credit amount under section 

25C(a)(1) for the two exterior doors 

would be $510 (($800 + $900) × 0.3), 

and the credit amount under section 

25C(a)(2) for the natural gas hot water 

boiler would be $750 ($2,500 × 0.3). The 

$510 amount is limited to $490 ($240 + 

$250) under paragraph (b)(4) of this 

section, allows $240 for the $800 door 

($800 × 0.3) but limits the amount for 

the $900 door ($900 × 0.3 = $270) to 

$250. The $750 amount is limited to 

$600 for an item of qualified energy 

property under paragraph (b)(2)(i) of 

this section. The $2,000 limit under 

paragraph (b)(2)(ii) of this section does 

not apply to natural gas hot water 

boilers. Therefore, the total section 25C 

credit allowable to B, assuming B meets 

all applicable requirements of section 

25C, is limited to $1,090 ($490 for the 

exterior doors + $600 for the natural gas 

hot water boiler) for taxable year 2024. 

(d) When expenditures are treated as 

made. Pursuant to sections 25C(f)(1) and 

25D(e)(8)(A), an expenditure for an item 

of property is treated as made when the 

original installation of the item is 

completed. 

(e) Expenditures in connection with 

reconstruction or addition; 

Substantiation—(1) In general. Any 

amount paid or incurred by a taxpayer 

for section 25C property in connection 

with the reconstruction of or an 

addition to a dwelling unit will be 

treated as paid or incurred when the 

taxpayer’s use of the reconstructed or 

post-addition dwelling unit begins. 

(2) New construction. Any amount 

paid or incurred by a taxpayer in 

connection with the original 

construction of a dwelling unit is not an 

expenditure eligible for the section 25C 

credit. 

(3) Substantiation. Taxpayers must 

maintain records that itemize the 

amount paid or incurred for each item 

of section 25C property in connection 

with the reconstruction or addition 

described paragraph (e)(1) of this 

section. Cost segregation studies may 

not be used as substantiation unless the 

taxpayer limits the amount claimed as a 

section 25C credit to the amount paid or 

incurred by the contractor or 

subcontractor for the section 25C 

property added to the dwelling unit as 

part of such reconstruction or addition. 

(f) Rules for joint occupancy, tenantstockholders in cooperative housing, 

and members of a condominium 

management association—(1) Joint 

occupancy. Pursuant to section 25C(f)(1) 

and section 25D(e)(4), in the case of any 

dwelling unit that is jointly occupied 

and used during the calendar year as a 

principal residence by two or more 

taxpayers, the expenditures allocated to 

any taxpayer for the taxable year in 

which such calendar year ends is the 

amount paid or incurred by such 

taxpayer for section 25C property with 

respect to such dwelling unit during 

such calendar year. 

(2) Tenant-stockholders in 

cooperative housing corporations—(i) In 

general. Pursuant to sections 25C(f)(1) 

and 25D(e)(5), in the case of an taxpayer 

who is an individual tenant-stockholder 

(as defined in section 216 of the Code) 

in a cooperative housing corporation (as 

defined in section 216), for purposes of 

the section 25C credit, such taxpayer 

will be treated as having paid or 

incurred the taxpayer’s proportionate 

share (as defined in section 216(b)(3)) of 

any amounts paid or incurred by such 

corporation for section 25C property. 

Tenant-stockholders that are not 

individuals cannot claim the section 

25C credit. 

(ii) Example. X, a cooperative housing 

corporation, has 10 tenant-stockholders 

who are all individuals. Each tenantstockholder owns 1 share of stock. In 

taxable year 2024, X pays $2,000 for a 

new exterior door for the building and 

has no other expenditures eligible for 

the section 25C credit. Pursuant to 

paragraph (f)(2)(i) of this section, each 

tenant-stockholder will be treated as 

having paid the tenant-stockholder’s 

proportionate share of the expenditure 

for the exterior door. Under section 

216(b)(3), the proportionate share is the 

proportion that the stock of the 

cooperative housing corporation owned 

by the tenant-stockholder is to the total 

outstanding stock of the corporation 

(including any stock held by the 

corporation). Each tenant-stockholder 

will be treated as having paid $200 

($2,000 × (1 share of stock per tenantstockholder/10 total shares of stock)) for 

the exterior door. Assuming all other 

applicable requirements of section 25C 

are met, for taxable year 2024, each 

tenant-stockholder is entitled to a $60 

($200 × 0.3) section 25C credit with 

respect to the exterior door. 

