Internal Revenue Bulletin 2024-2 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 2024–2
January 8, 2024
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
ADMINISTRATIVE
Notice 2024-7, page 355.
The IRS temporarily suspended the mailing of certain auto-
mated reminder notices for unpaid taxes in February 2022,
as announced in IR-2022-31. In 2024, the IRS will resume
mailing these notices for taxable years 2021 and earlier. This
Notice provides automatic relief to eligible taxpayers from
the additions to tax for the failure to pay with respect to
certain income tax returns for 2020 and 2021. For eligible
taxpayers, these additions to tax will be waived or, to the ex-
tent previously assessed or paid, will be abated, refunded, or
credited to other outstanding tax liabilities, as appropriate,
for the relief period, which begins on the date the IRS issued
an initial balance due notice or February 5, 2022, whichever
is later, and ends on March 31, 2024.
ADMINISTRATIVE, EMPLOYMENT
TAX, INCOME TAX, SPECIAL
ANNOUNCEMENT
Announcement 2024-3, page 364.
This announcement announces a Voluntary Disclosure Program
for taxpayers to resolve refunds or credits for erroneous Em-
ployee Retention Credit claims. The announcement explains
taxpayer eligibility criteria, terms, and procedures for taxpayers
electing to participate in the Voluntary Disclosure Program. The
announcement is intended to provide taxpayers an opportunity
to efficiently resolve their civil tax liabilities under this Voluntary
Disclosure Program and avoid potential litigation.
EMPLOYEE PLANS
Notice 2024-2, page 316.
This notice provides guidance in the form of questions and
answers with respect to certain provisions of the SECURE
2.0 Act of 2022.
Notice 2024-3, page 338.
This notice sets forth the 2023 Cumulative List of Changes in
Plan Qualification Requirements for Defined Contribution Quali-
fied Pre-approved Plans (2023 Cumulative List). The 2023 Cu-
mulative List will assist pre-approved plan providers applying
to the Internal Revenue Service (IRS) for opinion letters for
the fourth remedial amendment cycle for defined contribution
qualified pre-approved plans (Cycle 4) under the IRS’s pre-ap-
proved plan program. The 2023 Cumulative List identifies re-
cent changes in the qualification requirements of the Internal
Revenue Code that were not taken into account during the
first three remedial amendment cycles for defined contribution
qualified pre-approved plans and that will be taken into account
by the IRS with respect to the form of a plan submitted to the
IRS for Cycle 4. The Cycle 4 submission period begins on
February 1, 2024, and ends on January 31, 2025.
Notice 2024-4, page 343.
This notice sets forth updates on the corporate bond month-
ly yield curve, the corresponding spot segment rates for
December 2023 used under § 417(e)(3)(D), the 24-month
average segment rates applicable for December 2023, and
the 30-year Treasury rates, as reflected by the application of
§ 430(h)(2)(C)(iv).
Rev. Rul. 2024-1, page 307.
This revenue ruling provides tables of covered compensation
under § 401(l)(5)(E) of the Internal Revenue Code and the In-
come Tax Regulations thereunder, effective January 1, 2024.
EMPLOYEE PLANS, EXCISE TAX
Notice 2024-1, page 314.
This notice provides the indexing factors to be used by group
health plans and health insurance issuers to calculate the
qualifying payment amount (QPA) for items or services pro-
vided on or after January 1, 2024, and before January 1,
2025. The No Surprises Act (NSA) added parallel provisions
at Code sections 9816 and 9817, ERISA sections 716 and
Finding Lists begin on page ii.

717, and PHS Act sections 2799A-1 and 2799A-2. These
provisions provide protections against balance-billing for cer-
tain out-of-network items or services provided to patients.
The QPA is the basis for determining individual cost sharing
for items and services covered by the balance-billing pro-
tections in the NSA, under certain circumstances. The QPA
for a given calendar year is based on information regarding
median rates for certain items and services from prior years
and is indexed based on changes in the consumer price in-
dex. In addition to providing the indexing factor for adjusting
2023 amounts for 2024, the notice also provides cumulative
adjustments for prior years and examples of how to apply the
percentage increases.
EXCISE TAX, INCOME TAX, SPECIAL
ANNOUNCEMENT
Notice 2024-6, page 348.
Notice 2024-6 discusses a method that can be used to
qualify for and calculate the sustainable aviation fuel (SAF)
credit, the Renewable Fuel Standard (RFS) program, and also
discusses other methods. Notice 2024-6 provides RFS safe
harbors to qualify for and calculate the SAF credit and also
informs the public that the current Greenhouse Gases, Reg-
ulated Emissions, and Energy Use in Technologies (GREET)
model does not currently meet the applicable requirements
to be used for the SAF credit, but federal agencies are work-
ing to modify the GREET model so that it does.
EXEMPT ORGANIZATIONS
Announcement 2024-1, page 363.
Revocation of IRC 501(c)(3) Organizations for failure to meet
the code section requirements. Contributions made to the
organizations by individual donors are no longer deductible
under IRC 170(b)(1)(A).
INCOME TAX
Notice 2024-5, page 347.
This notice provides a safe harbor regarding the incremental
cost of certain qualified commercial clean vehicles placed
in service in calendar year 2024 for purposes of the credit
for qualified commercial clean vehicles under § 45W of the
Internal Revenue Code. This notice also requests comments
regarding additional types or classes of vehicles that should
be included in the safe harbor in the future.
Notice 2024-8, page 356.
This notice provides the optional 2024 standard mileage
rates for taxpayers to use in computing the deductible costs
of operating an automobile for business, charitable, medical,
or moving expense purposes. This notice also provides the
amount taxpayers must use in calculating reductions to basis
for depreciation taken under the business standard mileage
rate, and the maximum standard automobile cost that may
be used in computing the allowance under a fixed and vari-
able rate plan. Additionally, this notice provides the maximum
fair market value of employer-provided automobiles first
made available to employees for personal use in calendar
year 2024 for which employers may use the fleet-average
valuation rule in § 1.61-21(d)(5)(v) or the vehicle cents-per-
mile valuation rule in § 1.61-21(e).
Notice 2024-9, page 358.
The notice of intent to propose regulations concerns the
statutorily-required exceptions to the elective payment
phaseout for entities that do not satisfy the domestic content
requirements of §§ 45, 45Y, 48 and 48E. This notice pro-
vides the transitional process by which the IRS will implement
the statutorily-required exceptions to the elective payment
phaseout for entities that do not satisfy the domestic content
requirements of §§ 45, 45Y, 48 and 48E. These transitional
procedures only apply to projects that begin construction pri-
or to January 1, 2025. This notice also requests comments
to inform the development of the forthcoming proposed reg-
ulations that will implement the process by which the statuto-
rily-required exceptions will be provided to these phaseouts if
construction begins on or after January 1, 2025.
Notice 2024-11, page 360.
This notice updates Notice 2011-64, 2011-37 I.R.B. 231,
which contains the list of treaties that meet the requirements
of section 1(h)(11)(C)(i)(II) of the Code. It adds the treaty with
Chile, which entered into force on December 19. The list
removes the treaties with Russia and Hungary because both
have ceased to meet the requirements of section 1(h)(11)
after the publication of Notice 2011-64. Notice 2011–64 is
amplified and superseded.
REG-118492-23, page 366.
These proposed regulations would provide guidance to quali-
fied manufacturers of new clean vehicles to comply with rules
regarding excluded entities, as established by the Inflation Re-
duction Act of 2022 (IRA). Section 30D(d)(7) excludes from
the definition of “new clean vehicle (A) any vehicle placed in
service after December 31, 2024, with respect to which any
of the applicable critical minerals contained in the battery of
such vehicle were extracted, processed, or recycled by a for-
eign entity of concern (as defined in section 40207(a)(5) of the
Infrastructure Investment and Jobs Act (42 U.S.C. 18741(a)
(5))), or (B) any vehicle placed in service after December 31,
2023, with respect to which any of the components contained
in the battery of such vehicle were manufactured or assembled
by a foreign entity of concern (as so defined). These proposed
regulations would provide guidance for qualified manufactur-
ers for how to comply with these rules.
Rev. Rul. 2024-2, page 311.
Federal rates; adjusted federal rates; adjusted federal long-
term rate, and the long-term tax exempt rate. For purposes
of sections 382, 1274, 1288, 7872 and other sections of
the Code, tables set forth the rates for January 2024.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing of-
ficial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
January 8, 2024 Bulletin No. 2024–2

Part I
Section 401. — Qualified
Pension, Profit-Sharing,
and Stock Bonus Plans
26 CFR 1.401(l)-1: Permitted disparity in employ-
er-provided contributions or benefits
Rev. Rul. 2024-1
This revenue ruling provides tables of
covered compensation under § 401(l)(5)
(E) of the Internal Revenue Code and the
Income Tax Regulations thereunder, for
the 2024 plan year.
Section 401(l)(5)(E)(i) defines covered
compensation with respect to an employ-
ee as the average of the contribution and
benefit bases in effect under section 230
of the Social Security Act (“Act”) for each
year in the 35-year period ending with the
year in which the employee attains Social
Security retirement age.
Section 401(l)(5)(E)(ii) of the Code
states that the determination for any year
preceding the year in which the employ-
ee attains Social Security retirement age
shall be made by assuming that there is
no increase in covered compensation after
the determination year and before the em-
ployee attains Social Security retirement
age.
Section 1.401(l)-1(c)(34) of the Reg-
ulations defines the taxable wage base as
the contribution and benefit base under
section 230 of the Act.
Section 1.401(l)-1(c)(7)(i) defines cov-
ered compensation for an employee as the
average (without indexing) of the taxable
wage bases in effect for each calendar year
during the 35-year period ending with the
last day of the calendar year in which the
employee attains (or will attain) Social
Security retirement age. A 35-year peri-
od is used for all individuals regardless
of the year of birth of the individual. In
determining an employee’s covered com-
pensation for a plan year, the taxable wage
base for all calendar years beginning after
the first day of the plan year is assumed to
be the same as the taxable wage base in
effect as of the beginning of the plan year.
An employee’s covered compensation for
a plan year beginning after the 35-year pe-
riod applicable under § 1.401(l)-1(c)(7)(i)
is the employee’s covered compensation
for a plan year during which the 35-year
period ends. An employee’s covered com-
pensation for a plan year beginning be-
fore the 35-year period applicable under
§ 1.401(l)-1(c)(7)(i) is the taxable wage
base in effect as of the beginning of the
plan year.
Section 1.401(l)-1(c)(7)(ii) provides
that, for purposes of determining the
amount of an employee’s covered com-
pensation under § 1.401(l)-1(c)(7)(i), a
plan may use tables, provided by the Com-
missioner, that are developed by rounding
the actual amounts of covered compensa-
tion for different years of birth.
For purposes of determining covered
compensation for the 2024 year, the tax-
able wage base is $168,600.
The following tables provide covered
compensation for 2024.
ATTACHMENT I
2024 COVERED COMPENSATION TABLE
CALENDAR
YEAR OF
BIRTH
CALENDAR YEAR OF
SOCIAL SECURITY
RETIREMENT AGE
2024 COVERED
COMPENSATION
TABLE II
19071972$ 4,488
190819734,704
190919745,004
191019755,316
191119765,664
191219776,060
19131978 6,480
191419797,044
191519807,692
191619818,460
191719829,300
1918198310,236
1919198411,232
1920198512,276
1921198613,368
1922198714,520
Bulletin No. 2024–2 307 January 8, 2024

January 8, 2024 308 Bulletin No. 2024–2
ATTACHMENT I
2024 COVERED COMPENSATION TABLE
CALENDAR
YEAR OF
BIRTH
CALENDAR YEAR OF
SOCIAL SECURITY
RETIREMENT AGE
2024 COVERED
COMPENSATION
TABLE II
1923198815,708
1924198916,968
1925199018,312
1926199119,728
1927199221,192
1928199322,716
1929199424,312
1930199525,920
1931199627,576
1932199729,304
1933199831,128
1934199933,060
1935200035,100
1936200137,212
1937200239,444
1938200443,992
1939200546,344
1940200648,816
1941200751,348
1942200853,952
1943200956,628
1944201059,268
1945201161,884
1946201264,560
1947201367,308
1948201469,996
1949201572,636
1950201675,180
1951201777,880
1952201880,532
1953201983,244
1954202086,052
1955202291,884
1956202395,172
1957202498,616
19582025101,964
19592026105,264
19602027108,492
19612028111,660
19622029114,744
19632030117,816

Bulletin No. 2024–2 309 January 8, 2024
ATTACHMENT I
2024 COVERED COMPENSATION TABLE
CALENDAR
YEAR OF
BIRTH
CALENDAR YEAR OF
SOCIAL SECURITY
RETIREMENT AGE
2024 COVERED
COMPENSATION
TABLE II
19642031120,840
19652032123,792
19662033126,660
19672034129,396
19682035132,036
19692036134,556
19702037136,944
19712038139,284
19722039141,588
19732040143,832
19742041145,956
19752042147,984
19762043149,892
19772044151,656
19782045153,420
1979 2046155,184
19802047156,864
19812048158,424
19822049159,900
19832050161,340
19842051162,768
19852052163,944
19862053165,096
19872054166,116
19882055167,004
19892056167,736
19902057168,360
1991 and later2058 and later168,600

January 8, 2024 310 Bulletin No. 2024–2
ATTACHMENT II
2024 ROUNDED COVERED COMPENSATION TABLE
CALENDAR
YEAR OF
BIRTH
2024 COVERED
COMPENSATION
ROUNDED
1937$ 39,000
1938 – 193945,000
194048,000
194151,000
194254,000
194357,000
194460,000
194563,000
1946 – 194766,000
194869,000
194972,000
195075,000
195178,000
195281,000
195384,000
195487,000
195593,000
195696,000
195799,000
1958102,000
1959105,000
1960108,000
1961111,000
1962114,000
1963117,000
1964120,000
1965123,000
1966126,000
1967129,000
1968132,000
1969135,000
1970 – 1971138,000
1972141,000
1973144,000
1974 – 1975147,000
1976150,000
1977 – 1978153,000
1979 – 1980156,000
1981 – 1982159,000
1983 – 1984162,000
1985 – 1987165,000
1988 – 1989168,000
1990 and later168,600

Bulletin No. 2024–2 311 January 8, 2024
DRAFTING INFORMATION
The principal author of this notice is
Tom Morgan of the Office of Associate
Chief Counsel (Employee Benefits, Ex-
empt Organizations, and Employment
Taxes). However, other personnel from
the IRS participated in the development
of this guidance. For further information
regarding this notice, contact Mr. Morgan
at 202-317-6700 or Nicholas Fox at 267-
466-2192 (not toll-free numbers).
Section 1274.—
Determination of Issue
Price in the Case of Certain
Debt Instruments Issued for
Property
(Also Sections 42, 280G, 382, 467, 468, 482, 483,
1288, 7520, 7702, 7872.)
Rev. Rul. 2024-2
This revenue ruling provides various
prescribed rates for federal income tax
purposes for January 2024 (the current
month). Table 1 contains the short-term,
mid-term, and long-term applicable feder-
al rates (AFR) for the current month for
purposes of section 1274(d) of the Inter-
nal Revenue Code. Table 2 contains the
short-term, mid-term, and long-term ad-
justed applicable federal rates (adjusted
AFR) for the current month for purposes
of section 1288(b). Table 3 sets forth the
adjusted federal long-term rate and the
long-term tax-exempt rate described in
section 382(f). Table 4 contains the ap-
propriate percentages for determining the
low-income housing credit described in
section 42(b)(1) for buildings placed in
service during the current month. Howev-
er, under section 42(b)(2), the applicable
percentage for non-federally subsidized
new buildings placed in service after July
30, 2008, shall not be less than 9%. Table
5 contains the federal rate for determining
the present value of an annuity, an interest
for life or for a term of years, or a remain-
der or a reversionary interest for purpos-
es of section 7520. Table 6 contains the
deemed rate of return for transfers made
during calendar year 2024 to pooled in-
come funds described in section 642(c)(5)
that have been in existence for less than
3 taxable years immediately preceding
the taxable year in which the transfer was
made. Finally, Table 7 contains the av-
erage of the applicable federal mid-term
rates (based on annual compounding) for
the 60-month period ending December 31,
2023, for purposes of section 7702(f)(11).
REV. RUL. 2024-02 TABLE 1
Applicable Federal Rates (AFR) for January 2024
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR5.00%4.94%4.91%4.89%
110% AFR5.50%5.43%5.39%5.37%
120% AFR6.02%5.93%5.89%5.86%
130% AFR6.52%6.42%6.37%6.34%
Mid-term
AFR4.37%4.32%4.30%4.28%
110% AFR 4.81%4.75%4.72%4.70%
120% AFR5.25%5.18%5.15%5.12%
130% AFR5.70%5.62%5.58%5.56%
150% AFR6.58%6.48%6.43%6.39%
175% AFR7.70%7.56%7.49%7.44%
Long-term
AFR4.54%4.49%4.47%4.45%
110% AFR5.00%4.94%4.91%4.89%
120% AFR5.46%5.39%5.35%5.33%
130% AFR5.93%5.84%5.80%5.77%

January 8, 2024 312 Bulletin No. 2024–2
REV. RUL. 2024-02 TABLE 2
Adjusted AFR for January 2024
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted AFR3.79%3.75%3.73%3.72%
Mid-term adjusted AFR3.31%3.28%3.27%3.26%
Long-term adjusted AFR3.44%3.41%3.40%3.39%
REV. RUL. 2024-02 TABLE 3
Rates Under Section 382 for January 2024
Adjusted federal long-term rate for the current month3.44%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal
long-term rates for the current month and the prior two months.)
3.81%
REV. RUL. 2024-02 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for January 2024
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit8.04%
Appropriate percentage for the 30% present value low-income housing credit 3.44%
REV. RUL. 2024-02 TABLE 5
Rate Under Section 7520 for January 2024
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a
remainder or reversionary interest
5.20%
REV. RUL. 2024-02 TABLE 6
Deemed Rate for Transfers to New Pooled Income Funds During 2024
Deemed rate of return for transfers during 2024 to pooled income funds that have been in existence for less than
3 taxable years
3.8%
REV. RUL. 2024-02 TABLE 7
Average of the Applicable Federal Mid-Term Rates for 2023
For purposes of section 7702(f)(11), the average of the applicable federal mid-term rates (based on annual compounding) for the
60-month period ending December 31, 2023, is 2.12%, rounded to 2%.

Bulletin No. 2024–2 313 January 8, 2024
Section 42.—Low-Income
Housing Credit
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
January 2024. See Rev. Rul. 2024-02, page 311.
Section 280G.—Golden
Parachute Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
January 2024. See Rev. Rul. 2024-02, page 311.
Section 382.—Limitation
on Net Operating Loss
Carryforwards and
Certain Built-In Losses
Following Ownership
Change
The adjusted applicable federal long-term rate
is set forth for the month of January 2024. See Rev.
Rul. 2024-02, page 311.
Section 467.—Certain
Payments for the Use of
Property or Services
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
January 2024. See Rev. Rul. 2024-02, page 311.
Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The applicable federal short-term rates are set
forth for the month of January 2024. See Rev. Rul.
2024-02, page 311.
Section 482.—Allocation
of Income and Deductions
Among Taxpayers
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
January 2024. See Rev. Rul. 2024-02, page 311.
Section 483.—Interest on
Certain Deferred Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
January 2024. See Rev. Rul. 2024-02, page 311.
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month of
January 2024. See Rev. Rul. 2024-02, page 311.
Section 7520.—Valuation
Tables
The applicable federal mid-term rates are set
forth for the month of January 2024. See Rev. Rul.
2024-02, page 311.
Section 7872.—Treatment
of Loans With Below-
Market Interest Rates
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
January 2024. See Rev. Rul. 2024-02, page 311.

January 8, 2024 314 Bulletin No. 2024–2
Part III
26 CFR 54.9816-6T:
Calculating the qualifying
payment amount in 2024
Notice 2024-1
SECTION 1. PURPOSE AND SCOPE
Pursuant to Treas. Reg. § 54.9816-
6T(c), 29 CFR 2590.716-6(c), and 45
CFR 149.140(c), this notice provides the
percentage increase for calculating the
qualifying payment amounts (QPAs) for
items and services furnished during 2024
for purposes of sections 9816 and 9817 of
the Internal Revenue Code (Code), sec-
tions 716 and 717 of the Employee Retire-
ment Income Security Act of 1974 (ERI-
SA), and sections 2799A-1 and 2799A-2
of the Public Health Service Act (PHS
Act). These provisions, added by the No
Surprises Act,
1
provide protections against
surprise medical bills in certain circum-
stances. This notice was drafted in con-
sultation with the Departments of Labor
and Health and Human Services. Similar
guidance for items and services furnished
during 2022 and 2023 was published
in Revenue Procedure 2022-11, Notice
2022-11, and Notice 2023-4.
2

SECTION 2. BACKGROUND
Under § 54.9816-6T(c), 29 CFR
2590.716-6(c), and 45 CFR 149.140(c),
for an item or service furnished during
2022, plans and issuers must calculate the
QPA by increasing the median contracted
rate (as determined in accordance with
§ 54.9816-6T(b), 29 CFR 2590.716-6(b),
and 45 CFR 149.140(b))
3,4
for the same
or similar item or service under such plan
or coverage, on January 31, 2019, by the
combined percentage increase as pub-
lished by the Department of the Treasury
(Treasury Department) and the Internal
Revenue Service (IRS) to reflect the per-
centage increase in the Consumer Price
Index for All Urban Consumers (U.S. city
average) (CPI-U) over 2019, the percent-
age increase over 2020, and the percentage
increase over 2021.
5
Pursuant to Revenue
Procedure 2022-11, for items and services
provided on or after January 1, 2022, and
before January 1, 2023, the combined per-
centage increase to adjust the median con-
tracted rate for the same or similar item
or service under such plan or coverage, on
January 31, 2019, is 1.0648523983.
Under § 54.9816-6T(c)(2), 29 CFR
2590.716-6(c)(2), and 45 CFR 149.140(c)
(2), with respect to a sponsor of a plan or
issuer offering group or individual health
insurance coverage in a geographic region
in which the sponsor or issuer did not of-
fer any group health plan or health insur-
ance coverage in 2019, for the first year
in which the group health plan or group
or individual health insurance coverage
is offered in the region, if the plan or is-
suer does not have sufficient information
to calculate the median of the contracted
rates for an item or service provided in the
geographic region, the plan or issuer must
determine the QPA pursuant to § 54.9816-
6T(c)(3)(i), 29 CFR 2590.716-6(c)(3)(i),
and 45 CFR 149.140(c)(3)(i) for an item
or service furnished in 2022. For each
subsequent year the group health plan or
group or individual health insurance cov-
erage is offered in the region, the plan or
issuer must calculate the QPA by increas-
ing the QPA determined for items or ser-
vices provided in the immediately preced-
ing year, by the percentage increase in the
CPI-U over the preceding year.
6
Pursuant to § 54.9816-6T(c)(3)(i), 29
CFR 2590.716-6(c)(3)(i), and 45 CFR
149.140(c)(3)(i), for an item or service
furnished during 2022, a plan or issuer
that does not have sufficient information
to calculate the median of the contracted
rates in 2019 for the same or similar item
or service provided in a geographic region
must calculate the QPA by first identify-
ing the rate that is equal to the median of
the in-network allowed amounts for the
same or similar item or service provided
in the geographic region in 2021, deter-
mined by the plan or issuer through use
of any eligible database, and then increas-
ing that rate by the percentage increase
in the CPI-U over 2021. Similarly, in the
case of a newly covered item or service
furnished during the first coverage year,
when a plan or issuer does not have suffi-
cient information to calculate the median
of the contracted rates in the first coverage
year for the item or service, the plan or is-
suer must calculate the QPA by using an
eligible database to determine the rate that
is equal to the median of the in-network
allowed amounts for the same or similar
item or service provided in the geographic
region in the year immediately preceding
the first coverage year, and then increasing
that rate by the percentage increase in the
CPI-U over the preceding year.
Under § 54.9816-6T(c)(3)(ii), 29
CFR 2590.716-6(c)(3)(ii), and 45 CFR
149.140(c)(3)(ii), for an item or service
furnished in a subsequent year (before
the first sufficient information year for the
item or service with respect to the plan or
1
The No Surprises Act was enacted as Title I of Division BB of the Consolidated Appropriations Act, 2021, Pub. L. 116-260, 134 Stat. 1182 (2020).
2
Revenue Procedure 2022-11, 2022-3 IRB 449; Notice 2022-11, 2022-14 IRB 939, and Notice 2023-4, 2023-2 IRB 321.
3
For information on the calculation of QPAs in light of the August 24, 2023 decision in Texas Medical Association et al. v. United States Department of Health and Human Services et al., Case
No. 6:22-cv-450-JDK (E.D. Tex.), see FAQs about Consolidated Appropriations Act, 2021 Implementation Part 62 (Oct. 6, 2023), available at https://www.dol.gov/agencies/ebsa/about-ebsa/
our-activities/resource-center/faqs/aca-part-62 and https://www.cms.gov/files/document/faqs-part-62.pdf.
4
The protections against surprise billing additionally apply to health benefits plans offered by carriers under the Federal Employees Health Benefits (FEHB) Act pursuant to 5 U.S.C. 8902(p).
Accordingly, the guidance provided in this notice applies to FEHB carriers to the extent consistent with their contracts. See 5 CFR 890.114.
5
The calculations of the QPAs for anesthesia services, air ambulance services, and certain other items or services furnished during 2022 for which a plan or issuer has sufficient information
to calculate the median of the contracted rates in 2019 differ slightly, but all use the same formula for increasing a base rate by the combined percentage increase as published by the Treasury
Department and the IRS to reflect the percentage increase in the CPI-U over 2019 and subsequent years. See
§ 54.9816-6T(c)(1)(iii)-(vii), 29 CFR 2590.716-6(c)(1)(iii)-(vii), and 45 CFR
149.140(c)(1)(iii)-(vii).
6
The calculations of the QPAs for anesthesia services, air ambulance services, and certain other items or services furnished in a subsequent year differ slightly, but all use the same formula
for increasing the indexed median contracted rate determined for the item or service in the immediately preceding year by the percentage increase. See
§ 54.9816-6T(c)(2)(ii), 29 CFR
2590.716-6(c)(2)(ii), and 45 CFR 149.140(c)(2)(ii).

Bulletin No. 2024–2 315 January 8, 2024
coverage), the plan or issuer must calcu-
late the QPA by increasing the QPA deter-
mined for the item or service for the year
immediately preceding the subsequent
year, by the percentage increase in the
CPI-U over the preceding year.
The percentage increase in the CPI-U
for items and services provided in 2022
over the preceding year is the average
CPI-U for 2021 over the average CPI-U
for 2020. Pursuant to Notice 2022-11, the
percentage increase from 2021 to 2022 is
1.0299772040. The percentage increase in
the CPI-U for items and services provid-
ed in 2023 over the preceding year is the
average CPI-U for 2022 over the average
CPI-U for 2021. Pursuant to Notice 2023-
4, the percentage increase from 2022 to
2023 is 1.0768582128.
In the case of a plan or issuer that does
not have sufficient information to calcu-
late the median of the contracted rates for
the same or similar item or service provid-
ed in a geographic region and determine
the QPA in accordance with the previously
described methodology because the item
or service is billed under a new service
code, for items or services furnished in
2022 (or for newly covered items and ser-
vices, during the first coverage year for the
item or service), the plan or issuer must
identify a reasonably related service code
that existed in the immediately preceding
year and calculate the QPA pursuant to
§ 54.9816-6T(c)(4)(i), 29 CFR 2590.716-
6(c)(4)(i), and 45 CFR 149.140(c)(4)(i).
Under § 54.9816-6T(c)(4)(ii), 29
CFR 2590.716-6(c)(4)(ii), and 45 CFR
149.140(c)(4)(ii), for an item or service
furnished in a subsequent year (before
the first sufficient information year for
the item or service with respect to such
plan or coverage or before the first year
for which an eligible database has suffi-
cient information to calculate a rate under
§ 54.9816-6T(c)(3)(i), 29 CFR 2590.716-
6(c)(3)(i), and 45 CFR 149.140(c)(3)(i)
in the immediately preceding year), the
plan or issuer must calculate the QPA by
increasing the QPA determined for the
item or service for the year immediate-
ly preceding the subsequent year, by the
percentage increase in the CPI-U over the
preceding year.
SECTION 3. GUIDANCE
The percentage increase in the CPI-U
over a preceding year is calculated by
dividing the average CPI-U for the pre-
ceding year by the average CPI-U for the
year immediately prior to the preceding
year. For this purpose, the average CPI-U
for a year is the average of the monthly
CPI-Us published by the Bureau of La-
bor Statistics of the Department of La-
bor for the 12-month period ending on
August 31 of each year, rounded to 10
decimal places. The percentage increase
in the CPI-U for items and services pro-
vided in 2024 over the preceding year
is the average CPI-U for 2023 over the
average CPI-U for 2022. Pursuant to this
calculation, the percentage increase from
2023 to 2024 is 1.0543149339. Further,
pursuant to this notice, plans and issu-
ers may round any resulting QPAs to the
nearest dollar.
To calculate the adjusted QPA, the pri-
or year’s adjusted QPA is multiplied by
the percentage increase for the most re-
cent year. To simplify this calculation, this
notice provides cumulative percentage in-
creases. To calculate the adjusted QPA for
items and services furnished in 2024, the
“base year” QPA is multiplied by the cu-
mulative percentage increase for the year
the base QPA originated. A plan or issuer
may select their preferred method, but it
must be applied consistently. A plan or is-
suer is not permitted to use one method for
certain QPAs and a different method for
other QPAs.
BASE YEAR OF
QPA ORIGINATION
CUMULATIVE
PERCENTAGE
INCREASE FOR QPA
FROM BASE YEAR
TO 2023
PERCENTAGE
INCREASE FOR
QPA FROM 2023
TO 2024
CUMULATIVE
PERCENTAGE
INCREASE FOR QPA
FROM BASE YEAR
TO 2024
20191.14669505061.05431493391.2089777165
20211.10913941121.05431493391.1693822450
20221.07685821281.05431493391.1353476955
20231.00000000001.05431493391.0543149339
.01 Adjusting QPAs based on January
31, 2019 rates.
For QPAs calculated by increasing the
median contracted rate for 2019, the QPAs
for items and services furnished in 2024 are
determined by taking the QPAs calculated
for items and services furnished in 2023
and multiplying the 2023 adjusted QPAs
by the percentage increase from 2023 to
2024 (1.0543149339). Alternatively, the
QPAs for items and services furnished in
2024 may be calculated by increasing the
median contracted rate for 2019 by the
2024 cumulative percentage increase for
the 2019 base year (1.2089777165).
For example, using the alternative
method: An item is furnished in 2024. The
median contracted rate for the item on Jan-
uary 31, 2019, was $1,500. The 2024 ad-
justed QPA for the item can be calculated
by multiplying $1,500 x 1.2089777165,
resulting in $1,813.
7

.02 Adjusting QPAs based on 2021
rates.
For items and services furnished in
2022 for which the QPAs were calculat-
ed by increasing the median of the in-net-
7
The 2022 adjusted QPA for the $1,500 item was $1,597 ($1,500 x 1.0648523983). The 2023 adjusted QPA for the item was $1,720 ($1,597 x 1.0768582128). The 2024 adjusted QPA for
the item is $1,813 ($1,720 x 1.0543149339).

January 8, 2024 316 Bulletin No. 2024–2
work allowed amounts for the same or
similar item or service provided in the
geographic region in 2021, drawn from
any eligible database, by the percentage
increase from 2021 to 2022, the QPAs for
items and services furnished in 2024 are
determined by taking the QPAs calculat-
ed for the items and services furnished in
2022 and multiplying the 2022 adjusted
QPAs by the percentage increase from
2022 to 2023 (1.0768582128) and multi-
plying the resulting 2023 adjusted QPAs
by the percentage increase from 2023 to
2024 (1.0543149339). Alternatively, the
QPAs for items and services furnished in
2024 may be calculated by multiplying
the 2022 adjusted QPA by the 2024 cu-
mulative percentage increase for the 2021
base year (1.1693822450).
For example, using the alternative
method: A newly covered service for
which the plan or issuer does not have
sufficient information to calculate the me-
dian of the contracted rates is furnished
in 2022. The median of the in-network
allowed amounts for the same or similar
service provided in the geographic region
in 2021, drawn from any eligible data-
base, was $4,000. The 2024 adjusted QPA
for the covered service is $4,678 ($4,000
x 1.1693822450).
8
.03 Adjusting QPAs based on 2022
rates.
For items and services furnished in
2023 for which the QPAs were calculated
by increasing the median of the in-network
allowed amounts for the same or similar
item or service provided in the geographic
region in 2022, drawn from any eligible
database, by the percentage increase from
2022 to 2023, the QPAs for items and ser-
vices furnished in 2024 are determined by
taking the QPAs calculated for the items
and services furnished in 2023 and mul-
tiplying the 2023 adjusted QPAs by the
percentage increase from 2023 to 2024
(1.0543149339). Alternatively, the QPAs
for items and services furnished in 2024
may be calculated by increasing the me-
dian contracted rate for 2022 by the 2024
cumulative percentage increase for the
2022 base year (1.1353476955).
For example, using the alternative
method: A newly covered service for
which the plan or issuer does not have
sufficient information to calculate the me-
dian of the contracted rates is furnished
in 2023. The median of the in-network
allowed amounts for the same or similar
service provided in the geographic region
in 2022, drawn from an eligible database,
was $2,100. The 2024 adjusted QPA for
the covered service is $2,384 ($2,100 x
1.1353476955).
9
The adjustment to the QPAs will be
applied similarly for items and services
covered by a new plan or new group or
individual health insurance coverage that
was not offered in a geographic region in
a prior year. For items and services first
offered by a new plan or new group or
individual health insurance coverage in a
geographic region in 2023 for which the
plan or issuer does not have sufficient in-
formation to calculate the median of the
contracted rates for the items or services
provided in the geographic region, the
QPAs are calculated by increasing the me-
dian of the in-network allowed amounts
for the same or similar item or service
provided in the geographic region in
2022, drawn from any eligible database,
by the percentage increase from 2022 to
2023 (1.0768582128). For that plan or
coverage, the QPAs for items and ser-
vices furnished in 2024 are determined
by taking the QPAs calculated for items
and services furnished in 2023 and mul-
tiplying the 2023 adjusted QPAs by the
percentage increase from 2023 to 2024
(1.0543149339).
.04 Calculating QPAs when 2024 is the
first coverage year.
For newly covered items and services
furnished in 2024 for which the plan or
issuer does not have sufficient informa-
tion, when 2024 is the first coverage year
for the item or service with respect to the
plan or coverage, the QPAs for the items
and services first furnished in 2024 are
determined by multiplying the median
of the in-network allowed amounts for
the same or similar item or service pro-
vided in the geographic region in 2023,
drawn from any eligible database, by the
percentage increase from 2023 to 2024
(1.0543149339).
For example, using the alternative
method: A newly covered service is fur-
nished in 2024. The median of the in-net-
work allowed amounts for the same or
similar service provided in the geographic
region in 2023, drawn from an eligible
database, was $3,000. The 2024 adjusted
QPA for the service is $3,163 ($3,000 x
1.0543149339).
SECTION 4. EFFECTIVE DATE
The effective date of this notice is Jan-
uary 1, 2024.
SECTION 5. DRAFTING
INFORMATION
The principal author of this notice is
Jason Sandoval of the Office of Associ-
ate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). For further information regarding
this notice, contact Jason Sandoval at 202-
317-5500 (not a toll-free number).
Miscellaneous Changes
Under the SECURE 2.0 Act
of 2022
Notice 2024-2
I. PURPOSE
This notice provides guidance in the
form of questions and answers with re-
spect to certain provisions of Division T
of the Consolidated Appropriations Act,
2023, Pub. L. 117-328, 136 Stat. 4459
(2022), known as the SECURE 2.0 Act
of 2022 (SECURE 2.0 Act). Specifically,
this notice addresses issues under the fol-
lowing sections of the SECURE 2.0 Act:
section 101 (expanding automatic enroll-
ment in retirement plans), section 102
8
The 2022 adjusted QPA for the $4,000 service is $4,120 ($4,000 x 1.0299772040). The 2023 adjusted QPA for the service is $4,437 ($4,120 x 1.0768582128). The 2024 adjusted QPA is
$4,678 ($4,437 x 1.0543149339).
9
The 2023 adjusted QPA for the $2,100 service is $2,261 ($2,100 x 1.0768582128). The 2024 adjusted QPA is $2,384 ($2,261 x 1.0543149339).

Bulletin No. 2024–2 317 January 8, 2024
(modification of credit for small employer
pension plan startup costs), section 112
(military spouse retirement plan eligibility
credit for small employers), section 113
(small immediate financial incentives for
contributing to a plan), section 117 (con-
tribution limit for SIMPLE plans), section
326 (exception to the additional tax on
early distributions from qualified plans
for individuals with a terminal illness),
section 332 (employers allowed to replace
SIMPLE retirement accounts with safe
harbor 401(k) plans during a year), sec-
tion 348 (cash balance), section 350 (safe
harbor for correction of employee elective
deferral failures), section 501 (provisions
relating to plan amendments), section 601
(SIMPLE and SEP Roth IRAs), and sec-
tion 604 (optional treatment of employer
contributions or nonelective contributions
as Roth contributions).
This notice is not intended to provide
comprehensive guidance as to the specif-
ic provisions of the SECURE 2.0 Act, but
rather is intended to provide guidance on
discrete issues to assist in commencing
implementation of these provisions. The
Department of the Treasury (Treasury De-
partment) and the Internal Revenue Ser-
vice (IRS) continue to analyze the various
provisions of the SECURE 2.0 Act and
anticipate issuing further guidance, in-
cluding regulations, as appropriate.
II. PROVISIONS OF THE SECURE
2.0 ACT
TABLE OF CONTENTS:
A - Section 101 of the SECURE 2.0 Act
B - Section 102 of the SECURE 2.0 Act
C - Section 112 of the SECURE 2.0 Act
D - Section 113 of the SECURE 2.0 Act
E - Section 117 of the SECURE 2.0 Act
F - Section 326 of the SECURE 2.0 Act
G - Section 332 of the SECURE 2.0 Act
H - Section 348 of the SECURE 2.0 Act
I - Section 350 of the SECURE 2.0 Act
J - Section 501 of the SECURE 2.0 Act
K - Section 601 of the SECURE 2.0 Act
L - Section 604 of the SECURE 2.0 Act
A. SECTION 101 OF THE SECURE
2.0 ACT
Section 101 of the SECURE 2.0 Act
amends the Internal Revenue Code (Code)
to add new section 414A. Section 414A(a)
generally provides that a cash or deferred
arrangement (CODA) will not be treated
as a qualified CODA described in sec-
tion 401(k), and an annuity contract oth-
erwise described in section 403(b) that is
purchased under a salary reduction agree-
ment will not be treated as described in
section 403(b), unless the CODA or sal-
ary reduction agreement satisfies the au-
tomatic enrollment requirements of sec-
tion 414A(b). Section 414A(b) requires
the CODA or salary reduction agreement
to be an eligible automatic contribution
arrangement (as defined in section 414(w)
(3)) that provides permissible withdrawals
and satisfies certain additional require-
ments involving default elective contribu-
tions and default investments.
Section 414A(c) sets forth sever-
al exceptions to the application of sec-
tion 414A(a). Among other exceptions,
section 414A(c)(2)(A)(i) and (ii) provides
that section 414A(a) does not apply to any
qualified CODA established before the
date of the enactment of section 101 of the
SECURE 2.0 Act (December 29, 2022) or
to any annuity contract purchased under
a plan established before the date of the
enactment of section 101 of the SECURE
2.0 Act. For purposes of this notice, a qual-
ified CODA or section 403(b) plan that is
established before December 29, 2022, is
called a pre-enactment qualified CODA or
pre-enactment section 403(b) plan.
However, section 414A(c)(2)(B) of
the Code provides that, in the case of an
employer adopting a plan maintained by
more than one employer after the date of
the enactment of section 101 of the SE-
CURE 2.0 Act, section 414(c)(2)(A) of
the Code does not apply to that employer,
and section 414A(a) applies with respect
to that employer as if that plan were a sin-
gle plan.
Section 101(c) of the SECURE 2.0 Act
provides that the amendments made by
section 101 apply to plan years beginning
after December 31, 2024.
Q. A-1: When is a qualified CODA
established for purposes of determining
whether the qualified CODA is except-
ed under section 414A(c)(2)(A)(i) of the
Code from the requirements related to
automatic enrollment (that is, whether the
qualified CODA is a pre-enactment quali-
fied CODA)?
A. A-1: For purposes of section 414A(c)
(2)(A)(i), a qualified CODA is established
on the date plan terms providing for the
CODA are adopted initially. This is the
case even if the plan terms providing for
the CODA are effective after the adoption
date. For example, if an employer adopted
a plan that included a qualified CODA on
October 3, 2022, with an effective date of
January 1, 2023, then the qualified CODA
would have been established on October
3, 2022 (that is, before December 29,
2022), even though the qualified CODA
was not effective until after December 29,
2022.
Q. A-2: If a single employer plan that
includes a pre-enactment qualified CODA
is merged with another plan that includes
a pre-enactment qualified CODA, will the
qualified CODA included in the ongo-
ing plan after the merger be treated as a
pre-enactment qualified CODA?
A. A-2: Yes. In the case of the merg-
er of two single employer plans, each of
which includes a pre-enactment qualified
CODA, the treatment of the qualified
CODA included in the ongoing plan as
a pre-enactment qualified CODA is un-
affected by the merger. The result is the
same if a single employer plan that in-
cludes a pre-enactment qualified CODA is
merged with a plan maintained by more
than one employer that includes a pre-en-
actment qualified CODA.
Q. A-3: If a plan that includes a qual-
ified CODA that is not a pre-enactment
qualified CODA is merged with a plan
that includes a pre-enactment qualified
CODA, will the qualified CODA included
in the ongoing plan be treated as a pre-en-
actment qualified CODA after the merger?
A. A-3: Generally, no. However, if, in
connection with a transaction described
in section 410(b)(6)(C), a single employ-
er plan that includes a qualified CODA
that is not a pre-enactment qualified
CODA is merged with another single
employer plan that includes a pre-en-
actment qualified CODA, and the plan
that includes the pre-enactment qualified
CODA is designated as the ongoing plan,
then the qualified CODA included in the
ongoing plan continues to be treated as a
pre-enactment qualified CODA after the
merger, provided that the merger occurs
by the end of the section 410(b)(6)(C)
transition period.

