Inflation Reduction Act Apprenticeship Resources

On August 29, 2023, the Department of the Treasury and the Internal Revenue Service (IRS) released a Notice of Proposed Rulemaking (NPRM) on the prevailing wage and apprenticeship provisions of the Inflation Reduction Act. Some of the information on this webpage may be out of date but will be updated soon. More information about the proposed rule can be found on the IRS Website.

On August 16, 2022, President Biden signed Public Law 117-369, 136 Stat. 1818, commonly known as the Inflation Reduction Act of 2022 (IRA), into law. The IRA amended the Internal Revenue Code to add prevailing wage and Registered Apprenticeship requirements for taxpayers constructing, and in some case performing alteration or repair, of qualified clean energy facilities, property, projects, or equipment to qualify for increased tax credit or deduction amounts. The U.S. Department of Labor’s (DOL) Office of Apprenticeship is committed to supporting the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) in the effective implementation of these apprenticeship requirements. The IRS has launched a page dedicated to providing the latest information and guidance on the implementation of the IRA.

By statute, the prevailing wage and apprenticeship requirements generally apply to qualifying facilities where construction begins 60 days or more after Treasury and the IRS publish guidance on those requirements. On November 30, Treasury and the IRS published initial guidance on the prevailing wage and apprenticeship requirements. The publication of guidance on November 30 starts the 60-day period, meaning the prevailing wage and apprenticeship requirements will be operative for facilities where construction begins on or after January 29, 2023.

This webpage provides resources on apprenticeship for background information purposes only. Please consult Notice 2022-61 published by the Internal Revenue Service for guidance on the prevailing wage and apprenticeship requirements.

The IRA is by far our nation’s largest investment in clean energy solutions to date. By pairing climate investment, with the creation of good paying jobs, the IRA’s unparalleled investments to fight the climate crisis will help improve job quality in clean energy industries and incentivize the expansion of workforce training pathways into these jobs. The inclusion of Registered Apprenticeship provisions also enables a talent pipeline for developing this critical workforce and ensures that it is an industry-driven approach with high-quality career pathway opportunities for all workers. By utilizing Registered Apprenticeships, employers can develop and prepare their future workforce, and individuals can obtain paid work experience, receive progressive wage increases, classroom instruction, and a portable, nationally-recognized credential.

The IRA’s prevailing wage and apprenticeship provisions apply to the:

Alternative Fuel Refueling Property Credit
Production Tax Credit
Credit for Carbon Oxide Sequestration
Credit for Production of Clean Hydrogen
Clean Fuel Production Credit
Investment Tax Credit
Advanced Energy Project Credit
Energy Efficient Commercial Buildings Deduction

In addition, the IRA’s prevailing wage provisions apply to the:

New Energy Efficient Home Credit
Zero-Emission Nuclear Power Production Credit

High-Demand Apprenticeship Sectors

Construction

EXPLORE

Clean Energy

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Featured Resources

- Inflation Reduction Act (IRA) of 2022
- IRS Notice of Proposed Rulemaking Increased Credit or Deduction Amounts for Satisfying Certain Prevailing Wage and Registered Apprenticeship Requirements
- Inflation Reduction Act of 2022 | Internal Revenue Service (irs.gov)
  - Notice 2022-61 (regulations.gov)
  - Notice 2022-51 (regulations.gov)
- Department of Labor Inflation Reduction Act Information
  - Webinar on the Inflation Reduction Act's Labor Standards Provisions
    On December 14, 2022, the U.S. Department of Labor’s Office of Apprenticeship and Wage and Hour Division jointly hosted an educational webinar on the apprenticeship and prevailing wage provisions contained in the Inflation Reduction Act and Treasury Guidance.
- Wage and Hour Division (WHD): Davis-Bacon and Related Acts
  - Wage and Hour Division IRA Resources
- Partner Finder Tool
  - Are you looking to join an existing program or create your own program? Our Partner Finder Tool can connect you with the right partners to help you learn more about existing programs and how to design, develop, or enhance your program.
- Occupation Finder Tool
  - Are you looking to find approved apprenticeship occupations? Our Occupation Finder Tool can help you find occupations approved for use in a Registered Apprenticeship Program along with descriptions, alternative titles, and related occupations.
- Standards Builder Tool
  - Are you looking to register an apprenticeship program? Our Standards Builder Tool can help you quickly customize and register your program in a single centralized place.
- Express Interest
  - Are you an employer or career seeker looking to learn more about Registered Apprenticeship? Learn more about Registered Apprenticeships and how you can get started as an employer or a career seeker through our Express Interest portal
- State Offices
  - Are you looking for state level assistance and support for your program? State Apprenticeship offices are located across the nation to provide technical assistance and support to program sponsors, answer questions about the apprenticeship model, guide partners on each phase of developing a program, connect business to training providers, advise partners on available funding sources to support apprenticeships, and register eligible programs.