(3) Condominium management 

association—(i) In general. Pursuant to 

sections 25C(f)(1) and 25D(e)(6), in the 

case of a taxpayer who is a member of 

a condominium management 

association with respect to a 

condominium dwelling unit that the 

taxpayer owns, such taxpayer will be 

treated as having paid or incurred the 

taxpayer’s proportionate share of any 

expenditures of such association for 

section 25C property. Such 

proportionate share may be determined 

using any reasonable method 

determined by the condominium 

management association’s governing 

body. Unless otherwise provided in 

guidance, reasonable methods to 

determine the proportionate share of 

such association expenditures include, 

but are not limited to, looking to State 

law to determine the proportionate 

share of association expenditures, 

determining the proportionate share 

based on the association’s 

organizational documents as they relate 

to each owner’s responsibility for 

association expenditures, and 

determining the proportionate share 

based on the percentages of total square 

footage of the condominium’s common 

elements for each individual owner. The 

governing body must maintain a 

consistent method for determining the 

proportionate share of association 

expenditures, and should maintain 


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85116 Federal Register / Vol. 89, No. 207 / Friday, October 25, 2024 / Proposed Rules 

records to document such 

determinations. The governing body 

also must develop reasonable 

procedures to notify individuals of their 

allocable share of the association 

expenditures, and of the PINs of the 

specified property. Nothing in this 

paragraph negates the individual 

limitations described in this section. 

(ii) Condominium management 

association. For purposes of this 

paragraph (f)(3), the term condominium 

management association means an 

organization that meets the 

requirements of section 528(c)(1) and (2) 

of the Code with respect to a 

condominium project substantially all 

of the units of which are used as 

residences. 

(iii) Example. Y, a condominium, has 

50 resident owners. In taxable year 

2024, Y pays $2,000 for a new exterior 

door for the building and has no other 

expenditures eligible for the section 25C 

credit. The organizational documents 

for Y include a Declaration that lists 

each resident’s percentage interest in 

common elements based on the 

proportion of square footage of each 

dwelling unit to the total square footage 

of all dwelling units in the building. 

The Y Declaration shows that Z, an 

individual dwelling unit owner in Y, 

has a 10 percent interest in the common 

elements. Pursuant to paragraphs 

(f)(3)(i) and (ii) of this section, the Y 

Board of Directors can determine that 

Z’s proportionate share of the 

expenditure for the exterior door is $200 

($2,000 × 0.1). Z will be treated as 

having paid $200 in taxable year 2024 

for the exterior door for purposes of 

section 25C. Assuming all other 

applicable requirements of section 25C 

have been met, Z’s section 25C credit for 

taxable year 2024 with respect to the 

exterior door will be $60 ($200 × 0.3). 

(g) Allocation for nonbusiness 

purposes in certain cases. Pursuant to 

sections 25C(f)(1) and 25D(e)(7), if less 

than 80 percent of the use of an item of 

property is for nonbusiness purposes, 

only that portion of the expenditures 

with respect to such item that is 

properly allocable to use for 

nonbusiness purposes can be taken into 

account for purposes of calculating the 

section 25C credit. 

(h) Applicability date. This section 

applies to taxable years ending after 

[DATE OF PUBLICATION OF FINAL 

REGULATIONS IN THE FEDERAL 

REGISTER]. 

§ 1.25C–3 Special rules. 

(a) In general. This section provides 

special rules regarding the section 25C 

credit. Except as otherwise provided in 

this section, the other rules of the 

section 25C regulations continue to 

apply. 

(b) Enabling property; Taxable year of 

installation—(1) In general. Except as 

provided in paragraph (b)(2) of this 

section, enabling property is considered 

to have been installed in conjunction 

with enabled property if it was installed 

in the same taxable year as the enabled 

property was installed. 

(2) Safe harbor. If enabling property 

and enabled property are installed in 

consecutive taxable years, the taxpayer 

may treat the enabling property and 

enabled property as installed in the 

same taxable year (deemed taxable 

year), provided that the deemed taxable 

year is the later of the taxable year in 

which the enabling property was 

installed or the enabled property was 

installed. Nothing in this paragraph 

(b)(2) negates the requirement to 

provide a PIN for both the enabling and 

enabled property as required in section 

25C(h), § 1.25C–4(a), or guidance. 

(3) Example. In taxable year 2024, 

Taxpayer C installs a new panelboard in 

his principal residence, and in taxable 

year 2025, C installs a new electric heat 

pump water heater in his principal 

residence. If C chooses to apply the safe 

harbor under paragraph (b)(2) of this 

section, C may treat both the enabling 

property (panelboard) and the enabled 

property (electric heat pump water 

heater) to have been installed in taxable 

year 2025, for purposes of the section 

25C credit. If C chooses not to apply the 

safe harbor under paragraph (b)(2) of 

this section, then the panelboard is 

determined to have been installed in 

taxable year 2024, and the electric heat 

pump water heater is determined to 

have been installed in taxable year 2025, 

for purposes of the section 25C credit. 

Thus, if C chooses not to apply the safe 

harbor under paragraph (b)(2) of this 

section, then C cannot claim the section 

25C credit with respect to the 

panelboard. 