January 8, 2024 318 Bulletin No. 2024–2
In addition, if a single employer plan
that includes a qualified CODA that is
not a pre-enactment qualified CODA is
merged into a plan maintained by more
than one employer that includes a pre-en-
actment qualified CODA, then the quali-
fied CODA included in the ongoing plan
would not be treated as a pre-enactment
qualified CODA with respect to that em-
ployer. However, in that case, the merg-
er would not affect whether the qualified
CODA is treated as a pre-enactment qual-
ified CODA with respect to other employ-
ers that participate in the ongoing plan.
Q. A-4: If a plan that includes a quali-
fied CODA is spun-off from a plan that in-
cludes a pre-enactment qualified CODA,
is the qualified CODA included in the new
spun-off plan also treated as a pre-enact-
ment qualified CODA?
A. A-4: Generally, yes. If the plan from
which the new plan was spun-off was
a single employer plan that included a
pre-enactment qualified CODA, then the
qualified CODA included in the spun-off
plan is also treated as a pre-enactment
qualified CODA. However, if the plan
from which the new plan was spun-off
was a plan maintained by more than one
employer that was established before De-
cember 29, 2022, then the qualified CODA
included in the spun-off plan is treated as a
pre-enactment qualified CODA only if the
qualified CODA in the plan maintained
by more than one employer was treated
as a pre-enactment qualified CODA with
respect to the employer sponsoring the
spun-off plan.
Q. A-5: How do the rules of sec-
tion 414A(c)(2)(A)(ii) apply to sec-
tion 403(b) plans?
A. A-5: In general, the rules of section
414A that apply to qualified CODAs also
apply to section 403(b) plans. However,
under section 414A(c)(2)(A)(ii), a section
403(b) plan is excepted from the require-
ments of section 414A(a) as a pre-enact-
ment section 403(b) plan if it was estab-
lished before December 29, 2022, without
regard to the date of adoption of plan
terms that provide for salary reduction
agreements.
Q. A-6: For plan years beginning after
December 31, 2024, does section 414A(a)
apply to a starter 401(k) deferral-only ar-
rangement described in section 401(k)(16)
(B) or to a safe harbor deferral-only plan
described in section 403(b)(16)(B) (which
were added to the Code by section 121
of the SECURE 2.0 Act, applicable to
plan years beginning after December 31,
2023)?
A. A-6: Generally, yes. Unless an ex-
ception set forth in section 414A(c) of
the Code applies (for example, the ex-
ception for a new or small business un-
der section 414A(c)(4)(A) or (B)), sec-
tion 414A(a) applies to a starter 401(k)
deferral-only arrangement or to a safe
harbor deferral-only plan for plan years
beginning after December 31, 2024. Al-
though section 414A(c) sets forth sever-
al exceptions to the application of sec-
tion 414A(a), section 414A(c) does not
include a specific exception for a starter
401(k) deferral-only arrangement de-
scribed in section 401(k)(16)(B) or for a
safe harbor deferral-only plan described
in section 403(b)(16)(B). Similarly, sec-
tions 401(k)(16) and 403(b)(16) do not
provide that a starter 401(k) deferral-on-
ly arrangement or a safe harbor defer-
ral-only plan is treated as satisfying the
requirements of section 414A.
B. SECTION 102 OF THE SECURE
2.0 ACT
Section 102 of the SECURE 2.0 Act
amends section 45E of the Code to pro-
vide, for an eligible employer within the
meaning of section 408(p)(2)(C)(i)
1
: (1)
an increased small employer pension plan
startup cost credit for qualifying small
employers with no more than 50 employ-
ees; (2) a new credit based on matching
and nonelective contributions made by
qualifying small employers with no more
than 100 employees; and (3) revised rules
for the disallowance of deductions for cer-
tain small employer plan startup costs and
matching and nonelective contributions to
take into account the new credit based on
matching and nonelective contributions.
Section 102(a) of the SECURE 2.0
Act adds new paragraph (e)(4) to sec-
tion 45E of the Code. Section 45E(e)
(4) provides for an increase in the small
employer pension plan startup cost cred-
it provided under section 45E(a) (startup
costs credit), so that the credit for an eli-
gible employer with no more than 50 em-
ployees is increased from 50 percent to
100 percent of the qualified startup costs
paid or incurred by the eligible employer
(increased startup costs credit). A start-
up costs credit (including the increased
startup costs credit) is available to an
eligible employer for a first credit year
and each of the two taxable years im-
mediately following the first credit year
(together, a 3-year startup costs credit
period), as described in section 45E(b)
and (d)(3) and is subject to a dollar lim-
itation set forth in section 45E(b). Under
section 45E(d)(3), the first credit year is
(1) the taxable year that includes the date
that the eligible employer plan to which
such costs relate becomes effective with
respect to the eligible employer, or (2) at
the election of the eligible employer, the
taxable year preceding the taxable year
that the plan becomes effective.
Section 102(b) of the SECURE 2.0
Act adds new section 45E(f) to the Code.
Section 45E(f) provides for an additional
amount of credit under section 45E based
on employer matching and nonelective
contributions to an eligible employer
plan other than a defined benefit plan
(employer contributions credit). Under
section 45E(f)(1), an eligible employer is
entitled to a credit for a taxable year equal
to a specified applicable percentage of
aggregate employer contributions (other
than any elective deferrals, as defined in
section 402(g)(3)) made by the employer
during the taxable year to an eligible em-
ployer plan (other than a defined benefit
plan, as defined in section 414(j)). The
amount of the credit under section 45E(f)
(1) is limited, under section 45E(f)(2)(A),
to no more than $1,000 with respect to
any employee. In addition, under section
45E(f)(2)(C), contributions with respect
to any employee who receives wages, as
1
Under section 408(p)(2)(C)(i)(I), an employer is an eligible employer with respect to any taxable year if the employer had no more than 100 employees who received at least $5,000 of
compensation from the employer for the preceding taxable year. In addition, under section 408(p)(2)(C)(i)(II), an eligible employer that establishes and maintains a plan for one or more years
will be treated as an eligible employer for the two years following the last year the employer was an eligible employer (unless the increase in the employer’s number of employees was due
to an acquisition, disposition, or similar transaction involving the eligible employer).

Bulletin No. 2024–2 319 January 8, 2024
defined under section 3121(a) (that is,
wages for purposes of the Federal Insur-
ance Contributions Act (FICA) (chapter
21 of the Code)), from the employer for
the taxable year in excess of $100,000
(indexed for inflation) are excluded from
the credit amount calculation for the tax-
able year. Further, under section 45E(f)
(2)(B), the amount determined under sec-
tion 45E(f)(1) (after applying the section
45E(d)(2)(A) and (C) limitations) is re-
duced through a credit phase-in formula
by 2 percent for each employee of the
employer for the preceding taxable year
in excess of 50 employees. For purpos-
es of the credit formula in section 45E(f)
(1), section 45E(f)(3) provides that the
applicable percentage is 100 percent for
the first taxable year during which the el-
igible employer plan is established with
respect to the eligible employer (the first
employer contributions credit taxable
year), 100 percent for the second em-
ployer contributions credit taxable year,
75 percent for the third employer contri-
butions credit taxable year, 50 percent for
the fourth employer contributions credit
taxable year, and 25 percent for the fifth
employer contributions credit taxable
year (together, a 5-year employer contri-
butions credit period).
Section 102(c) of the SECURE 2.0
Act amends section 45E(e)(2) of the Code
with respect to the disallowance of de-
ductions for certain small employer plan
startup costs and matching and nonelec-
tive contributions to take into account the
new credit under section 45E(f), by pro-
viding that no deduction is allowed (1) for
that portion of the qualified startup costs
paid or incurred for the taxable year that
is equal to so much of the portion of the
credit determined under section 45E(a)
as is properly allocable to such costs, and
(2) for that portion of the employer con-
tributions by the employer for the taxable
year that is equal to so much of the credit
increase determined under section 45E(f)
as is properly allocable to such contribu-
tions.
Section 102(d) of the SECURE 2.0
Act provides that the amendments to sec-
tion 45E of the Code made by section 102
of the SECURE 2.0 Act apply to taxable
years beginning after December 31, 2022.
Q. B-1: Is the employer contributions
credit under section 45E(f) of the Code
treated as a separate credit that is in addi-
tion to the startup costs credit under sec-
tion 45E(a)?
A. B-1: Yes. For example, an eligi-
ble employer might be eligible both for
a startup costs credit calculated under
section 45E(a) (as limited by the dollar
limitation in section 45E(b)), and an ad-
ditional employer contributions credit cal-
culated under section 45E(f)(1) (as limit-
ed by the dollar, wage, and credit phase-in
limitations in section 45E(f)(2), but not
the dollar limitation in section 45E(b)).
Q. B-2: When is an eligible employer
plan treated as being established, for pur-
poses of determining the first (and sub-
sequent) employer contributions credit
taxable years during the 5-year employer
contributions credit period for which an
eligible employer can claim an employer
contributions credit under section 45E(f)?
A. B-2: An eligible employer plan is
treated as being established, for purposes
of determining the first (and subsequent)
employer contributions credit taxable
years during the 5-year employer con-
tributions credit period for which an el-
igible employer is permitted to claim an
employer contributions credit under sec-
tion 45E(f), on the date the plan becomes
effective with respect to the eligible em-
ployer. This determination of the first em-
ployer contributions credit taxable year
during the 5-year employer contributions
credit period is similar to the determina-
tion of the taxable year that is the first
credit year during the 3-year startup costs
credit period under section 45E(a), as
defined in section 45E(d)(3), except that
an employer is permitted to elect, under
section 45E(d)(3)(B), for the first startup
costs credit year to be the taxable year pre-
ceding the taxable year in which the plan
becomes effective with respect to the eli-
gible employer. Thus, an eligible employ-
er may be able to claim both the startup
costs credit and the employer contribu-
tions credit beginning with the taxable
year in which the plan becomes effective
with respect to the eligible employer. If
an eligible employer elects, for purposes
of the startup costs credit, for the taxable
year preceding the taxable year in which
the plan becomes effective with respect to
the eligible employer to be the first startup
costs credit year, then the 5-year employer
contributions credit period begins with the
second taxable year of the 3-year startup
costs credit period.
Q. B-3: How does a change in an em-
ployer’s status as an eligible employer
under section 408(p)(2)(C)(i) due to a
change in the number of the employer’s
employees who received at least $5,000 of
compensation from the employer for the
preceding taxable year affect the employ-
er’s eligibility for the employer contribu-
tions credit under section 45E(f) for tax-
able years during the employer’s 5-year
employer contributions credit period?
A. B-3: An employer is eligible for the
employer contributions credit for a tax-
able year during the employer’s 5-year
employer contributions credit period only
if (1) the employer was an eligible em-
ployer under section 408(p)(2)(C)(i)(I)
for the first employer contributions credit
taxable year during the employer’s 5-year
employer contributions credit period, and
(2) the employer is an eligible employ-
er under section 408(p)(2)(C)(i) for the
taxable year with respect to which the
employer contributions credit is claimed.
Accordingly, if an employer had more
than 100 employees for the taxable year
preceding the first employer contributions
credit taxable year during the employer’s
5-year employer contributions credit peri-
od, the employer will not become eligible
for the employer contributions credit for
the first time in a subsequent taxable year,
even if the number of employees who re-
ceived at least $5,000 of compensation
from the employer drops to 100 or fewer
for a taxable year following the taxable
year preceding the first taxable year in the
employer’s 5-year employer contributions
credit period.
Q. B-4: How does a change in an em-
ployer’s status as an eligible employer
under section 408(p)(2)(C)(i) due to a
change in the number of the employer’s
employees who received at least $5,000
of compensation from the employer for
a taxable year that precedes a particular
taxable year during the employer’s 3-year
startup costs credit period affect the em-
ployer’s eligibility for (1) the startup costs
credit under section 45E(a) for that partic-
ular taxable year or (2) the increased start-
up costs credit under section 45E(e)(4) for
that particular taxable year?
A. B-4: (1) An employer is eligible
for the startup costs credit under section

January 8, 2024 320 Bulletin No. 2024–2
45E(a) (disregarding the increased startup
costs credit under section 45E(e)(4)) for a
taxable year during the employer’s 3-year
startup costs credit period only if (a) the
employer was an eligible employer un-
der section 408(p)(2)(C)(i)(I) for the first
taxable year during the employer’s 3-year
startup costs credit period, and (b) the em-
ployer is an eligible employer under sec-
tion 408(p)(2)(C)(i) for the taxable year
with respect to which the startup costs
credit is claimed. Accordingly, if an em-
ployer had more than 100 employees for
the taxable year preceding the first taxable
year during the employer’s 3-year startup
costs credit period, the employer will not
become eligible for the employer contri-
butions credit for the first time in a subse-
quent taxable year, even if the number of
employees who received at least $5,000 of
compensation from the employer drops to
100 or fewer for a taxable year following
the taxable year preceding the first taxable
year during the employer’s 3-year startup
costs credit period.
(2) An employer is eligible for the in-
creased startup costs credit under section
45E(e)(4) for a taxable year during the em-
ployer’s 3-year startup costs credit period
only if (a) the employer was an eligible
employer under section 408(p)(2)(C)(i)(I),
applied by substituting “50 employees”
for “100 employees,” for the first taxable
year during the employer’s 3-year startup
costs credit period, and (b) the employer is
an eligible employer under section 408(p)
(2)(C)(i), applied by substituting “50 em-
ployees” for “100 employees,” for the tax-
able year with respect to which the startup
costs credit is claimed. Accordingly, if an
employer had more than 50 employees for
the taxable year immediately preceding
the first taxable year during the employ-
er’s 3-year startup costs credit period, the
employer will not become eligible for the
increased startup costs credit under sec-
tion 45E(e)(4) for the first time in a sub-
sequent taxable year, even if the number
of employees who received at least $5,000
of compensation from the employer drops
to 50 or fewer for a taxable year following
the taxable year preceding the first taxable
year during the employer’s 3-year startup
costs credit period.
Q. B-5: Is it possible for an employ-
er that was eligible for the startup costs
credit under section 45E(a) for a taxable
year that began on or before December 31,
2022, to be eligible for the increased start-
up costs credit under section 45E(e)(4) or
the employer contributions credit under
section 45E(f) for a taxable year that be-
gins after December 31, 2022?
A. B-5: Yes. However, an employ-
er that was eligible for the startup costs
credit under section 45E(a) for a taxable
year that began on or before December
31, 2022, can be eligible for the increased
startup costs credit under section 45E(e)
(4) or the employer contributions credit
under section 45E(f) for a taxable year that
begins after December 31, 2022, only if
there is a taxable year during the employ-
er’s applicable 3- or 5-year credit period
that begins after December 31, 2022. For
example, for an eligible employer with a
calendar year taxable year that maintains
a plan that became effective on January 1,
2021: (1) the 5-year employer contribu-
tions credit period began with the eligible
employer’s 2021 taxable year and ends
with the employer’s 2025 taxable year;
and (2) for the three employer contribu-
tions credit taxable years in the 5-year
employer contributions credit period that
begin after December 31, 2022, it is pos-
sible, if the employer meets the eligibility
requirements described in Q&A B-3 of
this notice, for the employer to be eligible
for an employer contributions credit equal
to the applicable percentage of aggregate
employer contributions set forth in section
45E(f)(1) (75 percent for the 2023 taxable
year, 50 percent for the 2024 taxable year,
and 25 percent for the 2025 taxable year).
Q. B-6: Is an eligible employer permit-
ted to take into account, for purposes of
determining the employer contributions
credit under section 45E(f) for a taxable
year, contributions to an individual who
does not have wages as defined in section
3121(a) in excess of the $100,000 (indexed
for inflation) wage limitation set forth in
section 45E(f)(2)(C) for the taxable year,
even if the individual has earned income
that is not wages as defined in section
3121(a) for the taxable year in excess of
the $100,000 amount or the individual is
a state or local government employee with
remuneration in excess of the $100,000
amount whose services are excluded from
employment under section 3121(b)(7)?
A. B-6: Yes. The $100,000 (indexed
for inflation) wage limitation set forth in
section 45E(f)(2)(C), under which no con-
tributions with respect to any individual
who receives wages from the employer
for a taxable year in excess of $100,000
(indexed for inflation) may be taken into
account for purposes of determining em-
ployer contributions credits for the tax-
able year, only applies with respect to an
individual who has wages as defined in
section 3121(a) that are in excess of the
wage limitation for the taxable year. Ac-
cordingly, contributions with respect to
an individual who does not have any
wages as defined in section 3121(a) for
a taxable year because the individual is
self-employed (including a partner) or
because the individual is a state or local
government employee whose services are
excluded from employment under sec-
tion 3121(b)(7) (and, thus, does not have
wages as defined in section 3121(a)) may
be taken into account for purposes of de-
termining employer contributions credits
for the taxable year, even if the individual
has earned income or remuneration from a
state or local government in excess of the
$100,000 wage limitation.
Q. B-7: In which taxable year of an el-
igible employer is a matching or nonelec-
tive contribution made by the employer
to an eligible employer plan taken into
account for purposes of the employer con-
tributions credit under section 45E(f)?
A. B-7: A matching or nonelective
contribution made by an eligible employ-
er to an eligible employer plan is taken
into account for purposes of the employer
contributions credit for the same taxable
year that a deduction under section 404(a)
would apply with respect to the contribu-
tion. Thus, an employer is deemed to have
made a matching or nonelective contribu-
tion on the last day of the preceding tax-
able year if the contribution is on account
of that taxable year and is not made later
than the time prescribed by law for filing
the return for that taxable year (including
extensions thereof). See section 404(a)(6).
C. SECTION 112 OF THE SECURE
2.0 ACT
Section 112 of the SECURE 2.0 Act
amends the Code to add new section
45AA, which provides a military spouse
retirement plan eligibility credit for small
employers (section 45AA credit). This

Bulletin No. 2024–2 321 January 8, 2024
new credit provides a business credit un-
der section 38 of the Code for an eligible
employer that provides for participation
and benefits to a military spouse under
an eligible defined contribution plan or
plans of the employer (as defined under
section 45AA(e)) within two months after
the military spouse’s date of hire by the
employer.
Section 45AA(a) provides that the sec-
tion 45AA credit for the taxable year is
equal to the sum of (1) $200 with respect
to each military spouse who is an employ-
ee of the employer and who participates in
an eligible defined contribution plan of the
employer at any time during the taxable
year, plus (2) so much of the contributions
made by the employer (other than an elec-
tive deferral as defined in section 402(g)
(3)) to all eligible defined contribution
plans with respect to the employee during
the taxable year as do not exceed $300.
Section 45AA(b) provides that, for pur-
poses of the section 45AA credit, a mili-
tary spouse is only taken into account for
the taxable year which includes the date
on which the spouse began participating
in the eligible defined contribution plan of
the employer and the two succeeding tax-
able years (3-year credit period).
Section 45AA(c) provides that the
term “eligible small employer” means an
eligible employer as defined in section
408(p)(2)(C)(i)(I), which requires that an
employer have had no more than 100 em-
ployees who received at least $5,000 of
compensation from the employer for the
preceding taxable year.
Section 45AA(d) defines a military
spouse as any individual who is married
(within the meaning of section 7703 as
of the first date that the employee is em-
ployed by the employer) to an individual
who is a member of the uniformed ser-
vices (as defined in section 101(a)(5) of
title 10, United States Code) serving on
active duty. For purposes of the credit, an
employer may rely on an employee’s cer-
tification that the employee’s spouse is a
member of the uniformed services if the
certification provides the name, rank, and
service branch of the spouse. However,
section 45AA(d)(2) of the Code provides
that a military spouse does not include
any individual who is a highly compensat-
ed employee of the employer (within the
meaning of section 414(q)).
Section 45AA(e) defines an eligible
defined contribution plan as any defined
contribution plan (as defined in section
414(i)) of the eligible small employer if,
under the terms of the plan, (1) military
spouses employed by the employer are
eligible to participate in the plan not lat-
er than the date which is two months af-
ter the date on which the military spouse
begins employment with the employer,
and (2) military spouses who are eligi-
ble to participate in the plan (A) are im-
mediately eligible to receive an amount
of employer contributions under the
plan which is not less than the amount
of contributions that a similarly situated
participant who is not a military spouse
would be eligible to receive under the
plan after two years of service, and (B)
immediately have a nonforfeitable right
to the employee’s accrued benefit de-
rived from employer contributions un-
der the plan.
Section 45AA(f) provides that all per-
sons treated as a single employer under
section 414(b), (c), (m), or (o) will be
treated as one employer for purposes of
section 45AA.
Section 112(e) of the SECURE 2.0 Act
provides that the section 45AA credit ap-
plies to taxable years of the employer be-
ginning after December 29, 2022.
Q. C-1: May an employer claim the
section 45AA credit with respect to a mil-
itary spouse for any taxable year of the
employer within the 3-year credit period
for which the employer does not meet the
requirements of section 408(p)(2)(C)(i)(I)
of the Code?
A. C-1: No. Section 45AA(c) specifies
that the employer must meet the require-
ments of section 408(p)(2)(C)(i)(I) to be
eligible for the section 45AA credit for a
taxable year. For example, if an employ-
er had no more than 100 employees who
received at least $5,000 of compensation
from the employer for the taxable year
preceding the 2024 taxable year but more
than 100 such employees for the taxable
year preceding both the employer’s 2023
and 2025 taxable years, with respect to a
military spouse whose 3-year credit peri-
od begins in the employer’s 2023 taxable
year and ends in the employer’s 2025 tax-
able year, the employer is eligible for the
section 45AA credit only for the employ-
er’s 2024 taxable year.
Q. C-2: May an eligible small employer
claim the section 45AA credit with respect
to a military spouse who participated in a
defined contribution plan of the employer
before the employer amends the plan to
become an eligible defined contribution
plan, or adopts another plan that is an el-
igible defined contribution plan in which
the military spouse participates?
A. C-2: Yes. If an employer amends the
plan (or adopts another plan) to become
an eligible defined contribution plan, the
employer is eligible for the section 45AA
credit for the employer’s taxable year that
includes the later of the date on which the
plan or amendment becomes effective and
the date on which the military spouse be-
gan participating in the plan after it was
amended (or adopted) to become an eli-
gible defined contribution plan and any
of the 2 succeeding taxable years during
which the military spouse participates
in the plan for any period (3-year credit
period). A military spouse’s 3-year credit
period begins from the first date that the
military spouse participates in any eligible
defined contribution plan of the employ-
er. For example, for an eligible small em-
ployer that uses the calendar year as the
employer’s taxable year and that amends
a defined contribution plan, effective Jan-
uary 1, 2024, to provide the benefits enu-
merated in section 45AA(e) to all military
spouses employed by the employer, with
respect to a military spouse who began
participating in the plan on June 15, 2020
(and who has not participated in any oth-
er eligible defined contribution plans of
the employer), the employer may claim
a section 45AA credit (of the applicable
amount) for any of the employer’s 2024,
2025, or 2026 taxable years during which
the military spouse participates in the plan
for any period.
Q. C-3: May an eligible small employ-
er claim the section 45AA credit with re-
spect to a military spouse whose 3-year
credit period described in Q&A C-2 of this
notice began during a taxable year of the
employer beginning on or before Decem-
ber 29, 2022?
A. C-3: Yes. The employer is eligible
for the section 45AA credit for any taxable
year of the employer beginning after De-
cember 29, 2022 that remains within the
military spouse’s 3-year credit period, as
described in Q&A C-2 of this notice. For

January 8, 2024 322 Bulletin No. 2024–2
example, for an eligible small employ-
er that uses the calendar year as the em-
ployer’s taxable year and that adopted a
defined contribution plan that provides the
benefits enumerated in section 45AA(e) to
all employees employed by the employer
and that became effective as of January
1, 2021, with respect to a military spouse
who began participating in the plan within
2 months of the spouse’s date of hire by
the employer on June 15, 2022, the em-
ployer may claim a section 45AA credit
(of the applicable amount) for any of the
employer’s 2023 and 2024 taxable years
during which the spouse participates in
the plan for any period.
D. SECTION 113 OF THE SECURE
2.0 ACT
Section 401(k)(4)(A), prior to amend-
ment by section 113(a) of the SECURE
2.0 Act, provided that “a cash or deferred
arrangement of any employer shall not
be treated as a qualified cash or deferred
arrangement if any other benefit is condi-
tioned (directly or indirectly) on the employ-
ee electing to have the employer make or not
make contributions under the arrangement
in lieu of receiving cash. The preceding sen-
tence shall not apply to any matching contri-
bution (as defined in section 401(m) of the
Code) made by reason of such an election.”
This provision is commonly referred to as
the contingent benefit rule.
Section 403(b)(12)(A) describes non-
discrimination requirements that apply
to section 403(b) plans under which em-
ployees participate pursuant to salary re-
duction agreements. Section 403(b)(12)
(A)(ii), which is commonly referred to
as the universal availability requirement,
provides that a section 403(b) plan will
satisfy the applicable nondiscrimination
requirements if all employees of the orga-
nization may elect to have the employer
make contributions of more than $200
pursuant to a salary reduction agreement
if any employee of the organization may
elect to have the organization make con-
tributions for such contracts pursuant to
such agreement.
Section 1.403(b)-5(b)(2) provides that
an employee is not treated as being per-
mitted to have section 403(b) elective
deferrals contributed on the employee’s
behalf unless the employee is provided an
effective opportunity that satisfies the re-
quirements of that paragraph. An effective
opportunity is not considered to exist if
there are any other rights or benefits (oth-
er than matching contributions or other
rights or benefits listed in § 1.401(k)-1(e)
(6)(i)) that are conditioned (directly or in-
directly) upon the participant making or
failing to make a cash or deferred election
with respect to a contribution to a section
403(b) contract.
Section 113(a) of the SECURE 2.0
Act amended section 401(k)(4)(A) of
the Code to provide that a de minimis fi-
nancial incentive (not paid for with plan
assets) provided to employees who elect
to have the employer make contributions
under the arrangement in lieu of receiving
cash will not violate the contingent benefit
rule of section 401(k)(4)(A).
Section 113(b) of the SECURE 2.0 Act
amended section 403(b)(12)(A) of the
Code to provide that a plan does not fail to
satisfy section 403(b)(12)(A)(ii) solely by
reason of offering a de minimis financial
incentive (not derived from plan assets) to
employees to elect to have the employer
make contributions pursuant to a salary
reduction agreement.
Section 113(c) of the SECURE 2.0 Act
amended section 4975(d) of the Code to
add a new paragraph (24) under which
the provision of a de minimis financial
incentive described in section 401(k)(4)
(A) is exempted from the tax on prohibit-
ed transactions. As a conforming change,
section 113(d) of the SECURE 2.0 Act
amended section 408(b) of the Employee
Retirement Income Security Act of 1974,
Pub. L. 93-406, 88 Stat. 829, as amend-
ed (ERISA), to add a new paragraph (21)
under which the provision of a de mini-
mis financial incentive described in either
section 401(k)(4)(A) or 403(b)(12)(A) of
the Code is exempted from the ERISA
prohibited transaction rules.
Section 113 of the SECURE 2.0 Act
did not specify what would constitute a de
minimis financial incentive described in
section 401(k)(4)(A) or 403(b)(12)(A)(ii)
of the Code. However, legislative history
mentions gift cards in small amounts as
an example of a de minimis financial in-
centive an employer might offer to boost
employee participation in workplace re-
tirement plans (see H. Rept. 117-283, Part
1 (117 Cong. 2d Sess.) at 86).
Section 113 of the SECURE 2.0 Act
is effective for plan years beginning after
December 29, 2022.
Q. D-1: Is there a limit on the value of
a financial incentive for the incentive to be
a de minimis financial incentive described
in section 401(k)(4)(A) of the Code?
A. D-1: A financial incentive is a de
minimis financial incentive described in
section 401(k)(4)(A) only if it does not
exceed $250 in value.
Q. D-2: Does the exception to the
contingent benefit rule that is described
in section 401(k)(4)(A) for a de minimis
financial incentive provided to employ-
ees who elect to have the employer make
contributions under a CODA apply to an
employee for whom an election to defer is
already in effect?
A. D-2: A de minimis financial incen-
tive is described in section 401(k)(4)(A)
only if it is offered to employees for whom
no election to defer under the CODA is al-
ready in effect. Thus, for example, if an
employer announces on February 1, 2024,
that any employee for whom an election
to defer under a CODA is not in effect on
that date and who, within the next 90 days,
makes an election to defer, will receive a
$200 gift card, then the gift card is a de
minimis financial incentive that does not
cause the CODA to fail to be a qualified
CODA on account of the contingent bene-
fit rule of section 401(k)(4)(A). A financial
incentive does not fail to be a de minimis
financial incentive described in section
401(k)(4)(A) merely because the incentive
is provided in the form of installments that
are contingent on the employee’s continu-
ing to defer (even if those installments are
paid over more than one plan year). Thus,
if the employer in the preceding example
provides a $100 gift card (instead of pro-
viding a $200 gift card) with a promise to
provide an additional $100 gift card a year
later, but only if the employee continues to
defer at that later date, then the $200 total
amount of gift cards is still a de minimis
financial incentive within the meaning of
section 401(k)(4)(A).
Q. D-3: Can a matching contribution
within the meaning of section 401(m)(4)
be a de minimis financial incentive de-
scribed in section 401(k)(4)(A)?
A. D-3: No. A matching contribution
cannot be a de minimis financial incentive
described in section 401(k)(4)(A).

Bulletin No. 2024–2 323 January 8, 2024
Q. D-4: Is the provision of a de mini-
mis financial incentive described in sec-
tion 401(k)(4)(A) subject to the rules un-
der the Code that apply with respect to a
plan contribution?
A. D-4: No. A de minimis financial in-
centive described in section 401(k)(4)(A)
is not subject to the Code rules that apply
to a plan contribution, including the qual-
ification requirements of section 401(a)
and the deductibility timing rules of sec-
tion 404(a).
Q. D-5: What is an employee’s tax
treatment with respect to a de minimis
financial incentive described in section
401(k)(4)(A) that is provided by an em-
ployer?
A. D-5: If an employer provides a de
minimis financial incentive described in
section 401(k)(4)(A) to an employee, that
incentive constitutes remuneration that is
includible in the employee’s gross income
and wages and is subject to applicable
withholding and reporting requirements
for employment tax purposes, unless the
provision of the de minimis financial in-
centive satisfies an exception under the
Code. For example, the $200 gift card de-
scribed in Q&A D-2 of this notice is not
excludable from the employee’s gross in-
come as a de minimis fringe benefit with-
in the meaning of section 132(e) and §
1.132-6(c) because, as a cash equivalent,
it is not eligible for that exclusion (and
therefore the gift card is includible in the
employee’s gross income and wages and
is a taxable fringe benefit for employment
tax and reporting purposes unless another
exception applies).
Q. D-6: Do the rules of Q&A D-1
through Q&A D-5 of this notice apply
with respect to a de minimis financial in-
centive described in section 403(b)(12)
(A) of the Code that is offered to employ-
ees to elect to have the employer make
contributions to a section 403(b) plan on
their behalf pursuant to a salary reduction
agreement?
A. D-6: Yes. The statutory provisions
that apply with respect to a de minimis
financial incentive described in section
403(b)(12)(A) are generally the same as
the statutory provisions that apply with
respect to a de minimis financial incentive
described in section 401(k)(4)(A). Ac-
cordingly, the rules of Q&A D-1 through
Q&A D-5 of this part D of this notice also
apply with respect to a de minimis finan-
cial incentive described in section 403(b)
(12)(A).
E. SECTION 117 OF THE SECURE
2.0 ACT
A SIMPLE IRA plan under section
408(p) or a SIMPLE 401(k) plan under
section 401(k)(11) is a plan under which
employees may elect to have salary re-
duction contributions (or elective contri-
butions, in the case of a SIMPLE 401(k)
plan) made on their behalf, and which
may only be sponsored by an eligible em-
ployer defined in section 408(p)(2)(C)(i)
(that is, generally, an employer who has
100 or fewer employees who received at
least $5,000 of compensation from the
employer for the preceding year). Under
a SIMPLE IRA plan or SIMPLE 401(k)
plan, the employer generally is required
to make either (1) a matching contribution
equal to the employee’s salary reduction
contributions or elective contributions that
do not exceed 3 percent of the employ-
ee’s compensation or (2) a nonelective
contribution of 2 percent of the employ-
ee’s compensation (regardless of whether
the employee elects to make contribu-
tions). Section 116 of the SECURE 2.0
Act amends sections 408(p) and 401(k)
(11) of the Code to permit the employer
to make additional nonelective contribu-
tions (up to 10 percent of compensation of
each employee eligible to participate, but
initially limited to $5,000 with respect to
each employee). Under section 408(p)(2)
(D), an employer generally cannot make
contributions to a SIMPLE IRA plan or a
SIMPLE 401(k) plan for a year if the em-
ployer maintained another qualified plan
with respect to which contributions were
made or benefits accrued for the period
beginning with the year that the SIMPLE
IRA plan or SIMPLE 401(k) plan was es-
tablished and ending with the current year.
Notice 98-4, 1998-1 CB 269, provides
guidance regarding SIMPLE IRA plans,
such as guidance on the determination of
the number of employees who received at
least $5,000 of compensation for the pre-
ceding year and the required notifications
to employees.
Section 117 of the SECURE 2.0 Act
amends sections 408(p), 401(k)(11), and
414(v) of the Code to increase both the
annual salary reduction contribution/
elective contribution limit and the limit
on additional catch-up contributions be-
ginning at age 50 for a SIMPLE IRA plan
or a SIMPLE 401(k) plan for certain eligi-
ble employers. For some of those eligible
employers, the increased limits apply au-
tomatically; while other of those eligible
employers must make an election for the
increased limits to apply and must also
make additional employer contributions.
The increased limits are 110 percent of the
otherwise applicable limits for 2024.
2

Section 117(h) of the SECURE 2.0 Act
provides that the amendments made by
section 117 of the SECURE 2.0 Act apply
for taxable years beginning after Decem-
ber 31, 2023.
Q. E-1: For which eligible employers
do the increased limits under section 117
of the SECURE 2.0 Act apply?
A. E-1: The increased limits under sec-
tion 117 of the SECURE 2.0 Act apply to
an eligible employer described in section
408(p)(2)(E)(iv)
3
of the Code. An eligible
employer is described in section 408(p)(2)
(E)(iv) if, during the 3-taxable year period
preceding the first year that the employer
maintained the SIMPLE IRA plan or SIM-
PLE 401(k) plan, the employer (including
any member of the employer’s controlled
group or any predecessor of the employ-
er or any member) has not established or
maintained a qualified plan under section
401(a), a section 403(a) annuity plan, or a
section 403(b) plan under which contribu-
tions were made or benefits were accrued
for substantially the same employees as
are eligible to participate in the SIMPLE
IRA plan or SIMPLE 401(k) plan.
Q. E-2: What are the differences in
how the increased limits apply to eligible
2
The annual salary reduction contribution/elective contribution limit for a SIMPLE IRA plan or SIMPLE 401(k) plan for 2023 is $15,500 and the limit on additional catch-up contributions
beginning at age 50 for 2023 is $3,500.
3
Section 408(p)(2)(E)(i)(I) and (II) refer to “an eligible employer described in clause (iii).” There is no description of an eligible employer in clause (iii), but there is a description of eligible
employer in clause (iv).

January 8, 2024 324 Bulletin No. 2024–2
employers described in section 408(p)(2)
(E)(iv) depending on the number of em-
ployees of the employer?
A. E-2: The increased limits apply au-
tomatically in the case of an eligible em-
ployer described in section 408(p)(2)(E)
(iv) that has no more than 25 employees
who received at least $5,000 of compen-
sation for the preceding calendar year.
For an employer that has more than 25
employees who received at least $5,000
of compensation for the preceding year,
the increased limits apply only if the em-
ployer makes an election for the increased
limits to apply. If the employer makes an
election for the increased limits to apply,
the employer must provide higher match-
ing or nonelective contributions, as de-
scribed in Q&A E-5 of this notice.
Q. E-3: How are the number of em-
ployees who received at least $5,000 of
compensation for the preceding year de-
termined?
A. E-3: The rules set forth in Q&A
B-1 of Notice 98-4 apply for purposes
of calculating the number of employees.
Thus, all employees employed at any time
during the calendar year are taken into ac-
count, regardless of whether they are el-
igible to participate in the SIMPLE IRA
plan or SIMPLE 401(k) plan (including
employees excludable under the rules of
section 410(b)(3) or who have not met the
plan’s minimum eligibility requirements,
as well as self-employed individuals de-
scribed in section 401(c)(1) who received
earned income from the employer during
the year).
For purposes of determining whether
an employer has no more than 25 employ-
ees who received at least $5,000 of com-
pensation for the preceding year, there
generally is a 2-year grace period. Thus, if
an employer that has no more than 25 em-
ployees increases the number of employ-
ees to more than 25, the employer will still
be treated as having 25 employees for two
years following the last year the employer
had no more than 25 employees (unless
the increase in the employer’s number of
employees was due to an acquisition, dis-
position, or similar transaction involving
the eligible employer).
Q. E-4: How does an employer reflect
the increased limits?
A. E-4: An employer that must make
an election to apply the increased limits
must take formal written action to make
an election to reflect the increased limits
and should maintain documentation of
the election in the plan’s records. An em-
ployer (including employers for whom
the increased limits apply automatically)
must reflect the increased limits in the
plan terms (see section II.J. of this notice
regarding plan amendment deadlines) and
must notify employees of the increased
limits (see Q&A E-6 of this notice).
Q. E-5: If an employer makes an elec-
tion to apply the increased limits, what
other contributions must be made?
A. E-5: If an employer makes an elec-
tion under Q&A E-4 of this notice to
apply the increased limits, the employer
must make matching contributions equal
to the employee’s salary reduction con-
tributions or elective contributions that
do not exceed 4 percent (increased from
3 percent) of the employee’s compensa-
tion or make a nonelective contribution
of 3 percent (increased from 2 percent) of
the employee’s compensation (regardless
of whether the employee elects to make
contributions).
Q. E-6: Who must an employer notify
of the increased limits?
A. E-6: The employer must notify em-
ployees of the increased limits. The notice
must be included in the annual employer
notification that informs employees of
the opportunity to enter into a salary re-
duction agreement or to modify a prior
agreement. In the case of an employer for
whom the increased limits apply pursu-
ant to an election, the employer also must
notify employees of the increased match-
ing contribution or increased nonelective
contribution. The employer should also
(1) notify the SIMPLE IRA plan’s or
SIMPLE 401(k) plan’s financial institu-
tion and payroll provider of the increased
limits, and (2) keep records of all actions
concerning the increased limits. However,
the employer does not need to notify the
IRS of the election to apply the increased
limits.
Q. E-7: What is the deadline for an em-
ployer to make the election to apply the
increased limits for a year?
A. E-7: An employer election to apply
the increased limits for a calendar year
must be made before the employer pro-
vides the annual notice to each employee
of the employee’s opportunity to enter
into a salary reduction agreement or to
modify a prior agreement for that cal-
endar year, as provided in Q&A G-1 of
Notice 98-4.
Q. E-8: For how long is an employer
election to apply the increased limits ef-
fective?
A. E-8: An employer’s election to ap-
ply the increased limits is effective until it
is revoked by the employer. The employer
must take formal written action to revoke
the election before the employer provides
the annual notice to each employee of the
employee’s opportunity to enter into a
salary reduction agreement or to modify
a prior agreement for the next calendar
year. The employer should maintain doc-
umentation of the revocation in the plan’s
records.
If an employer revokes a prior election
to apply the increased limits, the employer
must also amend the plan terms to reflect
the revocation (see section II.J. of this no-
tice regarding plan amendment deadlines)
and notify employees of the applicable
limits (see generally Q&A E-6 of this no
-
tice).
F. SECTION 326 OF THE SECURE
2.0 ACT
Section 72(t)(1) generally imposes a 10
percent additional tax on any distribution
from a qualified retirement plan within
the meaning of section 4974(c), unless
the distribution qualifies for one of the
exceptions listed in section 72(t)(2). Sec-
tion 326 of the SECURE 2.0 Act amended
section 72(t)(2) of the Code to add a new
exception to the 10 percent additional tax
for any distribution made to a terminally
ill individual.
Section 72(t)(2)(L) permits an em-
ployee
4
who is a terminally ill individual
to receive a distribution (terminally ill in-
4
Section 72(t)(5) provides that, for purposes of section 72(t), the term “employee” includes any participant, and in the case of an individual retirement plan, an individual for whose benefit
such plan was established.