Frequently Asked Questions

Registered Apprenticeship FAQs for IRA

These FAQs are being provided for background information purposes only and do not constitute official IRS tax guidance. Publications in the Federal Register and Internal Revenue Bulletin represent authoritative Internal Revenue Service guidance. Please visit https://www.irs.gov/credits-deductions/prevailing-wage-and-apprenticeship-requirements for additional information on the prevailing wage and apprenticeship requirements.

Treasury and the IRS published a Notice of Proposed Rulemaking (NPRM) on August 30, 2023. The NPRM is proposed to apply facilities, property, projects, or equipment placed in service in taxable years ending after the date these regulations are published as final in the Federal Register and the construction or installation of which begins after the date these regulations are published as final regulations in the Federal Register. However, taxpayers may rely on the proposed regulations with respect to construction or installation of a facility, property, project, or equipment beginning on or after January 29, 2023, and on or before the date the regulations are published as final regulations in the Federal Register, provided, that beginning after the date that is 60 days after August 29, 2023, taxpayers follow the proposed regulations in their entirety and in a consistent manner. All references to sections of 26CFR 1.45 in these FAQs refer to regulatory provisions proposed in this NPRM.

If you have any questions that are not addressed by the following FAQs, please contact ApprenticeshipIRA@dol.gov. Interested parties are also requested to contact the Registration Agency for their state at: https://www.apprenticeship.gov/about-us/state-offices.

