by: Kyle Krenske

On December 2, 2022, the Internal Revenue Service (IRS) issued 2022 draft instructions for Schedules K-2 and K-3 for Partnership’s (Form 1065). The instructions provide an exception from filing Schedules K-2 and K-3 for Partnership’s if the four criteria and notification dates are met. On December 5, 2022, the IRS issued 2022 draft instructions for Schedules K-2 and K-3 for S Corporation’s (Form 1120-S). The instructions provide an exception from filing Schedules K-2 and K-3 for S Corporation’s if the three criteria and notification dates are met. The filing exceptions for tax year 2022 are much different from tax year 2021 as the IRS attempted to address taxpayers and practitioners request for expanded relief and clarity.

On November 2, 2022, the Advisory Council on Historic Preservation (ACHP) published an announcement in the Federal Register which provides an exemption for federal agencies to review the effects of certain EV (electrical vehicle) supply equipment on historic properties. This exemption will be retroactive to October 26, 2022 and was in response to the 2021 executive orders to prioritize clean energy vehicles and the Infrastructure Investment and Jobs Act of 2021. However, this exemption does not apply on Tribal Lands unless there is a written notification to the ACHP from the Tribe agreeing with the use of the exemption.

On November 10, 2022, the IRS issued announcement 2022-23 with updated credit amounts for the renewable energy production tax credit (PTC) for facilities placed in service after December 31, 2021. This announcement reflects changes due to the Inflation Reduction Act (IRA) and replaces the amounts previously published in Notice 2022-20.

On November 14, 2022, the IRS published a notice in the Federal Register requesting comments on Form 8609 and Form 8609-A. No changes have been proposed to the current forms. The written comments deadline is January 13, 2023.

On November 21, 2022, more than 2,500 businesses and organizations from every state in the U.S. have signed a letter by the ACTION Campaign urging Congress to expand availability of the Housing Credit during the last few weeks of year 2022. Two of the critical criteria requested of Congress include Expand Housing Credit authority by 50% (or at a minimum to reinstate the 12.5% cut the Housing Credit suffered in 2022) and enhance the use of Private Activity Bond authority for rental housing production by reducing the threshold from 50% to 25% for bond financing.

On November 30, 2022, the IRS published a notice in the Federal Register which provides guidance on prevailing wage and apprenticeship requirements that allow bonus credit percentages for certain renewable energy provisions from the IRA. The beginning of construction date for certain credits is also addressed. Properties qualify for the 30% renewable energy investment tax credit and the $26 per megawatt-hour PTC if the requirements are met in accordance with the IRA.

by: Kyle Krenske

Minnesota did not have a major tax bill enacted during the regular 2022 legislative session, which ended on May 23, 2022. Two law changes were addresses earlier in the session which included the bonus pay for eligible COVID-19 frontline workers and unemployment taxes for businesses.
The Minnesota Historic Structure Rehabilitation Tax Credit program has sunset and the State Historic Preservation Officer (SHPO) is no longer accepting state Part A applications. This program expired on June 30, 2022 because the Minnesota State Legislature adjourned on May 23, 2022 without passing an extension. For projects that received an allocation certificate before the program expired in 2022, construction must be completed and building must be placed in service within three calendar years from the allocation certificate’s date of issuance.