Bulletin No. 2024–2 325 January 8, 2024
dividual distribution) on or after the date
on which the employee has been certi-
fied by a physician as having a terminal
illness. Section 72(t)(2)(L)(ii) provides
that the term “terminally ill individual”
has the same meaning given that term un-
der section 101(g)(4)(A), except that “84
months” is substituted for “24 months.”
Section 72(t)(2)(L)(iii) provides that,
in order to be considered a terminally ill
individual, an employee must furnish suf-
ficient evidence to the plan administrator
in the form and manner as the Secretary
of the Treasury (Secretary) may require.
A terminally ill individual distribution is
includible in gross income but is not sub-
ject to the 10 percent additional tax under
section 72(t)(1). Section 72(t)(2)(L)(iv)
provides that a terminally ill individual
distribution may be repaid following rules
similar to repayment of qualified birth or
adoption distributions in section 72(t)(2)
(H)(v).
The amendment made to section 72(t)
(2) by section 326 of the SECURE 2.0 Act
applies to terminally ill individual distri-
butions made after December 29, 2022.
The Treasury Department and the IRS
intend to issue regulations under sec-
tion 72(t) of the Code, including provid-
ing guidance on exceptions under section
72(t)(2) as added by the SECURE 2.0 Act
(such as the exception to the 10 percent
additional tax for an eligible distribution
to a domestic abuse victim).
Questions and Answers Relating to
Terminally Ill Individual Distributions
Q. F-1: What is a terminally ill individ-
ual distribution?
A. F-1: The term “terminally ill indi-
vidual distribution” means any distribu-
tion from a qualified retirement plan to an
employee (as defined in section 72(t)(5))
who is a terminally ill individual (within
the meaning of Q&A F-4 of this notice)
that is made on or after the date on which
the employee has been certified by a phy-
sician as having a terminal illness. The
certification must satisfy the content re-
quirements in Q&A F-6 of this notice.
Q. F-2: Which types of plans are eli-
gible to permit a terminally ill individual
distribution?
A. F-2: Unlike qualified birth or adop-
tion distributions in section 72(t)(2)(H),
which uses the term “applicable eligible
retirement plan” described in section 72(t)
(2)(H)(vi)(I), section 72(t)(2)(L) does not
include a special definition of retirement
plan. Section 72(t)(1) provides that the 10
percent additional tax applies to any amount
received from a qualified retirement plan
within the meaning of section 4974(c).
Therefore, for purposes of section 72(t)(2)
(L), a terminally ill individual distribution
may be made from a qualified retirement
plan as defined in section 4974(c), which
is defined as a section 401(a) qualified plan
(including a defined benefit plan), sec-
tion 403(a) annuity plan, section 403(b) an-
nuity contract, or an individual retirement
account described in section 408(a) or an
individual retirement annuity described
in section 408(b).
5
Note that, for purposes
of section 72(t)(2)(L), an eligible deferred
compensation plan that is maintained by
an eligible employer described in sec-
tion 457(e)(1)(A) is not eligible to permit
a terminally ill individual distribution be-
cause it is not a qualified retirement plan as
defined in section 4974(c).
Q. F-3: Is a terminally ill individual
distribution subject to the 10 percent addi-
tional tax under section 72(t)?
A. F-3: No. Although a terminally ill in-
dividual distribution is includible in gross
income, it is not subject to the 10 percent
additional tax under section 72(t)(1).
Q. F-4: Who is a terminally ill individ-
ual for purposes of the exception to the 10
percent additional tax under section 72(t)
(2)(L)?
A. F-4: Section 72(t)(2)(L)(ii) provides
that the term “terminally ill individual”
has the same meaning as the term under
section 101(g)(4)(A), except that “84
months” is substituted for “24 months.”
Thus, for purposes of the exception to
the 10 percent additional tax under sec-
tion 72(t)(2)(L), a terminally ill individual
means an individual who has been certi-
fied by a physician as having an illness or
physical condition that can reasonably be
expected to result in death in 84 months or
less after the date of the certification.
Q. F-5: In determining who is a ter-
minally ill individual, how is the term
“physician” defined for purposes of sec-
tion 72(t)(2)(L)?
A. F-5: The definition of terminally ill
individual under section 72(t)(2)(L) is de-
rived, in part, from the definition of termi-
nally ill individual under section 101(g)(4)
(A). For purposes of section 72(t)(2)(L), a
physician capable of making a certification
is a physician defined in section 101(g)(4)
(D), which has the same meaning as the
term used in section 1861(r)(1) of the So-
cial Security Act (42 USC 1395x(r)(1)).
Thus, for purposes of section 72(t)(2)(L)
of the Code, the term “physician” generally
means a doctor of medicine or osteopathy
that is legally authorized to practice medi-
cine and surgery by the State in which the
doctor performs such function or action.
6

Q. F-6: For purposes of section 72(t)(2)
(L), what must be included in a certifica-
tion of terminal illness from a physician?
A. F-6: A certification of terminal ill-
ness from a physician must include the
following:
(1) A statement that the individual’s
illness or physical condition can be rea-
sonably expected to result in death in 84
months or less after the date of certification;
(2) A narrative description of the evi-
dence that was used to support the state-
ment of illness or physical condition (as
described in this F-6 (1));
(3) The name and contact information
of the physician making the statement;
(4) The date the physician examined
the individual or reviewed the evidence
provided by the individual, and the date
that the certification is signed by the phy-
sician; and
(5) The signature of the physician mak-
ing the statement, and an attestation from
the physician that, by signing the form,
the physician confirms that the physician
composed the narrative description based
on the physician’s examination of the in-
dividual or the physician’s review of the
evidence provided by the individual.
5
For purposes of this notice, the term “IRA” includes both an individual retirement account described in section 408(a) and an individual retirement annuity described in section 408(b).
6
The definition of “State” for purposes of 42 USC 1395x(r)(1) is in 42 USC 410(h), which provides that the term “State” includes the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, and American Samoa.

January 8, 2024 326 Bulletin No. 2024–2
As provided in Q&A F-13 of this no-
tice, for purposes of section 72(t)(2)(L)
(iii), it is not sufficient evidence for an
employee who is a physician to certify the
physician’s own terminal illness.
Q. F-7: May a certification be made af-
ter an employee receives a terminally ill
individual distribution?
A. F-7: No. For a distribution to be a
terminally ill individual distribution, for
purposes of section 72(t)(2)(L) and Q&A
F-1 of this notice, the distribution must
be made on or after the date a physician
makes the certification that the employee
has a terminal illness.
Q. F-8: Is there a limit on the amount
received as a terminally ill individual dis-
tribution?
A. F-8: In general, there is no limit on
the amount that an employee is permitted
to receive as a terminally ill individual
distribution. However, see Q&A F-15 of
this notice for rules on when an employee
may elect to treat an otherwise permissi-
ble in-service distribution as a terminally
ill individual distribution.
Q. F-9: May an employee recontribute
a terminally ill individual distribution to a
qualified retirement plan?
A. F-9: Yes. An employee may re-
contribute any portion of a terminally ill
individual distribution (up to the entire
amount of the terminally ill individual
distribution) to a qualified retirement plan
in which the employee is a beneficiary
and to which a rollover can be made under
sections 402(c), 403(a)(4), 403(b)(8), or
408(d)(3), as applicable. Rules similar to
recontributions of qualified birth or adop-
tion distributions in section 72(t)(2)(H)(v)
apply for purposes of terminally ill indi-
vidual distributions.
7
Questions and Answers Relating to
Qualified Retirement Plans Permitting
Terminally Ill Individual Distributions
Q. F-10: Is a qualified retirement plan
required to permit terminally ill individual
distributions under section 72(t)(2)(L)?
A. F-10: No. It is optional for a quali-
fied retirement plan, including an IRA, to
permit terminally ill individual distribu-
tions pursuant to section 72(t)(2)(L). Plan
amendments adopted to permit terminally
ill individual distributions are discretion-
ary amendments for purposes of the plan
amendment rules discussed in section II.J.
of this notice. To the extent that a qualified
retirement plan does not permit terminally
ill individual distributions, the employee
is permitted to treat an otherwise permis-
sible in-service distribution as a terminal-
ly ill individual distribution. See Q&A
F-15 of this notice.
Q. F-11: If an employer chooses to
amend its qualified retirement plan to per-
mit terminally ill individual distributions,
what is the deadline for adopting that
amendment?
A. F-11: For information relating to the
deadline for adopting plan amendments,
see section II.J. of this notice.
Q. F-12: Do terminally ill individual
distributions from a qualified retirement
plan meet the distribution restriction re-
quirements in sections 401(k)(2)(B)(i),
403(b)(7)(A)(i), and 403(b)(11)?
A. F-12: No. Section 72(t)(2)(L) pro-
vides an exception to the 10 percent ad-
ditional tax but does not provide an ex-
ception from the distribution restriction
requirements in sections 401(k)(2)(B)(i),
403(b)(7)(A)(i), and 403(b)(11). There-
fore, for a plan that is subject to the dis-
tribution restriction requirements under
sections 401(k)(2)(B)(i), 403(b)(7)(A)
(i), and 403(b)(11) to permit a terminally
ill individual distribution to an employee
and not violate the distribution restric-
tion requirements, the employee must
otherwise be eligible for a permissible
in-service distribution. Thus, for exam-
ple, a section 401(k) plan may distribute
a terminally ill individual distribution to
an employee who is otherwise eligible for
a permissible in-service distribution and
meets the requirements of that permissible
in-service distribution, such as a hardship
distribution or a disability distribution,
without violating the distribution restric-
tion requirements under section 401(k)(2)
(B)(i). However, for the hardship distribu-
tion or disability distribution to also meet
the requirements of a terminally ill indi-
vidual distribution, the distribution must
also meet the applicable requirements in
this notice for a terminally ill individual
distribution, including the content re-
quirement for the certification described
in Q&A F-6 of this notice, the timing re-
quirement for the certification described
in Q&A F-7 of this notice, and the docu-
mentation requirement described in Q&A
F-13 of this notice.
Q. F-13: In order for an employee to be
a terminally ill individual for purposes of
section 72(t)(2)(L), what documentation
is required to be provided to a plan admin-
istrator under section 72(t)(2)(L)(iii)?
A. F-13: An employee must furnish to
the plan administrator a physician’s certi-
fication that certifies that the employee is
a terminally ill individual. A physician’s
certification is sufficient evidence that an
employee is a terminally ill individual.
However, for purposes of section 72(t)(2)
(L)(iii), it is not sufficient evidence for an
employee who is a physician to certify the
physician’s own terminal illness.
Although the certification must meet
the requirements of Q&A F-6 of this no-
tice, as well as this Q&A, it does not need
to include the underlying documentation
upon which the certification is based.
However, the employee should retain both
the underlying documentation and a copy
of the certification for the employee’s tax
records (as required by section 6001).
A plan administrator for purposes of
section 72(t)(2)(L)(iii) is a plan adminis-
trator as defined in section 414(g), or an
IRA trustee, custodian, or issuer. Howev-
er, see Q&A F-15 of this notice for rules
relating to when a qualified retirement
plan does not permit terminally ill indi-
vidual distributions.
Q. F-14: May a plan administrator rely
on a self-certification of an employee that
the employee is terminally ill?
A. F-14: No. For a qualified retirement
plan that permits terminally ill individ-
ual distributions, section 72(t)(2)(L)(i)
requires that an employee must be certi-
fied by a physician as having a terminal
illness. As provided in section 72(t)(2)(L)
(iii), an employee generally will not be
considered terminally ill unless the em-
ployee provides sufficient evidence of the
7
Section 311 of the SECURE 2.0 Act amends section 72(t)(2)(H)(v)(I) of the Code to require that an individual who receives a qualified birth or adoption distribution may, at any time during
the 3-year period beginning on the day after the date on which the distribution was received, recontribute the qualified birth or adoption distribution to an applicable eligible retirement plan.
Section 311 of the SECURE 2.0 Act is generally effective for qualified birth or adoption distributions made after December 29, 2022.

Bulletin No. 2024–2 327 January 8, 2024
terminal illness to the plan administrator.
The only documentation required to be
provided to the plan administrator is the
certification from a physician that meets
the requirements of Q&As F-6 and F-13
of this notice.
Q. F-15: If a qualified retirement plan
does not permit terminally ill individual
distributions, may an employee treat an
otherwise permissible in-service distribu-
tion as a terminally ill individual distribu-
tion?
A. F-15: Yes. If a qualified retirement
plan does not permit terminally ill individ-
ual distributions and an employee receives
an otherwise permissible in-service distri-
bution that meets the requirements of both
the permissible in-service distribution and
a terminally ill individual distribution,
the employee may treat the distribution
as a terminally ill individual distribution
on the employee’s federal income tax re-
turn. As part of the employee’s tax return,
the employee will claim on Form 5329,
Additional Taxes on Qualified Plans (In-
cluding IRAs) and Other Tax-Favored Ac-
counts, that the distribution is a terminally
ill individual distribution, in accordance
with form’s instructions. The employee
must retain the physician’s certification
that meets the requirements of Q&A F-6
and F-13 of this notice in the employee’s
tax files (as required by section 6001) in
case the IRS later requests the certifica-
tion. The terminally ill individual distri-
bution, while includible in gross income,
is not subject to the 10 percent additional
tax under section 72(t)(1). If the employ-
ee decides to recontribute the amount to
a qualified retirement plan, the employee
may recontribute the amount to an IRA.
For example, on May 15, 2024, Partici-
pant B, age 50, goes to the doctor and gets
a certification of terminal illness that meets
the requirements of Q&A F-6 of this no-
tice. Participant B’s plan, a section 401(k)
plan, does not permit terminally ill in-
dividual distributions but does permit
hardship distributions. On June 10, 2024,
Participant B applies for a hardship distri-
bution in the amount of $15,000. When
Participant B files his tax return, Partic-
ipant B indicates on Form 5329 that the
distribution is excepted from the 10 per-
cent additional tax as a terminally ill indi-
vidual distribution under section 72(t)(2)
(L). Participant B retains the physician’s
certification, dated May 15, 2024, with
Participant B’s files as part of Participant
B’s tax returns for tax year 2024. Partici-
pant B does not owe the additional $1,500
(representing the 10 percent additional tax
of the amount includible in gross income).
Unlike a hardship distribution, Participant
B may also recontribute the $15,000 to an
IRA following rules similar to qualified
birth or adoption distributions.
G. SECTION 332 OF THE SECURE
2.0 ACT
Under section 408(p)(2)(D), an em-
ployer that maintains a SIMPLE IRA plan
for a calendar year generally is not permit-
ted to maintain another plan, contract, pen-
sion, or trust described in section 219(g)
(5)(A) or (B) to which contributions were
made or benefits were accrued for service
in the year. Also, prior to amendment by
section 332 of the SECURE 2.0 Act, sec-
tion 408(d)(3)(G) of the Code provided
that if section 72(t)(6) applied to a distri-
bution (that is, the distribution is from a
SIMPLE IRA within the first two years of
an individual’s participation in the SIM-
PLE IRA plan), then the individual could
only roll over the distribution to another
eligible retirement plan if the other eligi-
ble retirement plan was a SIMPLE IRA.
Section 332(a) of the SECURE 2.0
Act amended section 408(p) of the Code
by adding paragraph (11). Section 408(p)
(11)(A) permits an employer to elect (in
such form and manner as the Secretary
may prescribe), at any time during a year,
to terminate the qualified salary reduction
arrangement under a SIMPLE IRA plan if
the employer establishes and maintains a
safe harbor section 401(k) plan to replace
the terminated arrangement.
Section 408(p)(11)(B) provides a
combined limit on the total of the salary
reduction contributions under the termi-
nated arrangement and elective contribu-
tions under the safe harbor section 401(k)
plan for the transition year described in
section 408(p)(11)(C) (that is, the period
beginning after the termination date and
ending on the last day of the calendar year
during which the termination occurs). Un-
der this limit, the total of those contribu-
tions must not exceed the time-weighted
average of the limits that apply, on a full
year basis, to a SIMPLE IRA plan (after
the application of the catch-up provisions
of section 414(v)) and a section 401(k)
plan.
Section 332(b) of the SECURE 2.0 Act
adds section 72(t)(6)(B) to the Code and
amends section 408(d)(3)(G). Under the
addition and amendment, the limitation
on rollovers of a distribution from a SIM-
PLE IRA does not apply if an employer
terminates the qualified salary reduction
arrangement of a SIMPLE IRA plan and
establishes a section 401(k) plan or sec-
tion 403(b) plan, provided that the amount
is paid in a rollover contribution described
in section 408(d)(3) into a qualified trust
under section 401(k) (but only if such
contribution is subsequently subject to the
rules of section 401(k)(2)(B)) or an annui-
ty contract described in section 403(b) (but
only if such contribution is subsequently
subject to the rules of section 403(b)(12).
8

Section 401(k)(12)(D) generally re-
quires a CODA that is intended to satisfy
the requirements of section 401(k)(12) to
provide an annual notice to each eligible
employee that is sufficiently accurate and
comprehensive to apprise the employee of
the employee’s rights and obligations un-
der the CODA. A similar notice require-
ment applies under section 401(k)(13)(E)
to a CODA that is intended to satisfy the
requirements of section 401(k)(13). Under
section 401(k)(16)(B)(iii), a CODA that is
intended to satisfy the notice requirements
of section 401(k)(16) must satisfy the re-
quirements of section 401(k)(13)(E).
Section 1.401(k)-3(d)(2)(ii) lists cer-
tain information that generally must be
described in a notice for the notice to be
considered sufficiently accurate and com-
prehensive under section 401(k)(12)(D) of
the Code and subject to the additional in-
formation requirements under § 1.401(k)-
3(k)(4)(ii) and under section 401(k)(13)
(E) of the Code.
8
It should be noted that section 72(t)(6)(B) refers to section 403(b)(12). However, unlike section 401(k)(2)(B), section 403(b)(12) does not include distribution limitations. Instead, section
403(b)(11) includes distribution limitations that are comparable to section 401(k)(2)(B).

January 8, 2024 328 Bulletin No. 2024–2
Section 332(c) of the SECURE 2.0
Act provides that amendments made by
section 332 apply to plan years beginning
after December 31, 2023.
Q. G-1: How does an employer termi-
nate a SIMPLE IRA plan?
A. G-1: An employer terminates a SIM-
PLE IRA plan by taking formal written ac-
tion that specifies the date as of which the
plan is terminated (termination date).
Q. G-2: If an employer terminates a
SIMPLE IRA plan, when do the contribu-
tions under the plan cease?
A. G-2: If an employer terminates a
SIMPLE IRA plan, then no salary reduc-
tion contributions may be made under the
plan with respect to compensation that
would be paid after the termination date.
However, the employer must make em-
ployer matching contributions under the
plan attributable to salary reduction con-
tributions or nonelective contributions,
based on the employees’ compensation
earned through the termination date of the
SIMPLE IRA plan.
Q. G-3: Who must the employer notify
of the termination of a SIMPLE IRA plan?
A. G-3: The employer must notify em-
ployees of the termination of a SIMPLE
IRA plan at least 30 days before the termi-
nation date. The notification must specify
that no salary reduction contributions will
be made to the plan with respect to com-
pensation that would be paid after the ter-
mination date. The notice must also include
a statement that employees will receive
matching contributions attributable to sal-
ary reduction contributions or nonelective
contributions based on the employees’
compensation through the termination date
of the SIMPLE IRA plan. The employer
should also (1) notify the SIMPLE IRA
plan’s financial institution and the employ-
er’s payroll provider that the employer will
cease making any SIMPLE IRA contribu-
tions, and (2) keep records of all actions
concerning the termination of the SIMPLE
IRA plan. However, the employer does not
need to notify the IRS that the SIMPLE
IRA plan has been terminated.
Q. G-4: If a participant takes a distribu-
tion from a terminated SIMPLE IRA plan
within the first two years of participation
under the plan, under what circumstances
can that distribution be rolled over to an-
other eligible retirement plan that is not a
SIMPLE IRA?
A. G-4: If a participant takes a distri-
bution from a terminated SIMPLE IRA
plan within the first two years of partici-
pation under the plan, the distribution may
be rolled over to an eligible retirement
plan that is not a SIMPLE IRA only if
the amount is rolled over to either: (1) a
section 401(k) plan that is subject to the
distribution limits of section 401(k)(2)(B)
of the Code; or (2) a section 403(b) plan
that is subject to the distribution limits of
section 403(b)(11).
Q. G-5: Is the establishment of a safe
harbor section 408(k) plan under section
408(p)(11) an exception to the rule in sec-
tion 408(p)(2)(D)?
A. G-5: Yes. The rule under section
408(p)(11) that permits an employer to
terminate a SIMPLE IRA plan and replace
it with a section 401(k) safe harbor plan
is an exception to the section 408(p)(2)
(D) prohibition on an employer maintain-
ing both a SIMPLE IRA plan and another
plan, contract, pension, or trust described
in section 219(g)(5)(A) or (B) in the same
calendar year.
Q. G-6: When a SIMPLE IRA plan is
replaced by a safe harbor section 401(k)
plan mid-year, how are the elective con-
tribution limits determined under the safe
harbor section 401(k) plan?
A. G-6: When a SIMPLE IRA plan is
replaced by the safe harbor section 401(k)
plan mid-year, the total amount that may
be contributed as salary reduction con-
tributions under the terminated SIMPLE
IRA plan and as elective contributions
under the safe harbor section 401(k) plan
may not exceed the weighted average of
the salary reduction contribution and elec-
tive contribution limits for each of those
plans (weighted by how many of the 365
days in the transition year each plan was
in effect). Thus, the total amount that may
be contributed as elective contributions
to the safe harbor section 401(k) plan is
equal to-
(1) The annual limit on salary reduction
contributions under a SIMPLE IRA plan
for the year (taking into account catch-up
contributions described in section 414(v)),
multiplied by a fraction equal to the num-
ber of days the SIMPLE IRA plan was in
effect for that year divided by 365, plus
(2) The annual limit on elective contri-
butions under a section 401(k) plan for the
year, under section 402(g), multiplied by
a fraction equal to the number of days the
safe harbor plan was in effect for that year
divided by 365, minus
(3) Any salary reduction contributions
under the SIMPLE IRA plan for the year.
Q. G-7: If an employer elects during a
year to terminate a qualified salary reduc-
tion arrangement under section 408(p)(2),
and the employer establishes and main-
tains a safe harbor section 401(k) plan to
replace the terminated arrangement, must
the notice required under section 401(k)
(12)(D), (13)(E), or (16)(B)(iii) for the
year the safe harbor plan is established
describe the limit on contributions to the
safe harbor section 401(k) plan for the
transition year pursuant to section 408(p)
(11)(B)?
A. G-7: Yes. Under § 1.401(k)-3(d)(2)
(ii)(D), a notice must accurately describe
the type and amount of compensation that
may be deferred under the plan for the no-
tice to satisfy the requirements of section
401(k)(12)(D), (13)(E), or (16)(B)(iii) of
the Code. Accordingly, the notice required
under section 401(k)(12)(D), (13)(E), or
(16)(B)(iii) for the transition year must
describe the limit on contributions to the
safe harbor section 401(k) plan for that
year pursuant to section 408(p)(11)(B).
H. SECTION 348 OF THE SECURE
2.0 ACT
Under section 411(a), for a defined
benefit plan to be qualified under section
401(a), it must satisfy the accrual require-
ments of section 411(b)(1). Section 411(b)
(1)(A), (B), and (C) provide three alterna-
tive methods of demonstrating that the
plan satisfies the accrual requirements,
each of which limits the extent to which
accruals under a defined benefit plan can
be provided at a greater rate later in a par-
ticipant’s career (commonly referred to as
backloading). Under each of these alterna-
tive methods, all relevant factors used to
compute benefits are treated as remaining
constant as of the current year for all years
after the current year.
Section 348(a) of the SECURE 2.0
Act, which is titled “Cash Balance,”
amends section 411(b) of the Code to add
paragraph (6), effective for plan years
beginning after December 29, 2022. Sec-
tion 411(b)(6) provides a special rule for
applying the anti-backloading rules of

Bulletin No. 2024–2 329 January 8, 2024
section 411(b)(1)(A), (B), and (C) for ap-
plicable defined benefit plans, as defined
in section 411(a)(13)(C). Under section
411(b)(6), for purposes of applying the
rules of section 411(b)(1) in the case of
an applicable defined benefit plan that
provides variable interest crediting rates,
the interest crediting rate that is treated
as in effect and as the projected interest
crediting rate is a reasonable projection
of that variable interest crediting rate, not
to exceed 6 percent. Section 348(b) of the
SECURE 2.0 Act amends ERISA by add-
ing corresponding provisions to ERISA
section 204(b)(6).
Section 411(a)(13)(C)(i) of the Code
defines the term “applicable defined ben-
efit plan” as a defined benefit plan under
which the accrued benefit (or any por-
tion of the accrued benefit) is calculated
as the balance of a hypothetical account
maintained for the participant or as an
accumulated percentage of the partici-
pant’s final average compensation. Under
section 411(a)(13)(C)(ii), the Secretary is
instructed to issue regulations that include
in the definition of an applicable defined
benefit plan any defined benefit plan (or
any portion of such a plan) that has an ef-
fect similar to an applicable defined ben-
efit plan.
Under section 411(b)(1)(H), a defined
benefit plan does not satisfy the require-
ments of section 411(b)(1) if, under the
plan, the employee’s benefit accrual is
ceased, or the rate of an employee’s ben-
efit accrual is reduced, because of the at-
tainment of any age. Under section 411(b)
(5)(B)(i)(I), an applicable defined benefit
plan is treated as violating section 411(b)
(1)(H) if any interest credit (or an equiva-
lent amount) for any plan year is at a rate
that is greater than a market rate of return.
Section 1.411(b)-1 provides rules for
the application of section 411(b)(1)(A),
(B), and (C) of the Code. Under that sec-
tion, the rules generally providing that all
relevant factors used to compute benefits
are treated as remaining constant for all
future years under the three alternative
methods are interpreted as meaning that
the factors are treated as remaining con-
stant as of the beginning of the current
plan year for all subsequent plan years.
Section 1.411(b)-1(b)(2)(ii)(G) (relat-
ing to the 133 1/3 percent rule) provides
that a plan that determines any portion of
the participant’s accrued benefit pursu-
ant to a statutory hybrid benefit formu-
la
9
that utilizes an interest crediting rate
described in § 1.411(b)(5)-1(d) that is a
variable rate that was less than zero for
the prior plan year is not treated as failing
to satisfy the requirements of § 1.411(b)-
1(b)(2) for the current plan year merely
because the plan assumes for purposes of
§ 1.411(b)-1(b)(2) that the variable rate
is zero for the current plan year and all
future plan years.
Section 1.411(b)(5)-1(d)(1)(i) provides
that a statutory hybrid plan
10
satisfies the
requirements of section 411(b)(1)(H) of
the Code only if, for any plan year, the
interest crediting rate with respect to ben-
efits determined under a statutory hybrid
benefit formula is not greater than a mar-
ket rate of return. Under § 1.411(b)(5)-
1(d)(1), an interest crediting rate is not in
excess of a market rate of return only if
the interest crediting rate is described in
§ 1.411(b)(5)-1(d)(3) through (5) (or is a
rate that can never be in excess of one of
those rates). Section 1.411(b)(5)-1(d)(3)
provides for interest rates that are based
on long-term investment grade corporate
bonds. Section 1.411(b)(5)-1(d)(4) pro-
vides for interest rates that are: (1) based
on Treasury bonds, (2) based on changes
in the cost of living, (3) based on short
and mid-term investment grade corporate
bonds, or (4) a fixed 6 percent. Section
1.411(b)(5)-1(d)(5) provides for invest-
ment-based interest crediting rates that are
not greater than a market rate of return.
Section 1.411(b)(5)-1(d)(6) provides
rules for determining whether a plan with
an interest crediting rate that is equal to
the greater of two or more interest cred-
iting rates provides an effective interest
crediting rate in excess of a market rate
of return. Under those rules, an interest
crediting rate based on investment-grade
corporate bonds under § 1.411(b)(5)-1(d)
(3) or (d)(4)(iv) may be combined with an
annual floor of 4 percent and an interest
crediting rate based on Treasury bonds or
a cost-of-living index under § 1.411(b)(5)-
1(d)(4)(ii) or (iii) may be combined with
an annual floor of 5 percent. If the interest
crediting rate is an investment-based rate,
it is not permitted to be combined with any
annual floor (but may be combined with a
cumulative floor described in § 1.411(b)
(5)-1(d)(6)(iii)).
Section 1.411(b)(5)-1(e)(3) provides
that the right to future interest credits de-
termined in the manner specified under
the plan and not conditioned on future ser-
vice is a factor that is used to determine
the participant’s accrued benefit, for pur-
poses of section 411(d)(6). Thus, to the
extent that benefits have accrued under the
terms of a statutory hybrid plan that enti-
tle the participant to future interest credits,
an amendment to the plan to change the
interest crediting rate must satisfy sec-
tion 411(d)(6) if the revised rate under
any circumstances could result in inter-
est credits that are smaller as of any date
after the applicable amendment date than
the interest credits that would be provided
without regard to the amendment.
Section 411(d)(6) provides general-
ly that a plan is treated as not satisfying
the requirements of section 411 if a plan
amendment decreases the accrued benefit
of a participant. For this purpose, a plan
amendment that eliminates or reduces an
early retirement benefit or retirement-type
subsidy, or eliminates an optional form
of benefit, with respect to benefits attrib-
utable to service before the amendment,
generally is treated as reducing a partici-
pant’s accrued benefit.
As described in section II.J. of this no-
tice, section 501 of the SECURE 2.0 Act
sets forth provisions with respect to plan
amendments adopted pursuant to a provi-
sion of the SECURE 2.0 Act or the reg-
ulations thereunder, including a provision
specifying that, except as provided by the
Secretary (or the Secretary’s delegate),
a retirement plan will not violate sec-
tion 411(d)(6) of the Code because of an
amendment made to the plan that is made
pursuant to the SECURE 2.0 Act.
9
The term “statutory hybrid benefit formula” is defined in § 1.411(a)(13)-1(d)(4) to encompass the formulas used under applicable defined benefit plans described in section 411(a)(13)(C)
(i) or (ii).
10
The term “statutory hybrid plan” is defined in § 1.411(a)(13)-1(d)(5) as a defined benefit plan that contains a statutory hybrid benefit formula.

January 8, 2024 330 Bulletin No. 2024–2
Q. H-1: What is the effect of the enact-
ment of section 348 of the SECURE 2.0
Act for a cash balance plan
11
?
A. H-1: For a cash balance plan that
provides for pay credits to participants
that increase with a participant’s age or
service and provides for a variable interest
crediting rate, the effect of the enactment
of section 348 of the SECURE 2.0 Act is
that the plan no longer risks violating the
accrual requirements of section 411(b)(1)
of the Code if that interest crediting rate
falls below a certain point. To prevent
such a violation prior to the enactment
of section 348 of the SECURE 2.0 Act, a
plan of this type had to provide for a fixed
annual minimum interest crediting rate as
part of its interest crediting rate. With the
enactment of section 348 of the SECURE
2.0 Act, the fixed annual minimum inter-
est crediting rate is no longer needed to
avoid a violation of section 411(b)(1) of
the Code for this type of plan.
Q. H-2: Under what circumstances
is an amendment to a cash balance plan
made pursuant to section 348 of the SE-
CURE 2.0 Act?
A. H-2: An amendment to a cash bal-
ance plan is made pursuant to section 348
of the SECURE 2.0 Act (and is therefore
eligible for the treatment in section 501 of
the SECURE 2.0 Act) only if: (1) the plan
is currently providing for principal cred-
its that increase with a participant’s age or
service, and the amendment is to change
the plan’s interest crediting rate, or (2)
the plan is implementing such a pattern of
principal credits as part of the amendment.
Q. H-3: Does the exception from sec-
tion 411(d)(6) of the Code for certain
amendments that is provided under sec-
tion 501 of the SECURE 2.0 Act apply to
an amendment that reduces a participant’s
accumulated benefit?
A. H-3: No, the exception from section
411(d)(6) of the Code under section 501
of the SECURE 2.0 Act does not apply to
an amendment that reduces a participant’s
accumulated benefit determined as of the
end of the interest crediting period that
includes the applicable amendment date
(as defined in § 1.411(d)-3(g)(4)) for the
amendment. Thus, the exception from
section 411(d)(6) of the Code applies with
respect to an amendment that affects inter-
est credits for interest crediting periods be-
ginning after the later of the effective date
of the amendment or the date the amend-
ment is adopted, but not interest credits
for interest crediting periods beginning
before the later of the effective date of the
amendment or the date the amendment is
adopted.
Q. H-4: For which amendments affect-
ing future interest crediting rates that are
made pursuant to section 348 of the SE-
CURE 2.0 Act does the exception from
section 411(d)(6) of the Code apply?
A. H-4: The exception from section
411(d)(6) of the Code provided under sec-
tion 501 of the SECURE 2.0 Act applies
to a plan amendment affecting future in-
terest crediting rates that is made pursu-
ant to section 348 of the SECURE 2.0 Act
only if: (1) the plan’s interest crediting rate
prior to the amendment is the greater of a
fixed annual minimum rate or an interest
rate described in § 1.411(b)(5)-1(d)(3) or
(4), and the amendment either (a) reduces
or eliminates the fixed minimum interest
crediting rate while retaining the under-
lying interest rate described in § 1.411(b)
(5)-1(d)(3) or (4), or (b) changes the inter-
est crediting rate to an investment-based
rate described in § 1.411(b)(5)-1(d)(5); or
(2) the plan’s interest crediting rate prior
to the amendment is a permitted fixed rate
described in § 1.411(b)(5)-1(d)(4)(v), and
the amendment changes the interest cred-
iting rate to any permitted variable rate,
subject to a limitation that the amount by
which the new variable interest crediting
rate is less than the maximum variable
interest crediting rate of the same type
must not exceed the amount by which the
pre-amendment fixed interest crediting
rate was less than the maximum fixed in-
terest crediting rate of 6 percent.
Q. H-5: Does the enactment of section
348 of the SECURE 2.0 Act have an im-
pact on a statutory hybrid plan that is not a
cash balance plan?
A. H-5: The Treasury Department and
the IRS expect that a sponsor of a stat-
utory hybrid plan that is not a cash bal-
ance plan will have no reason to apply
section 411(b)(6) of the Code as added
by section 348 of the SECURE 2.0 Act;
accordingly, no amendment to the plan
would be made pursuant to section 348 of
the SECURE 2.0 Act.
I. SECTION 350 OF THE SECURE
2.0 ACT
Section 350(a) of the SECURE 2.0 Act
adds new section 414(cc) to the Code.
Section 414(cc) provides that, if certain
conditions are satisfied, a plan or arrange-
ment will not fail to be treated as de-
scribed in section 401(a), 403(b), 408, or
457(b) solely by reason of a corrected rea-
sonable administrative error made (1) in
implementing an automatic enrollment or
automatic escalation feature with respect
to an eligible employee (or an affirmative
election made by an eligible employee
covered by such a feature), or (2) by fail-
ing to afford an eligible employee the op-
portunity to make an affirmative election
because the employee was improperly
excluded from the plan (implementation
error).
Section 414(cc)(2)(B)(i) specifies that
the date by which an implementation error
with respect to elective deferrals must be
corrected is the earlier of (1) the date of
the first payment of compensation made
by the employer to the employee on or
after the last day of the 9½-month period
after the end of the plan year during which
the error with respect to the employee first
occurred, or (2) in the case of an employee
who notifies the plan sponsor of the error,
the date of the first payment of compensa-
tion made by the employer to the employ-
ee on or after the last day of the month fol-
lowing the month in which the notification
was made.
Section 414(cc)(2)(B)(ii) provides that,
in the case of an employee who would
have been entitled to additional matching
contributions had any missed elective de-
ferrals been made, the plan sponsor must
make a corrective allocation of match-
ing contributions to which the employee
would have been entitled (adjusted to ac-
count for earnings) had the missed elec-
tive deferrals been made, and that the ad-
11
For purposes of this notice, a cash balance plan is a plan with a lump sum-based benefit formula (as defined in § 1.411(a)(13)-1(d)(3)) under which the accumulated benefit (within the
meaning of § 1.411(a)(13)-1(d)(2)) for a participant is the current balance of a hypothetical account.