The apprenticeship requirements of the IRA include three components — a labor hours requirement, a ratio requirement, and a participation requirement. Under the labor hours requirement, the taxpayer must ensure that, depending on when construction began, 12.5 percent or 15 percent of the total labor hours performed in the construction, alteration, or repair of the facility are performed by qualified apprentices from a registered apprenticeship program. Under the ratio requirement, the taxpayer must ensure that the applicable ratio of apprentices to journey-workers established by the registered apprenticeship program are met for apprentices working on the facility each day. Under the participation requirement, any taxpayer (or contractor or subcontractor) that employs four or more laborers or mechanics in the construction, alteration, or repair of the facility must also hire at least one qualified apprentice.
A Registered Apprenticeship program is an apprenticeship program registered under the National Apprenticeship Act that meets the requirements of 29 CFR parts 29 and 30.
A Registered Apprenticeship program is an industry-driven, high-quality career pathway where employers can develop and prepare their future workforce, and individuals can obtain paid work experience, receive progressive wage increases, classroom instruction, and a portable, nationally-recognized credential. Registered Apprenticeship programs are industry-vetted and approved by the U.S. Department of Labor or a State Apprenticeship Agency. For more information on Registered Apprenticeship programs, please visit: https://www.apprenticeship.gov/employers/registered-apprenticeship-program.
A State Apprenticeship Agency (SAA) is an agency of a State government that has been recognized by the Office of Apprenticeship (OA) as a Registration Agency to register apprenticeship programs in that State, and has responsibility and accountability for overseeing apprenticeship within the State, including compliance with 29 CFR parts 29 and 30. A map showing which state agencies have been recognized by OA as SAAs, along with state agency contact information, is available at https://www.apprenticeship.gov/about-us/apprenticeship-system.
Registered Apprenticeship program regulations at 29 CFR 29.5(b)(7) require: “A numeric ratio of apprentices to journeyworkers consistent with proper supervision, training, safety, and continuity of employment, and applicable provisions in collective bargaining agreements, except where such ratios are expressly prohibited by the collective bargaining agreements. The ratio language must be specific and clearly described as to its application to the job site, workforce, department or plant.”
Apprentice to journeyworker ratios are established in the standards developed by Registered Apprenticeship program sponsors, in accordance with the requirements of the U.S. Department of Labor’s Office of Apprenticeship (OA) or an applicable State Apprenticeship Agency (SAA). Apprentice to journeyworker ratios in Registered Apprenticeship programs are subject to the approval by OA or an SAA consistent with 29 CFR 29.5, and any applicable subregulatory guidance. In states where OA registers apprenticeship programs, the approval of a program’s apprentice to journeyworker ratios must follow the subregulatory guidance contained in Circular 2021-02 (which can be accessed from this link: https://www.apprenticeship.gov/about-us/legislation-regulations-guidance/circulars). SAAs may have their own policies regarding the approval of program ratios, consistent with 29 CFR 29.5.
Registered Apprenticeship programs are available in occupations that have been approved by the Office of Apprenticeship (OA) as “apprenticeable occupations” (see 29 CFR 29.4). Occupations approved for apprenticeship can be found on OA’s occupation finder at https://www.apprenticeship.gov/apprenticeship-occupations.
Many occupations approved for Registered Apprenticeship programs are within the meaning of "construction, alteration, or repair" work covered by the IRA increased tax benefits. “Construction, alteration, or repair” means all types of work done on the facility by laborers and mechanics of the taxpayer, a construction contractor or construction subcontractor, including altering, remodeling, and installation; painting and decorating; the manufacturing or furnishing of materials, articles, supplies or equipment on the site of the facility; and transportation between the taxpayer’s facility and an off-site facility dedicated to the construction of the taxpayer’s facility and deemed part of the site of the work under 29 CFR 5.2(l). For example, using the occupation finder tool and browsing by "construction" industry yields over 50 occupations (and associated O*Net Codes) approved for Registered Apprenticeship programs. Browsing by "manufacturing," "transportation and warehousing," and "utilities" industries leads to additional or overlapping results for occupations in the clean energy sector. A list of all occupations approved by OA is available for download on the occupation finder site: https://www.apprenticeship.gov/sites/default/files/wps/apprenticeship-occupations.xlsx.
Employers seeking to join Registered Apprenticeship programs for the purpose of hiring qualified apprentices may do so by first identifying group registered apprenticeship programs in the needed occupations and geographic area. The Office of Apprenticeship’s partner finder tool, available at https://www.apprenticeship.gov/partner-finder, allows employers to search for group Registered Apprenticeship programs by occupations and state. State Apprenticeship Agencies may have additional resources for identifying group Registered Apprenticeship programs.
Group Registered Apprenticeship programs are programs in which multiple employers participate in employing apprentices (as opposed to an individual apprenticeship program that only places apprentices with one specific employer). To request an apprentice from such a program, the employer must agree to the standards and requirements of the Registered Apprenticeship program; this is customarily done through an agreement (an employer acceptance agreement or being a signatory to the Registered Apprenticeship Program’s collective bargaining agreement or project labor agreement). Once an employer has joined a Registered Apprenticeship program via the customary agreement, the employer may request apprentices through the Registered Apprenticeship program’s usual processes.
Employers may sponsor their own Registered Apprenticeship programs and hire their own “qualified apprentices” by registering their new programs with the appropriate Registration Agency, the Office of Apprenticeship (OA) or their State Apprenticeship Agency (SAA). Determining whether to register with OA or an SAA depends on the state the sponsor chooses to register and operate their program. OA has many resources available for potential sponsors on apprenticeship.gov.
- To locate and contact the appropriate Registration Agency, please visit https://www.apprenticeship.gov/about-us/state-offices.
- For information about registering a new apprenticeship program, please visit https://www.apprenticeship.gov/employers/registered-apprenticeship-program; employers are encouraged to utilize OA’s “Express Interest” page - https://www.apprenticeship.gov/employers/express-interest-instructions.
- To assist in developing standards of apprenticeship, please visit OA’s “Standards Builder” page - https://www.apprenticeship.gov/employers/registered-apprenticeship-program/register/standards-builder
Taxpayers are also required to maintain and preserve records to establish compliance with the apprenticeship requirements. These records include copies of any written requests for apprentices by the taxpayer (or contractor or subcontractor), any agreement entered by the taxpayer (or contractor or subcontractor) with a registered apprenticeship program, documents reflecting any registered apprenticeship program sponsored by the taxpayer (or contractor or subcontractor), documents verifying participation in a registered apprenticeship program by each apprentice, records reflecting the required ratio of apprentices to journeyworkers prescribed by each registered apprenticeship program from which qualified apprentices are employed, records reflecting the daily ratio of apprentices to journeyworkers, and the payroll records for any work performed by apprentices.
This FAQ has been republished on this webpage for the reader's convenience and may be updated intermittently to reflect IRS guidance. For the official version of this FAQ, please see IRS FAQ Penalty and cure provisions and recordkeeping Q4.
For all other IRS FAQs on IRA prevailing wage requirements, see Frequently asked questions about the prevailing wage and apprenticeship under the Inflation Reduction Act.
Taxpayer, contractor, or subcontractor must submit a written request for qualified apprentices to at least one registered apprenticeship program which: (1) has a geographic area of operation that includes the location of the facility, or that can reasonably be expected to provide apprentices to the location of the facility; (2) trains apprentices in the occupation(s) needed to perform construction, alteration, or repair with respect to the facility; and (3) has a usual and customary business practice of entering into agreements with employers for placement of apprentices in the occupation for which they are training, pursuant to its standards and requirements. The request must be in writing and sent electronically or by registered mail.
The written request must include the proposed dates of employment, occupation of apprentices needed, location of the work to be performed, number of apprentices needed, the expected number of labor hours to be performed by the apprentices, and the name and contact information of the taxpayer, contractor, or subcontractor requesting employment of apprentices from the registered apprenticeship program. The request must also state that the request for apprentices is made with an intent to employ apprentices in the occupation for which they are being trained and in accordance with the requirements and standards of the registered apprenticeship program.
If the taxpayer, contractor, or subcontractor submits a request and the request is denied or not responded to, the taxpayer will be deemed to have exercised a Good Faith Effort with respect to the request for a period of 120 days from the date of the request. The taxpayer will not be deemed to have exercised a Good Faith Effort beyond 120 days of a previously denied request unless the taxpayer submits an additional request.
If the registered apprenticeship program fails to respond to a valid request within five business days after the date on which such registered apprenticeship program received the taxpayer’s (or its contractor or subcontractor) request, then such request is deemed to be denied. Acknowledgement, whether in writing or otherwise, by the registered apprenticeship program of receipt of such valid request is a sufficient response.
A registered apprenticeship program’s response that it could partially fulfill the request in the occupation(s) for which it trains apprentices would not constitute a denial of the request with respect to the parts of the request that could be fulfilled. The parts of the request that were denied because they could not be fulfilled could qualify a taxpayer for the good faith effort exception if all of the requirements for the good faith effort exception have been met.
Although it may be possible for a taxpayer to meet all the apprenticeship requirements from one apprenticeship program, it is likely that given the multiple occupations involved in the construction, alteration, or repair of a qualified facility, a taxpayer would need to request apprentices from more than one apprenticeship program. This is in part because a registered apprenticeship program typically trains apprentices in a single occupation, whereas more than one occupation may be needed to meet the apprenticeship requirements.

