Yes, there are certain exceptions or provisions regarding penalties for not meeting prevailing wage requirements:
- Penalty Exemptions with Corrective Actions: If a taxpayer fails to meet the prevailing wage requirements but takes corrective actions, they may still be eligible for the increased credit or deduction amounts. This involves paying affected laborers the difference between what they were paid and the required prevailing wage, plus interest, and paying a penalty to the IRS of $5,000 per laborer. This penalty may be waived if the correction is made quickly and the taxpayer has a qualifying project labor agreement in place.
- Good Faith Effort Exception and Project Labor Agreements for Apprenticeships: Similar considerations apply to apprenticeship requirements. While this is not a direct exception to prevailing wage penalties, having a qualifying project labor agreement can mitigate penalties for apprenticeship requirements, which are often tied to prevailing wage compliance.
- Statutory Exceptions: There are statutory exceptions allowing increased credits or deductions without meeting prevailing wage requirements, such as facilities with a net output under 1 megawatt or those that began construction before January 29, 2023. However, these exceptions apply more broadly to the requirements themselves rather than specifically to penalty exemptions.
In summary, penalties for not meeting prevailing wage requirements can be mitigated through corrective actions and compliance measures like project labor agreements, but specific statutory exceptions are more about eligibility for incentives rather than penalty waivers.
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