Bulletin No. 2024–2 331 January 8, 2024
ditional matching contributions must be
allocated not later than the deadline for al-
locating corrective matching contributions
specified by the Secretary in regulations,
or other guidance of general applicability.
Section 414(cc)(2)(B)(iii) through (v)
provides that the implementation error
must be corrected for all similarly situ-
ated participants in a nondiscriminatory
manner and that notice of the error that
satisfies regulations or other guidance pre-
scribed by the Secretary must be given to
employees affected by the error within 45
days after the date on which correct defer-
rals begin.
Section 414(cc)(2) also provides that
the correction described in section 414(cc)
(2) may occur before or after the partici-
pant has terminated employment and may
occur without regard to whether the error
is identified by the Secretary.
Section 414(cc)(3) provides that if the
requirements in section 414(cc)(2) are sat-
isfied, an employer is not required to pro-
vide employees affected by the error with
the missed amount of elective deferrals re-
sulting from the error through a qualified
nonelective contribution, or otherwise.
Section 414(cc)(4) provides that the
Secretary will, by regulations or other
guidance of general applicability, pre-
scribe (i) the deadline for making a correc-
tive allocation of matching contributions,
(ii) the content of the required notice to
affected employees, (iii) the manner in
which the amount of the corrective match-
ing allocation is determined, (iv) the man-
ner of adjustment to account for earnings
on matching contributions, and (v) such
other rules as are necessary to carry out
the purposes of the subsection.
Section 350(b) of the SECURE 2.0
Act provides that section 414(cc) of the
Code applies with respect to any errors
for which the date referred to in section
414(cc) is after December 31, 2023, and
that, prior to the application of any regu-
lations or other guidance prescribed under
section 414(cc), taxpayers may rely upon
their reasonable good faith interpretations
of the provisions of section 414(cc).
Q. I-1: For purposes of determining the
effective date of section 414(cc) with re-
spect to an implementation error in accor-
dance with section 350(b) of the SECURE
2.0 Act, what is “the date referred to in
section 414(cc)”?
A. I-1: For purposes of determining
the effective date of section 414(cc) of the
Code with respect to an implementation
error in accordance with section 350(b) of
the SECURE 2.0 Act, “the date referred
to in section 414(cc)” is the date by which
an employer must implement correct de-
ferrals in accordance with section 414(cc)
(2)(B)(i) of the Code (or, with respect to
a terminated employee, the date by which
they would have been implemented but
for the termination of employment). This
date is the earlier of (1) the date of the first
payment of compensation made by the
employer to the employee on or after the
last day of the 9½-month period after the
end of the plan year during which an im-
plementation error with respect to the em-
ployee first occurred, or (2) in the case of
an employee who notifies the plan sponsor
of the error, the date of the first payment
of compensation made by the employer to
the employee on or after the last day of
the month following the month in which
the notification was made. Accordingly,
the effective date with respect to an im-
plementation error may vary depending
on, for example, the date the error occurs,
the date compensation is paid, whether the
employee notifies the plan sponsor of the
error, and whether the plan year is a fiscal
year or calendar year.
For example, Employer X sponsors a
calendar year 401(k) plan that includes
an automatic contribution enrollment
feature. On January 1, 2023, Employer
X fails to automatically enroll an eligible
employee due to an implementation error.
The employee does not inform Employer
X of the error. Under section 414(cc)(2)
(B), Employer X has until the date of the
first payment of compensation made by
the employer to the employee on or af-
ter October 15, 2024 (the last day of the
9½-month period after the end of the 2023
plan year) to begin corrected elective de-
ferrals for the eligible employee. The date
of the first payment of compensation made
to the employee after October 15, 2024, is
October 18, 2024. Because October 18,
2024, is after December 31, 2023, section
414(cc) applies with respect to the error
that occurred on January 1, 2023.
Q. I-2. How may a plan sponsor cor-
rect, pursuant to section 414(cc), an
implementation error to which section
414(cc) is applicable?
A. I-2. In general, the sponsor of a
plan to which section 414(cc) applies
may correct, pursuant to section 414(cc),
an implementation error by following the
safe harbor correction method set forth in
Appendix A, section .05(8), of Rev. Proc.
2021-30, 2021-31 IRB 172, for failures re-
lated to automatic contribution features in
a section 401(k) plan or a section 403(b)
plan. However, see Q&A I-4 of this no-
tice for rules regarding the deadline for
making the allocation of matching con-
tributions with respect to missed elective
deferrals.
Q. I-3. Is section 414(cc) available
for correcting an implementation error
with respect to an individual even if the
individual terminates employment before
corrected deferrals would otherwise have
begun?
A. I-3. Yes. In general, the sponsor of
a plan to which section 414(cc) applies
is permitted to correct an implementa-
tion error with respect to both active and
terminated employees, by following, as
described in Q&A I-2 of this notice, the
correction method set forth in Appendix
A, section .05(8), of Rev. Proc. 2021-30,
for failures related to automatic contribu-
tion features in a section 401(k) plan or a
section 403(b) plan, including by satisfy-
ing the notice requirement set forth in Ap-
pendix A, section .05(8)(c). However, the
notice provided to a terminated employee
is not required to include the following in-
formation set forth in Appendix A, section
.05(8)(c): (1) a statement that appropriate
amounts have begun to be deducted from
compensation and contributed to the plan
(or that appropriate deductions and con-
tributions will begin shortly), or (2) an
explanation that the affected terminated
employee may elect an increased deferral
percentage to make up for the missed de-
ferral opportunity.
Q. I-4. If an individual affected by an
implementation error would have been en-
titled to additional matching contributions
had missed elective deferrals been made,
what is the deadline for making a correc-
tive allocation of matching contributions
with respect to the missed elective defer-
rals?
A. I-4. A corrective allocation of match-
ing contributions (adjusted for earnings)
must be made within a reasonable period,
as determined applying all relevant facts

January 8, 2024 332 Bulletin No. 2024–2
and circumstances, after the date on which
the correct elective deferrals begin (or,
with respect to a terminated employee,
would have begun but for the termination
of employment). A corrective allocation
of matching contributions that is made by
the last day of the sixth month following
the month in which correct elective defer-
rals begin (or, with respect to a terminated
employee, would have begun but for the
termination of employment) will be treat-
ed as having been made within a reason-
able period.
In addition, with respect to an auto-
matic contribution error that begins on or
before December 31, 2023, as described
in the safe harbor correction method of
Appendix A, section .05(8) of Rev. Proc.
2021-30, for failures related to automatic
contribution features in a section 401(k)
plan or a section 403(b) plan, a corrective
allocation of matching contributions made
by the end of the third plan year following
the year in which the error occurred will
be treated as having been made within a
reasonable period.
J. SECTION 501 OF THE SECURE
2.0 ACT
Section 501 of the SECURE 2.0 Act
provides, in general, that a retirement plan
or annuity contract will be treated as be-
ing operated in accordance with the terms
of the plan during a specified period (as
described in paragraph (3) of this section
II.J) and, except as provided by the Sec-
retary of the Treasury (or the Secretary’s
delegate), a retirement plan will not fail
to satisfy the anti-cutback requirements of
section 411(d)(6) of the Code or section
204(g) of ERISA,
12
by reason of a plan
amendment made pursuant to any amend-
ment made by the SECURE 2.0 Act or
pursuant to any regulation issued by the
Secretary of the Treasury or the Secretary
of Labor (or a delegate of either such Sec-
retary) under the SECURE 2.0 Act, pro-
vided that:
(1) the amendment is adopted no later
than the last day of the first plan year be-
ginning on or after January 1, 2025, or, for
an applicable collectively bargained plan
(a plan maintained pursuant to one or more
collective bargaining agreements between
employee representatives and one or more
employers ratified before December 29,
2022), or for a governmental plan (with-
in the meaning of section 414(d) of the
Code), the last day of the first plan year
beginning on or after January 1, 2027, or
such later date as the Secretary may pre-
scribe (the section 501 date);
(2) the amendment applies retroactive-
ly to the effective date of the SECURE 2.0
Act provision or the regulations thereun-
der (or, in the case of an amendment not
required by a provision of the SECURE
2.0 Act or the regulations thereunder, the
effective date specified by the plan); and
(3) the plan or contract is operated as
if the amendment were in effect during
the period beginning on the effective date
of the SECURE 2.0 Act provision or the
regulations thereunder (or, in the case of
an amendment not required by a provision
of the SECURE 2.0 Act or the regulations
thereunder, the effective date specified by
the plan or contract) and ending on the
section 501 date or, if earlier, the date the
amendment is adopted.
Section 501(c) of the SECURE 2.0 Act
modifies section 601(b)(1) of Division O
of the Further Consolidated Appropria-
tions Act, 2020, Pub. L. 116-94, 133 Stat.
2534, known as the Setting Every Com-
munity Up for Retirement Enhancement
Act of 2019 (SECURE Act), sections
2202(c)(2)(A) and 2203(c)(2)(B)(i) of the
Coronavirus Aid, Relief, and Economic
Security Act (CARES Act),
13
and section
302(d)(2)(A) of Title III of the Taxpayer
Certainty and Disaster Tax Relief Act of
2020 (Relief Act), enacted as Division EE
of the Consolidated Appropriations Act,
2021, to extend plan amendment dead-
lines with respect to these sections to co-
ordinate with the plan amendment dead-
lines under section 501 of the SECURE
2.0 Act, as applicable.
14
Rev. Proc. 2022-40
Rev. Proc. 2022-40, 2022-47 IRB
487,
15
sets forth plan amendment dead-
lines for qualified plans and section 403(b)
plans that apply except as otherwise pro-
vided by statute or in regulations or other
guidance published in the Internal Reve-
nue Bulletin. For example, for an individ-
ually designed qualified plan that is not a
governmental plan (within the meaning
of section 414(d) of the Code), the plan
amendment deadline for a disqualifying
provision with respect to a change in qual-
ification requirements is the last day of
the second calendar year that begins after
the issuance of the Required Amendments
List in which the change in qualification
requirements appears, and the plan amend-
ment deadline for a discretionary amend-
ment is the end of the plan year in which
the plan amendment is operationally put
into effect. Rev. Proc. 2020-40 sets forth
similar plan amendment deadlines for sec-
tion 403(b) form defects first occurring
after June 30, 2020, and for discretionary
amendments made to section 403(b) plans
with respect to plan years beginning on
12
As described in section II.H of this notice, section 411(d)(6) generally prohibits plan amendments that decrease accrued benefits. Section 204(g) of ERISA provides parallel rules to the rules
of section 411(d)(6) of the Code. The Secretary has interpretive authority over section 204(g) of ERISA pursuant to Reorganization Plan No. 4 of 1978, 5 U.S.C. App.
13
Section 2202 of the CARES Act is modified by section 280 of the COVID-related Tax Relief Act of 2020, which was enacted as Subtitle B, Title II, Division N, of the Consolidated Appro-
priations Act, 2021, Pub. L. 116-260, 134 Stat. 1182 (2020). References in section II.J of this notice to section 2202 of the CARES Act are to section 2202 of the CARES Act as modified.
Notice 2020-51, 2020-29 IRB 73, which sets forth guidance relating to a waiver of 2020 required minimum distributions under section 2203 of the CARES Act, provides that an IRA does not
have to be amended to reflect the waiver and provides a sample amendment for defined contribution plans that plan sponsors may adopt to implement section 401(a)(9)(I) of the Code. The
notice provides that, although employers may adopt amendments pursuant to section 2203 of the CARES Act other than those provided in the sample amendment, the Treasury Department
and the IRS are exercising their authority under section 2203(c) of the CARES Act to deny Code section 41
1(d)(6) relief for a plan amendment that eliminates an optional form of benefit.
14
Section G of Notice 2020-68, 2020-38 IRB 567, extended the deadline to amend a plan to reflect section 104 of Division M of the Further Consolidated Appropriations Act, 2020, known
as the Bipartisan American Miners Act of 2019 (Miners Act), to coordinate with the plan amendment deadlines provided in section 601 of the SECURE Act.
15
See Part III of Rev. Proc. 2016-37, 2016-29 IRB 136, as modified by Rev. Proc. 2017-41, 2017-29 IRB 92, Rev. Proc. 2018-21, 2018-14 IRB 467, Rev. Proc. 2018-42, 2018-36 IRB 424, Rev.
Proc. 2020-10, 2020-2 IRB 295, Notice 2020-35, 2020-25 IRB 948, Rev. Proc. 2020-40, 2020-38 IRB 575, and Rev. Proc. 2021-38, 2021-38 IRB 425, with respect to qualified pre-approved
plans, and Part III of Rev. Proc. 2019-39, 2019-42 IRB, 945, as modified by Notice 2020-35, Rev. Proc. 2020-40, and Rev. Proc. 2021-37, 2021-38 IRB 385, with respect to section 403(b)
pre-approved plans. The Treasury Department and the IRS anticipate updating the provisions of Part III of Rev. Proc. 2016-37 and Part III of Rev. Proc. 2019-39 in future guidance relating
to qualified pre-approved plans and section 403(b) pre-approved plans, respectively.

Bulletin No. 2024–2 333 January 8, 2024
or after January 1, 2020. Although Rev.
Proc. 2020-40 provides plan amendment
deadlines, it does not provide relief from
the anti-cutback requirements of section
411(d)(6) of the Code or section 204(g)
of ERISA, if applicable, for amendments
adopted by those deadlines.
Eligible governmental plans
Section 457(b) of the Code provides,
generally, that a section 457(b) plan main-
tained by an employer described in sec-
tion 457(e)(1)(A) (an eligible governmen-
tal plan) that is administered in a manner
that is inconsistent with the requirements
of section 457(b) is not treated as an eligi-
ble governmental plan as of the first plan
year beginning more than 180 days after
the date of notification by the Secretary of
the inconsistency unless the employer cor-
rects the inconsistency before the first day
of such plan year.
IRAs
Under section 408(a), an IRA that
is an individual retirement account is a
trust created or organized in the United
States for the exclusive benefit of an in-
dividual or his beneficiaries, provided that
the written instrument creating the trust
meets certain requirements. Under sec-
tion 408(b), an IRA that is an individual
retirement annuity is an annuity contract
or endowment contract that is issued by an
insurance company and that meets certain
requirements.
Q. J-1: When must a retirement plan be
amended to reflect the applicable provi-
sions of the SECURE Act, section 104 of
the Miners Act, section 2202 or 2203 of
the CARES Act, section 302 of the Relief
Act, and the SECURE 2.0 Act (collective-
ly, the Acts), or any regulations thereun-
der?
A. J-1: The deadlines to amend an el-
igible retirement plan (including an IRA
or annuity contract) for the applicable
provisions of the Acts, or any regulations
thereunder, which apply to both required
and discretionary plan amendments,
16
are
hereby extended as follows:
(a) Qualified plans
In general, the deadline to amend a
qualified plan: (1) that is not a govern-
mental plan within the meaning of section
414(d) of the Code or an applicable col-
lectively bargained plan is December 31,
2026; (2) that is an applicable collectively
bargained plan is December 31, 2028; or
(3) that is a governmental plan within the
meaning of section 414(d) is December
31, 2029.
17
See section II. H. of this notice
relating to section 348 of the SECURE 2.0
Act for guidance that (1) addresses which
cash balance plan amendments are made
“pursuant to” section 348 of the SECURE
2.0 Act for purposes of applying section
501, and (2) sets forth the extent of an-
ti-cutback relief for those plan amend-
ments changing the interest crediting rate
under the plan.
A sponsor of a qualified plan may
amend its plan, in accordance with Rev.
Proc. 2022-40, to reflect the Acts, or any
regulations thereunder, after the dates set
forth in the preceding paragraph. Howev-
er, amendments made after the dates set
forth in the preceding paragraph are not
entitled, under Rev. Proc. 2022-40, to the
anti-cutback relief from the requirements
of section 411(d)(6) of the Code or section
204(g) of ERISA provided by section 501
of the SECURE 2.0 Act.
(b) Section 403(b) plans
In general, the deadline to amend a sec-
tion 403(b) plan: (1) that is not maintained
by a public school, as described in section
403(b)(1)(A)(ii) of the Code, is December
31, 2026; (2) that is an applicable collec-
tively bargained plan of a tax-exempt or-
ganization described in section 501(c)(3)
is December 31, 2028; or (3) that is main-
tained by a public school, as described in
section 403(b)(1)(A)(ii), is December 31,
2029.
A sponsor of a section 403(b) plan may
be entitled to amend its plan, in accor-
dance with Rev. Proc. 2022-40, to reflect
the Acts, as applicable, or any regula-
tions thereunder, after the dates set forth
in the preceding paragraph. Amendments
to a section 403(b) plan that is subject to
ERISA that are made after the dates set
forth in the preceding paragraph are not
entitled, under Rev. Proc. 2022-40, to the
anti-cutback relief from the requirements
of section 204(g) of ERISA provided by
section 501 of the SECURE 2.0 Act.
(c) Eligible governmental plans
The deadline to amend an eligible gov-
ernmental plan is the later of (1) Decem-
ber 31, 2029, or (2) if applicable, the first
day of the first plan year beginning more
than 180 days after the date of notification
by the Secretary that the plan was admin-
istered in a manner that is inconsistent
with the requirements of section 457(b) of
the Code.
(d) IRAs
The deadline to amend the trust gov-
erning an IRA that is an individual retire-
ment account or the contract issued by an
insurance company with respect to an IRA
that is an individual retirement annuity is
December 31, 2026, or such later date as
the Secretary prescribes in guidance.
In the case of a deemed IRA described
in section 408(q), the deadline to amend
the deemed IRA provisions is the dead-
line applicable to the plan under which the
deemed IRA is established.
K. SECTION 601 OF THE SECURE
2.0 ACT
Section 601 of the SECURE 2.0 Act
amends certain provisions of the Code to
permit an employee who participates in a
SIMPLE IRA plan or simplified employee
pension (SEP) arrangement to designate
a Roth IRA as the IRA to which contri-
butions under the plan or arrangement are
made.
Section 601(a) of the SECURE 2.0
Act amends section 408A of the Code by
striking subsection (f). Prior to the dele-
tion, section 408A(f) provided that (1) a
SEP or SIMPLE IRA account could not be
designated as a Roth IRA, and (2) contri-
butions to any such SEP or SIMPLE IRA
account would not be taken into account
16
With respect to pre-approved plans, the extended plan amendment deadlines apply to both interim (required) and discretionary amendments. It is anticipated that the cumulative list for the
fourth remedial amendment cycle for pre-approved defined contribution plans (pre-approved plans for which the opinion letter application submission window falls between February 1, 2024,
and January 31, 2025) will include certain provisions of the Acts. Accordingly, it is anticipated that the pre-approved defined contribution plans submitted for that cycle will need to include
provisions that reflect the applicable provisions of the Acts.
17
It is anticipated that this date will accommodate the needs of states without annual legislative sessions, which will not be required to amend their plans before 90 days after the close of the
third regular legislative session of the legislative body with the authority to amend the plan that begins after 2023 (the year in which this notice is published).

January 8, 2024 334 Bulletin No. 2024–2
for purposes of the Roth IRA contribution
limit of section 408A(c)(2)(B).
Section 601(b)(1) of the SECURE 2.0
Act amends section 408(k) of the Code by
adding a new paragraph (section 408(k)
(7)) that provides that a Roth IRA will not
be treated as a SEP unless the employee
elects for the Roth IRA to be so treated
(at such time and in such manner as the
Secretary may provide).
Section 601(c) of the SECURE 2.0 Act
similarly amends section 408(p) of the Code
by adding a new paragraph (section 408(p)
(12)) that provides that a Roth IRA will not
be treated as a simple retirement account
unless the employee elects for the Roth IRA
to be so treated (at such time and in such
manner as the Secretary may provide).
Added by section 601(b) of the SE-
CURE 2.0 Act, new subsection 402(h)
(1)(C) of the Code provides that any
contribution under a SEP which is made
to a Roth IRA is not excludable from the
employee’s gross income. Section 402(k)
provides that rules similar to the rules in
section 402(h)(1) applies to contributions
under a SIMPLE IRA plan. Therefore, any
contribution under a SIMPLE IRA which
is made to a Roth IRA is not excludable
from the employee’s gross income.
Section 601(e) of the SECURE 2.0 Act
provides that these amendments apply to
taxable years beginning after December
31, 2022.
Q. K-1: Is an employer required to of-
fer an employee an election to designate
a Roth IRA as the IRA to which SIMPLE
IRA plan or SEP arrangement contributions
are made (Roth contribution election)?
A. K-1: No. The employer is not re-
quired to offer an employee a Roth contri-
bution election.
Q. K-2: If an employer offers a Roth
contribution election, when may an em-
ployee make the election?
A. K-2: For a SIMPLE IRA plan, the
employer must offer employees the same
effective opportunity to make a Roth con-
tribution election as the employees have
to enter into a salary reduction agreement
under the plan, the minimum requirements
of which are provided in section 408(p)(5)
of the Code, as described in Notice 98-4.
For a SEP arrangement with a Salary
Reduction SEP (SARSEP) component, the
employer must offer employees the same
effective opportunity to make a Roth con-
tribution election as the employees have
to enter into a salary reduction agreement
under the SARSEP arrangement.
For a SEP arrangement without a
SARSEP component, the employer must
offer employees an effective opportunity,
as described in § 1.401(k)-1(e)(2)(ii), to
elect that a SEP contribution is to be made
to a Roth IRA.
In all cases, an election to have a con-
tribution made to a Roth IRA must be
made before the contribution is made.
Q. K-3: May an employer make SIM-
PLE IRA plan or SEP arrangement contri-
butions to a Roth IRA without an employ-
ee’s prior Roth contribution election, for
example, under the terms of an automatic
enrollment arrangement?
A. K-3: No. An employer can make
contributions to a Roth IRA under a SIM-
PLE IRA plan or SEP arrangement only
if the employee has affirmatively elected
that contributions under the plan or ar-
rangement are to be made to a Roth IRA.
Q. K-4: In which taxable year is a Roth
IRA contribution includible in the em-
ployee’s income?
A. K-4: A salary reduction contribution
made to a Roth IRA is includible in the
employee’s gross income for the taxable
year that includes the date on which the
employee would otherwise have received
the salary reduction contribution as wages
or salary if the employee had not elected
for the amount to be contributed to the
SIMPLE IRA plan or SEP arrangement.
An employer matching or nonelective
contribution made to a Roth IRA is inclu-
dible in the employee’s gross income for
the taxable year that includes the date on
which the contribution is made to the Roth
IRA. The preceding sentence applies even
if the employer matching contribution or
nonelective contribution is treated as if it
were made for the prior taxable year of the
employer, as described in section 404(h)
(1)(B) or (m)(2)(B).
Q. K-5: How is a contribution to a Roth
IRA under a SIMPLE IRA plan or SEP ar-
rangement reported?
A. K-5: The employer must report
salary reduction contributions made to a
Roth IRA on Form W-2, Wage and Tax
Statement, Box 12, using Code F (for a
SARSEP) or Code S (for a SIMPLE IRA),
and include the same amount in Boxes
1,3, and 5.
The employer must report employer
matching and nonelective contributions
made to a Roth IRA on Form 1099-R,
Distributions From Pensions, Annuities,
Retirement or Profit Sharing Plans, IRAs,
Insurance Contracts, etc., in the same
manner as the reporting that would have
applied if (1) there were no after-tax con-
tributions made to any of the employee’s
IRAs, and (2) the matching or nonelective
contributions were made to an IRA that
was not a Roth IRA and then immediately
converted to a Roth IRA. Thus, the con-
tributions must be reported using Form
1099-R, for the year in which the contri-
butions are made to the employee’s Roth
IRA, with the total reported in boxes 1 and
2a of Form 1099-R, using code 2 or 7 in
box 7, and the IRA/SEP/SIMPLE check-
box in box 7 checked.
Q. K-6: Which amounts contributed to
a Roth IRA under a SIMPLE IRA plan or
SEP arrangement are subject to income
tax withholding, FICA and the Federal
Unemployment Tax Act (FUTA) (chapter
23 of the Code)?
A. K-6: The salary reduction contribu-
tions contributed to a Roth IRA under a
SIMPLE IRA plan or SEP arrangement
are subject to income tax withholding,
FICA, and FUTA taxes.
Matching contributions and nonelec-
tive contributions that are made to an
IRA under a SIMPLE IRA plan or SEP
arrangement are excluded from wages un-
der section 3401(a). Similarly, matching
contributions and nonelective contribu-
tions that are made to a Roth IRA under
a SIMPLE IRA plan or SEP arrangement
are excluded from wages under section
3401(a). Accordingly, these matching
contributions and nonelective contribu-
tions are not wages, as defined in section
3401(a), for purposes of federal income
tax withholding under section 3402. How-
ever, an employee on whose behalf either
type of contribution is made may need to
increase the employee’s withholding or
make estimated tax payments to avoid an
underpayment penalty.
Matching contributions and nonelec-
tive contributions that are made to an
IRA under a SIMPLE IRA plan or SEP
arrangement are excluded from wages un-
der section 3121(a)(5)(C) and (H). Simi-
larly, matching contributions and nonelec-
tive contributions that are made to a Roth

Bulletin No. 2024–2 335 January 8, 2024
IRA under a SIMPLE IRA plan or SEP
arrangement are excluded from wages
under section 3121(a)(5)(C) and (H) (and
those contributions are not added back
into wages under section 3121(v)(1)(A)).
Accordingly, those contributions are not
wages, as defined in section 3121(a), for
purposes of FICA.
Matching and nonelective contribu-
tions that are made to an IRA under a SIM-
PLE IRA plan or SEP arrangement also
are excluded from wages under section
3306(b)(5)(C) and (H). Similarly, match-
ing contributions and nonelective contri-
butions that are made to a Roth IRA under
a SIMPLE IRA plan or SEP arrangement
are excluded from wages under section
3306(b)(5)(C) and (H). Accordingly, those
contributions are not wages, as defined in
section 3306(b), for purposes of FUTA.
Q. K-7: How may an employer make
SIMPLE IRA plan or SEP arrangement
contributions to a Roth IRA prior to the
amendment of IRS forms and Listings of
Required Modifications?
A. K-7: An employer using any of Form
5304-SIMPLE, Savings Incentive Match
Plan for Employees of Small Employers
(SIMPLE)—Not for Use With a Designated
Financial Institution, Form 5305-SIMPLE,
Savings Incentive Match Plan for Employ-
ees of Small Employers (SIMPLE)—for
Use With a Designated Financial Institu-
tion, Form 5305-SEP, Simplified Employee
Pension—Retirement Accounts Contribu-
tion Agreement, Form 5305A-SEP, Salary
Reduction Simplified Employee Pension—
Individual Retirement Accounts Contribu-
tion Agreement, or a prototype plan docu-
ment approved by the IRS, may continue to
use (or begin to use) the form or document
without amendment, until the IRS issues
new forms or provides new guidance on
prototype plan documents.
Q. K-8: What is the effect of the de-
letion of section 408A(f)(2) on the Roth
IRA contribution limit in section 408A(c)
(2)(B)?
A. K-8: The deletion of section 408A(f)
(2) will be addressed in future guidance.
L. SECTION 604 OF THE SECURE
2.0 ACT
Prior to amendment by section 604 of
the SECURE 2.0 Act, section 402A of the
Code generally permitted an applicable re-
tirement plan (that is, a qualified plan un-
der section 401(a), a section 403(b) plan,
or a section 457(b) plan maintained by
an employer described in section 457(e)
(1)(A) (an eligible governmental plan))
to include a qualified Roth contribution
program as defined in section 402A(b)
(1). Prior to that amendment, a qualified
Roth contribution program was a program
under which an employee could elect to
make designated Roth contributions in
lieu of all or a portion of elective defer-
rals the employee was otherwise eligible
to make under the applicable retirement
plan. These contributions have been re-
ferred to as designated Roth contributions;
however, for purposes of this notice, they
are referred to as designated Roth elective
contributions.
Prior to amendment by section 604 of
the SECURE 2.0 Act, section 402A(a) of
the Code provided that if an applicable
retirement plan includes a qualified Roth
contribution program, then (1) any desig-
nated Roth elective contribution made by
an employee pursuant to the program is
treated as an elective deferral for purposes
of chapter 1 of the Code, except that the
contribution “shall not be excludable from
gross income,” and (2) the plan (and any
arrangement that is part of the plan) is not
treated as failing to satisfy any require-
ment of chapter 1 of the Code solely by
reason of including the program.
Section 604(a) of the SECURE 2.0
Act amends section 402A(a) of the Code
to redesignate section 402A(a)(2) as sec-
tion 402A(a)(4) and to add the following
as section 402A(a)(2) and (3): “(2) any
designated Roth contribution which pursu-
ant to the program is made by the employ-
er on the employee’s behalf on account of
the employee’s contribution, elective de-
ferral, or (subject to the requirements of
section 401(m)(13)) qualified student loan
payment shall be treated as a matching
contribution for purposes of this chapter,
except that such contribution shall not be
excludable from gross income,” and “(3)
any designated Roth contribution which
pursuant to the program is made by the
employer on the employee’s behalf and
which is a nonelective contribution shall
be nonforfeitable and shall not be exclud-
able from gross income...”
Section 604(b) of the SECURE 2.0 Act
makes a conforming change to the defi-
nition of a “qualified Roth contribution
program” under section 402A(b)(1) of the
Code. As amended, a “qualified Roth con-
tribution program” means a program un-
der which an employee may elect to make,
or to have made on the employee’s behalf,
designated Roth contributions in lieu of
all or a portion of elective deferrals the
employee is otherwise eligible to make, or
of matching contributions or nonelective
contributions that may otherwise be made
on the employee’s behalf, under the appli-
cable retirement plan.
Section 604(c) of the SECURE 2.0 Act
amends the definition of a “designated
Roth contribution” under section 402A(c)
(1) of the Code to mean any elective de-
ferral, matching contribution, or nonelec-
tive contribution that is excludable from
gross income of an employee without re-
gard to section 402A, and that the employ-
ee designates (at such time and in such
manner as the Secretary may prescribe)
as not being so excludable. For purposes
of this notice, matching contributions and
nonelective contributions that an employ-
ee designates as Roth contributions are
referred to as designated Roth matching
contributions and designated Roth non-
elective contributions.
Section 604(d) of the SECURE 2.0
Act adds section 402A(f)(3) of the Code,
which defines “matching contribution”
for purposes of section 402A to mean any
matching contribution described in sec-
tion 401(m)(4)(A), and any contribution
to an eligible governmental plan on behalf
of an employee and on account of the em-
ployee’s elective deferral under the plan,
but only if the contribution is nonforfeit-
able at the time received.
Section 604(e) of the SECURE 2.0 Act
provides that the amendments made by
section 604 apply to contributions made
after December 29, 2022.
Q. L-1: Do rules similar to the rules of
§ 1.401(k)-1(f) apply to designated Roth
matching contributions and designated
Roth nonelective contributions?
A. L-1: Yes. Rules similar to the rules
for designated Roth elective contribu-
tions under § 1.401(k)-1(f) (other than
§ 1.401(k)-1(f)(4)(i) and (6)) apply to
designated Roth matching contributions
and designated Roth nonelective contribu-
tions. For example, similar to the rules un-
der § 1.401(k)-1(f)(1) that apply to desig-

January 8, 2024 336 Bulletin No. 2024–2
nated Roth elective contributions: (1) any
designation of a matching contribution or
nonelective contribution as a Roth contri-
bution must be made by the employee no
later than the time that the contribution is
allocated to the employee’s account and
must be irrevocable, and (2) designated
Roth matching contributions and desig-
nated Roth nonelective contributions are
subject to inclusion treatment and separate
accounting rules. In addition, to the extent
a plan permits an employee to designate
matching contributions or nonelective
contributions as Roth contributions, an
employee must have an effective opportu-
nity to make (or change) that designation
at least once during each plan year.
Q. L-2: If an employee designates
a matching contribution or nonelective
contribution as a Roth contribution, for
which taxable year is that designated Roth
matching contribution or designated Roth
nonelective contribution includible in the
individual’s gross income?
A. L-2: A designated Roth matching
contribution or designated Roth nonelec-
tive contribution is includible in an indi-
vidual’s gross income for the taxable year
in which the contribution is allocated to
the individual’s account. The preceding
sentence applies even if the designated
Roth matching contribution or designated
Roth nonelective contribution is deemed
to have been made on the last day of the
prior taxable year of the employer under
section 404(a)(6) of the Code.
Q. L-3: May an employee designate a
matching contribution or nonelective con-
tribution as a Roth contribution if the em-
ployee is not fully vested in that type of
contribution at the time the contribution is
allocated to the employee’s account?
A. L-3: No. Under section 402A(f)
(3), a matching contribution may be des-
ignated as a Roth contribution only if the
employee is fully vested in matching con-
tributions at the time the contribution is
allocated to the employee’s account. Simi-
larly, under section 402A(a)(3), a nonelec-
tive contribution may be designated as a
Roth contribution only if the employee is
fully vested in nonelective contributions at
the time the contribution is allocated to the
employee’s account. For example, if at the
time a matching contribution is allocated
to the employee’s account, the employee
is only partially vested in the portion of
the employee’s account balance attribut-
able to matching contributions, then the
employee may not designate any part of
that matching contribution as a Roth con-
tribution.
Q. L-4: If matching contributions or
nonelective contributions under an ap-
plicable retirement plan are subject to
a vesting schedule, will the plan fail to
satisfy section 401(a)(4) (if applicable)
merely because the plan provides that an
employee may designate a matching con-
tribution or nonelective contribution as a
Roth contribution only if the employee is
fully vested in that type of contribution at
the time the contribution is allocated to the
employee’s account?
A. L-4: Under § 1.401(a)(4)-4(e)(3)(i),
the term “other right or feature” generally
means any right or feature applicable to
employees under the plan, except as pro-
vided in § 1.401(a)(4)-4(e)(3)(ii). Because
there is no applicable exception under
§ 1.401(a)(4)-4(e)(3)(ii), an employee’s
right under a plan to designate a matching
contribution or nonelective contribution
that may otherwise be made on the em-
ployee’s behalf under the plan as a Roth
contribution is an “other right or feature”
for purposes of § 1.401(a)(4)-4(e)(3).
However, pursuant to the authority
in § 1.401(a)(4)-1(d) to issue additional
guidance that is necessary or appropriate
in applying the nondiscrimination require-
ments of section 401(a)(4) of the Code, a
plan will not be treated as failing to satisfy
section 401(a)(4) merely because the plan
provides that an employee may designate
a matching contribution or nonelective
contribution as a Roth contribution only if
the employee is fully vested in that type of
contribution at the time the contribution is
allocated to the employee’s account (even
if the right to make that designation is not
currently available to a group of employ-
ees that would satisfy section 410(b) with-
out regard to the average benefit percent-
age test of § 1.410(b)-5)).
Q. L-5: Are designated Roth matching
contributions or designated Roth nonelec-
tive contributions included in wages, as
defined in section 3401(a) of the Code, for
purposes of federal income tax withhold-
ing under section 3402?
A. L-5: No. Matching contributions
and nonelective contributions that are
made to a qualified plan under sec-
tion 401(a) (including a section 401(k)
plan), a section 403(b) plan, or an eligi-
ble governmental plan are excluded from
wages under section 3401(a). Similarly,
designated Roth matching contributions
and designated Roth nonelective contribu-
tions that are made to a qualified plan un-
der section 401(a), a section 403(b) plan,
or an eligible governmental plan are ex-
cluded from wages under section 3401(a).
Accordingly, designated Roth matching
contributions and designated Roth non-
elective contributions are not wages, as
defined in section 3401(a), for purposes
of federal income tax withholding under
section 3402. However, an employee who
designates a matching contribution or
nonelective contribution as a Roth con-
tribution may need to increase the em-
ployee’s withholding or make estimated
tax payments to avoid an underpayment
penalty.
Q. L-6: Are designated Roth matching
contributions or designated Roth nonelec-
tive contributions that are contributed to a
qualified plan under section 401(a) or to a
section 403(b) plan included in wages, as
defined in section 3121(a), for purposes of
FICA, or as defined in section 3306(b), for
purposes of FUTA?
A. L-6: No. Matching contributions
and nonelective contributions that are
contributed to a qualified plan under sec-
tion 401(a) or to a section 403(b) plan
are excluded from wages under sec-
tion 3121(a)(5)(A) and (D). Similarly,
designated Roth matching contributions
and designated Roth nonelective contri-
butions that are contributed to a qualified
plan under section 401(a) or to a sec-
tion 403(b) plan are excluded from wages
under section 3121(a)(5)(A) and (D) (and
those contributions are not added back
to wages under section 3121(v)(1)(A)).
Accordingly, those contributions are not
wages, as defined in section 3121(a), for
purposes of FICA.
Matching and nonelective contribu-
tions that are contributed to a qualified
plan under section 401(a) or to a sec-
tion 403(b) plan also are excluded from
wages under section 3306(b)(5)(A) and
(D). Similarly, designated Roth matching
contributions and designated Roth non-
elective contributions that are contributed
to a qualified plan under section 401(a) or
to a section 403(b) plan are excluded from

Bulletin No. 2024–2 337 January 8, 2024
wages under section 3306(b)(5)(A) and
(D). Accordingly, those contributions are
not wages, as defined in section 3306(b),
for purposes of FUTA.
Q. L-7: Are designated Roth nonelec-
tive contributions that are contributed to
an eligible governmental plan (including
amounts that would be treated as match-
ing contributions under section 401(m) if
the plan were a qualified plan) included in
wages, as defined in section 3121(a), for
purposes of FICA?
A. L-7: Section 3121(a) defines wages
as all remuneration for employment, unless
specifically excluded. Section 3121(v)(2)
includes special timing rules that apply in
determining when amounts deferred under
an eligible governmental plan (including
employers’ contributions) are required to
be taken into account. Under these sec-
tions, an amount deferred under an eligible
governmental plan is required to be taken
into account for purposes of social secu-
rity and Medicare taxes as of the later of
when the services are performed or when
there is no substantial risk of forfeiture of
the rights to such amount. Because desig-
nated Roth nonelective contributions that
are contributed to an eligible governmen-
tal plan (including amounts that would be
treated as matching contributions under
section 401(m) if the plan were a qualified
plan) must be fully vested at the time the
contribution is allocated to a participant’s
account, these contributions are subject
to social security and Medicare taxes at
that time. However, FICA tax applies to
employees of state and local governments
only if they are subject to social security
or Medicare tax under section 3121(b)(7)
(E) (relating to agreements entered into
pursuant to section 218 of the Social Secu-
rity Act) or another provision of the Code,
such as section 3121(b)(7)(F) (relating
to state and local government employees
who are not members of a state or local
retirement system), or section 3121(u)
(relating to Medicare). See also Notice
2003-20, 2003-1 CB 894.
Q. L-8: Are designated Roth nonelec-
tive contributions that are contributed to
an eligible governmental plan (including
amounts that would be treated as match-
ing contributions under section 401(m) if
the plan were a qualified plan) included in
wages, as defined in section 3306(b), for
purposes of FUTA?
A. L-8: Section 3306(c)(7) generally
provides a FUTA exemption for service
performed in the employ of a state or any
political subdivision thereof or any in-
strumentality of any one or more of the
foregoing. In accordance with this provi-
sion, designated Roth nonelective contri-
butions that are contributed to an eligible
governmental plan (including amounts
that would be treated as matching contri-
butions under section 401(m) if the plan
were a qualified plan) are excluded from
wages under section 3306(c)(7). Accord-
ingly, those contributions are not wages,
as defined in section 3306(b), for purposes
of FUTA. See also Notice 2003-20.
Q. L-9: If designated Roth matching
contributions or designated Roth nonelec-
tive contributions are allocated to an in-
dividual’s account in a taxable year, what
reporting obligations apply to those con-
tributions?
A. L-9: The reporting obligations that
apply to a designated Roth matching con-
tribution or designated Roth nonelective
contribution are the same as if: (1) the
contribution had been the only contri-
bution made to an individual’s account
under the plan, and (2) the contribution,
upon allocation to that account, had been
directly rolled over to a designated Roth
account in the plan as an in-plan Roth
rollover. Thus, designated Roth matching
contributions and designated Roth non-
elective contributions to a qualified plan
under section 401(a) or to a section 403(b)
plan must be reported using Form 1099-R
for the year in which the contributions are
allocated to the individual’s account. The
total amount of designated Roth matching
contributions and designated Roth non-
elective contributions that are allocated in
that year are reported in boxes 1 and 2a
of Form 1099-R, and code “G” is used in
box 7.
The same reporting applies to desig-
nated Roth nonelective contributions that
are contributed to an eligible governmen-
tal plan (including amounts that would be
treated as matching contributions under
section 401(m) if the plan were a qualified
plan).
Q. L-10: If a plan uses a safe har-
bor definition of compensation under
§ 1.415(c)-2(d)(3) or (4) for purposes of
section 415 of the Code, are designated
Roth matching contributions or designat-
ed Roth nonelective contributions includ-
ed in that safe harbor definition of com-
pensation?
A. L-10: No. In general, the safe har-
bor definition of compensation under
§ 1.415(c)-2(d)(3) includes wages within
the meaning of section 3401(a) of the Code
(for purposes of income tax withholding
at the source), plus amounts that would
be included in wages but for an election
under section 125(a), 132(f)(4), 402(e)(3),
402(h)(1)(B), 402(k), or 457(b). However,
as described in Q&A L-5 of this notice,
designated Roth matching contributions
and designated Roth nonelective contribu-
tions are not included in wages within the
meaning of section 3401(a) (nor would
those contributions have been included
in wages but for an election to have those
contributions made as Roth contributions).
Similarly, the safe harbor definition of
compensation under § 1.415(c)-2(d)(4)
generally includes amounts that are com-
pensation under § 1.415(c)-2(d)(3), plus
all other payments of compensation to an
employee by his employer (in the course
of the employer’s trade or business) for
which the employer is required to furnish
the employee a written statement under
sections 6041(d), 6051(a)(3), and 6052
of the Code. However, designated Roth
matching contributions and designated
Roth nonelective contributions are not
payments of compensation to an employ-
ee by his employer for which the employ-
er is required to furnish the employee a
written statement under sections 6041(d),
6051(a)(3), and 6052.
Q. L-11: If an applicable retirement
plan includes a qualified Roth contribu-
tion program, which types of designated
Roth contributions must an employee be
permitted to elect to make, or have made
on the employee’s behalf, under the pro-
gram?
A. L-11: Pursuant to section 402A(b)
(1), a qualified Roth contribution program
may, but is not required, to include ev-
ery type of designated Roth contribution.
Thus, an employee generally may be per-
mitted to designate an elective contribu-
tion as a Roth contribution without being
permitted to designate a matching con-
tribution or nonelective contribution as a
Roth contribution. Similarly, an employee
generally may be permitted to designate
a matching contribution or nonelective