(c) Applicability date. This section 

applies to taxable years ending after 

[DATE OF PUBLICATION OF FINAL 

REGULATIONS IN THE FEDERAL 

REGISTER]. 

§ 1.25C–4 Qualified Product Identification 

Number Requirements for Specified 

Property Placed in Service After December 

31, 2024. 

(a) In general. No section 25C credit 

is allowed with respect to any item of 

specified property placed in service 

after December 31, 2024, unless such 

item is produced by a qualified 

manufacturer and the taxpayer includes 

the PIN of such item on the taxpayer’s 

tax return for the taxable year. 

Paragraph (b) of this section provides 

rules for a manufacturer of specified 

property to meet the requirement under 

section 25C(h)(3) of the Code to register 

with the IRS and enter into an 

agreement with the IRS regarding PINs. 

Paragraph (c) of this section provides 

rules for a manufacturer of specified 

property to meet the requirement under 

section 25C(h)(3)(A) to assign a product 

identification number unique to each 

item of specified property they produce 

(PIN assignment requirement). 

Paragraph (d) of this section provides 

rules for a manufacturer of specified 

property to meet the requirement under 

section 25C(h)(3)(B) to label each such 

item of specified property, and rules 

regarding the timing of providing PINs 

to taxpayers (PIN labeling requirement). 

Paragraph (e) of this section provides 

rules for a manufacturer of specified 

property to meet the requirement under 

section 25C(h)(3)(C) to make periodic 

written reports to the IRS of the PINs 

assigned, including such other 

information as the Secretary may 

require under the section 25C 

regulations with respect to the items of 

specified property (periodic written 

report requirement). 

(b) Qualified manufacturer 

registration and agreement—(1) General 

rule. For a manufacturer of specified 

property to become a qualified 

manufacturer, the manufacturer must, in 

accordance with this paragraph (b) and 

guidance, register with and enter into an 

agreement with the IRS (QM 

Registration Application and 

Agreement), certifying under penalties 

of perjury that the manufacturer will— 

(i) Assign a PIN unique to each item 

of specified property produced by such 

manufacturer, using the methodology 

described in paragraph (c) of this 

section and in guidance; 

(ii) Label each such item of specified 

property with the unique PIN and 

furnish the PIN to the consumer who 

purchases such item, in accordance 

with the rules provided in paragraph (d) 

of this section and in guidance; 

(iii) Make periodic written reports to 

the IRS of the PINs assigned and such 

other information as the Secretary may 

require with respect to such items of 

specified property, in accordance with 

the rules provided in paragraph (e) of 

this section and in guidance; and 

(iv) Provide such other information 

and certifications that the IRS may 

require in guidance, on https://

www.irs.gov, or on the electronic portal 

used by a manufacturer to register as a 

qualified manufacturer or to submit 

periodic written reports. 

(2) Manufacturers that can register to 

become qualified manufacturers—(i) 

General rule. Only a manufacturer 


ddrumheller on DSK120RN23PROD with PROPOSALS1
Federal Register / Vol. 89, No. 207 / Friday, October 25, 2024 / Proposed Rules 85117 

producing specified property at the time 

of registration may register with the IRS 

to become a qualified manufacturer for 

purposes of section 25C. 

(ii) Rule for multiple manufacturers. If 

more than one manufacturer 

participates in the production of the 

same product that is specified property, 

such manufacturers must follow the 

rules provided in guidance to determine 

which among them must register with 

the IRS to become a qualified 

manufacturer with respect to such 

property. 

(3) Validation and administrative 

review of agreements. The IRS will 

validate and may reject a QM 

Registration Application and Agreement 

in accordance with guidance. If the IRS 

rejects a QM Registration Application 

and Agreement, then the manufacturer 

may request administrative review by 

the IRS of such rejection, as provided in 

guidance. Any IRS rejection of a QM 

Registration Application and Agreement 

is not subject to administrative appeal to 

the IRS Independent Office of Appeals. 

(4) Revocation and suspension. The 

IRS may revoke or suspend a 

manufacturer’s qualified manufacturer 

registration status in the IRS’s sole 

discretion if the IRS concludes that the 

manufacturer is not adhering to the 

terms of its QM Registration Application 

and Agreement. If the IRS revokes or 

suspends a manufacturer’s qualified 

manufacturer registration status, then 

the manufacturer may request 

administrative review by the IRS of the 

IRS’s determination as provided in 

guidance. Any IRS determination 

relating to the revocation or suspension 

of a manufacturer’s qualified 

manufacturer registration status is not 

subject to administrative appeal to the 

IRS Independent Office of Appeals. 

(5) Voluntary discontinuance. A 

qualified manufacturer may voluntarily 

discontinue its qualified manufacturer 

registration status by following the 

procedures provided in guidance. 

(c) PIN assignment requirement. 

