On January 3, 2025, the U.S. Department of the Treasury and IRS announced the final regulations regarding the production tax credit (PTC) for hydrogen under Section 45V of the Internal Revenue Code, as part of the Inflation Reduction Act. This regulation allows for a PTC of $3 per kilogram of clean hydrogen produced during the taxable year for the first 10 years after the hydrogen generation facility is operational. Taxpayers also have the option to choose the investment tax credit (ITC) under Section 48 instead of the Section 45V PTC. The amount of the PTC is determined by the greenhouse gas emissions rate of the hydrogen produced, with rates ranging from 20% to 100% based on the kilograms of carbon dioxide equivalent (CO2e) per kilogram of hydrogen. If prevailing wage and apprenticeship requirements are not met, the $3 per kilogram amount is reduced to $0.60. It is crucial for the construction of the facility to commence before 2033 to qualify for the Section 45V credit. The U.S. Department of Energy is set to release a new version of 45VH2-GREET, along with a user manual, later in the month. The Holland & Knight Energy Tax Team is currently analyzing the final regulations and will offer more detailed insights for subscribers. To stay updated on this analysis, interested parties are encouraged to subscribe to the alerts and access the Holland & Knight Inflation Reduction Act Tax Resource Library.