January 8, 2024 338 Bulletin No. 2024–2
contribution (or both) as a Roth contri-
bution without being permitted to des-
ignate an elective contribution as a Roth
contribution. However, the right to make
designated Roth contributions is a right or
feature subject to the requirements of sec-
tion 401(a)(4). See § 1.401(k)-1(a)(4)(iv)
(B) and Q&A L-4 of this notice.
Further, under sections 402(c)(8)(B)
and 402A(c)(3)(A) of the Code, if any
portion of an eligible rollover distribution
is attributable to payments or distribu-
tions from a designated Roth account (as
defined in section 402A), that portion is
permitted to be rolled over only to anoth-
er designated Roth account or to a Roth
IRA. For purposes of sections 402(c)(8)
(B) and 402A(c)(3)(A), the term “desig-
nated Roth account” includes a separate
account that is established for designated
Roth matching contributions or designat-
ed Roth nonelective contributions. Simi-
larly, section 402A(c)(4)(B) requires an
applicable retirement plan to include a
qualified Roth contribution program in
order for the plan to permit employees to
make in-plan Roth rollovers. For purpos-
es of section 402A(c)(4)(B), a qualified
Roth contribution program includes a
program under which an employee may
designate a matching contribution or
nonelective contribution as a Roth con-
tribution, even if the employee is not per-
mitted to designate an elective contribu-
tion as a Roth contribution.
III. REQUEST FOR COMMENTS
The Treasury Department and the IRS
invite comments and suggestions regard-
ing the matters discussed in this notice. In
particular, the Treasury Department and
the IRS request comments on:
• Section 113 of the SECURE 2.0 Act
with respect to a de minimis financial
incentive that is provided by a party
other than the employer; and
• Section 348 of the SECURE 2.0 Act
with respect to whether there are
situations under which a plan with
a statutory hybrid benefit formula
within the meaning of § 1.411(a)
(13)-1(d)(4) that is not described in
Q&A H-2 of this notice would be
amended pursuant to section 348 of
the SECURE 2.0 Act, as described in
section II.H of this notice.
Comments should be submitted in
writing on or before February 20, 2024
and should include a reference to Notice
2024-2. Comments may be submitted
electronically via the Federal eRulemak-
ing Portal at www.regulations.gov (type
“IRS Notice 2024-2” in the search field
on the Regulations.gov home page to find
this notice and submit comments). Alter-
natively, comments may be submitted by
mail to: Internal Revenue Service, Attn:
CC:PA:LPD:PR (Notice 2024-2), Room
5203, P.O. Box 7604, Ben Franklin Sta-
tion, Washington, D.C. 20044.
The Treasury Department and the IRS
will publish for public availability any
comment submitted electronically or on
paper to its public docket.
IV. PAPERWORK REDUCTION ACT
The collection of information con-
tained in this notice has been submitted to
the Office of Management and Budget in
accordance with the Paperwork Reduction
Act (PRA) (44 U.S.C. 3507) under con-
trol number 1545-2317. An agency may
not conduct or sponsor, and a person is
not required to respond to, a collection of
information unless the collection of in-
formation displays a valid OMB control
number.
The collections of information in this
notice are section II.E, section II.F, and
section II.G of this notice. The informa-
tion collection requirements in section
II.E and section II.G of this notice are
accounted for in OMB Control Number
1545-1502. The information collection
requirements in section II.F will be sub-
mitted to OMB for review and approval in
accordance with 5 CFR 1320.13.
Q&A F-1 of this notice provides that
a “terminally ill individual distribution”
is any distribution from a qualified retire-
ment plan to an employee who is a ter-
minally ill individual that is made on or
after the date on which the employee has
been certified by a physician as having a
terminal illness. A certification of terminal
illness must meet the content requirement
for the certification described in Q&A F-6
of this notice, the timing requirement for
the certification described in Q&A F-7
of this notice, and the documentation re-
quirement described in Q&A F-13 of this
notice.
The collection of information is re-
quired to obtain a benefit. The likely re-
spondents are individual taxpayers who
are requesting terminally ill distributions
from a qualified retirement plan.
Estimated total annual reporting bur-
den: 125 hours.
Estimated average annual burden per
respondent: .25 hours.
Estimated number of respondents: 500.
Estimated frequency of responses: 1.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
revenue law. Generally, tax returns and tax
return information are confidential, as re-
quired by section 6103 of the Code.
V. DRAFTING INFORMATION
The principal author of this notice is
Tom Morgan of the Office of Associate
Chief Counsel (Employee Benefits, Ex-
empt Organizations, and Employment
Taxes). For further information regarding
this notice, please contact Mr. Morgan at
(202) 317-6700 (not a toll-free number).
2023 Cumulative List
of Changes in Plan
Qualification Requirements
for Defined Contribution
Qualified Pre-approved
Plans
Notice 2024-3
I. PURPOSE
This notice sets forth the 2023 Cumu-
lative List of Changes in Plan Qualifica-
tion Requirements for Defined Contribu-
tion Qualified Pre-approved Plans (2023
Cumulative List). The 2023 Cumulative
List will assist providers applying to the
Internal Revenue Service (IRS) for opin-
ion letters for the fourth remedial amend-
ment cycle for defined contribution qual-
ified pre-approved plans (Cycle 4) under
the IRS’s pre-approved plan program.
Cycle 4 began on February 1, 2023. The
2023 Cumulative List identifies recent

Bulletin No. 2024–2 339 January 8, 2024
changes in the qualification requirements
of the Internal Revenue Code (Code) that
were not taken into account during the
first three remedial amendment cycles
for defined contribution qualified pre-ap-
proved plans and that will be taken into
account by the IRS with respect to the
form of a plan submitted to the IRS for
Cycle 4. The Cycle 4 submission period
begins on February 1, 2024, and ends on
January 31, 2025.
II. BACKGROUND
Under Rev. Proc. 2023-37, 2023-51
IRB 1491, every pre-approved plan has a
recurring remedial amendment cycle, and
a provider of a pre-approved plan may ap-
ply for a new opinion letter for the plan
for each remedial amendment cycle. Fur-
ther, defined contribution qualified pre-ap-
proved plans, defined benefit qualified
pre-approved plans, and section 403(b)
pre-approved plans all have separate re-
medial amendment cycles. Part III of Rev.
Proc. 2023-37 sets forth the procedures for
a provider to apply for a Cycle 4 opinion
letter for a defined contribution qualified
pre-approved plan as well as the scope of
reliance provided by a Cycle 4 opinion let-
ter to adopting employers of a provider’s
defined contribution pre-approved plan.
Pursuant to section 17 of Rev. Proc.
2023-37, the IRS publishes a cumulative
list for each remedial amendment cycle
to identify the recent changes in the qual-
ification requirements that will be taken
into account with respect to the form of
a pre-approved plan submitted to the IRS
for that remedial amendment cycle.
1
A
change in the qualification requirements
includes a statutory change or a change
in the requirements provided in regula-
tions or other guidance published in the
Internal Revenue Bulletin, without re-
gard to whether the change is required to
be reflected in plan terms or relates to an
optional provision that a provider could
choose to reflect in plan terms as a discre-
tionary amendment.
III. APPLICATION OF THE 2023
CUMULATIVE LIST
The 2023 Cumulative List sets forth,
in section V of this notice, specific items
the IRS has identified for review in deter-
mining whether the form of a defined con-
tribution qualified pre-approved plan that
has been submitted to the IRS for a Cycle
4 opinion letter has been properly updated
since the plan was submitted for a Cycle 3
opinion letter.
2

Generally, the IRS will consider only
the items on the 2023 Cumulative List
in determining whether to issue a Cycle
4 opinion letter with respect to a pre-ap-
proved plan. However, if a plan has not
been previously reviewed and is submit-
ted for Cycle 4 (or has been amended with
respect to previously approved language),
the IRS will also review the plan for items
on earlier Cumulative Lists
3
as well as for
any other applicable qualification require-
ments that were considered by the IRS in
issuing opinion letters prior to the imple-
mentation of Cumulative Lists.
The list of changes in section V of this
notice does not extend the deadline by
which a plan must be amended to com-
ply with any change in the qualification
requirements applicable to the plan. The
general deadline for timely adoption of
an interim or discretionary amendment is
provided in section 7 of Rev. Proc. 2023-
37. However, see section IV of this notice
regarding the extended plan amendment
deadline applicable to interim and dis-
cretionary amendments adopted to reflect
a provision of the SECURE 2.0 Act of
2022, enacted on December 29, 2022, as
Division T of the Consolidated Appropria-
tions Act, 2023, Pub. L. 117-328, 136 Stat.
4459 (2022) (SECURE 2.0 Act).
IV. CHANGES IN QUALIFICATION
REQUIREMENTS UNDER THE
SECURE 2.0 ACT
The SECURE 2.0 Act made several
changes to plan qualification require-
ments. The IRS will review a defined
contribution qualified pre-approved plan
document that is submitted for Cycle 4
only for those changes in qualification
requirements made pursuant to the SE-
CURE 2.0 Act that are listed in section
V of this notice.
4
Providers of pre-ap-
proved plans should not include in plan
documents submitted with their Cycle 4
opinion letter applications terms reflect-
ing SECURE 2.0 Act provisions that are
not listed in section V. However, provid-
ers of pre-approved plans need to comply
with applicable requirements relating to
timely adoption of interim or discre-
tionary amendments to reflect changes
in qualification requirements made by
SECURE 2.0 Act provisions, whether
or not they are listed in section V. Gen-
erally, the deadline for adopting any re-
quired plan amendment made pursuant
to the SECURE 2.0 Act is December 31,
2026. This deadline, provided in Q&A J-1
of Notice 2024-2, 2024-2 IRB 316, 333
(January 8, 2024) will apply with respect
to interim amendments made pursuant
to the SECURE 2.0 Act, rather than the
general deadline for timely adoption of
interim amendments set forth in section
7.01(1)(a) of Rev. Proc. 2023-37. The
deadline for discretionary amendments
made pursuant to the SECURE 2.0 Act
generally is also December 31, 2026 (as
provided in Q&A J-1 of Notice 2024-2),
or, if later, the deadline for the timely
adoption of discretionary amendments set
forth in section 7.01(1)(b) of Rev. Proc.
2023-37, if applicable (depending on the
year in which the operation of the plan
is changed to reflect a SECURE 2.0 Act
provision permitting an optional change).
1
In order to be qualified, a defined contribution pre-approved plan must comply in operation with all applicable qualification requirements, not only those on the 2023 Cumulative List. To
assist plan providers in achieving operational compliance, the IRS provides an Operational Compliance List on its website that is updated periodically to identify changes in qualification
requirements that are effective during a calendar year. For the current Operational Compliance List, see https://www.irs.gov/retirement-plans/operational-compliance-list.
2
Consistent with previous Cumulative Lists, the 2023 Cumulative List does not include routine, ministerial guidance (such as guidance that is typically issued annually to announce a cost-
of-living adjustment to a qualified plan contribution limit).
3
For the items on earlier Cumulative Lists for defined contribution qualified pre-approved plans, see the 2017 Cumulative List, Notice 2017-37, 2017-29 IRB 89, the 2010 Cumulative List,
Notice 2010-90, 2010-52 IRB 909, and the 2004 Cumulative List, Notice 2004-84, 2004-2 CB 1030.
4
The IRS has included on this 2023 Cumulative List each SECURE 2.0 Act provision applicable to the form of a defined contribution qualified pre-approved plan that the IRS believes may be
appropriately reflected by plan providers in plan documents submitted for Cycle 4 either because: (1) no interpretive guidance is needed for a plan provider to draft plan language with respect
to the provision, or (2) the IRS has issued sufficient interpretive guidance prior to publication of this list for a plan provider to draft plan language with respect to the provision.

January 8, 2024 340 Bulletin No. 2024–2
V. 2023 CUMULATIVE LIST
OF CHANGES IN PLAN
QUALIFICATION REQUIREMENTS
FOR DEFINED CONTRIBUTION
QUALIFIED PRE-APPROVED
PLANS
1. Section 401(a):
a. Required Minimum Distributions
(Section 401(a)(9))
i. Required beginning date
• Section 114 of the Setting Every
Community Up for Retirement
Enhancement Act of 2019
(SECURE Act), enacted on
December 20, 2019, as Division
O of the Further Consolidated
Appropriations Act, 2020,
Pub. L. 116-94, 133 Stat. 2534
(2019) (FCAA 2020), amends
section 401(a)(9)(C)(i)(I) of the
Code to increase the age with
respect to which the required
beginning date for required
minimum distributions (RMDs)
is determined from age 70½ to
age 72 for employees born on
or after July 1, 1949, but before
January 1, 1951.
• Section 107 of the SECURE
2.0 Act amends section 401(a)
(9)(C) of the Code to increase
the age with respect to which
the required beginning date for
RMDs is determined from age
72 to age 73, for employees born
on or after January 1, 1951.
5
ii. Waiver of 2020 RMD
• Section 2203(a) of the
Coronavirus Aid, Relief, and
Economic Security Act (CARES
Act), Pub. L. 116-136, 134
Stat. 281 (2020), adds new
section 401(a)(9)(I) of the Code
to provide for a temporary
waiver of RMDs from defined
contribution plans for calendar
year 2020.
• Notice 2020-51, 2020-29 IRB
73, provides guidance relating
to the waiver of RMDs from
defined contribution plans for
calendar year 2020.
iii. Miscellaneous
• Section 401 of the SECURE Act
amends section 401(a)(9) of the
Code to provide new RMD rules
for designated beneficiaries.
• Proposed regulations under
section 401(a)(9) that were
published on February 24, 2022
(87 FR 10504), would provide
guidance relating to RMDs from
defined contribution plans that
reflects the amendments made
to section 401(a)(9) by sections
114 and 401 of the SECURE
Act. These regulations are
proposed to apply only on or
after the date of publication of
final regulations. The proposed
regulations provide that, until the
final regulations are published,
an employer may rely on a good
faith, reasonable interpretation
of the amendments made by
sections 114 and 401 of the
SECURE Act to which the final
regulations relate. Compliance
with the proposed regulations is
considered reliance on a good
faith, reasonable interpretation
of the amendments made by
sections 114 and 401 of the
SECURE Act to which the final
regulations relate.
• Section 202(a)(1) and (2) of the
SECURE 2.0 Act eliminates
the percentage limitation and
increases the dollar limitation
(from $125,000 to $200,000,
subject to future adjustments
for inflation) with respect to the
amount of an employee’s interest
under a defined contribution
plan which may be used to pay
premiums with respect to a
qualifying longevity annuity
contract.
b. Certain Involuntary Distributions
(Sections 401(a)(31)(B) and 411(a)
(11))
• Section 304 of the SECURE 2.0
Act permits a plan to increase its
involuntary cashout limit up to
$7,000 (increased from $5,000).
c. Distributions During Working
Retirement (Section 401(a)(36))
• Section 104 of the Bipartisan
American Miners Act of 2019
(Miners Act), enacted on
December 20, 2019, as Division
M of the FCAA 2020, amended
section 401(a)(36) of the Code to
lower the minimum age at which
a pension plan (including a money
purchase pension plan) may make
a distribution to an employee who
is not separated from employment
at the time of the distribution. The
minimum age is lowered from
age 62 to age 59½.
• Notice 2020-68, 2020-38 IRB
567, provides guidance with
respect to section 104 of the
Miners Act.
d. Miscellaneous Distributions and
Recontributions
• Section 109 of the SECURE Act
provides that defined contribution
plans may permit certain transfers
and distributions of lifetime
income investment options in
cases in which the investment
options are no longer authorized
to be held as investment options
under the plan.
• Section 113 of the SECURE Act
amends the Code to add section 72(t)
(2)(H), which permits an individual
to receive a distribution from an
applicable eligible retirement plan
of up to $5,000 without application
of the 10% additional tax if the
distribution meets the requirements
to be a qualified birth or adoption
distribution. An individual generally
may recontribute a qualified
birth or adoption distribution to
an applicable eligible retirement
plan in which the individual is a
beneficiary and to which a rollover
may be made.
• Notice 2020-68 provides
guidance with respect to the
SECURE Act, including section
113 of the SECURE Act.
• Section 115 of the SECURE
2.0 Act amends the Code to
5
Section 107 of the SECURE 2.0 Act includes a provision increasing the age with respect to which the required beginning date is determined to age 75. This increase will not affect the timing
of RMDs until after the beginning of a new remedial amendment cycle for defined contribution qualified pre-approved plans. Accordingly, the IRS will not review plan documents submitted
for Cycle 4 for that provision.

Bulletin No. 2024–2 341 January 8, 2024
add section 72(t)(2)(I), which
permits an individual to receive
a distribution from an applicable
eligible retirement plan of up
to $1,000 without application
of the 10% additional tax if
the distribution meets the
requirements to be an emergency
personal expense distribution. An
individual generally may, during
the 3-year period beginning on the
day after receipt of an emergency
personal expense distribution,
recontribute the distribution to
an applicable eligible retirement
plan in which the individual is
a beneficiary and to which a
rollover may be made.
• Section 311 of the SECURE 2.0
Act amends section 72(t)(2)(H)
(v)(I) of the Code (as added by
section 113 of the SECURE Act)
to restrict the permitted period
for recontribution of qualified
birth or adoption distributions to
three years for qualified birth or
adoption distributions made after
December 29, 2022. Qualified
birth or adoption distributions
made prior to that date may be
recontributed any time prior to
January 1, 2026.
• Section 314 of the SECURE 2.0
Act amends the Code to add section
72(t)(2)(K), which permits an
individual to receive a distribution
from an applicable eligible
retirement plan of up to $10,000 (to
be adjusted for inflation) without
application of the 10% additional
tax if the distribution is an eligible
distribution to a domestic abuse
victim. An individual generally
may, during the 3-year period
beginning on the day after
receipt of an eligible distribution,
recontribute the distribution to
an applicable eligible retirement
plan in which the individual is a
beneficiary and to which a rollover
may be made.
e. Forfeitures
• Proposed regulations under
section 401 of the Code that
were published on February
27, 2023 (88 FR 12282), would
provide rules relating to the
use of forfeitures in qualified
retirement plans. The proposed
regulations are proposed to apply
only to plan years that begin on
or after January 1, 2024, but,
prior to the applicability date of
final regulations, taxpayers may
rely on the proposed regulations.
f. Witnessing of Spousal Consent
• Proposed regulations under
section 401 of the Code that
were published on December
30, 2022 (87 FR 80501),
would provide an alternative
to in-person witnessing of
spousal consents required to be
witnessed by a notary public or
a plan representative and would
clarify that certain special rules
for the use of an electronic
medium for participant elections
also apply to spousal consents.
The regulations are proposed
to apply on the date that is six
months after the publication of
final regulations, but, prior to
the applicability date of final
regulations, taxpayers may rely
on the proposed regulations.
6
2. Section 401(b):
• Section 317 of the SECURE
2.0 Act amends section 401(b)
(2) of the Code to provide that,
in the case of an individual who
owns the entire interest in an
unincorporated trade or business
and who is the only employee
of such trade or business, any
elective deferrals (as defined
in section 402(g)(3)) under
a qualified cash or deferred
arrangement that has been
adopted retroactively pursuant
to section 401(b)(2), which are
made by such individual before
the time for filing the individual’s
tax return (determined without
regard to any extensions) for the
taxable year ending after or with
the end of the plan’s first plan
year, will be treated as having
been made before the end of such
first plan year.
3. Section 401(k) and 401(m):
a. Hardship Distributions
• Section 41113 of the Bipartisan
Budget Act of 2018 (BBA), Pub.
L. 115-123, 132 Stat. 64 (2018),
in part, directs the Secretary
of the Treasury (Secretary) to
modify Treas. Reg. § 1.401(k)-
1(d)(3)(iv)(E) to delete the
6-month prohibition on
contributions after a hardship
distribution and to make any
other modifications necessary to
carry out the purposes of section
401(k)(2)(B)(i)(IV) of the
Code. (See the final regulations
described in the third bullet of
this section.)
• Section 41114 of the BBA
amends section 401(k) of the
Code to (1) modify the hardship
distribution rules to expand the
sources of hardship distributions
to include qualified nonelective
contributions, qualified
matching contributions, and
earnings on those contributions
and on elective contributions,
and (2) provide that a distribution
from a plan is not treated as
failing to be made upon the
hardship of an employee solely
because the employee does not
take any available loan under
the plan.
• Final regulations under section
401(k) that were published on
September 23, 2019 (TD 9875,
84 FR 49651), amend the rules
relating to hardship distributions
from 401(k) plans to reflect
statutory changes, including
changes made by the BBA.
7
6
The IRS expects that most plans will not need to be amended to reflect these proposed regulations relating to the witnessing of spousal consent, as most plans will not include language that
contradicts these proposed regulations.
7
Proposed regulations under section 401(k) were published in the Federal Register on November 14, 2018 (83 FR 56763). Under the proposed regulations, the changes to the hardship
distribution rules made by the BBA generally apply to distributions made in plan years beginning after December 31, 2018. However, the prohibition on suspending an employee’s elective
contributions and employee contributions as a condition of obtaining a hardship distribution may be applied as of the first day of the first plan year beginning after December 31, 2018, even
if the distribution was made in the prior plan year. In addition, the revised list of safe harbor expenses for which distributions are deemed to be made on account of an immediate and heavy
financial need may be applied to distributions made on or after a date that is as early as January 1, 2018.

January 8, 2024 342 Bulletin No. 2024–2
b. Definitions of Qualified Nonelective
Contributions and Qualified
Matching Contributions
• Final regulations under section
401(k) and (m) that were
published on July 20, 2018 (TD
9835, 83 FR 34469), amend
the definitions of qualified
nonelective contributions
(QNECs) and qualified matching
contributions (QMACs) to
provide that QNECs and
QMACs must satisfy applicable
nonforfeitability and distribution
requirements at the time they
are allocated to participants’
accounts, but need not meet
these requirements when they are
contributed to the plan.
8
c. Safe Harbor Plans
• Section 102 of the SECURE
Act amends section 401(k)(13)
(C)(iii) of the Code to increase
the 10% cap on automatic
elective contributions under a
qualified automatic contribution
arrangement to 15% (for periods
following the initial period of
automatic elective contributions
described in section 401(k)(13)
(C)(iii)(I)).
• Section 103 of the SECURE
Act amends section 401(k) of
the Code to (1) eliminate certain
safe harbor notice requirements
for plans that provide for safe
harbor nonelective contributions
and (2) add new provisions for
the retroactive adoption of safe
harbor status for those plans.
• Notice 2020-52, 2020-29 IRB
79, clarifies the requirements that
apply to a mid-year amendment
to a safe harbor section 401(k)
or 401(m) plan that reduces only
contributions made on behalf of
highly compensated employees.
It also provides temporary
coronavirus-related relief
(which requires that specified
plan language be adopted as a
condition of obtaining the relief)
from certain requirements that
would otherwise apply to a
mid-year amendment adopted
between March 13, 2020, and
August 31, 2020, to reduce or
suspend safe harbor contributions
to a safe harbor section 401(k) or
401(m) plan.
• Notice 2020-86, 2020-53 IRB
1786, provides guidance with
respect to sections 102 and 103
of the SECURE Act.
• Section 121(a) of the SECURE
2.0 Act adds new section 401(k)
(16) to the Code to provide that an
eligible employer may establish
a “starter 401(k) deferral-only
arrangement” pursuant to the
requirements of section 401(k)
(16).
• Section 401(a)(1) of the SECURE
2.0 Act amends section 401(m)
(12) of the Code to provide
that a safe harbor automatic
contribution arrangement under
section 401(m)(12) must meet
the notice requirements under
section 401(k)(13)(E).
d. Long-term, Part-time Employees
• Section 112 of the SECURE Act
and sections 125 and 401(a)(2)
of the SECURE 2.0 Act amend
section 401(k)(2)(D) of the Code
and add new section 401(k)(15) to
the Code to provide that a qualified
cash or deferred arrangement may
not require an employee meeting
the minimum age requirement to
complete, for eligibility purposes,
a period of service that extends
beyond the close of the earlier
of: (i) the period permitted under
section 410(a)(1) (disregarding
section 410(a)(1)(B)(i)); or (ii)
subject to section 401(k)(15), the
first period of three consecutive
12-month periods (or, for plan
years beginning after December
31, 2024, the first period of
two consecutive 12-month
periods) during each of which
the employee has completed
at least 500 hours of service.
For purposes of determining
an employee’s eligibility to
participate on account of clause
(ii) in the preceding sentence, or
for purposes of determining the
vesting service of an employee
who is eligible to participate
solely on account of clause (ii),
12-month periods beginning
before January 1, 2021, are not
taken into account.
• Proposed regulations under
section 401(k) that were
published on November 27, 2023
(88 FR 82796), would provide
guidance relating to long-term,
part-time employees that reflect
the amendments made to section
401(k) by section 112 of the
SECURE Act and sections 125
and 401 of the SECURE 2.0 Act.
These regulations are proposed
to apply only to plan years that
begin on or after January 1, 2024,
but, prior to the applicability date
of final regulations, taxpayers
may rely on the proposed
regulations.
e. SIMPLE 401(k) Plans
• Section 116 of the SECURE 2.0
Act amends sections 408(p) and
401(k) of the Code to permit an
employer to make additional
nonelective contributions for a
year (beyond the 2% nonelective
contribution permitted in lieu of
the otherwise required matching
contribution) of a uniform
percentage of compensation up
to a specified amount for each
employee who is eligible to
participate in the employer’s
SIMPLE 401(k) plan and who has
at least $5,000 of compensation
from the employer for the year.
• Section 117 of the SECURE 2.0
Act permits eligible employers
to allow eligible employees
to contribute up to a specified
amount of additional elective
contributions and catch-up
contributions to SIMPLE 401(k)
plans.
• Notice 2024-2, in section II.E,
provides guidance with respect
to section 117 of the SECURE
2.0 Act.
8
Proposed regulations under section 401(k) and (m) were published in the Federal Register on January 18, 2017 (82 FR 5477), and were permitted to be relied upon until the issuance of the
final regulations listed here.

Bulletin No. 2024–2 343 January 8, 2024
4. Sections 402 and 402A:
• Section 41104 of the BBA adds
section 6343(f) of the Code to
hold an individual harmless in
the case of a wrongful levy upon
an eligible retirement plan. The
eligible retirement plan may
permit the contribution of any
property or money returned
to the individual as a result of
the wrongful levy, and such
contribution will be treated as
a rollover under section 402(c)
or section 402A(c)(3), as
applicable.
• Proposed regulations under
section 402(c) that were
published on February 24,
2022 (87 FR 10504), amend
the rules relating to eligible
rollover distributions from
defined contribution plans. These
regulations are proposed to apply
only to taxable years beginning
on or after the publication of final
regulations, but taxpayers may
choose to rely on the proposed
regulations from the date of their
publication.
• Section 604 of the SECURE
2.0 Act amends section 402A
of the Code to allow a qualified
plan to permit an employee to
elect to designate nonforfeitable
employer matching or
nonelective contributions as
Roth contributions.
• Notice 2024-2, in section II.L,
provides guidance with respect
to section 604 of the SECURE
2.0 Act.
5. Section 402(l):
• Section 328 of the SECURE
2.0 Act amends section 402(l)
(5)(A) of the Code to permit
governmental plans to make
direct distributions to certain
eligible retired public safety
officers of amounts necessary
to pay for qualified health
insurance premiums, provided
the participant includes an
attestation as to the necessity of
the distribution along with the
participant’s tax return for the
taxable year of the distribution.
6. Section 411:
• Section 209 of the Taxpayer
Certainty and Disaster Tax
Relief Act of 2020, enacted as
Division EE of the Consolidated
Appropriations Act, 2021 (CAA
2021), Pub. L. 116-260, 134 Stat.
1182 (2020), provides temporary
guidance relating to partial plan
terminations.
9
7. Section 413:
• Section 101(a) of the SECURE
Act adds section 413(e) of the
Code, which creates a statutory
exception to the unified plan
rule for certain types of multiple
employer plans (MEPs) that
include defined contribution
qualified plans.
• Proposed regulations under
section 413(e) were published on
March 28, 2022 (87 FR 17225).
These regulations are proposed to
apply only on or after the date of
publication of final regulations.
The proposed regulations provide
that, pursuant to section 413(e)
(4)(B), until the final regulations
are published, an employer or
pooled plan provider may rely
on a good faith, reasonable
interpretation of the provisions of
section 413(e) to which the final
regulations relate. Compliance
with the proposed regulations is
considered reliance on a good
faith, reasonable interpretation of
the provisions of section 413(e)
to which the final regulations
relate.
8. Section 414(p):
• Section 339 of the SECURE
2.0 Act amends the definition
of “domestic relations order” in
section 414(p)(1)(B) of the Code
to include a domestic relations
order issued pursuant to an
Indian tribal domestic relations
law.
9. Section 414(v):
• Section 109 of the SECURE 2.0
Act amends section 414(v) of
the Code to increase the annual
limit on catch-up contributions,
beginning with the 2025 taxable
year, for individuals between
ages 60 and 63. For non-SIMPLE
plans, the increased limit is the
greater of $10,000 or 150% of
the regular catch-up limit for
2024, indexed for inflation. For
SIMPLE plans, the increased
limit is the greater of $5,000 or
150% of the regular catch-up limit
for 2025, indexed for inflation.
10. Section 415:
• Section 116 of the SECURE Act
amends section 415(c) of the
Code to treat difficulty of care
payments that are excluded from
gross income as compensation
for determining retirement
contribution limitations.
• Notice 2020-68 provides
guidance with respect to the
SECURE Act, including section
116 of the SECURE Act.
11. Section 416:
• Section 121(c)(3) of the SECURE
2.0 Act revises section 416(g)
(4)(H) of the Code to provide
that a starter 401(k) deferral-
only arrangement described in
section 401(k)(16)(B) shall not
be treated as a top-heavy plan.
• Section 310 of the SECURE 2.0
Act adds new section 416(c)(2)
(C) to the Code, under which
employees not meeting the
age or service requirements of
section 410(a)(1) (without regard
to subparagraph (B) thereof) may
be excluded from consideration
in determining whether a plan
meets the top-heavy minimum
benefit requirements in
section 416(c)(2)(A) and (B).
12. Disaster-related Rules:
• Section 502 of the Disaster Tax
Relief and Airport and Airway
Extension Act of 2017, Pub. L.
115-63, 131 Stat. 1168 (2017), as
amended by section 20201 of the
BBA, provides special disaster-
related rules for use of retirement
funds.
9
The IRS expects that most plans will not need to be amended to reflect section 209 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, as most plans will not include language
that contradicts section 209.

January 8, 2024 344 Bulletin No. 2024–2
• Section 11028 of the Tax Cuts
and Jobs Act of 2017, Pub. L.
115-97, 131 Stat. 2054 (2017),
provides special disaster-related
rules for use of retirement funds.
• Section 20101 of the BBA
provides special disaster-related
rules for use of retirement funds.
• Section 202 of the Taxpayer
Certainty and Disaster Tax Relief
Act of 2019, enacted as Division
Q of the FCAA 2020, provides
special disaster-related rules for
use of retirement funds.
• Section 2202 of the CARES
Act, as modified by section
280 of Division N of the CAA
2021, provides special rules for
coronavirus-related distributions
and plan loans made to qualified
individuals.
• Notice 2020-50, 2020-28 IRB
35, provides guidance relating
to the application of section
2202 of the CARES Act for
qualified individuals and eligible
retirement plans.
• Section 302 of the Taxpayer
Certainty and Disaster Tax Relief
Act of 2020 provides special
disaster-related rules for use of
retirement funds.
• Section 331 of the SECURE
2.0 Act provides permanent
special rules governing plan
distributions, recontributions,
and loans to participants affected
by qualified federally declared
major disasters.
VI. DRAFTING INFORMATION
The principal author of this notice
is Jessica Weinberger of the Office of
Associate Chief Counsel (Employee
Benefits, Exempt Organizations, and
Employment Taxes). For further infor-
mation regarding this notice, contact
Employee Plans at (513) 975-6319 (not
a toll-free number).
Update for Weighted
Average Interest Rates,
Yield Curves, and Segment
Rates
Notice 2024-4
This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used
under § 417(e)(3), and the 24-month aver-
age segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan
years beginning before 2008 and the 30-
year Treasury weighted average rate under
§ 431(c)(6)(E)(ii)(I).
YIELD CURVE AND SEGMENT
RATES
Section 430 specifies the minimum
funding requirements that apply to sin-
gle-employer plans (except for CSEC
plans under § 414(y)) pursuant to § 412.
Section 430(h)(2) specifies the inter-
est rates that must be used to determine
a plan’s target normal cost and funding
target. Under this provision, present val-
ue is generally determined using three
24-month average interest rates (“seg-
ment rates”), each of which applies to
cash flows during specified periods. To
the extent provided under § 430(h)(2)
(C)(iv), these segment rates are adjusted
by the applicable percentage of the 25-
year average segment rates for the period
ending September 30 of the year preced-
ing the calendar year in which the plan
year begins.
1
However, an election may
be made under § 430(h)(2)(D)(ii) to use
the monthly yield curve in place of the
segment rates.
Notice 2007-81, 2007-44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond
segment rates used to compute the target
normal cost and the funding target. Con-
sistent with the methodology specified in
Notice 2007-81, the monthly corporate
bond yield curve derived from November
2023 data is in Table 2023-11 at the end
of this notice. The spot first, second, and
third segment rates for the month of No-
vember 2023 are, respectively, 5.50, 5.76,
and 5.83.
The 24-month average segment rates
determined under § 430(h)(2)(C)(i)
through (iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) to be within the appli-
cable minimum and maximum percent-
ages of the corresponding 25-year aver-
age segment rates. For this purpose, any
25-year average segment rate that is less
than 5% is deemed to be 5%. The 25-year
average segment rates for plan years be-
ginning in 2022, 2023 and 2024 were pub-
lished in Notice 2021-54, 2021-41 I.R.B.
457, Notice 2022-40, 2022-40 I.R.B. 266,
and Notice 2023-66, 2023-40 I.R.B. 992,
respectively. The applicable minimum and
maximum percentages are 95% and 105%
for plan years beginning in 2022, 2023
and 2024.
24-MONTH AVERAGE CORPORATE
BOND SEGMENT RATES
The three 24-month average corporate
bond segment rates applicable for Decem-
ber 2023 without adjustment for the 25-
year average segment rate limits are as
follows:
24-Month Average Segment Rates Without 25-Year Average Adjustment
Applicable Month First Segment Second Segment Third Segment
December 2023 4.21 4.86 4.87
1
Pursuant to § 433(h)(3)(A), the third segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).

Bulletin No. 2024–2 345 January 8, 2024
The adjusted 24-month average seg-
ment rates set forth in the chart below re-
flect § 430(h)(2)(C)(iv) of the Code. The
24-month averages applicable for Decem-
ber 2023, adjusted to be within the appli-
cable minimum and maximum percentag-
es of the corresponding 25-year average
segment rates in accordance with § 430(h)
(2)(C)(iv) of the Code, are as follows:
Adjusted 24-Month Average Segment Rates
For Plan Years Begin-
ning InApplicable MonthFirst SegmentSecond SegmentThird Segment
2022December 20234.755.185.92
2023December 20234.755.005.74
2024December 20234.754.875.59
30-YEAR TREASURY SECURITIES
INTEREST RATES
Section 431 specifies the minimum
funding requirements that apply to mul-
tiemployer plans pursuant to § 412. Sec-
tion 431(c)(6)(B) specifies a minimum
amount for the full-funding limitation
described in § 431(c)(6)(A), based on the
plan’s current liability. Section 431(c)(6)
(E)(ii)(I) provides that the interest rate
used to calculate current liability for this
purpose must be no more than 5 percent
above and no more than 10 percent below
the weighted average of the rates of inter-
est on 30-year Treasury securities during
the four-year period ending on the last
day before the beginning of the plan year.
Notice 88-73, 1988-2 C.B. 383, provides
guidelines for determining the weighted
average interest rate. The rate of interest
on 30-year Treasury securities for No-
vember 2023 is 4.66 percent. The Service
determined this rate as the average of
the daily determinations of yield on the
30-year Treasury bond maturing in Au-
gust 2053 determined each day through
November 8, 2023 and the yield on the
30-year Treasury bond maturing in No-
vember 2053 determined each day for the
balance of the month. For plan years be-
ginning in December 2023, the weighted
average of the rates of interest on 30-year
Treasury securities and the permissible
range of rates used to calculate current
liability are as follows:
Treasury Weighted Average Rates
For Plan Years Beginning In30-Year Treasury Weighted AveragePermissible Range 90% to 105%
December 20233.082.77 to 3.23
MINIMUM PRESENT VALUE
SEGMENT RATES
In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates
computed without regard to a 24-month
average. Notice 2007-81 provides guide-
lines for determining the minimum pres-
ent value segment rates. Pursuant to that
notice, the minimum present value seg-
ment rates determined for November 2023
are as follows:
Minimum Present Value Segment Rates
Month First Segment Second Segment Third Segment
November 2023 5.50 5.76 5.83
DRAFTING INFORMATION
The principal author of this notice is
Tom Morgan of the Office of Associate
Chief Counsel (Employee Benefits, Ex-
empt Organizations, and Employment
Taxes). However, other personnel from
the IRS participated in the development of
this guidance. For further information re-
garding this notice, contact Mr. Morgan at
202-317-6700 or Tony Montanaro at 626-
927-1475 (not toll-free numbers).

January 8, 2024 346 Bulletin No. 2024–2
Table 2023-11
Monthly Yield Curve for November 2023
Derived from November 2023 Data
MaturityYieldMaturityYieldMaturityYieldMaturityYieldMaturityYield
0.55.7820.55.8740.55.8360.55.8280.55.81
1.05.6821.05.8641.05.8361.05.8281.05.81
1.55.6021.55.8641.55.8361.55.8281.55.81
2.05.5222.05.8642.05.8362.05.8282.05.81
2.55.4722.55.8642.55.8362.55.8282.55.81
3.05.4223.05.8543.05.8363.05.8283.05.81
3.55.4023.55.8543.55.8363.55.8283.55.81
4.05.3824.05.8544.05.8364.05.8284.05.81
4.55.3824.55.8544.55.8264.55.8284.55.81
5.05.3925.05.8545.05.8265.05.8285.05.81
5.55.4125.55.8545.55.8265.55.8285.55.81
6.05.4426.05.8446.05.8266.05.8286.05.81
6.5
5.4726.55.8446.55.8266.55.8286.55.81
7.05.5127.05.8447.05.8267.05.8287.05.81
7.55.5527.55.8447.55.8267.55.8287.55.81
8.05.5828.05.8448.05.8268.05.8288.05.81
8.55.6228.55.8448.55.8268.55.8288.55.81
9.05.6629.05.8449.05.8269.05.8289.05.81
9.55.6929.55.8449.55.8269.55.8289.55.81
10.05.7230.05.8450.05.8270.05.8290.05.81
10.55.7530.55.8450.55.8270.55.8290.55.81
11.05.7731.05.8451.05.8271.05.8291.05.81
11.55.7931.55.8351.55.8271.55.8291.55.81
12.05.8132.05.8352.05.8272.05.8292.05.81
12.55.8332.55.8352.55.8272.55.8292.55.81
13.05.8433.05.8353.0
5.8273.05.8293.05.81
13.55.8533.55.8353.55.8273.55.8293.55.81
14.05.8634.05.8354.05.8274.05.8294.05.81
14.55.8734.55.8354.55.8274.55.8194.55.81
15.05.8735.05.8355.05.8275.05.8195.05.81
15.55.8835.55.8355.55.8275.55.8195.55.81
16.05.8836.05.8356.05.8276.05.8196.05.81
16.55.8836.55.8356.55.8276.55.8196.55.81
17.05.8837.05.8357.05.8277.05.8197.05.81
17.55.8837.55.8357.55.8277.55.8197.55.81
18.05.8838.05.8358.05.8278.05.8198.05.81
18.55.8838.55.8358.55.8278.55.8198.55.81
19.05.8739.05.8359.05.8279.05.8199.05.81
19.55.8739.55.8359.55.8279.55.8199.5
5.81
20.05.8740.05.8360.05.8280.05.81100.05.81

Bulletin No. 2024–2 347 January 8, 2024
Section 45W Commercial
Clean Vehicles and
Incremental Cost for 2024
Notice 2024-5
SECTION 1. PURPOSE
This notice provides a safe harbor
regarding the incremental cost of cer-
tain qualified commercial clean vehicles
placed in service in calendar year 2024 for
purposes of the credit for qualified com-
mercial clean vehicles under § 45W of
the Internal Revenue Code (Code).
1
This
notice also requests comments regarding
additional types or classes of vehicles that
should be included in the safe harbor in
the future.
SECTION 2. BACKGROUND
Section 13403(a) of Public Law 117-
169, 136 Stat. 1818 (August 16, 2022),
commonly known as the Inflation Reduc-
tion Act of 2022, added § 45W to the Code
to allow a credit for qualified commercial
clean vehicles (§ 45W credit), which is ef-
fective for vehicles acquired after Decem-
ber 31, 2022, and before January 1, 2033.
For purposes of § 38, § 45W(a) allows
a taxpayer a § 45W credit for the purchase
of each qualified commercial clean ve-
hicle, as defined in § 45W(c), placed in
service by the taxpayer during the taxable
year. The amount of the § 45W credit for
each qualified commercial clean vehicle is
the lesser
of (1) 30 percent of the taxpay-
er’s basis in the vehicle in the case of a ve-
hicle not powered by a gasoline or diesel
internal combustion engine (15 percent
in any other case), or (2) the incremen-
tal cost of the vehicle. See § 45W(b)(1).
Under § 45W(b)(4), the maximum credit
allowed is $7,500 in the case of a qualified
commercial clean vehicle that has a gross
vehicle weight rating of less than 14,000
pounds, and $40,000 for all other vehicles.
Section 45W(b)(2) provides that the in-
cremental cost of a qualified commercial
clean vehicle is the excess of the purchase
price of such vehicle over the price of a
comparable vehicle. A comparable vehicle
with respect to any qualified commercial
clean vehicle is any vehicle that is pow-
ered solely by a gasoline or diesel internal
combustion engine and is comparable in
size and use to such qualified commercial
clean vehicle. See § 45W(b)(3).
A qualified commercial clean vehicle
under § 45W(c) means (1) a street vehi-
cle and (2) mobile machinery as defined
in § 4053(8). For purposes of § 45W(c), a
street vehicle is a vehicle that is: (a) treat-
ed as a motor vehicle for purposes of title
II of the Clean Air Act; (b) manufactured
primarily for use on public streets, roads,
and highways; and (c) not a vehicle oper-
ated exclusively on a rail or rails.
On December 29, 2022, the Internal
Revenue Service (IRS) released Notice
2023-9, 2023-3 I.R.B. 402 (January 17,
2023), which provides a safe harbor re-
garding the incremental cost of certain
qualified commercial clean vehicles for
purposes of the §45W credit for qualified
commercial clean vehicles placed in ser-
vice in calendar year 2023, based on an
incremental cost analysis by the U.S. De-
partment of Energy (DOE) across classes
of street vehicles conducted in December
2022 (DOE Analysis).
2
The DOE Analysis
modeled the costs of representative elec-
tric vehicles, which include street electric
vehicles, and comparable street internal
combustion engine vehicles. For this pur-
pose, street electric vehicles include bat-
tery electric, plug-in hybrid electric, fuel
cell electric cars, SUVs, minivans, and
pickup trucks.
The DOE has amended the DOE Anal-
ysis in December 2023 to incorporate
minor modifications. The minor modifi-
cations did not change the results of the
analysis conducted in December 2022.
For qualified commercial clean vehicles
placed in service in calendar year 2024,
the Department of the Treasury (Treasury
Department) and the IRS have concluded
it is appropriate for the IRS to rely on the
DOE Analysis, as amended.
3
Results of the DOE Analysis show that
the modeled incremental cost of all street
electric vehicles, other than compact car
PHEVs,
4
that have a gross vehicle weight
rating of less than 14,000 pounds will be
greater than $7,500.
SECTION 3. SAFE HARBOR
The DOE Analysis calculated the in-
cremental cost for compact car PHEVs,
which include minicompact and subcom-
pact cars, to be less than $7,500. For com-
pact car PHEVs, the modeled incremen-
tal cost is $7,000. The IRS will accept a
taxpayer’s use of the modeled incremental
cost published in the DOE Analysis to cal-
culate the § 45W credit amount for com-
pact car PHEVs placed in service during
calendar year 2024.
In addition, the DOE Analysis provid-
ed an incremental cost analysis of current
costs for several representative classes of
street electric vehicles with a gross vehicle
weight rating of 14,000 pounds or more.
The IRS will accept a taxpayer’s use of
the incremental cost published in the DOE
Analysis for the appropriate class of street
electric vehicle to calculate the § 45W
credit amount for clean vehicles placed in
service during calendar year 2024.
For all street electric vehicles (other
than compact, including minicompact
and subcompact, car PHEVs) with a gross
vehicle weight rating of less than 14,000
pounds, the results of the DOE Analysis
lead the Treasury Department and the IRS
to conclude that incremental cost will not
limit the available § 45W credit amount
for such vehicles placed in service in cal-
1
Unless otherwise specified, all “Section” or “§” references are to sections of the Code.
2
U.S. Department of Energy, “2022 Incremental Purchase Cost Methodology and Results for Clean Vehicles,” December 2022, available at https://www.energy.gov/sites/default/
files/2022-12/2022.12.23%202022%20Incremental%20Purchase%20Cost%20Methodology%20and%20Results%20for%20Clean%20Vehicles.pdf.
3
U.S. Department of Energy, “Incremental Purchase Cost Methodology and Results for Clean Vehicles,” originally published December 2022 and amended December 2023, available at
https://www.energy.gov/sites/default/files/2023-12/2023.12.18%20Incremental%20Purchase%20Cost%20Methodology%20and%20Results%20for%20Clean%20Vehicles%20pub%2012-
2022%20amd%2012-2023%20Final_2.pdf.
4
Compact cars are defined as those with an interior volume index of less than 110 cubic feet, and for the purpose of the DOE analysis also include minicompact cars, subcompact cars, and
compact cars as described in 40 CFR 600.315-08(a)(1)(ii), (iii), and (iv). PHEVs are defined as commercial clean vehicles that use a gasoline or diesel internal combustion engine and are
propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 7 kilowatt hours (15 kilowatt hours in the case of a vehicle with a
gross vehicle weight rating of 14,000 pounds or more) and are capable of being recharged from an external source of electricity. See § 45W(b)(1) and (c).