Except as provided in guidance, for a 

manufacturer of specified property to be 

a qualified manufacturer, the 

manufacturer must assign a PIN unique 

to each item of specified property it 

produces, in accordance with paragraph 

(b)(1)(i) of this section and using the PIN 

Assignment System and other rules set 

forth in guidance. 

(d) PIN Labeling requirement; Time to 

provide PIN to taxpayers—(1) In 

general. For a manufacturer of specified 

property to be a qualified manufacturer, 

the manufacturer must label each item 

of specified property it produces with a 

PIN unique to such item, in accordance 

with the requirements and rules set 

forth in guidance. Third-party labeling 

systems are not allowed, unless allowed 

by guidance. 

(2) Time to furnish PINs to taxpayers. 

Qualified manufacturers must furnish 

PINs to taxpayers within the time 

frames set forth in guidance. 

(e) Periodic written report 

requirement—(1) In general. For a 

manufacturer of specified property to be 

a qualified manufacturer, the 

manufacturer must submit periodic 

written reports to the IRS. A qualified 

manufacturer must follow the rules set 

forth in guidance regarding the required 

contents of the written reports, the 

attestation included with the written 

reports, the required timing and 

frequency with which to file the written 

reports, and the format of the written 

reports. 

(2) Increased frequency of filing 

written reports. Notwithstanding 

guidance regarding the timing and 

frequency in which to file written 

reports, qualified manufacturers may 

submit written reports more frequently 

than required, provided that the other 

requirements relating to the written 

report are satisfied. 

(3) Updating and rescinding written 

reports. If a qualified manufacturer 

wants to update or rescind certain 

information on a written report for a 

scrivener’s error or missing PIN, the 

qualified manufacturer must follow the 

rules provided in guidance. 

(f) Applicability date. This section 

applies to taxable years ending after 

[INSERT DATE OF PUBLICATION OF 

FINAL REGULATIONS IN THE 

FEDERAL REGISTER]. 

Douglas W. O’Donnell, 

Deputy Commissioner. 

[FR Doc. 2024–24110 Filed 10–24–24; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2024–0198] 

RIN 1625–AA09 

Drawbridge Operation Regulation; 

Atlantic Intracoastal Waterway, 

Beaufort, SC 

AGENCY: Coast Guard, Department of 

Homeland Security (DHS). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Coast Guard proposes to 

modify the operating schedule that 

governs the Lady’s Island (Woods 

Memorial) Bridge across the Atlantic 

Intracoastal Waterway (AICW) (Beaufort 

River), mile 536.0, at Beaufort, SC. 

South Carolina Department of 

Transportation (SCDOT) has requested 

the Coast Guard consider changing the 

operating schedule to remove the 

seasonal operating schedule. This 

proposed action is intended to reduce 

vehicular traffic congestion and provide 

a more consistent operating schedule for 

the bridge. We invite your comments on 

this proposed rulemaking. 

DATES: Comments and related material 

must reach the Coast Guard on or before 

December 9, 2024. 

ADDRESSES: You may submit comments 

identified by docket number USCG– 

2024–0198 using Federal Decision 

Making Portal at https://

www.regulations.gov. 

See the ‘‘Public Participation and 

Request for Comments’’ portion of the 

SUPPLEMENTARY INFORMATION section 

below for instructions on submitting 

comments. This notice of proposed 

rulemaking with its plain-language, 100- 

word-or-less proposed rule summary 

will be available in this same docket. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this proposed 

rule, call or email Ms. Jennifer Zercher, 

Bridge Management Specialist, Seventh 

Coast Guard District; telephone 571– 

607–5951, email Jennifer.N.Zercher@

uscg.mil. 

SUPPLEMENTARY INFORMATION: 

I. Table of Abbreviations 

CFR Code of Federal Regulations 

DHS Department of Homeland Security 

FR Federal Register 

OMB Office of Management and Budget 

NPRM Notice of Proposed Rulemaking 

(Advance, Supplemental) 

§ Section 

U.S.C. United States Code 

SC South Carolina 

TD Temporary Deviation 

AICW Atlantic Intracoastal Waterway 

II. Background, Purpose and Legal 

Basis 

Lady’s Island (Woods Memorial) 

Bridge across the AICW (Beaufort 

River), mile 536.0, at Beaufort, SC, is a 

swing bridge with a 30-foot vertical 

clearance at mean high water in the 

closed position. The normal operating 

schedule for the bridge is found in 33 

CFR 117.911(f). 

On March 20, 2024, the Coast Guard 

published a temporary deviation 

entitled ‘‘Drawbridge Operation 

Regulation; Atlantic Intracoastal 

Waterway, Beaufort, SC’’ in the Federal 

Register (89 FR 19731). That temporary 

deviation, effective from 12:01 a.m. on 


ddrumheller on DSK120RN23PROD with PROPOSALS1