Registered Apprenticeship and Prevailing Wage Considerations

In accordance with 29 CFR 5.5(a)(4)(i), a worker is considered an apprentice who can be paid a rate less than the applicable prevailing wage rate if the worker is employed pursuant to and individually registered in a bona fide apprenticeship program registered by the Department of Labor’s Employment Training Administration, Office of Apprenticeship, or a State Apprenticeship Agency recognized by the Department of Labor’s Office of Apprenticeship, and the employer adheres to the requirements of that registered apprenticeship program.
In accordance with 29 CFR 5.5(a)(4)(i), if a taxpayer, contractor, or subcontractor wishes to pay an apprentice rate below the applicable prevailing wage rate(s) to registered apprentices, they must ensure that sufficient journeyworkers are on the site of work with the apprentices each day to ensure that the apprenticeship program ratio is met. If the apprentice to journeyworker ratio is not met for one or more apprentices that day, those apprentices must be paid the full prevailing wage rate for the classification in which they are performing work.
On projects subject to the prevailing wage provisions of the Inflation Reduction Act, the prevailing wage rate for the classification in the applicable wage determination substitutes for the journeyworker rate listed in the apprenticeship agreement, and taxpayers, contractors, and subcontractors should adjust the rate listed for each stage of apprenticeship in the apprenticeship agreement and pay apprentices accordingly, in accordance with 29 CFR 5.5(a)(4)(i).
Many apprenticeship agreements provide a specific percentage of the journeyworker rate due for each level of apprenticeship, which can then be applied to the prevailing wage rate listed for the classification in the applicable wage determination to figure out the wage rate that can be paid to apprentices at each stage of apprenticeship while they are working on the project.
Sometimes, however, the agreement only lists the rates paid to apprentices and the rate paid to journeyworkers. For apprentices enrolled in such registered apprenticeship programs, the listed apprentice rate can be divided by the journeyworker rate listed in the apprenticeship agreement to convert it to a percentage, which can then be applied to the base hourly wage rate listed in the applicable wage determination to find the applicable rate for apprentices while they are working on the project.
In addition to complying with the prevailing wage provisions of the Inflation Reduction Act, all taxpayers, contractors, and subcontractors performing construction, alteration or repair on a qualified facility must continue to pay laborers and mechanics in compliance with all applicable local, state and federal laws.
If the apprenticeship agreement explicitly states that a percentage applies to fringe benefits, or specifically states a lower fringe benefit amount that can be similarly applied to fringe benefit rate in the applicable wage determination, then the taxpayer, contractor, or subcontractor may apply that percentage to the fringe benefits listed in the wage determination. However, if the apprenticeship agreement is silent as to fringe benefits, the full fringe benefit amount on the applicable wage determination must be paid to the apprentice to satisfy the prevailing wage requirement.