January 8, 2024 348 Bulletin No. 2024–2
endar year 2024. Accordingly, the IRS
will accept a taxpayer’s use of $7,500 as
the incremental cost for all street electric
vehicles (other than compact, includ-
ing minicompact and subcompact, car
PHEVs) with a gross vehicle weight rating
of less than 14,000 pounds to calculate the
§ 45W credit amount for vehicles placed
in service during calendar year 2024.
SECTION 4. REQUEST FOR
COMMENTS
The Treasury Department and the IRS
request comments regarding additional
classes or types of vehicles that should
be considered for future safe harbors, in
addition to the safe harbor described in
this notice. In particular, the Treasury De-
partment and the IRS request comments
on classes or types of vehicles that are
not adequately represented by the existing
classes or types of vehicles listed in the
DOE Analysis.
Written comments should be submitted
by February 18, 2024. The subject line
for the comments should include a refer-
ence to Notice 2024-5. Comments may
be submitted electronically via the Fed-
eral eRulemaking Portal at https://www.
regulations.gov (type IRS-2023-0061 in
the search field on the regulations.gov
homepage to find this notice and submit
comments). Alternatively, comments may
be submitted by mail to: Internal Revenue
Service, CC:PA:LPD:PR (Notice 2024-5),
Room 5203, P.O. Box 7604, Ben Franklin
Station, Washington, DC 20044. All com-
menters are strongly encouraged to submit
comments electronically. The Treasury
Department and the IRS will publish for
public availability any comment submit-
ted electronically, or on paper, to the IRS’s
public docket on https://www.regulations.
gov.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
This notice amplifies Notice 2023-9 by
applying the safe harbor provisions that
applied to vehicles placed in service in
calendar year 2023 to vehicles placed in
service in calendar year 2024.
SECTION 6. DRAFTING
INFORMATION
The principal author of this notice
is the Office of Associate Chief Coun-
sel (Passthroughs & Special Industries).
However, other personnel from the Trea-
sury Department and the IRS participated
in its development. For further informa-
tion regarding this notice contact Chief
Counsel on (202) 317-5254 (not a toll-free
number).
Sustainable Aviation
Fuel Credit; Lifecycle
Greenhouse Gas Emissions
Reduction Percentage
and Certification of
Sustainability Requirements
Related to the Clean Air
Act; Safe Harbors
Notice 2024-6
SECTION 1. PURPOSE
The Department of the Treasury (Trea-
sury Department) and the Internal Reve-
nue Service (IRS) provided initial guid-
ance on December 19, 2022, regarding the
sustainable aviation fuel (SAF) credits in
Notice 2023-6, 2023-2 I.R.B. 328. Such
credits are collectively referred to as a
“SAF credit” or the “SAF credits.” This
notice provides additional guidance with
respect to the SAF credits under §§ 40B
and 6426(k) of the Internal Revenue
Code.
1

Section 2 of this notice provides rele-
vant background and an overview. Section
3 of this notice provides safe harbors for
calculating the lifecycle greenhouse gas
emissions reduction percentage under
§ 40B(e)(2) and for certifying the related
requirements under § 40B(f)(2)(A) (sus-
tainability requirements). Section 4 of
this notice describes Appendix A of this
notice, which contains a Model Certificate
for SAF Synthetic Blending Component
and supersedes Appendix B of Notice
2023-6. A certificate is required under
section 6.04(2) of Notice 2023-6 in order
to make a claim with respect to a SAF
qualified mixture under § 34(a)(3), 40B,
6426(k), or 6427(e)(1). Section 5 of this
notice explains that the existing Green-
house gases, Regulated Emissions, and
Energy use in Transportation (GREET)
model of the Argonne National Laborato-
ry (ANL-GREET model)
2
is a methodol-
ogy that does not satisfy the requirements
to calculate the emissions reduction per-
centage under § 40B(e)(2). To date, no
GREET-based model has been identified
as satisfying the applicable requirements.
3

Finally, section 6 of this notice an-
nounces that the Department of Energy
(DOE) is collaborating with other federal
agencies to develop a modified version of
the GREET model that would satisfy the
requirements of § 40B(e)(2) (§ 40B(e)(2)
GREET model). The agencies developing
the § 40B(e)(2) GREET model currently
anticipate it to be released in early 2024.
SECTION 2. BACKGROUND AND
OVERVIEW
.01 Applicable law generally. Sec-
tion 13203 of Public Law 117-169, 136
Stat. 1818 (August 16, 2022), commonly
known as the Inflation Reduction Act of
2022, added § 40B and amended §§ 38(b),
40A, 87, 4101(a), 6426, and 6427(e)(1),
to establish the SAF credits, effective
for certain fuel mixtures containing SAF
sold or used after December 31, 2022.
The SAF credit is equal to the product
of (1) the number of gallons of SAF in a
qualified mixture and (2) the sum of (A)
$1.25 and (B) the “applicable supplemen-
tary amount” with respect to such SAF.
In general, the applicable supplementary
1
Unless otherwise specified, all references to “section” or “§” are references to sections of the Internal Revenue Code.
2
The “ANL-GREET model” refers to the following lifecycle analysis model: Wang, Michael, et al. (2022). Greenhouse gases, Regulated Emissions, and Energy use in Technologies Model
® (2022 Excel). Computer Software. USDOE Office of Energy Efficiency and Renewable Energy (EERE). 10 Oct. 2022. Web. https://www.osti.gov/doecode/biblio/80997.
3
Letter from Joseph Goffman, Principal Deputy Assistant Administrator for the Office of Air and Radiation, U.S. Environmental Protection Agency, to Lily Batchelder, Assistant Secretary for
Tax Policy, U.S. Department of Treasury (December 13, 2023) (EPA Letter), available at https://home.treasury.gov/system/files/136/Final-EPA-letter-to-UST-on-SAF-signed.pdf.

Bulletin No. 2024–2 349 January 8, 2024
amount increases the $1.25 base credit by
$0.01 for each percentage point by which
the emissions reduction percentage of the
SAF exceeds 50 percent, for a maximum
increase of $0.50. See §§ 40B(b) and
6426(k).
Among a number of requirements, un-
der § 40B(d)(1)(D) and (e), SAF must be
certified to have a lifecycle greenhouse
gas emissions reduction percentage of at
least 50 percent. Section 40B(e) defines
the term “lifecycle greenhouse gas emis-
sions reduction percentage” (emissions re-
duction percentage) to mean, with respect
to any sustainable aviation fuel, the per-
centage reduction in lifecycle greenhouse
gas emissions achieved by such fuel, as
compared with petroleum-based jet fuel,
as defined in accordance with (1) the most
recent Carbon Offsetting and Reduction
Scheme for International Aviation (COR-
SIA) that has been adopted by the Interna-
tional Civil Aviation Organization (ICAO)
with the agreement of the United States or
(2) any similar methodology that satisfies
the criteria under § 211(o)(1)(H) of the
Clean Air Act (42 U.S.C. 7545(o)(1)(H),
as in effect on August 16, 2022) (CAA).
Section 40B(f)(2)(A) requires a pro-
ducer or importer of SAF to provide cer-
tification (in the form and manner pre-
scribed by the Secretary of the Treasury or
her delegate (Secretary)) from an unrelat-
ed party demonstrating compliance with
(i) any general requirements, supply chain
traceability requirements, and information
transmission requirements established
under CORSIA as described in § 40B(e)
(1), or (ii) in the case of any similar meth-
odology established under § 40B(e)(2),
requirements similar to the sustainability
requirements described in § 40B(f)(2)(A)
(i). Section 40B(f)(2)(B) requires SAF
producers or importers to provide such
other information with respect to such fuel
as the Secretary may require for purposes
of carrying out § 40B.
.02 Notice 2023-6. Notice 2023-6 pro-
vides guidance on the SAF credits and
related credit and payment rules under
§§ 34(a)(3), 38, 87, and 6427(e)(1). No-
tice 2023-6 also provides guidance relat-
ed to the registration requirements under
§ 4101 for persons producing or importing
SAF. For definitions of terms used in this
notice and procedures for claiming a SAF
credit, see Notice 2023-6.
Sections 4.04 and 5.01(4) of Notice
2023-6 include CORSIA-based safe har-
bors for determining the emissions reduc-
tion percentage under § 40B(e)(1) and
for providing an unrelated party certifica-
tion of sustainability requirements under
§ 40B(f)(2)(A)(i). However, Notice 2023-
6 does not provide guidance regarding
the calculation of the emissions reduction
percentage under § 40B(e)(2) or the asso-
ciated unrelated party certification of sus-
tainability requirements under § 40B(f)(2)
(A)(ii).
.03 Sections 3 through 6 of this notice.
The Treasury Department and the IRS de-
veloped the guidance set forth in sections
3 through 5 of this notice, in consultation
with the Environmental Protection Agen-
cy (EPA) and other agencies, to provide
safe harbors for using the EPA’s Renew-
able Fuel Standard (RFS) program to cal-
culate the emissions reduction percentage
under § 40B(e)(2) and RFS guidance to
certify related sustainability requirements
under § 40B(f)(2)(A)(ii), and to address
other models. Section 6 of this notice an-
nounces the § 40B(e)(2) GREET model is
expected in early 2024.
SECTION 3. LIFECYCLE
GREENHOUSE GAS
EMISSIONS REDUCTION
PERCENTAGE UNDER § 40B(e)
(2) AND CERTIFICATION
OF SUSTAINABILITY
REQUIREMENTS UNDER § 40B(f)
(2)(A)(ii); RENEWABLE FUEL
STANDARD PROGRAM; SAFE
HARBORS
.01 Calculating the lifecycle green-
house gas emissions reduction percentage
under § 40B(e)(2).
(1) Renewable Fuel Standard program.
Section 40B(e)(2) provides that the emis-
sions reduction percentage may be calcu-
lated in accordance with any methodology
similar to the most recent CORSIA that
satisfies the criteria under § 211(o)(1)(H)
of the CAA (CAA § 211(o)(1)(H) criteria).
Section 211(o)(1)(H) of the CAA defines
the term “lifecycle greenhouse gas emis-
sions” to mean “the aggregate quantity
of greenhouse gas emissions (including
direct emissions and significant indirect
emissions such as significant emissions
from land use changes), as determined by
the [EPA] Administrator, related to the full
fuel lifecycle, including all stages of fuel
and feedstock production and distribution,
from feedstock generation or extraction
through the distribution and delivery and
use of the finished fuel to the ultimate
consumer, where the mass values for all
greenhouse gases are adjusted to account
for their relative global warming poten-
tial.” Section 211(o)(2)(A) of the CAA,
as added by § 1501(a)(2) of the Energy
Policy Act of 2005, Public Law 109-58,
119 Stat. 594, 1067 (2005) and amended
by § 202(a)(1) of the Energy Indepen-
dence and Security Act of 2007, Public
Law 110-140, 121 Stat. 1492, 1521-22
(2007), requires the Administrator of the
EPA to promulgate regulations imple-
menting the statutory requirements of
the RFS program, which include require-
ments related to greenhouse gas emissions
reduction thresholds for renewable fuels.
Regulations for the RFS program are cod-
ified under 40 CFR Part 80: Regulation of
Fuels and Fuel Additives. Under the RFS
program, the EPA evaluates a biofuel’s
lifecycle greenhouse gas emissions to de-
termine whether a particular fuel meets a
20-percent, a 50-percent, or a 60-percent
emissions reduction from a gasoline or
diesel fuel baseline, as applicable.
4
See 42
U.S.C. 7545(o)(1)(B) – (E); 40 CFR 80.2.
The EPA’s methodology for determin-
ing lifecycle greenhouse gas emissions
under the RFS program was specifically
designed to satisfy the statutory definition
in § 211(o)(1)(H) of the CAA. The meth-
odology employed by the RFS program,
consistent with that definition, is similar
to the CORSIA methodology as both are
methodologies that evaluate the “full fuel
lifecycle, including all stages of fuel and
4
Although § 40B(e) requires use of a petroleum-based jet fuel baseline, the Treasury Department and the IRS conclude that it is reasonable to use the RFS program’s diesel fuel baseline for
purposes of the safe harbor in section 3.01(2) of this notice because the differences are small compared to the inherent lack of precision with respect to lifecycle greenhouse gas emissions
calculations.

feedstock production” through to the end
use of the finished fuel.
5

(2) Safe harbor based on certain RFS
program determinations. With respect to
any SAF qualified mixture produced under
ASTM International (ASTM) D7566, the
IRS will accept an emissions reduction per-
centage of the SAF synthetic blending com-
ponent for a jet fuel that qualifies as renew-
able fuel under the RFS program. Rows F, G,
H, L, M, and P in Table 1 to 40 CFR 80.1426
list the generally applicable fuel pathways
and the D-codes under the RFS program
for jet fuel, which are available at https://
www.epa.gov/renewable-fuel-standard-
program/approved-pathways-renewable-
fuel#generally.
Specifically, a SAF synthetic blend-
ing component that has generated bio-
mass-based diesel (D-code 4) or advanced
biofuel (D-code 5) renewable identifica-
tion numbers (RINs) under the RFS pro-
gram that have been validated under a
quality assurance plan (QAP) will be as-
signed a 50-percent emissions reduction
percentage. See 40 CFR 80.2. A SAF syn-
thetic blending component that has gener-
ated valid cellulosic biofuel (D-code 3) or
cellulosic diesel (D-code 7) RINs under
the RFS program that have been validated
under a QAP will be assigned a 60-per-
cent emissions reduction percentage. See
40 CFR 80.2 and 80.1425(g).
The EPA has also made facility-spe-
cific determinations for renewable jet
fuel pathways under the RFS program,
which are available at https://www.epa.
gov/renewable-fuel-standard-program/
approved-pathways-renewable-fuel#
completed. The IRS will also accept the
emissions reduction percentage for a SAF
synthetic blending component for a jet
fuel that has generated a D-code 3, 4, 5, or
7 RIN and that has been validated under
a QAP pursuant to these approved facili-
ty-specific pathways.
(3) Emissions reduction percentages
other than 50 percent or 60 percent de-
scribed in the safe harbor will not be ac-
cepted. For some fuel pathways, the EPA
has published specific lifecycle analysis
point estimates (or a range of estimates)
to support its determinations under the
RFS program. Those estimates are only
used to determine whether a particular

fuel meets either the 50-percent thresh-
old or the 60-percent threshold under the
RFS program. Using those point estimates
to calculate an emissions reduction per-
centage beyond 50 percent or 60 percent
would extend those estimates beyond their
intended uses. Therefore, the IRS will not
accept those point estimates (or range of
estimates) for the safe harbor provided in
section 3.01(2) of this notice.
(4) Example for calculating the amount
of the SAF credit using the RFS safe har-
bor in section 3.01(2) of this notice. A
blender used 100,000 gallons of a SAF
synthetic blending component to produce
a SAF qualified mixture. The SAF syn-
thetic blending component has generated
cellulosic diesel (D-code 7) RINs under
a pathway that qualifies under the RFS
program, and these RINs were validated
under a QAP. The final rule that added
the pathway to the list of approved re-
newable fuel production pathways in the
RFS regulations states that the jet fuel’s
emissions reduction percentage compared
to the baseline is 64 percent. However,
for purposes of calculating the applicable
supplementary amount, the emissions re-
duction percentage will be deemed to be
60 percent under the safe harbor described
in section 3.01(2) of this notice, which
corresponds to the emissions reduction
threshold the fuel was required to meet to
qualify as cellulosic diesel and thus gener-
ate D-code 7 RINs.
The per-gallon amount of the SAF
credit with respect to the SAF qualified
mixture described above is calculated by
adding $1.25 and the applicable supple-
mentary amount, if any, with respect to the
SAF synthetic blending component used
to produce the SAF qualified mixture.
Here, the SAF synthetic blending compo-
nent qualifies for the applicable supple-
mentary amount because the emissions
reduction percentage is deemed to be 60
percent. The applicable supplementary
amount is calculated by subtracting 50
from the emissions reduction percentage
(60), and then multiplying by the applica-
ble rate ($0.01): (60 – 50) × $0.01 = $0.10
per gallon.
The total amount of the SAF credit is
calculated as follows: 100,000 gallons ×
($1.25 + $0.10) = $135,000.00.
.02 Unrelated party certification of sus-
tainability requirements under § 40B(f)(2)
(A)(ii); RFS Q-RIN safe harbor. In the
case of a methodology established un-
der § 40B(e)(2) (relating to the CAA),
§ 40B(f)(2)(A)(ii) provides that no SAF
credit is allowed with respect to any
SAF unless the producer or importer of
such fuel provides certification from an
unrelated party demonstrating compli-
ance with requirements similar to the re-
quirements described in § 40B(f)(2)(A)
(i) (relating to the CORSIA methodolo-
gy). See also § 6426(k)(3). A Q-RIN is a
RIN verified by a registered independent
third-party auditor using a QAP that has
been approved under 40 CFR 80.1469(c)
following the audit process described in
40 CFR 80.1472. See generally 40 CFR
Part 80: Subpart M. A Q-RIN signifies
that the fuel has been produced pursuant
to an EPA-approved pathway that the EPA
has determined meets the specified lifecy-
cle greenhouse gas emissions reduction
threshold requirement.
With respect to any SAF qualified mix-
ture produced under ASTM D7566, the
IRS will consider a producer of a SAF
synthetic blending component to meet the
certification of sustainability requirements
of § 40B(f)(2)(A)(ii) if the SAF synthet-
ic blending component has generated a
Q-RIN with an eligible D-code. For this
purpose, an eligible D-Code means that a
D-code 3, 4, 5, or 7 RIN was generated
for the SAF synthetic blending compo-
nent and the RIN has been verified under
a QAP.
To demonstrate compliance with
§ 40B(f)(2)(A)(ii), the registered pro-
ducer of the SAF synthetic blending
component must record a valid Q-RIN or
Q-RINs on the Certificate for SAF Syn-
thetic Blending Component required un-
der section 4 of this notice and sections
6.04(2) and 7.02 of Notice 2023-6 for the
particular volume of fuel to which the
certificate relates.
SECTION 4. CERTIFICATE FOR
SAF SYNTHETIC BLENDING
COMPONENT
Appendix B of Notice 2023-6 con-
tains a Model Certificate for SAF Syn-
5
EPA Letter, available at https://home.treasury.gov/system/files/136/Final-EPA-letter-to-UST-on-SAF-signed.pdf.
January 8, 2024 350 Bulletin No. 2024–2

Bulletin No. 2024–2 351 January 8, 2024
thetic Blending Component. Appendix A
of this notice supersedes the model cer-
tificate in Appendix B of Notice 2023-6.
For claims filed after December 15, 2023,
claimants must submit with their claim a
Certificate for SAF Synthetic Blending
Component in substantially the same
form as the model certificate in Appendix
A of this notice.
SECTION 5. ANL-GREET
There are different methodologies that
may be used to calculate lifecycle green-
house gas emissions, such as those estab-
lished by CORSIA and RFS. A widely
used model for calculating an emissions
reduction percentage is the GREET mod-
el. There are several existing GREET-
based models such as CA-GREET used
by the California Air Resources Board
for the California Low Carbon Fuel Stan-
dard, and ICAO-GREET used by COR-
SIA,
6
but the core version is the ANL-
GREET model developed by Argonne
National Laboratory, with DOE support,
in 1994. The ANL-GREET model is up-
dated annually and produces a lifecycle
greenhouse gas emissions value that is
comparable to the lifecycle greenhouse
gas emissions of petroleum-based fuels,
including jet fuel.
Section 40B(e)(2) allows the emissions
reduction percentage to be determined
in accordance with a methodology that
is “similar” to CORSIA and satisfies the
CAA § 211(o)(1)(H) criteria. The EPA has
previously determined, in the context of
the RFS program in which it has interpret-
ed and implemented § 211(o)(1)(H) of the
CAA, that the 2010 version of the ANL-
GREET model by itself is not sufficient to
calculate lifecycle greenhouse gas emis-
sions. The EPA has further advised that,
as relevant to § 40B(e)(2), the only cur-
rent methodology that it has determined
satisfies the CAA § 211(o)(1)(H) criteria
is the methodology, modeling, and anal-
ysis the EPA developed in 2010 for the
RFS program and applied in subsequent
RFS rulemakings.
7
Based on those con-
sultations, the Treasury Department and
the IRS conclude that the ANL-GREET
model and other existing GREET-based
models do not satisfy the applicable re-
quirements.
SECTION 6. § 40B(e)(2) GREET
MODEL
The DOE is collaborating with other
federal agencies to develop the §40B(e)
(2) GREET model to calculate the emis-
sions reduction percentage under § 40B(e)
(2). The collaborating agencies anticipate
that the § 40B(e)(2) GREET model will
be available in early 2024, and will satisfy
the statutory requirements of § 40B(e)(2).
After the § 40B(e)(2) GREET model is
released, and subject to any further guid-
ance from the Treasury Department and
the IRS, it is anticipated that taxpayers
will be able to use the § 40B(e)(2) GREET
model to calculate the emissions reduction
percentage for SAF sold or used after De-
cember 31, 2022, and prior to January 1,
2025. A registration applicant using the
§ 40B(e)(2) GREET model would also
need to meet all statutory requirements
under § 40B, including registration, sus-
tainability, traceability, and unrelated par-
ty certification.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Appendix B of Notice 2023-6 is super-
seded by Appendix A of this notice.
SECTION 8. PAPERWORK
REDUCTION ACT
Sections 3 and 4 of this notice set forth
a collection of information to be provided
to the IRS to determine whether a claimant
qualifies for a SAF credit. Any third-party
disclosure burden associated with this no-
tice is accounted for in the Office of Man-
agement and Budget (OMB) Control Num-
ber 1545-1835 that is associated with Form
637, Application for Registration (For
Certain Excise Tax Activities). This notice
does not substantially alter any previously
accounted for information collection re-
quirements within OMB Control Number
1545-1835 and does not create new col-
lection requirements not already approved
by the OMB. An agency may not conduct
or sponsor, and a person is not required to
respond to, a collection of information un-
less the collection of information displays a
valid OMB control number.
SECTION 9. DRAFTING
INFORMATION
The principal authors of this notice are
Camille Edwards Bennehoff and Jenni-
fer Golden of the Office of the Associate
Chief Counsel (Passthroughs & Special
Industries). For further information re-
garding this notice, call the energy securi-
ty guidance contact number at (202) 317-
5254 (not a toll-free number).
6
Other existing GREET-based models include, but are not limited to, Washington GREET and Oregon GREET.
7
EPA Letter, available at https://home.treasury.gov/system/files/136/Final-EPA-letter-to-UST-on-SAF-signed.pdf.

January 8, 2024 352 Bulletin No. 2024–2
Appendix A – Model Certificate for SAF Synthetic Blending Component
CERTIFICATE FOR SAF SYNTHETIC BLENDING COMPONENT
Certificate Identification Number: ____________________
(To support a claim related to sustainable aviation fuel (SAF)
under the Internal Revenue Code (Code))
Note: In the case of a claimant that is also the producer or importer of the SAF synthetic blending component, the information re-
quired on lines 2, 4, and 10 of the model certificate is not applicable and those lines do not need to be completed.
The undersigned producer or importer of a SAF synthetic blending component (Producer) hereby certifies the following under
penalties of perjury:
1. Producer’s name, address, and employer identification number (EIN).
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
2. Name, address, and EIN of person buying the SAF synthetic blending component from Producer.
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
3. Name and address of the unrelated party certifying compliance with the general requirements, supply chain traceability
requirements, and information transmission requirements established under the Carbon Offsetting and Reduction Scheme for
International Aviation (CORSIA) or similar requirements for methodologies established under section 211(o)(1)(H) of the Clean
Air Act (42 U.S.C. 7545(o)(1)(H)).
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
4. Date and location of sale to buyer.
______________________________________________________________________________________________________
5. This certificate applies to __________ gallons of a SAF synthetic blending component.
6. Producer certifies that the SAF synthetic blending component to which this certificate relates:
(A) Meets the requirements of an ASTM International (ASTM) D7566 Annex (the certificate of analysis reference number
demonstrating conformance with such standard is ____________________, dated __________ );
(B) Is not derived from co-processing an applicable material (monoglycerides, diglycerides, triglycerides, free fatty acids, or
fatty acid esters) or materials derived from an applicable material with a feedstock that is not biomass (as defined in section
45K(c)(3) of the Code);

Bulletin No. 2024–2 353 January 8, 2024
(C) Is not derived from palm fatty acid distillates or petroleum; and
(D) Has been certified in accordance with section 40B(e) of the Code as having a lifecycle greenhouse gas emissions reduction
percentage of at least 50 percent.
7. The lifecycle greenhouse gas emissions reduction percentage of the SAF synthetic blending component to which this certificate
relates is __________. (This percent must be rounded down to the nearest whole percent.)
(Check one)
______ The lifecycle greenhouse gas emissions reduction percentage is calculated from the “Default Life Cycle Emissions
Values for CORSIA Eligible Fuels” in the most recently published version by the International Civil Aviation Organization
(ICAO).
______ The lifecycle greenhouse gas emissions reduction percentage is calculated from the “CORSIA Methodology for
Calculating Actual Life Cycle Emission Values” in the most recently published version by the ICAO.
______ The lifecycle greenhouse gas emissions reduction percentage is deemed to be 50% because the fuel is biomass-based
diesel (D-code 4) or advanced biofuel (D-code 5) under the Renewable Fuel Standard program for which a Q-RIN was generated.
______ The lifecycle greenhouse gas emissions reduction percentage is deemed to be 60% because the fuel is cellulosic biofuel
(D-code 3) or cellulosic diesel (D-code 7) under the Renewable Fuel Standard program for which a Q-RIN was generated.
______ The lifecycle greenhouse gas emissions reduction percentage is calculated according to a methodology that satisfies the
requirements of section 40B(e) of the Code. Describe method: ____________________________________________________
____________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
8. The applicable supplementary amount with respect to the SAF synthetic blending component to which this certificate relates is
__________. In no event can the applicable supplementary amount exceed $0.50.
9. This certificate applies to the following sale:
______ Invoice or delivery ticket number
______ Total number of gallons of the SAF synthetic blending component sold under that invoice or delivery ticket number
(including SAF synthetic blending component not covered by this certificate)
______ Total number of certificates issued for that invoice or delivery ticket number
10. Name, address, and EIN of reseller to whom certificate is issued (only in the case of certificates reissued to a reseller after the
return of the original certificate).
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
11. _________ Original Certificate Identification Number (only in the case of certificates reissued to a reseller after return of the
original certificate).
12. Producer is registered as a sustainable aviation fuel (activity letter SA) producer or importer with registration number __________.
Producer’s registration has not been suspended or revoked by the Internal Revenue Service.

January 8, 2024 354 Bulletin No. 2024–2
13. Q-RIN or Q-RINs (only in the case where the lifecycle greenhouse gas emissions reduction percentage is deemed because of the
fuel’s qualification under the Renewable Fuel Standard program).
______________________________________________________________________________________________________
Producer understands that the fraudulent use of this certificate may subject Producer and all parties making any fraudulent use of this
certificate to a fine or imprisonment, or both, together with the costs of prosecution.
___________________________________________
Printed or typed name of person signing this certificate
___________________________________________
Title of person signing
___________________________________________
Signature and date signed

Bulletin No. 2024–2 355 January 8, 2024
Relief from Additions to
Tax for Certain Taxpayers’
Failure to Timely Pay
Income Tax for Taxable
Years 2020 and 2021
Notice 2024-7
SECTION I. PURPOSE
This notice provides relief for certain
taxpayers from additions to tax for the
failure to pay income tax with respect
to certain income tax returns for taxable
years 2020 and 2021. These additions to
tax for the failure to pay income tax will
be waived or, to the extent previously as-
sessed or paid, will be abated, refunded,
or credited to other outstanding tax liabil-
ities, as described in section III of this no-
tice. Section III.D of this notice describes
situations in which the relief provided in
this notice does not apply.
SECTION II. BACKGROUND
Section 6651(a)(2) of the Internal Rev-
enue Code (Code)
1
generally imposes an
addition to the tax owed by a taxpayer for
the failure to pay the amount shown as tax
on a return required to be filed by the tax-
payer, on or before the date prescribed for
payment of such tax, including any exten-
sion of time for payment. Section 6651(a)
(3) generally imposes an addition to the
tax owed by the taxpayer for the failure
to pay the amount required to be shown
on a return that is not so shown within 21
calendar days from the date of notice and
demand or 10 business days if the amount
in the notice and demand is $100,000 or
greater. Sections 6651(a)(2) and 6651(a)
(3) apply to returns required to be filed un-
der the authority of any provision of sub-
chapter A of chapter 61 of the Code, (for
example, §§ 6012 through 6017 requiring
the filing of income tax returns) and do
not apply to information returns required
to be filed or furnished under part III of
such subchapter (that is, §§ 6031 through
6056 of the Code). Sections 6651(a)(2)
and 6651(a)(3) do not apply if the taxpay-
er can show that the failure to pay the tax
shown or required to be shown on the re-
turn is due to reasonable cause and not due
to willful neglect.
When a taxpayer does not fully pay a
tax liability, the Internal Revenue Service
(IRS) sends an initial balance due notice,
which includes Notices CP14 and CP161.
2

An initial balance due notice informs the
taxpayer of the amount of tax owed and
instructs the taxpayer how to pay the tax
liability. If the taxpayer does not pay the
tax liability after receiving the initial no-
tice, the IRS normally sends the taxpayer
certain automated reminder notices.
On March 13, 2020, the President
of the United States declared a nation-
al emergency in response to the ongoing
Coronavirus Disease 2019 (COVID-19)
pandemic.
3
The same day, the President
also issued an emergency declaration un-
der the Robert T. Stafford Disaster Relief
and Emergency Assistance Act, 42 U.S.C.
5121 et seq. (Emergency Declaration).
4

The Emergency Declaration instructed
the Secretary of the Treasury “to provide
relief from tax deadlines to Americans
who have been adversely affected by the
COVID-19 emergency, as appropriate,
pursuant to 26 U.S.C. 7508A(a).” In re-
sponse, the Department of the Treasury
(Treasury Department) and the IRS issued
a series of notices and other guidance to
provide relief to affected taxpayers.
On February 9, 2022, the IRS an-
nounced in IRS News Release IR-2022-31
(IR-2022-31) the temporary suspension of
the mailing of certain automated remind-
er notices. The IRS did not suspend the
mailing of initial balance due notices. The
additions to tax for the failure to pay taxes
owed under §§ 6651(a)(2) and 6651(a)(3)
continued to accrue for taxpayers who did
not fully pay their balance due.
The IRS will fully resume issuing au-
tomated reminder notices in calendar year
2024 for balances due for taxable years
2021 and earlier, thereby resuming the
normal notice process for these taxable
years. The Treasury Department and the
IRS have determined that the relief de-
scribed in section III of this notice will
help certain taxpayers, who were not sent
reminder notices during the temporary
suspension of certain automated reminder
notices, meet their Federal tax obligations.
SECTION III. GRANT OF RELIEF
Taxpayers described in section III.A of
this notice (eligible taxpayers) who have
filed tax returns specified in section III.B
of this notice (eligible returns) will have
the accrual of additions to tax for the fail-
ure to pay taxes owed for taxable year
2020 or 2021 waived for the relief period
described in section III.C (relief period)
or, to the extent previously assessed or
paid, will have such additions to tax au-
tomatically abated, refunded, or credited
to other outstanding tax liabilities, as ap-
propriate, for the relief period. There is no
need for taxpayers to request this relief.
The IRS will issue a notice to each eligible
taxpayer that reflects the updated amount
owed and any refund or credit resulting
from the automatic abatement. The relief
granted in this notice applies to additions
to tax under §§ 6651(a)(2) and 6651(a)(3)
for the failure to pay taxes owed, but does
not apply to any amount of interest that
accrues as a result of any underpayment.
A. Eligible Taxpayers
The relief granted in this notice is
available only to eligible taxpayers for ac-
cruals of additions to tax under §§ 6651(a)
(2) and 6651(a)(3) for the failure to pay
during the relief period. An “eligible tax-
payer” is any taxpayer:
• Whose assessed income tax for
taxable year 2020 or 2021, as of
1
Unless otherwise specified, all “Section” or “§” references are to sections of the Code.
2
Notice CP14, Notice of Tax Due and Demand for Payment, Balance Due $5 or More, No Math Error, is issued to a taxpayer who owes money on unpaid taxes, states the amount of tax owed,
including interest and penalties, and requests payment within 21 days. Notice CP161, Balance Due – Request for Payment or Notice of Unpaid Balance, is issued to a taxpayer who has an
unpaid balance due, and explains how the IRS calculated the amount due, and states the taxpayer should contact the IRS within 10 days if the taxpayer believes the IRS has made a mistake
or to contact the IRS to make a payment arrangement.
3
Proclamation 9994, 85 F.R. 15337 (March 18, 2020).
4
March 13, 2020, letter from the President to Secretaries of the Departments of Homeland Security, the Treasury, and Health and Human Services and the Administrator of the Federal Emer-
gency Management Agency, available at https://trumpwhitehouse.archives.gov/briefings-statements/letter-president-donald-j-trump-emergency-determination-stafford-act/.

January 8, 2024 356 Bulletin No. 2024–2
December 7, 2023, is less than
$100,000, excluding any applicable
additions to tax, penalties, or interest;
• Who was issued an initial balance due
notice (including, but not limited to
Notice CP14 or Notice CP161) on or
before December 7, 2023, for taxable
year 2020 or 2021; and
• Who is otherwise liable during the
relief period for accruals of additions
to tax for the failure to pay under
§ 6651(a)(2) or 6651(a)(3) with
respect to an eligible return for
taxable year 2020 or 2021.
B. Eligible Returns
The relief granted in this notice is
available only to eligible taxpayers who
have filed an eligible return. An “eligible
return” is one of the following income tax
returns:
1. Income Tax Returns of Individuals:
• Form 1040, U.S. Individual Income
Tax Return
• Form 1040-C, U.S. Departing Alien
Income Tax Return
• Form 1040-NR, U.S. Nonresident
Alien Income Tax Return
• Form 1040-PR, Declaración de
la Contribución Federal sobre el
Trabajo por Cuenta Propia
• Form 1040-SR, U.S. Tax Return for
Seniors
• Form 1040-SS, U.S. Self-Employment
Tax Return
2. Income Tax Returns of Trusts, Estates,
Certain Taxable Corporations, and
Certain Tax-Exempt Organizations:
• Form 1120, U.S. Corporation Income
Tax Return
• Form 1120-C, U.S. Income Tax
Return for Cooperative Associations
• Form 1120-F, U.S. Income Tax Return
of a Foreign Corporation
• Form 1120-FSC, U.S. Income Tax
Return of Foreign Sales Corporation
• Form 1120-H, U.S. Income Tax
Return for Homeowners Associations
• Form 1120-L, U.S. Life Insurance
Company Income Tax Return
• Form 1120-ND, Return for Nuclear
Decommissioning Funds and Certain
Related Persons
• Form 1120-PC, U.S. Property and
Casualty Insurance Company Income
Tax Return
• Form 1120-POL, U.S. Income
Tax Return for Certain Political
Organizations
• Form 1120-REIT, U.S. Income Tax
Return for Real Estate Investment
Trusts
• Form 1120-RIC, U.S. Income Tax
Return for Regulated Investment
Companies
• Form 1120-S, U.S. Income Tax Return
for an S Corporation
• Form 1120-SF, U.S. Income Tax
Return for Settlement Funds (Under
Section 468B)
• Form 1041, U.S. Income Tax Return
for Estates and Trusts
• Form 1041-N, U.S. Income Tax
Return for Electing Alaska Native
Settlement Trusts
• Form 1041-QFT, U.S. Income Tax
Return for Qualified Funeral Trusts
• Form 990-T, Exempt Organization
Business Income Tax Return
C. Relief Period
For purposes of the relief granted in
this notice, the “relief period” is the peri-
od that begins on the date the IRS issued
an initial balance due notice to the eligible
taxpayer, or February 5, 2022, whichever
is later, and ends on March 31, 2024. Eli-
gible taxpayers will remain liable for any
addition to tax for the failure to pay tax
that accrued before or after the relief pe-
riod. Eligible taxpayers will also remain
liable for interest that accrues during the
relief period as a result of any underpay-
ment of tax for taxable year 2020 or 2021.
D. Exceptions to Relief
The relief described in this notice does
not apply to any addition to tax, penalty,
or interest that is not specifically listed in
the grant of relief under section III of this
notice. In addition, the relief described in
section III of this notice is not available
with respect to any return for which the
penalty for fraudulent failure to file under
§ 6651(f) or the penalty for fraud under
§ 6663 applies. The relief described in sec-
tion III of this notice also does not apply to
any addition to tax for the failure to pay in
an offer in compromise under § 7122 that
is accepted by the IRS because acceptance
of the offer conclusively settles all of the
liabilities in the offer under § 301.7122-
1(e)(5) of the Procedure and Administra-
tion Regulations (26 CFR part 301). Final-
ly, the relief described in section III of this
notice does not apply to any addition to
tax for the failure to pay that is settled in a
closing agreement under § 7121 or finally
determined in a judicial proceeding.
SECTION IV. DRAFTING
INFORMATION
The principal author of this notice is
Jamie Song of the Office of the Associate
Chief Counsel (Procedure and Adminis-
tration). For further information regarding
this notice, contact Jamie Song at (202)
317-6845 (not a toll-free number).
2024 Standard Mileage
Rates
Notice 2024-08
SECTION 1. PURPOSE
This notice provides the optional 2024
standard mileage rates for taxpayers to
use in computing the deductible costs
of operating an automobile for business,
charitable, medical, or moving expense
purposes. This notice also provides the
amount taxpayers must use in calculating
reductions to basis for depreciation tak-
en under the business standard mileage
rate, and the maximum standard automo-
bile cost that may be used in computing
the allowance under a fixed and variable
rate (FAVR) plan. Additionally, this notice
provides the maximum fair market value
(FMV) of employer-provided automobiles
first made available to employees for per-
sonal use in calendar year 2024 for which
employers may use the fleet-average val-

Bulletin No. 2024–2 357 January 8, 2024
uation rule in § 1.61-21(d)(5)(v) or the
vehicle cents-per-mile valuation rule in
§ 1.61-21(e).
1
SECTION 2. BACKGROUND
Rev. Proc. 2019-46, 2019-49 I.R.B.
1301, provides rules for computing the
deductible costs of operating an automo-
bile for business, charitable, medical, or
moving expense purposes, and for sub-
stantiating, under § 274(d) and § 1.274-
5, the amount of ordinary and necessary
business expenses of local transportation
or travel away from home. Taxpayers us-
ing the standard mileage rates must com-
ply with Rev. Proc. 2019-46. However, a
taxpayer is not required to use the substan-
tiation methods described in Rev. Proc.
2019-46, but instead may substantiate us-
ing actual allowable expense amounts if
the taxpayer maintains adequate records
or other sufficient evidence.
An independent contractor conducts
an annual study for the Internal Revenue
Service of the fixed and variable costs of
operating an automobile to determine the
standard mileage rates for business, med-
ical, and moving use reflected in this no-
tice. The standard mileage rate for charita-
ble use is set by § 170(i).
Longstanding regulations under § 61
provide special valuation rules for em-
ployer-provided automobiles. The amount
that must be included in the employee’s
income and wages for the personal use of
an employer-provided automobile gener-
ally is determined by reference to the au-
tomobile’s FMV. If an employer chooses
to use a special valuation rule, the special
value is treated as the FMV of the benefit
for income tax and employment tax pur-
poses. Section 1.61-21(b)(4). Two such
special valuation rules, the fleet-average
valuation rule and the vehicle cents-per-
mile valuation rule, are set forth in § 1.61-
21(d)(5)(v) and § 1.61-21(e), respective-
ly. These two special valuation rules are
subject to limitations, including that they
may be used only in connection with auto-
mobiles having values that do not exceed
a maximum amount set forth in the regu-
lations.
SECTION 3. STANDARD MILEAGE
RATES
The standard mileage rate for transpor-
tation or travel expenses is 67 cents per
mile for all miles of business use (busi-
ness standard mileage rate). See section 4
of Rev. Proc. 2019-46. However, § 11045
of Public Law 115-97, 131. Stat. 2054
(December 22, 2017), commonly known
as the Tax Cuts and Jobs Act (TCJA) sus-
pends all miscellaneous itemized deduc-
tions that are subject to the two-percent
of adjusted gross income floor under § 67,
including unreimbursed employee travel
expenses, for taxable years beginning af-
ter December 31, 2017, and before Janu-
ary 1, 2026. Thus, the business standard
mileage rate provided in this notice cannot
be used to claim an itemized deduction for
unreimbursed employee travel expenses
during the suspension. Notwithstanding
the foregoing suspension of miscellaneous
itemized deductions, deductions for ex-
penses that are deductible in determining
adjusted gross income are not suspended.
For example, members of a reserve com-
ponent of the Armed Forces of the Unit-
ed States (Armed Forces), state or local
government officials paid on a fee basis,
and certain performing artists are entitled
to deduct unreimbursed employee trav-
el expenses as an adjustment to total in-
come on line 12 of Schedule 1 of Form
1040 (2023), U.S. Individual Income Tax
Return, not as an itemized deduction on
Schedule A of Form 1040 (2023), and
therefore may continue to use the business
standard mileage rate.
The standard mileage rate is 14 cents
per mile for use of an automobile in ren-
dering gratuitous services to a charitable
organization under § 170. See section 5 of
Rev. Proc. 2019-46.
The standard mileage rate is 21 cents
per mile for use of an automobile: (1) for
medical care described in § 213; or (2) as
part of a move for which the expenses are
deductible under § 217(g). See section
5 of Rev. Proc. 2019-46. Section 11049
of the TCJA suspends the deduction for
moving expenses for taxable years begin-
ning after December 31, 2017, and before
January 1, 2026. However, the suspension
does not apply to members of the Armed
Forces on active duty who move pursuant
to a military order and incident to a per-
manent change of station. Thus, except
for taxpayers to whom § 217(g) applies,
the standard mileage rate provided in this
notice is not applicable for the use of an
automobile as part of a move occurring
during the suspension.
SECTION 4. BASIS REDUCTION
AMOUNT
For automobiles a taxpayer uses for
business purposes, the portion of the busi-
ness standard mileage rate treated as de-
preciation is 27 cents per mile for 2020, 26
cents per mile for 2021, 26 cents per mile
for 2022, 28 cents per mile for 2023, and
30 cents per mile for 2024. See section
4.04 of Rev. Proc. 2019-46.
SECTION 5. MAXIMUM
STANDARD AUTOMOBILE COST
For purposes of computing the allow-
ance under a FAVR plan, the standard au-
tomobile cost may not exceed $62,000 for
automobiles (including trucks and vans).
See section 6.02(6) of Rev. Proc. 2019-46.
SECTION 6. MAXIMUM VALUE
OF EMPLOYER-PROVIDED
AUTOMOBILES
For purposes of the fleet-average val-
uation rule in § 1.61-21(d)(5)(v) and the
vehicle cents-per-mile valuation rule in §
1.61-21(e), the maximum FMV of auto-
mobiles (including trucks and vans) first
made available to employees in calendar
year 2024 is $62,000.
SECTION 7. EFFECTIVE DATE
This notice is effective for: (1) de-
ductible transportation expenses paid or
incurred on or after January 1, 2024; (2)
mileage allowances or reimbursements
paid to a charitable volunteer or a member
of the Armed Forces to whom § 217(g) ap-
plies: (a) on or after January 1, 2024, and
1
Unless otherwise specified, all “section” or “§” references are to sections of the Internal Revenue Code (Code) or the Income Tax Regulations (26 CFR part 1).

January 8, 2024 358 Bulletin No. 2024–2
(b) for transportation expenses the char-
itable volunteer or such member of the
Armed Forces pays or incurs on or after
January 1, 2024; and (3) for purposes of
the maximum FMV of employer-provided
automobiles for which employers may use
the fleet-average valuation rule in § 1.61-
21(d)(5)(v) or the vehicle cents-per-mile
rule in § 1.61-21(e), automobiles first
made available to employees for personal
use on or after January 1, 2024.
SECTION 8. EFFECT ON OTHER
DOCUMENTS
Notice 2023-03 is superseded.
DRAFTING INFORMATION
The principal author of this notice is
Christian Lagorio of the Office of Associate
Chief Counsel (Income Tax and Account-
ing). For further information on this notice
regarding the use of an employee-provided
automobile, contact Mr. Lagorio at (202)
317-7005 (not a toll-free number). For fur-
ther information on this notice regarding
the use of an employer-provided automo-
bile, contact Stephanie Caden of the Office
of Associate Chief Counsel (Employee
Benefits, Exempt Organizations, and Em-
ployment Taxes), at (202) 317-4774 (not a
toll-free number).
Statutory Exceptions
to Phaseout Reducing
Elective Payment Amounts
for Applicable Entities
if Domestic Content
Requirements are Not
Satisfied
Notice 2024-9
SECTION 1. PURPOSE
The Department of the Treasury (Trea-
sury Department) and the Internal Revenue
Service (IRS) intend to propose regulations
(forthcoming proposed regulations) ad-
dressing the process by which the Secretary
of the Treasury or her delegate (Secretary)
will implement the statutorily-required ex-
ceptions to the phaseouts under §§ 45(b)
(10), 45Y(g)(12), 48(a)(13), and 48E(d)
(5) of the Internal Revenue Code (Code).
1

Such phaseouts apply to credits determined
under § 45, 45Y, 48, or 48E with respect to
property placed in service by an applicable
entity, as defined in § 6417(d)(1)(A) (Ap-
plicable Entity), making an elective pay-
ment election under § 6417 with respect to
such credits if the property does not satisfy
the domestic content requirements under
those provisions of the Code (Statutory
Elective Payment Phaseouts). If the Statu-
tory Elective Payment Phaseouts apply, the
amount of an elective payment received by
an Applicable Entity making an election
under § 6417 with respect to such property
is reduced.
This notice provides transitional proce-
dures for taxpayers to claim the statutory
exceptions to the application of the Statu-
tory Elective Payment Phaseouts for Ap-
plicable Entities making an election under
§ 6417 with respect to Applicable Credit
Property (that is, qualified facilities under
§§ 45 and 45Y, energy projects under § 48,
or qualified investments in qualified facili-
ties or energy storage technologies under
§ 48E), but only if the construction of the
Applicable Credit Property begins before
January 1, 2025. The Treasury Depart-
ment and the IRS will treat an attestation,
described in section 5.02, provided by an
Applicable Entity, as establishing that one
or both statutory exceptions to the appli-
cation of the Statutory Elective Payment
Phaseouts are met with respect to Appli-
cable Credit Property the construction of
which begins before January 1, 2025. This
notice also requests comments to inform
the development of the forthcoming pro-
posed regulations regarding the process by
which the statutorily-required exceptions
will be provided to the Statutory Elective
Payment Phaseouts for Applicable Enti-
ties making an election under § 6417 with
respect to Applicable Credit Property the
construction of which begins on or after
January 1, 2025.
SECTION 2. BACKGROUND
.01 Domestic Content Bonus Credit
Amounts and Steel, Iron, or Manufactured
Products. Public Law 117-169, 136 Stat.
1818 (August 16, 2022), commonly known
as the Inflation Reduction Act of 2022
(IRA), amends §§ 45 and 48, in part, to
provide rules that taxpayers must satisfy to
receive bonus credit amounts for satisfying
domestic content requirements with respect
to steel, iron, and manufactured products
with respect to qualified facilities and en-
ergy projects placed in service after De-
cember 31, 2022. The IRA also adds new
§ 45Y and new § 48E, which provide sim-
ilar rules for domestic content bonus credit
amounts with respect to qualified facili-
ties, and qualified investments in qualified
facilities or energy storage technologies,
placed in service after December 31, 2024.
On May 12, 2023, the Treasury Depart-
ment and the IRS released Notice 2023-38,
2023-22 I.R.B. 872, which states that the
Treasury Department and the IRS intend to
propose regulations to address the applica-
tion of the rules that taxpayers must satisfy
to qualify for the domestic content bonus
credit amounts under §§ 45, 45Y, 48, and
48E. Taxpayers may rely on Notice 2023-
38 for the domestic content bonus credit
requirements for any qualified facility, en-
ergy project, or qualified investment with
respect to a qualified facility or energy stor-
age technology the construction of which
begins before the date that is 90 days after
the date of publication of the forthcoming
proposed regulations on the domestic con-
tent bonus credit requirements in the Fed-
eral Register.
.02 Statutory Elective Payment Phase-
outs and Exceptions. Section 45(b)(10),
as amended by the IRA, provides the
Statutory Elective Payment Phaseouts
with respect to the credit determined un-
der § 45 (§ 45 credit). Section 45(b)(10)
(A) provides that in the case of a taxpayer
making an election under § 6417 with re-
spect to a § 45 credit, the amount of such
credit will be replaced with the value of
such credit (determined without regard to
§ 45(b)(10)), multiplied by the applicable
percentage. Section 45(b)(10)(B) provides
1
Unless otherwise specified, all “section” or “§” references are to sections of the Code.

Bulletin No. 2024–2 359 January 8, 2024
that in the case of any qualified facility
(1) that satisfies the requirements under
§ 45(b)(9)(B) (that is, the domestic con-
tent bonus credit requirements as set forth
in Notice 2023-38 or other forthcoming
guidance), or (2) with a maximum net out-
put of less than 1 megawatt (as measured
in alternating current), the applicable per-
centage is 100 percent. Section 45(b)(10)
(C) states that subject to the exceptions in
§ 45(b)(10)(D), for any qualified facility
that is not described in § 45(b)(10)(B), the
applicable percentage is (1) 100 percent
if construction of such facility begins be-
fore January 1, 2024, and (2) 90 percent
if construction of such facility begins in
calendar year 2024.

Section 45(b)(10)(D)(i) directs the
Secretary to provide exceptions to the re-
quirements under § 45(b)(10) if: (1) the
inclusion of steel, iron, or manufactured
products that are produced in the United
States increases the overall costs of con-
struction of qualified facilities by more
than 25 percent (Increased Cost Excep-
tion), or (2) relevant steel, iron, or manu-
factured products are not produced in the
United States in sufficient and reasonably
available quantities or of a satisfactory
quality (Non-Availability Exception).
Section 45(b)(10)(D)(ii) provides that in
any case in which the Secretary provides
an exception pursuant to § 45(b)(10)(D)
(i), the applicable percentage is 100 per-
cent. The Increased Cost Exception and
the Non-Availability Exception are collec-
tively referred to as the Domestic Content
Exceptions in this notice.
Section 48(a)(13), as amended by the
IRA, and §§ 45Y(g)(12) and 48E(d)(5),
as added by the IRA, provide the Statu-
tory Elective Payment Phaseout rules and
Domestic Content Exceptions for credits
determined under those Code sections,
which are similar to the rules and excep-
tions provided under § 45(b)(10).
2
SECTION 3. REQUEST FOR
COMMENTS
On October 5, 2022, the Treasury De-
partment and the IRS released Notice
2022-51, 2022-43 I.R.B. 331, requesting
comments on aspects of the increased
credit amount provisions enacted by the
IRA, including comments regarding the
Statutory Elective Payment Phaseouts
under §§ 45, 45Y, 48, and 48E. The Trea-
sury Department and the IRS now request
additional comments to inform the devel-
opment of the forthcoming proposed reg-
ulations. In addition to general comments,
the Treasury Department and the IRS re-
quest comments that address the follow-
ing specific questions:
(1) For purposes of the Increased Cost
Exception, what factors should be consid-
ered in defining the term “overall costs
of construction”? For purposes of the
Non-Availability Exception, what factors
should be considered in defining the terms
“sufficient and reasonably available quan-
tities” or “satisfactory quality”?
(a) Are there existing factors or proce-
dures under other federal programs with
different statutory requirements, such as
under the Federal Transit Administration’s
Buy America requirements or the Build
America Buy America Act, that Treasury
and the IRS should consider in providing
guidance on the Increased Cost Exception
and the Non-Availability Exception?
(b) Are there factors or procedures
under other federal programs that should
not apply for the purpose of the Increased
Cost Exception and the Non-Availability
Exception, including for reasons related
to different statutory requirements and ad-
ministrative feasibility?
(c) Are there alternative approaches
that could be adopted by the Secretary to
allow domestic manufacturers to identify
the availability of domestic steel, iron, or
manufactured products that may be rele-
vant to the Domestic Content Exceptions?
(2) What documentation or other sub-
stantiation should be required of Appli-
cable Entities to qualify for the Increased
Cost Exception?
(3) What documentation or other sub-
stantiation should be required of Applica-
ble Entities to establish that relevant steel,
iron, or manufactured products are not
produced in the United States in sufficient
and reasonably available quantities or of
a satisfactory quality to qualify for the
Non-Availability Exception?
(4) For purposes of the Non-Avail-
ability Exception, what factors should be
considered “relevant” in defining the term
“relevant steel, iron, or manufactured
products”?
(5) How, if at all, should both the In-
creased Cost Exception and Non-Avail-
ability Exception take into account that
not all manufactured products must be
mined, produced, or manufactured in the
United States in order to meet the domes-
tic content bonus credit requirements?
(6) What steps should be taken, if any,
in implementing the Domestic Content
Exceptions to reduce the burden on Ap-
plicable Entities? For example, how can
the Secretary identify certain steel, iron,
or manufactured products that are not pro-
duced in the United States in sufficient
and reasonably available quantities or of a
satisfactory quality and what process and
criteria could be used?
(7) How many Applicable Credit Prop-
erties are expected to be affected by the
phaseout of elective payments each year
but for the exceptions process, and what
are relevant characteristics of such facil-
ities, projects, or technologies (for exam-
ple, size or other factors) to consider in
developing an exceptions process?
(8) What solicitation processes are
used by Applicable Entities with respect to
qualified facilities or energy projects that
have a maximum net output of 1 mega-
watt or greater and how might this affect
their ability to source domestic products
or determine these products would qual-
ify for the Non-Availability Exception or
Increased Cost Exception? Do these solic-
itation processes provide cost, product or-
igin, and/or product availability informa-
tion? If Applicable Entities use a request
for proposal (RFP) or similar solicitation
process with respect to qualified facilities
or energy projects that have a maximum
net output of 1 megawatt or greater:
(a) Is it common for a respondent’s
proposal to specify whether the steel, iron,
or manufactured products that are appli-
2
For purposes of §§ 45Y(g)(12) and 48E(d)(5), the applicable percentages are the same as §§ 45 and 48 for qualified facilities or qualified investments with respect to a qualified facility or
energy storage technology that begin construction in 2024 or earlier, but the applicable percentage decreases to 85 percent for construction beginning in 2025, and to 0 percent for construction
beginning after 2025.

January 8, 2024 360 Bulletin No. 2024–2
cable project components are produced in
the United States?
(b) What is the range of cost informa-
tion provided in the proposal and is it au-
ditable?
(c) Besides bids that are submitted in
response to an RFP, could Applicable En-
tities provide other documentation or in-
formation to demonstrate that the applica-
ble project components are not produced
in the United States, or are not produced
sufficiently or satisfactorily in the United
States, or that including applicable project
components produced in the United States
increases costs by at least a specified per-
centage?
(d) Who is involved in the procurement
process? Do developers or installers con-
tracted through the RFP handle the pro-
curement process for Applicable Entities?
SECTION 4. SUBMISSION OF
COMMENTS
Written comments should be submit-
ted by February 26, 2024. The subject
line for the comments should include a
reference to Notice 2024-9. Comments
may be submitted electronically via the
Federal eRulemaking Portal at https://
www.regulations.gov (type IRS-2023-
0062 in the search field on the regulations.
gov homepage to find this notice and
submit comments). Alternatively, com-
ments may be submitted by mail to: In-
ternal Revenue Service, CC:PA:LPD:PR
(Notice 2024-9), Room 5203, P.O. Box
7604, Ben Franklin Station, Washington,
DC 20044. All commenters are strongly
encouraged to submit comments elec-
tronically. The Treasury Department and
the IRS will publish for public availabili-
ty any comment submitted electronically,
or on paper, to the IRS’s public docket on
regulations.gov.
SECTION 5. TRANSITION
PROCESS FOR CLAIMING THE
STATUTORY EXCEPTION TO THE
ELECTIVE PAYMENT PHASEOUTS
.01 Exception for Eligible Construc-
tion. If an Applicable Entity provides an
attestation described in section 5.02 of
this notice with respect to an Applicable
Credit Property the construction of which
begins before January 1, 2025 (Eligible
Construction), the Treasury Department
and the IRS will treat the attestation as es-
tablishing that a Domestic Content Excep-
tion is met with respect to such Applicable
Credit Property.
.02 Attestation. An attestation is de-
scribed in this section 5.02 if an Applica-
ble Entity attests, under penalties of per-
jury, that it has reviewed the requirements
for the Increased Cost Exception and the
Non-Availability Exception provided un-
der §§ 45(b)(10)(D), 48(a)(13), 45Y(g)
(12)(D), or 48E(d)(5), as applicable, and
has made a good faith determination that
the qualified facility, energy project, or
qualified investment with respect to a
qualified facility or energy storage tech-
nology, as applicable, qualifies for ei-
ther the Increased Cost Exception or the
Non-Availability Exception, or both. The
attestation described in this section 5.02
must be signed by a person with the legal
authority to bind the Applicable Entity in
federal tax matters and must be attached
to a Form 8835, Renewable Electricity
Product Credit; Form 3468, Investment
Credit; or other applicable form required
to be filed by the Applicable Entity to
make an elective payment election under
§ 6417.
.03 Recordkeeping. An Applicable En-
tity providing an attestation described in
section 5.02 of this notice must meet the
general recordkeeping requirements under
§ 6001 and the regulations thereunder to
substantiate its attestation.
SECTION 6. PAPERWORK
REDUCTION ACT
Any collection burden associated with
this notice is accounted for in Office of
Management and Budget (OMB) control
numbers 1545-0123 and 1545-0047. The
collection of information (the attestation
detailed in section 5 of this notice) is as-
sociated with the IRA-related changes
to Form 3468 and Form 8835 and is ap-
proved, and will continue to be approved,
under OMB control numbers 1545-0123
and 1545-0047. The IRS will use this at-
testation to allow exceptions to the phase-
out of elective payments. This notice does
not alter any previously approved infor-
mation collection requirements and does
not create new collection requirements not
already approved by OMB.
SECTION 7. DRAFTING
INFORMATION
The principal author of this notice
is the Office of Associate Chief Coun-
sel (Passthroughs & Special Industries).
However, other personnel from the Trea-
sury Department and the IRS participated
in its development. For further informa-
tion regarding this notice, call the energy
security guidance contact number at (202)
317-5254 (not a toll-free number).
United States Income
Tax Treaties That Meet
the Requirements of
Section 1(h)(11)(C)(i)(II)
Notice 2024-11
SECTION 1. SUMMARY
Under section 1(h)(11), a dividend
paid to an individual shareholder from ei-
ther a domestic corporation or a “qualified
foreign corporation” generally is subject
to tax at the reduced rates applicable to
certain capital gains. A qualified foreign
corporation includes certain foreign cor-
porations that are eligible for benefits of
a comprehensive income tax treaty with
the United States that the Secretary deter-
mines is satisfactory for purposes of this
provision and that includes an exchange
of information program. This notice up-
dates the list of treaties that meet the re-
quirements of section 1(h)(11)(C)(i)(II).
It adds the treaty with Chile, which en-
tered into force on December 19, 2023.
The list no longer includes the treaties
with Russia and Hungary because both
have ceased to meet the requirements of
section 1(h)(11) after the publication of
Notice 2011-64.
SECTION 2. ANALYSIS
Section 1(h)(1) of the Internal Revenue
Code (the Code) generally provides that a
taxpayer’s “net capital gain” for any tax-
able year will be subject to a maximum
tax rate of 20 percent (or 15 percent in the
case of certain taxpayers). See also section

Bulletin No. 2024–2 361 January 8, 2024
1411 (imposing a 3.8 percent tax on cer-
tain taxpayers’ net investment income).
Section 1(h)(11) provides that net capi-
tal gain for purposes of section 1(h) means
net capital gain (determined without regard
to section 1(h)(11)) increased by “quali-
fied dividend income.” Qualified dividend
income means dividends received during
the taxable year from domestic corpora-
tions and “qualified foreign corporations.”
Section 1(h)(11)(B)(i). Subject to certain
exceptions, a qualified foreign corporation
is any foreign corporation that is either (i)
incorporated in a possession of the Unit-
ed States, or (ii) eligible for benefits of
a comprehensive income tax treaty with
the United States that the Secretary deter-
mines is satisfactory for purposes of this
provision and that includes an exchange
of information program (the treaty test).
Section 1(h)(11)(C)(i).
A foreign corporation that does not sat-
isfy either of these two tests is treated as a
qualified foreign corporation with respect
to any dividend paid by such corporation
if the stock with respect to which such
dividend is paid is readily tradable on an
established securities market in the United
States. Section 1(h)(11)(C)(ii). See Notice
2003-71, 2003-2 C.B. 922, for the defi-
nition, for taxable years beginning on or
after January 1, 2003, of “readily tradable
on an established securities market in the
United States.”
A qualified foreign corporation does
not include any foreign corporation that
for the taxable year of the corporation in
which the dividend was paid, or the pre-
ceding taxable year, is a passive foreign
investment company (as defined in sec-
tion 1297). Section 1(h)(11)(C)(iii). A
dividend from a qualified foreign corpo-
ration is also subject to the other limita-
tions in section 1(h)(11). For example, a
shareholder receiving a dividend from a
qualified foreign corporation must satisfy
the holding period requirements of section
1(h)(11)(B)(iii).
The appendix to this notice provides
the current list of U.S. income tax trea-
ties that meet the requirements of sec-
tion 1(h)(11)(C)(i)(II). The list has been
updated to include the treaty with Chile,
which entered into force on December 19,
2023, and to remove two treaties that have
ceased to meet the requirements of section
1(h)(11)(C)(i)(II) since the publication of
Notice 2011-64: the treaty with Hungary
and the treaty with Russia.
The treaty between Hungary and the
United States (the Hungary treaty) termi-
nated on January 8, 2023. Consequently,
the Hungary treaty has ceased to meet the
requirements of section 1(h)(11)(C)(i)(II).
On April 5, 2022, a Department of the
Treasury (Treasury) spokesperson an-
nounced that the IRS paused assistance to
Russian tax authorities through exchange
of information under the treaty between
Russia and the United States (the Russia
treaty). Therefore, the Russia treaty does
not have an exchange of information pro-
gram as required by section 1(h)(11)(C)(i)
(II).
Three other U.S. income tax treaties
still in effect do not meet the requirements
of section 1(h)(11)(C)(i)(II). They are the
U.S.-U.S.S.R. income tax treaty (which
was signed on June 20, 1973, and current-
ly applies to certain former Soviet Repub-
lics), and the tax treaties with Bermuda
and the Netherlands Antilles.
Treasury and the IRS intend to con-
tinue to update this list, as appropriate.
Situations that may result in changes to
the list include the entry into force of new
income tax treaties and the amendment
or renegotiation of existing tax treaties.
Further, Treasury and the IRS continue to
study the operation of each U.S. income
tax treaty, including the implications of
any change in the domestic laws of the
treaty partner, to ensure that the treaty
accomplishes its intended objectives and
continues to be satisfactory for purposes
of this provision.
SECTION 3. EFFECTIVE DATE
This notice is effective with respect to
Chile for dividends paid on or after De-
cember 19, 2023. This notice is effective
with respect to Hungary for dividends
paid on or after January 8, 2023. This no-
tice is effective with respect to Russia for
dividends paid on or after January 1, 2023.
This notice is effective with respect to
Bulgaria for dividends paid on or after De-
cember 15, 2008. This notice is effective
with respect to Malta for dividends paid
on or after November 23, 2010.
This notice is effective with respect to
Bangladesh for dividends paid on or after
August 7, 2006. This notice is effective
with respect to Barbados for dividends
paid on or after December 20, 2004. This
notice is effective with respect to Sri Lan-
ka for dividends paid on or after July 12,
2004. This notice is effective with respect
to all other U.S. income tax treaties listed
in the Appendix for taxable years begin-
ning after December 31, 2002.
SECTION 4. EFFECT ON OTHER
DOCUMENTS
Notice 2011-64 is amplified and super-
seded.
SECTION 5. DRAFTING
INFORMATION
The principal author of this notice is
Sarah Stein of the Office of Associate
Chief Counsel (International). For further
information regarding this notice, contact
Sarah Stein at (202) 317-4917 (not a toll-
free number).

January 8, 2024 362 Bulletin No. 2024–2
APPENDIX
U.S. INCOME TAX TREATIES SATISFYING THE REQUIREMENTS OF
SECTION 1(h)(11)(C)(i)(II)
AustraliaFranceLuxembourgSpain
AustriaGermanyMaltaSri Lanka
BangladeshGreeceMexicoSweden
BulgariaIcelandMoroccoSwitzerland
BarbadosIndiaNetherlandsThailand
BelgiumIndonesiaNew ZealandTrinidad and Tobago
CanadaIrelandNorwayTunisia
ChileIsraelPakistanTurkey
ChinaItalyPhilippinesUkraine
CyprusJamaicaPolandUnited Kingdom
Czech RepublicJapanPortugalVenezuela
DenmarkKazakhstanRomania
EgyptKoreaSlovak Republic
EstoniaLatviaSlovenia
FinlandLithuaniaSouth Africa

Bulletin No. 2024–2 363 January 8, 2024
Part IV
Deletions From Cumulative
List of Organizations,
Contributions to Which
are Deductible Under
Section 170 of the Code
Announcement 2024-1
Table of Contents
The Internal Revenue Service has re-
voked its determination that the organi-
zations listed below qualify as organiza-
tions described in sections 501(c)(3) and
170(c)(2) of the Internal Revenue Code
of 1986.
Generally, the IRS will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletin that an organization no longer
qualifies. However, the IRS is not preclud-
ed from disallowing a deduction for any
contributions made after an organization
ceases to qualify under section 170(c)(2)
if the organization has not timely filed a
suit for declaratory judgment under sec-
tion 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declar-
atory judgment has been timely filed,
contributions from individuals and or-
ganizations described in section 170(c)
(2) that are otherwise allowable will con-
tinue to be deductible. Protection under
section 7428(c) would begin on January
08, 2024 and would end on the date the
court first determines the organization is
not described in section 170(c)(2) as more
particularly set for in section 7428(c)(1).
For individual contributors, the maximum
deduction protected is $1,000, with a hus-
band and wife treated as one contributor.
This benefit is not extended to any indi-
vidual, in whole or in part, for the acts or
omissions of the organization that were
the basis for revocation.
NAME OF ORGANIZATION
Effective Date of
Revocation
LOCATION
MASTERS COMMISSION INTERNATIONAL NETWORKS
INC.
01/01/2018HUNTSVILLE, AL
AMBAZONIA FOUNDATION01/01/2019OWINGS MILLS, MD
INKSTER SENIOR SERVICES INC01/07/2020INKSTER, MI

January 8, 2024 364 Bulletin No. 2024–2
Employee Retention Credit
Voluntary Disclosure
Program
Announcement 2024-3
Section 1. Purpose and Scope
The Internal Revenue Service (IRS)
announces a Voluntary Disclosure Pro-
gram for employers (participants) to re-
solve erroneous claims for credit or refund
involving the Employee Retention Credit
(ERC). The ERC is a refundable tax cred-
it intended for businesses and tax-exempt
organizations that continued paying em-
ployees during the COVID-19 pandemic
if their operations were fully or partially
suspended due to a government order,
they experienced the required decline in
gross receipts, or they were a recovery
startup business during the relevant eligi-
bility periods.
The IRS has concerns about scams
and potential fraud regarding ERC claims
given false and misleading public adver-
tisements and scams taking advantage of
taxpayers. Those that filed for and errone-
ously received the ERC face enforcement
action from the IRS and are subject to as-
sessment and collection procedures. The
IRS believes that it would prevail in any
litigation to recover credits or refunds of
erroneous ERC claims and that the impo-
sition of appropriate penalties and interest
would be upheld by a court. For efficient
tax administration reasons, however, the
IRS is offering employers an opportunity
to resolve their civil tax liabilities under
this Voluntary Disclosure Program and
avoid potential civil litigation, penalties,
and interest.
This Voluntary Disclosure Program in-
cludes the settlement of the ERC for pur-
poses of a participant’s employment tax
obligations by eliminating their eligibility
for the ERC while allowing a participant
to retain 20% of the claimed ERC amount.
Additionally, because the ERC reduces the
income tax expense for qualified wages
under rules similar to section 280C of the
Internal Revenue Code (Code), this Vol-
untary Disclosure Program also resolves
the issue of the corresponding adjustment
to income tax expense for participants,
which include common law employers
who used a third-party payer to claim the
ERC on their behalf.
Section 2. Eligibility
Any participant that has claimed the
ERC and has received a credit or refund
is eligible to participate in this Voluntary
Disclosure Program, provided that:
(1) The participant is not under criminal
investigation and they have not
been notified that the IRS intends to
commence a criminal investigation;
(2) The IRS has not received information
from a third party alerting the IRS
to the participant’s noncompliance,
nor has the IRS acquired information
directly related to the noncompliance
from an enforcement action;
(3) The participant is not under an
employment tax examination by the
IRS for any tax period(s) for which
the taxpayer is applying for this
Voluntary Disclosure Program; and
(4) The participant has not previously
received notice and demand for
repayment of all or part of the claimed
ERC.
A participant that claimed the ERC us-
ing a third-party payer (such as an agent
under section 3504 of the Code, a profes-
sional employer organization, or a certi-
fied professional employer organization)
that claimed the ERC for the participant
on an employment tax return filed under
the third-party payer’s own employer
identification number (EIN) rather than
the EIN of the participant, may participate
in this Voluntary Disclosure Program, but
the third-party payer must submit the ap-
plication described in Section 4 of this
announcement on the participant’s behalf.
Section 3. Terms of ERC Voluntary
Disclosure Program
The terms of this ERC Voluntary Dis-
closure Program are as follows:
(1) Employment Tax Adjustments –
The participant is not eligible for, or
entitled to, any ERC, including both
the refundable and non-refundable
portions, for the tax period(s) at issue.
(2) The participant will remit back to
the Department of the Treasury 80%
of the claimed ERC, including both
the refundable and non-refundable
portions.
(3) The participant will not be required
to repay any overpayment interest
received. If the participant makes
full payment of 80% of the claimed
ERC prior to executing the closing
agreement, no underpayment interest
will apply. If the IRS approves a
request for an installment agreement,
interest may apply from the agreement
date.
(4) Income Tax Effects – Because the
settlement eliminates a participant’s
eligibility for and/or entitlement to all
of the claimed ERC, participants are
not required to reduce wage expense
with respect to any of the previously
claimed ERC. Consequently, if they
had not previously reduced wage
expense by any of the claimed ERC,
participants need not file amended
returns or Administrative Adjustment
Requests (AARs) to reduce wage
expense. Correspondingly, if they had
previously reduced wage expense by
any of the claimed ERC, participants
should not reduce wage expense by
any of the claimed ERC if they file
an amended return or AAR adjusting
the previous reduction to wage
expense. Pursuant to the settlement, a
participant has no income with respect
to the resolution of the employment
tax obligation by remittance of
payment of only 80% of the claimed
ERC, including both the refundable
and non-refundable portions.
(5) Preparer/Advisor Information – If
a return preparer or advisor assisted
or advised the participant with any
portion of the claim for credit or
refund, the participant will provide
the name, address, and phone number
of the preparer(s) or advisor(s) who
assisted with the claim for credit or
refund and a description of services
provided by the preparer or advisor.
(6) Application of Penalties – The IRS
will not assert civil penalties related
to the underpayment of employment

Bulletin No. 2024–2 365 January 8, 2024
tax attributable to the claimed
ERC against a participant of this
Voluntary Disclosure Program under
Announcement 2024-3 that remits
full payment of 80% of the claimed
ERC prior to executing the closing
agreement.
(7) The participant will execute a closing
agreement, as more fully described in
Section 4(3).
Section 4. Procedures for Participants
in the ERC Voluntary Disclosure
Program
(1) Form 15434, Application for
Employee Retention Credit Voluntary
Disclosure Program
Participants in this Voluntary Dis-
closure Program must notify the IRS of
their election by completing and sub-
mitting Form 15434, Application for
Employee Retention Credit Voluntary
Disclosure Program, on or before 11:59
pm local time on March 22, 2024. Par-
ticipants must submit Form 15434 and
any required attachments electronically
via the Document Upload Tool at irs.
gov/DUT.
Form 15434 must be prepared under
penalties of perjury and:
(a) Include the taxpayer’s name, taxpayer
identification number, current
address, and daytime telephone
number. If a practitioner will represent
the taxpayer, the practitioner must
provide a completed Form 2848,
Power of Attorney and Declaration of
Representative;
(b) Identify the tax period(s) for which
the ERC was claimed, the form on
which the ERC was claimed, and
the full amount of the ERC claimed,
including both the amounts that were
refundable and non-refundable;
(c) If the tax period(s) for which the ERC
was claimed include any tax period
ending in 2020, a completed, signed
ERC Voluntary Disclosure Program
Form SS-10, Consent to Extend the
Time to Assess Employment Taxes, for
the 2020 Tax Period(s), is required to
be submitted with Form 15434. The
ERC Voluntary Disclosure Program
Form SS-10 is available at https://
www.irs.gov/pub/irs-utl/form-ss10-
2020-ercvd.pdf;
(d) If the ERC was claimed by a
third-party payer on behalf of the
participant, as described in Section
2, the third-party payer must attach
a copy of the relevant pages of the
Schedule R (Form 941), Allocation
Schedule for Aggregate Form 941
Filers, that was attached to each
Form 941, Employer’s Quarterly
Federal Tax Return, on which the
third-party payer claimed the ERC for
the participant; and
(e) If a return preparer or advisor assisted
with the claim for credit or refund,
include the name, address, and
phone number of the preparer(s) and
advisor(s) who assisted with the claim
for credit or refund and a description
of services provided by the preparer
or advisor.
(2) Payment
Form 15434 will help a participant
calculate how much they will be required
to pay to the Department of the Treasury
under the terms of the ERC Voluntary Dis-
closure Program.
A participant must use the Electronic
Federal Tax Payment System (EFTPS)
to submit an online payment(s). Payment
should be made separately for each tax
period upon submission of Form 15434.
For each EFTPS payment, select the cat-
egory “Advanced Payment.” Participants
should not make a single, lump-sum pay-
ment for multiple tax periods to ensure
such payments are accurately credited to
the correct tax period. Full payment of the
liabilities under this Voluntary Disclosure
Program should be made by the date the
closing agreement described in subsection
(3) is executed by the participant. Partic-
ipants who are unable to remit full pay-
ment of the 80% of claimed ERC may be
considered for an installment agreement,
pending approval.
(3) Closing Agreement
After receiving the requested informa-
tion, the IRS will prepare a closing agree-
ment under section 7121 of the Code in
accordance with the terms of the settle-
ment.
The IRS will mail the closing agree-
ment to the participant who must sign
and return it to the IRS within 10 days of
the date of mailing by the IRS. The IRS
may grant an extension for good cause to
participants who request additional time
within the 10-day period. Full payment of
the liabilities under this Voluntary Disclo-
sure Program should be made by the date
the closing agreement is executed by the
participant.
As discussed in Section 4(2), partici-
pants who are unable to remit full payment
of the liabilities under this Voluntary Dis-
closure Program may be considered for an
installment agreement, pending approval.
(4) Other Matters
(a) Denial of a participant’s request
to participate in this Voluntary
Disclosure Program is not subject
to judicial review or administrative
appeal.
(b) Execution of a closing agreement
under this Voluntary Disclosure
Program does not preclude the IRS
from investigating any associated
criminal conduct or recommending
prosecution for violation of any
criminal statute, and does not provide
any immunity from prosecution.
CONTACT INFORMATION
The principal author of this announce-
ment is Michael Franklin of the Office of
the Associate Chief Counsel (Procedure
and Administration). If you need help
completing Form 15434, have questions
on the status of your ERC Voluntary Dis-
closure Program application, or have other
ERC Voluntary Disclosure Program relat-
ed questions, contact the ERC Voluntary
Disclosure hotline at 414-231-2222 (not a
toll-free number).

January 8, 2024 366 Bulletin No. 2024–2
Notice of Proposed
Rulemaking
Section 30D Excluded
Entities
REG-118492-23
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing.
SUMMARY: This document contains
proposed regulations that would provide
guidance regarding the excluded entity
provisions with respect to the clean ve-
hicle credit as amended by the Inflation
Reduction Act of 2022. The proposed
regulations would also provide clarity on
definitions with respect to new clean ve-
hicles eligible for the clean vehicle cred-
it. The proposed regulations would affect
qualified manufacturers of new clean ve-
hicles and taxpayers who purchase and
place in service new clean vehicles.
DATES: Written or electronic comments
and requests for a public hearing must be
received by January 18, 2023. Requests
for a public hearing must be submitted
as prescribed in the “Comments and Re-
quests for a Public Hearing” section.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically via the Federal eRulemak-
ing Portal at https://www.regulations.gov
(indicate IRS and REG-118492-23) by
following the online instructions for sub-
mitting comments. Requests for a public
hearing must be submitted as prescribed
in the “Comments and Requests for a
Public Hearing” section. Once submitted
to the Federal eRulemaking Portal, com-
ments cannot be edited or withdrawn.
The Department of the Treasury (Trea-
sury Department) and the IRS will pub-
lish for public availability any comments
submitted to the IRS’s public docket.
Send paper submissions to: CC:PA:01:PR
(REG-118492-23), Room 5203, Internal
Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington, DC 20044.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, the Office of Associate Chief
Counsel (Passthroughs & Special Indus-
tries) at (202) 317-6853 (not a toll-free
number); concerning submissions of com-
ments and requests for a public hearing,
call Vivian Hayes (202) 317-6901 (not a
toll-free number) or send an email to pub-
lichearings@irs.gov (preferred).
SUPPLEMENTARY INFORMATION:
Background
I. Overview
Public Law 117-169, 136 Stat. 1818
(August 16, 2022), commonly known as
the Inflation Reduction Act of 2022 (IRA),
amended section 30D of the Internal Rev-
enue Code (Code). Section 30D provides a
credit (section 30D credit) against the tax
imposed by chapter 1 of the Code (chapter
1) with respect to each new clean vehicle
that a taxpayer purchases and places in
service. The section 30D credit is deter-
mined and allowable with respect to the
taxable year in which the taxpayer places
the new clean vehicle in service.
This document contains proposed
amendments to the Income Tax Regula-
tions (26 CFR part 1) under section 30D.
These proposed regulations supplement
a notice of proposed rulemaking (REG-
120080-22) published in the Federal
Register (88 FR 23370) on April 17,
2023 (April 2023 proposed regulations)
that contains initial proposed regula-
tions under section 30D as amended by
the IRA, as well as a notice of proposed
rulemaking (REG-113064-23) published
in the Federal Register (88 FR 70310)
on October 10, 2023 (October 2023 pro-
posed regulations) that contains initial
and additional proposed regulations un-
der sections 25E, 30D, and 6213 of the
Code. This notice of proposed rulemak-
ing does not address written comments
that were submitted in response to the
April 2023 proposed regulations or the
October 2023 proposed regulations.
Any comments received in response to
this notice of proposed rulemaking will
be addressed in the Treasury Decision
adopting these regulations as final regu-
lations.
II. Section 30D
Section 30D was enacted by section
205(a) of the Energy Improvement and
Extension Act of 2008, Division B of
Public Law 110-343, 122 Stat. 3765, 3835
(October 3, 2008), to provide a credit for
purchasing and placing in service new
qualified plug-in electric drive motor ve-
hicles. Section 30D has been amended
several times since its enactment, most
recently by section 13401 of the IRA. In
general, the amendments made by sec-
tion 13401 of the IRA to section 30D
apply to vehicles placed in service after
December 31, 2022, except as provided
in section 13401(k)(2) through (5) of the
IRA.
Effective beginning on April 18, 2023,
section 30D(b) provides a maximum cred-
it of $7,500 per new clean vehicle, con-
sisting of $3,750 if certain critical min-
erals requirements are met and $3,750 if
certain battery components requirements
are met. These requirements are described
in section 30D(e)(1) and (2), respectively,
and the preamble to the April 2023 pro-
posed regulations.
The amount of the section 30D credit
is treated as a personal credit or a general
business credit depending on the charac-
ter of the vehicle. In general, under sec-
tion 30D(c)(2), the section 30D credit
is treated as a nonrefundable personal
credit allowable under subpart A of part
IV of subchapter A of chapter 1. How-
ever, under section 30D(c)(1), so much
of the credit that would be allowed un-
der section 30D(a) that is attributable to
property that is of a character subject to
an allowance for depreciation is treated
as a current year general business credit
under section 38(b) and not allowed under
section 30D(a). Section 38(b)(30) lists as
a current year business credit the portion
of the section 30D credit to which section
30D(c)(1) applies. The IRA did not amend
section 30D(c)(1) or (2).
The IRA amended section 30D(d) re-
garding the definition of a new clean vehi-
cle. Section 30D(d)(1) defines “new clean
vehicle” as a motor vehicle that satisfies
the following eight requirements set forth
in section 30D(d)(1)(A) through (H) of
the Code:
• the original use of the motor vehicle
must commence with the taxpayer;

Bulletin No. 2024–2 367 January 8, 2024
• the motor vehicle must be acquired
for use or lease by the taxpayer and
not for resale;
• the motor vehicle must be made by a
qualified manufacturer;
• the motor vehicle must be treated as a
motor vehicle for purposes of title II
of the Clean Air Act;
• the motor vehicle must have a gross
vehicle weight rating of less than
14,000 pounds;
• the motor vehicle must be propelled
to a significant extent by an electric
motor which draws electricity from a
battery that has a capacity of not less
than 7 kilowatt hours, and is capable
of being recharged from an external
source of electricity;
• the final assembly of the motor
vehicle must occur within North
America; and
• the person who sells any vehicle to the
taxpayer must furnish a report to the
taxpayer and to the Secretary of the
Treasury or her delegate (Secretary)
containing certain specifically
enumerated items.
Section 30D(d)(3) defines “quali-
fied manufacturer” as any manufacturer
(within the meaning of the regulations
prescribed by the Administrator of the
Environmental Protection Agency (EPA)
for purposes of the administration of title
II of the Clean Air Act (42 U.S.C. 7521
et seq.)) that enters into a written agree-
ment with the Secretary under which such
manufacturer agrees to make periodic
written reports to the Secretary (at such
times and in such manner as the Secretary
may provide) providing vehicle identifica-
tion numbers and such other information
related to each vehicle manufactured by
such manufacturer as the Secretary may
require.
Section 30D(d)(7) excludes from the
definition of “new clean vehicle” any
vehicle placed in service after December
31, 2024, with respect to which any of the
applicable critical minerals contained in
the battery of such vehicle were extracted,
processed, or recycled by a foreign entity
of concern (as defined in section 40207(a)
(5) of the Infrastructure Investment and
Jobs Act (42 U.S.C. 18741(a)(5))), or any
vehicle placed in service after December
31, 2023, with respect to which any of
the components contained in the battery
of such vehicle were manufactured or as-
sembled by a foreign entity of concern (as
so defined).
No section 30D credit is allowed with
respect to a vehicle placed in service after
December 31, 2032.
III. Prior Guidance
A. Notice 2022-46
On October 5, 2022, the Treasury De-
partment and the IRS published Notice
2022-46, 2022-43 I.R.B. 302. The notice
requested general comments on issues
arising under sections 25E and 30D, as
well as specific comments concerning:
(1) definitions; (2) critical minerals and
battery components; (3) foreign entities
of concern; (4) recordkeeping and report-
ing; (5) eligible entities; (6) elections to
transfer and advance payments; and (7)
recapture. The Treasury Department and
the IRS received 884 comments from in-
dustry participants, environmental groups,
individual consumers, and other stake-
holders. The Treasury Department and the
IRS appreciate the commenters’ interest
and engagement on these issues. These
comments have been carefully considered
in the preparation of the proposed regula-
tions.
B. Revenue Procedure 2022-42
On December 12, 2022, the Treasury
Department and the IRS published Rev-
enue Procedure 2022-42, 2022-52 I.R.B.
565, providing guidance for qualified
manufacturers to enter into written agree-
ments with the IRS, as required in sections
30D, 25E, and 45W, and to report certain
information regarding vehicles produced
by such manufacturers that may be eli-
gible for credits under these sections. In
addition, Revenue Procedure 2022-42
provides the procedures for sellers of new
clean vehicles or previously-owned clean
vehicles to report certain information to
the IRS and the purchasers of such clean
vehicles.
C. April 2023 Proposed Regulations
On April 17, 2023, the Treasury De-
partment and the IRS published the April
2023 proposed regulations in the Federal
Register, which provides proposed defi-
nitions for certain terms related to section
30D; proposed rules regarding personal
and business use and other special rules;
and additional proposed rules related to
the critical mineral and battery component
requirements.
D. Revenue Procedure 2023-33
On October 6, 2023, the Treasury De-
partment and the IRS released Revenue
Procedure 2023-33, which was published
on October 23, 2023, in Internal Revenue
Bulletin 2023-43, to provide guidance for
taxpayers electing to transfer credits under
section 25E or 30D and for eligible enti-
ties receiving advance payments of credits
under sections 30D and 25E. This reve-
nue procedure sets forth the procedures
under sections 30D(g) and 25E(f) for the
transfer of the previously-owned clean
vehicle credit and the new clean vehicle
credit from the taxpayer to an eligible en-
tity, including the procedures for dealer
registration with the IRS, the procedures
for the revocation and suspension of that
registration, and the establishment of an
advance payment program to eligible en-
tities. In addition, this revenue procedure
superseded sections 5.01 and 6.03 of Rev-
enue Procedure 2022-42, providing new
information for the time and manner of
submission of seller reports, respectively.
This revenue procedure also superseded
sections 6.01 and 6.02 of Revenue Proce-
dure 2022-42, providing updated informa-
tion on submission of written agreements
by manufacturers to the IRS to be con-
sidered qualified manufacturers, as well
as the method of submission of monthly
reports by qualified manufacturers.
E. October 2023 Proposed Regulations
On October 10, 2023, the Treasury De-
partment and the IRS published the Octo-
ber 2023 proposed regulations in the Fed-
eral Register, which provide guidance for
elections to transfer clean vehicle credits
under sections 30D(g) and 25E(f). The
proposed regulations provide guidance for
taxpayers intending to transfer the previ-
ously-owned clean vehicle credit and the
new clean vehicle credit to dealers who
are entities eligible to receive advance
payments of either credit. The proposed

January 8, 2024 368 Bulletin No. 2024–2
regulations also provide guidance for deal-
ers to become eligible entities to receive
advance payments of previously-owned
clean vehicle credits or clean vehicle cred-
its. The proposed regulations also provide
guidance for recapturing the credit under
sections 30D and 25E. Finally, proposed
§1.6213-2 defines the term “omission of
a correct vehicle identification number”
(VIN) for purposes of section 6213, un-
der which, in part, the IRS is authorized to
make a summary assessment when there
has been an omission of a correct VIN
on a taxpayer’s return when claiming or
electing to transfer a credit under section
25E or 30D.
IV. Department of Energy Guidance
Concurrently with the release of these
proposed regulations, the Department of
Energy (DOE) is releasing proposed guid-
ance in the Federal Register, which pro-
vides proposed interpretations of certain
terms used in the definition of “foreign
entity of concern” (FEOC) set forth in
section 40207(a)(5) of the Infrastructure
Investment and Jobs Act (IIJA), 42 U.S.C.
18741(a)(5), and as cross-referenced in
section 30D(d)(7). Section 40207(a)(5) of
the IIJA defines FEOC to include foreign
entities covered by specific designations,
inclusions, and allegations by Federal
agencies as described in section 40207(a)
(5)(A), (B), and (D), as well as foreign
entities “owned by, controlled by, or sub-
ject to the jurisdiction or direction of a
government” of a covered nation under
section 40207(a)(5)(C). Covered nations
are defined in 10 U.S.C. 4872(d)(2) as the
People’s Republic of China, the Russian
Federation, the Democratic People’s Re-
public of Korea, and the Islamic Repub-
lic of Iran as of the date of publication of
these proposed regulations. Finally, sec-
tion 40207(a)(5)(E) of the IIJA provides
that a FEOC includes a foreign entity that
the Secretary of Energy, in consultation
with the Secretary of Defense and the Di-
rector of National Intelligence, determines
is engaged in unauthorized conduct that is
detrimental to the national security or for-
eign policy of the United States.
The DOE proposed guidance provides
an interpretation of section 40207(a)(5)
(C) of the IIJA. In particular, the DOE pro-
posed guidance provides definitions for
the terms “government of a foreign coun-
try,” “foreign entity,” “subject to the juris-
diction,” and “owned by, controlled by, or
subject to the direction of.”. In general, an
entity incorporated in, headquartered in,
or performing the relevant activities in a
covered nation would be classified as a
FEOC. For purposes of these rules, an en-
tity would be “owned by, controlled by, or
subject to the direction” of another entity
if 25 percent or more of the entity’s board
seats, voting rights, or equity interest are
cumulatively held by such other entity. In
addition, licensing agreements or other
contractual agreements may also create
control. Finally, “government of a foreign
country” would be defined to include sub-
national governments and certain current
or former senior foreign political figures.
Explanation of Provisions
I. Section 1.30D-2 Definitions
Proposed §1.30D-2(a) is revised to
clarify that all definitions in the sec-
tion apply for purposes of section 30D
and the section 30D regulations, includ-
ing any guidance thereunder. Proposed
§1.30D-2(f) is revised to include in the
definition of “section 30D regulations”
the provisions of proposed §1.30D-5 as
set forth in the October 2023 proposed
regulations and proposed §1.30D-6 as set
forth in these proposed regulations. Pro-
posed §1.30D-2(k) would provide, consis-
tent with section 30D(d)(3), that “manu-
facturer” means any manufacturer within
the meaning of the regulations prescribed
by the Administrator of the Environmental
Protection Agency (EPA) for purposes of
the administration of title II of the Clean
Air Act (42 U.S.C. 7521 et seq.) and as
defined in 42 U.S.C. 7550(1). If multiple
manufacturers are involved in the produc-
tion of a vehicle, the requirements provid-
ed in section 30D(d)(3) must be met by
the manufacturer who satisfies the report-
ing requirements of the greenhouse gas
emissions standards set by EPA under the
Clean Air Act (42 U.S.C. 7521 et seq.) for
the subject vehicle.
Proposed §1.30D-2(l) would provide
that a qualified manufacturer means a
manufacturer that meets the requirements
described in section 30D(d)(3). A qualified
manufacturer would not include any man-
ufacturer whose qualified manufacturer
status has been terminated by the IRS. The
IRS may terminate qualified manufacturer
status for fraud, intentional disregard, or
gross negligence with respect to any re-
quirements of section 30D and the regula-
tions and guidance thereunder, including
with respect to the periodic written reports
described in section 30D(d)(3) and pro-
posed §1.30D-2(m) and any attestations,
documentation, or certifications described
in proposed §1.30D-3(e) and proposed
§1.30D-6(d), at the time and in the manner
provided in the Internal Revenue Bulletin.
Proposed §1.30D-2(m) would provide
that a “new clean vehicle” means a vehi-
cle that meets the requirements described
in section 30D(d). A new clean vehicle
would not include any vehicle for which
the qualified manufacturer does any of the
following: (1) fails to provide a periodic
written report for such vehicle prior to the
vehicle being placed in service, reporting
the VIN of such vehicle and certifying
compliance with the requirements of sec-
tion 30D(d); (2) provides incorrect infor-
mation with respect to the periodic written
report for such vehicle; (3) fails to update
its periodic written report in the event of a
material change with respect to such vehi-
cle; or, (4) for new clean vehicles placed
in service after December 31, 2024, the
qualified manufacturer fails to meet the
requirements of proposed §1.30D-6(d).
For purposes of section 30D(d)(6), the
term “new clean vehicle” includes any
new qualified fuel cell motor vehicle (as
defined in section 30B(b)(3)) which meets
the requirements under section 30D(d)(1)
(G) and (H). The Treasury Department
and the IRS request comment on whether,
in the interest of sound tax administration
and to provide additional transparency to
taxpayers, it would be feasible and helpful
for tax administration if qualified manu-
facturers were to encode eligibility for
section 30D through a particular calendar
year into the VIN using an alphanumeric
combination.
II. Section 1.30D-3 Provisions
Proposed §1.30D-3(d) would provide
rules regarding excluded entities by refer-
ence to proposed §1.30D-6.
Proposed §1.30D-3(e) would provide
for an upfront review of conformance

Bulletin No. 2024–2 369 January 8, 2024
with the critical minerals requirement
and battery components requirement.
Specifically, proposed §1.30D-3(e)
would provide that for new clean vehi-
cles placed in service after December
31, 2024, the qualified manufacturer
must provide attestations, certifications
and documentation demonstrating com-
pliance with the requirements of section
30D(e), at the time and in the manner
provided in the Internal Revenue Bulle-
tin. The IRS, with analytical assistance
from the DOE, will review the attesta-
tions, certifications, and documenta-
tions.
III. Excluded entities
A. Definitions
The proposed regulations would pro-
vide definitions for terms relevant to the
excluded entity provision. To the extent
many of these terms were defined in the
April 2023 proposed regulations, these
proposed regulations would provide the
same definitions for such terms as is pro-
vided in proposed §1.30D-3(c). The Trea-
sury Department and the IRS intend that
terms relevant to both the critical miner-
al and battery component requirements
described in proposed §1.30D-3 and the
excluded entity restrictions described in
these proposed regulations are interpreted
consistently.
1. Applicable critical mineral
Proposed §1.30D-6(a)(1) would define
“applicable critical mineral” as an appli-
cable critical mineral as defined in sec-
tion 45X(c)(6). Guidance regarding the
definition of applicable critical minerals,
including the applicable critical minerals
that are used in electric vehicle batteries
to facilitate the electrochemical processes
necessary for energy storage, would be
provided in forthcoming proposed regula-
tions under section 45X.
2. Assembly
Proposed §1.30D-6(a)(2) would de-
fine “assembly” as, with respect to battery
components, the process of combining
battery components into battery cells and
battery modules.
3. Battery
Proposed §1.30D-6(a)(3) would define
“battery” as, for purposes of a new clean
vehicle, a collection of one or more battery
modules, each of which has two or more
electrically configured battery cells in series
or parallel, to create voltage or current. The
term battery does not include items such as
thermal management systems or other parts
of a battery cell or module that do not direct-
ly contribute to the electrochemical storage
of energy within the battery, such as battery
cell cases, cans, or pouches.
4. Battery cell
Proposed §1.30D-6(a)(4) would define
“battery cell” as a combination of battery
components (other than battery cells) ca-
pable of electrochemically storing energy
from which the electric motor of a new
clean vehicle draws electricity.
5. Battery cell production facility
Proposed §1.30D-6(a)(5) would define
“battery cell production facility” as a fa-
cility in which battery cells are manufac-
tured or assembled.
6. Battery component
Proposed §1.30D-6(a)(6) would define
“battery component” as a component that
forms part of a battery and that is manu-
factured or assembled from one or more
components or constituent materials that
are combined through industrial, chemi-
cal, and physical assembly steps. Proposed
§1.30D-6(a)(6) would specify that battery
components may include, but are not limit-
ed to, a cathode electrode, anode electrode,
solid metal electrode, separator, liquid elec-
trolyte, solid state electrolyte, battery cell,
and battery module. Constituent materials
are not a type of battery component, al-
though constituent materials may be man-
ufactured or assembled into battery com-
ponents. Some battery components may be
made entirely of inputs that do not contain
constituent materials.
7. Compliant-battery ledger
Proposed §1.30D-6(a)(7) would de-
fine “compliant-battery ledger,” for a
qualified manufacturer for a calendar
year, as a ledger that tracks the number
of available FEOC-compliant batteries
for such calendar year. A compliant-bat-
tery ledger is established under the rules
of proposed §1.30D-6(d), described in
part III.D. of this Explanation of Provi-
sions.
8. Constituent materials
Proposed §1.30D-6(a)(8) would de-
fine “constituent materials” as materials
that contain applicable critical minerals
and that are employed directly in the
manufacturing of battery components.
Proposed §1.30D-6(a)(8) would specify
that constituent materials may include,
but are not limited to, powders of cath-
ode active materials, powders of anode
active materials, foils, metals for solid
electrodes, binders, electrolyte salts, and
electrolyte additives, as required for a
battery cell.
9. Extraction
Proposed §1.30D-6(a)(9) would de-
fine “extraction” to mean the activities
performed to harvest minerals or natu-
ral resources from the ground or a body
of water. Extraction would include, but
would not be limited to, operating equip-
ment to harvest minerals or natural re-
sources from mines and wells, or to ex-
tract minerals or natural resources from
the waste or residue of prior extraction.
Extraction would conclude when activi-
ties are performed to convert raw mined
or harvested products or raw well effluent
to substances that can be readily trans-
ported or stored for direct use in critical
mineral processing. Extraction would
include the physical processes involved
in refining. Extraction would not include
the chemical and thermal processes in-
volved in refining.
10. Foreign entity of concern
Proposed §1.30D-6(a)(10) would de-
fine “foreign entity of concern (FEOC)”
to have the same meaning as defined in
section 40207(a)(5) of the Infrastruc-
ture Investment and Jobs Act (42 U.S.C.
18741(a)(5)) and guidance promulgated
thereunder by the DOE.

January 8, 2024 370 Bulletin No. 2024–2
11. FEOC-compliant
Proposed §1.30D-6(a)(11) would de-
fine “FEOC-compliant” to mean in com-
pliance with the applicable excluded enti-
ty requirement under section 30D(d)(7). In
particular, the proposed regulation would
provide definitions of FEOC-compliant
with respect to a battery component (oth-
er than a battery cell), applicable critical
mineral, battery cell, or battery. This defi-
nition would treat battery cells separately
from other battery components because
battery cells contain applicable critical
minerals (and associated constituent mate-
rials) as well as other battery components.
Thus, the applicable rules under section
30D(d)(7) must be satisfied for such crit-
ical minerals and such components con-
tained in the battery cell as well as the
battery cell itself. A battery component
(other than a battery cell), with respect to
a new clean vehicle placed in service after
December 31, 2023, is FEOC-compliant
if it is not manufactured or assembled by
a FEOC. An applicable critical mineral,
with respect to a new clean vehicle placed
in service after December 31, 2024, is
FEOC-compliant if it is not extracted,
processed, or recycled by a FEOC. As de-
scribed in part III.C.4. of this Explanation
of Provisions, in general, the determina-
tion of whether an applicable critical min-
eral is FEOC-compliant would take into
account each step of extraction, process-
ing, or recycling through the step in which
such mineral is processed or recycled into
a constituent material, even if the mineral
is not in a form listed in section 45X(c)
(6). A battery cell, with respect to a new
clean vehicle placed in service after De-
cember 31, 2023, and before January 1,
2025, is FEOC compliant if it is not man-
ufactured or assembled by a FEOC and
it contains only FEOC-compliant battery
components. A battery cell, with respect to
a new clean vehicle placed in service after
December 31, 2024, is FEOC-compliant
if it is not manufactured or assembled by
a FEOC and it contains only FEOC-com-
pliant battery components and applicable
critical minerals. A battery, with respect to
a new clean vehicle placed in service after
December 31, 2023, is FEOC-compliant if
it contains only FEOC-compliant battery
components (other than battery cells) and
FEOC-compliant battery cells.
12. Manufacturing
Proposed §1.30D-6(a)(12) would de-
fine “manufacturing” to mean, with re-
spect to a battery component, the indus-
trial and chemical steps taken to produce a
battery component.
13. Non-traceable battery materials
Proposed §1.30D-6(a)(13)(i) would
define “non-traceable battery materials”
to mean specifically identified low-value
battery materials that may originate from
multiple sources and are often commin-
gled during refining, processing, or other
production processes by suppliers to such
a degree that the qualified manufacturer
cannot, due to current industry practice,
feasibly determine and attest to the or-
igin of such battery materials Proposed
§1.30D-6(a)(13)(ii), which is reserved,
would contain the specific list of identified
non-traceable battery materials. Low-val-
ue battery materials are those that, like the
exemplar materials listed below, have low
value compared to the total value of the
battery. Where battery materials make up
only a very small percentage of the value of
the battery as a whole, many industry par-
ticipants, prior to the passage of the IRA,
had little reason to trace the source of these
materials. As a result, unlike with higher
value battery materials, tracing the source
of these low value materials is not imme-
diately feasible, which makes it in turn not
feasible for qualified manufacturers to pro-
vide the necessary assurance to the IRS that
their materials are FEOC-compliant.
The Treasury Department and the
IRS, after extensive consultation with the
Department of Energy, are considering
whether the following applicable critical
minerals (and associated constituent ma-
terials) may be designated as identified
non-traceable battery materials: applicable
critical minerals contained in electrolyte
salts, electrode binders, and electrolyte
additives. These exemplar materials each
account for less than two percent of the
value of applicable critical minerals in the
battery, and the Treasury Department and
the IRS understand that industry tracing
of these particular applicable critical min-
eral production processes is uncommon
and third-party standards for doing so are
underdeveloped. Other materials for in-
clusion could include, for example, other
low-value electrode active materials that
are also subject to the traceability difficul-
ties described in part III.A.13. of this Ex-
planation of Provisions. As discussed fur-
ther below, the Treasury Department and
the IRS request comment on: (1) wheth-
er other applicable critical minerals (and
associated constituent materials) should
be designated as identified non-traceable
battery materials for the same reasons,
and (2) whether an approach other than
the proposed list of non-traceable battery
materials would better address the trace-
ability issues discussed here. As discussed
in part III.B.2. of this Explanation of Pro-
visions, some stakeholders have suggest-
ed that the Treasury Department and the
IRS adopt a de minimis exception to the
excluded entity restrictions based on val-
ue, weight, mass, or other considerations.
In response to these comments, the Trea-
sury Department and the IRS have pro-
posed a transition rule that would tempo-
rarily exclude a specific list of identified
non-traceable battery materials from the
due diligence requirements of the quali-
fied manufacturers.
The Treasury Department and the IRS
request comments on the best approach to
addressing low-value battery materials for
which tracing to their source is not imme-
diately feasible. The Treasury Department
and the IRS request comment on whether
the proposed approach is a sound method
of accounting for non-traceable battery
materials, and whether other criteria should
be used to distinguish between traceable
and non-traceable battery materials. In
particular, the Treasury Department and
the IRS request comments that explain
whether and why certain battery materials
are prohibitively difficult to trace at this
time given current supply chains and cur-
rent broadly available tools and practices
for supply-chain tracing in the battery sec-
tor, and that explain how the supply chain
may be limited by any such difficulty. The
Treasury Department and the IRS also re-
quest comments explaining how the state
of supply chains and tools and practices for
supply-chain tracing are expected to evolve
in the coming months and years for battery
materials that are prohibitively difficult to
trace at present. The Treasury Department
and the IRS further request comments ex-
plaining the state of recordkeeping that is

Bulletin No. 2024–2 371 January 8, 2024
currently used in the industry to trace sup-
ply chains, what kind of recordkeeping re-
quirements would facilitate better tracing
of supply chains in the coming months and
years, how to encourage manufacturers to
adopt appropriate tracing systems as soon
as practicable, and how these rules incen-
tivize further shifting of supply chains in
a manner that will strengthen our energy
security, national security, and domestic
manufacturing.
In addition, the Treasury Department
and the IRS request comment on whether
the listed materials are appropriately char-
acterized as non-traceable battery mate-
rials. The Treasury Department and the
IRS further request comment on whether
any other applicable critical minerals, in-
cluding associated constituent materials,
would also be appropriately characterized
as non-traceable battery materials because
they meet the required criteria. The Trea-
sury Department and the IRS further re-
quest comment on whether other criteria
should be applied to determine what quali-
fies as non-traceable battery materials, and
what applicable critical minerals, including
associated constituent materials, would be
appropriately characterized as such mate-
rials under the suggested criteria. Finally,
the Treasury Department and the IRS seek
comment describing alternative approach-
es to addressing the challenges posed by
low-value battery materials that are not
currently feasible to trace to their origins.
14. Processing
Proposed §1.30D-6(a)(14) would de-
fine “processing” to mean the non-phys-
ical processes involved in the refining of
non-recycled substances or materials, in-
cluding the treating, baking, and coating
processes used to convert such substanc-
es and materials into constituent materi-
als. Processing includes the chemical or
thermal processes involved in refining.
Processing does not include the physical
processes involved in refining.
15. Recycling
Proposed §1.30D-6(a)(15) would de-
fine “recycling” to mean the series of
activities during which recyclable ma-
terials containing critical minerals are
transformed into specification-grade com-
modities and consumed in lieu of virgin
materials to create new constituent materi-
als; such activities result in new constitu-
ent materials contained in the battery from
which the electric motor of a new clean
vehicle draws electricity.
B. Due diligence and transition rule for
non-traceable battery materials
1. Due diligence
Proposed §1.30D-6(b)(1) would pro-
vide that the qualified manufacturer must
conduct due diligence with respect to all
battery components and applicable criti-
cal minerals (and associated constituent
materials) that are relevant to determining
whether such components or minerals are
FEOC-compliant. This due diligence must
comply with standards of tracing for bat-
tery materials available in the industry at
the time of the attestation or certification
that enable the qualified manufacturer to
know with reasonable certainty the prov-
enance of applicable critical minerals,
constituent materials, and battery compo-
nents. Such tracing standards may include
international battery passport certifica-
tions and enhanced battery material and
component tracking and labeling. Pro-
posed §1.30D-6(b)(1) would specify that
reasonable reliance on a supplier attesta-
tion or certification will be considered due
diligence if the qualified manufacturer
does not know or have reason to know af-
ter due diligence that such supplier attes-
tation or certification is incorrect.
The due diligence must be conduct-
ed by the qualified manufacturer prior to
its determination of any information to
establish a compliant-battery ledger de-
scribed in proposed §1.30D-6(d), and on
an on-going basis. A battery is not consid-
ered FEOC-compliant unless the qualified
manufacturer has conducted such due dili-
gence with respect to all such components
and applicable critical minerals of the
battery and provided required attestations
or certifications described in part III.D. of
this Explanation of Provisions.
2. Transition rule for non-traceable
battery materials
Proposed §1.30D-6(b)(2) would pro-
vide that for any new clean vehicles for
which the qualified manufacturer provides
a periodic written report before January
1, 2027, the due diligence requirement
may be satisfied by excluding identified
non-traceable battery materials (and asso-
ciated constituent materials), as defined in
proposed §1.30D-6(a)(13)(ii). In addition,
as described in part III.C.3. of this Expla-
nation of Provisions, identified non-trace-
able battery materials (and associated con-
stituent materials) may be excluded from
the determination of whether a battery cell
is FEOC-compliant. To use this transition
rule, qualified manufacturers must sub-
mit a report during the up-front review
process described in part III.D. of this
Explanation of Provisions demonstrating
how the qualified manufacturer will com-
ply with the excluded entity restrictions
once the transition rule is no longer in ef-
fect and all materials must be fully traced
through the entire electric vehicle battery
supply chain.
As described in part III.A.13. of this
Explanation of Provisions, the Treasury
Department and the IRS understand, after
extensive consultation with the Depart-
ment of Energy, that industry has not de-
veloped standards or systems for tracing
certain low-value materials with preci-
sion. This inability to trace is exacerbat-
ed by the practice of commingling such
materials within the materials processing
supply chain. To address this issue, some
stakeholders have suggested that the Trea-
sury Department and the IRS adopt a de
minimis exception to the excluded entity
restrictions based on value, weight, mass,
or other considerations. The Treasury De-
partment and the IRS understand the trac-
ing concerns in light of current standards
and systems. However, these standards
and systems may develop to allow for im-
proved tracing in the future.
The Treasury Department and the IRS
therefore recognize the potential need for
a transition rule to enable determination
of FEOC compliance while detailed trac-
ing practices are being developed to allow
for full sourcing and tracing of applicable
critical mineral supply chains. The transi-
tion rule in proposed §1.30D-6(b)(2) and
(c)(3)(iii) is one option that the Treasury
Department and the IRS are considering
for such a rule. The Treasury Department
and the IRS also are considering and seek-
ing comment on possible alternative ap-

January 8, 2024 372 Bulletin No. 2024–2
proaches for a transition rule that would
address low-value materials that cannot
be traced under current industry standards
and that would be responsive to rapidly
changing industry practices regarding spe-
cific materials or overall battery composi-
tion, or no transition rule at all.
This transition rule in proposed
§1.30D-6(b)(2) is proposed to phase out
for any new clean vehicles for which the
manufacturer is required to provide a pe-
riodic written report after December 31,
2026. The Treasury Department and the
IRS request comments on the need for and
design of this transition rule, including
data or other objective information to sup-
port such comments.
The Treasury Department and IRS also
request comment on whether the challeng-
es identified in this Explanation of Provi-
sions related to traceability of low-value
materials should instead be addressed
through an alternative approach. The
Treasury Department and the IRS request
comment on whether a transition rule
that adopts an alternative to the approach
of listing materials would better achieve
the Treasury Department’s and IRS’s
stated goals and the challenges posed by
low-value materials that are not currently
feasible to trace. The Treasury Department
and the IRS specifically request comment
describing alternative approaches to pro-
viding a transition rule that accounts for
low-value materials that cannot be traced
under current industry standards and that
is responsive to rapidly changing industry
practice, if commenters believe a different
approach could better achieve the Trea-
sury Department’s and IRS’s stated goals.
Such alternative approaches, which might
include ones that use principle-based
criteria instead of the listing of specific
non-traceable battery materials in a final
regulation, should be narrowly tailored to
address the traceability challenges iden-
tified, enable effective administration by
the IRS, and phase-out on a schedule con-
sistent with the reasonable development
of industry standards.
C. Excluded entity restriction
1. In general
Proposed §1.30D-6(c)(1) would pro-
vide that in the case of any new clean ve-
hicle placed in service after December 31,
2023, the batteries from which the electric
motor of such vehicle draws electricity
must be FEOC-compliant. A serial num-
ber or other identification system must be
used to physically track FEOC-compliant
batteries to specific new clean vehicles.
The proposed regulation would pro-
vide that the determination that a battery
is FEOC-compliant is made as follows:
First, the qualified manufacturer makes
a determination of whether battery com-
ponents and applicable critical minerals
(and associated constituent materials)
are FEOC-compliant, in accordance with
rules for the determination of FEOC-com-
pliant battery components and applicable
critical minerals, which are described in
part III.C.4. of this Explanation of Pro-
visions. Next, the FEOC-compliant bat-
tery components and FEOC-compliant
applicable critical minerals (and associ-
ated constituent materials) are physically
tracked to specific battery cells, in accor-
dance with rules for the determination of
FEOC compliant-battery cells, described
in part III.C.3. of this Explanation of Pro-
visions. Alternatively, FEOC-compliant
applicable critical minerals and associated
constituent materials (but not battery com-
ponents) may be allocated to battery cells,
without physical tracking, in accordance
the rules for a temporary allocation-based
determination for applicable critical min-
erals and associated constituent materials,
described in part III.C.3.a of this Expla-
nation of Provisions. Finally, the battery
components, including battery cells, are
physically tracked to specific batteries, in
accordance with the rules for the determi-
nation of FEOC-compliant batteries de-
scribed in part II.C.2 of this Explanation
of Provisions.
2. Determination of FEOC-compliant
batteries
Proposed §1.30D-6(c)(2) would pro-
vide that the determination that a battery is
FEOC-compliant must be made by phys-
ically tracking FEOC-compliant battery
components, including battery cells, to
such battery. With respect to battery cells,
a serial number or other identification
system must be used to physically track
FEOC-compliant battery cells to such bat-
teries.
3. Determination of FEOC-compliant
battery cell
Proposed §1.30D-6(c)(3)(i) would
provide that, except as described in part
III.C.3.a. of this Explanation of Provi-
sions, the determination that a battery cell
contains FEOC-compliant battery com-
ponents and FEOC-compliant applica-
ble critical minerals and their associated
constituent materials must be made by
physically tracking FEOC-compliant bat-
tery components to specific battery cells
and by physically tracking the mass of
FEOC-compliant applicable critical min-
erals and associated constituent materials
to specific battery cells.
a. Temporary allocation-based
determination for applicable critical
materials and associated constituent
materials of a battery cell
Proposed §1.30D-6(c)(3)(ii)(A) would
provide that the determination that a bat-
tery cell is a FEOC-compliant battery cell
may be made through an allocation of
available mass of applicable critical min-
erals and associated constituent materials
to specific battery cells manufactured or
assembled in a battery cell production fa-
cility, without the physical tracking of the
mass of applicable critical minerals (and
associated constituent materials) to specif-
ic battery cells. This allocation-based de-
termination is an exception to the general
rule, requiring specific tracking, of pro-
posed §1.30D-6(c)(3)(ii)(A). As provid-
ed in proposed §1.30D-6(c)(3)(ii)(F), the
Treasury Department and the IRS propose
that this exception would be a temporary
rule for any new clean vehicle for which
the qualified manufacturer provides a
periodic written report before January 1,
2027.
After extensive consultation with the
DOE, the Treasury Department and the
IRS understand that certain applicable
critical minerals (and associated constit-
uent materials) are commingled prior to
delivery to or at the battery cell produc-
tion facility. Thus, while the qualified
manufacturer and its suppliers can trace
such minerals through the entire electric
vehicle battery supply chain to determine
FEOC-compliance, the manufacturer and
suppliers cannot physically track specific

Bulletin No. 2024–2 373 January 8, 2024
mass of minerals to specific battery cells
or batteries. As a result, the qualified man-
ufacturer cannot determine which battery
cells or batteries are FEOC-compliant,
absent an allocation-based determination.
The Treasury Department and the IRS
anticipate that industry accounting prac-
tices may adapt to compliance regimes
that require physical supply chain track-
ing in the future, whether through the ac-
quisition of wholly-compliant supply, the
separation of currently-commingled sup-
ply chains, the development of physical
tracking systems, or some combination
thereof. Accordingly, this exception is
proposed to phase out for any new clean
vehicle for which the qualified manufac-
turer provides a periodic written report
after December 31, 2026. The Treasury
Department and the IRS request com-
ments on the need for, design, and dura-
tion of this temporary rule, including data
or other objective information to support
such comments. The Treasury Depart-
ment and the IRS also request comment
on whether industry practices are likely
to develop that allow for physical track-
ing before December 31, 2032, and, if
not, whether allocation-based accounting
should be included as a permanent com-
pliance approach, rather than as a tempo-
rary transition rule.
Proposed §1.30D-6(c)(3)(ii)(B)
would provide that the temporary alloca-
tion-based determination rules are limited
to applicable critical minerals and associ-
ated constituent materials that are incor-
porated into a battery cell or its battery
components. Battery components must be
physically tracked.
Proposed §1.30D-6(c)(3)(ii)(C)
would provide that any allocation with
respect to the mass of an applicable criti-
cal mineral must be made within the type
of constituent materials (such as powders
of cathode active materials, powders of
anode active materials, or foils) in which
such mineral is contained. Masses of an
applicable critical mineral may not be
aggregated across constituent materials
with which such applicable critical min-
eral is not associated, and an allocation
of mass of an applicable critical mineral
may not be made from one type of con-
stituent material to another. Proposed
§1.30D-6(c)(3)(ii)(C) also provides an
example illustrating this rule.
Proposed §1.30D-6(c)(3)(ii)(D) would
provide that any allocation with respect
to applicable critical minerals and their
associated constituent materials must be
allocated within one or more specific bat-
tery cell product lines of the battery cell
production facility, such that a particular
mass of constituent material is not treated
as fungible across different battery chem-
istries and designs.
Proposed §1.30D-6(c)(3)(ii)(E) would
provide that if a qualified manufacturer
uses the allocation-based determination
rules described in this part III.C.3.a., the
quantity of FEOC-compliant battery cells
that can result from this allocation may
not exceed the number of battery cells
for which there is enough FEOC-compli-
ant quantity of every applicable critical
mineral. That number will necessarily
be limited by the applicable critical min-
eral that has the lowest percentage of
FEOC-compliant supply. For example, if
a qualified manufacturer allocates all of
applicable critical mineral A, that is 20
percent FEOC-compliant, and all of appli-
cable critical mineral B, that is 60 percent
FEOC-compliant, to a battery cell product
line, no more than 20 percent of the bat-
tery cells in that battery cell product line
may be FEOC-compliant.
Proposed §1.30D-6(c)(3)(ii)(F)
would provide that the rules of proposed
§1.30D-6(c)(3)(ii) do not apply with re-
spect to any new clean vehicle for which
the qualified manufacturer provides a pe-
riodic written report after December 31,
2026.
b. Transition rule for non-traceable
battery materials
Proposed §1.30D-6(c)(3)(iii) would
provide that for new clean vehicles for
which the qualified manufacturer provides
a periodic written report before January
1, 2027, the determination of whether a
battery cell is FEOC-compliant under pro-
posed §1.30D-6(c)(3) may be satisfied by
excluding non-traceable battery materials,
and their associated constituent materials.
To use this transition rule, which is further
discussed in part III.B. of this Explanation
of Provisions, qualified manufacturers
must submit a report during the up-front
review process described in proposed
§1.30D-6(d)(2)(ii).
4. Determination of FEOC-compliant
battery components and applicable
critical minerals
Proposed §1.30D-6(c)(4) would pro-
vide that the determination that battery
components and applicable critical miner-
als (and their associated constituent mate-
rials) are FEOC-compliant must be made
prior to any determination under proposed
§1.30D-6(c)(2) and (3). In general, the
determination of whether an applicable
critical mineral is FEOC-compliant would
take into account each step of extraction,
processing, or recycling through the step
in which such mineral is processed or re-
cycled into a constituent material, even if
the mineral is not in a form listed in sec-
tion 45X(c)(6)), such as nickel sulphate
that is used in production of a nickel-man-
ganese-cobalt cathode active powder. A
constituent material would be associated
with an applicable critical mineral if the
applicable critical mineral has been pro-
cessed or recycled into a constituent ma-
terial, even if that processing or recycling
transformed the mineral into a form not
listed in section 45X(c)(6). However, an
applicable critical mineral would be dis-
regarded for purposes of the determina-
tion under proposed §1.30D-6(c)(4) if it
is fully consumed in the production of the
constituent material or battery component
and no longer remains in any form in the
battery, such as certain solvents used in
electrode production.
With respect to recycling, applicable
critical minerals and associated constitu-
ent materials that are recycled would be
subject to the determination of whether
such mineral is FEOC-compliant if the
recyclable material contains an applica-
ble critical mineral, contains material that
was transformed from an applicable crit-
ical mineral, or if the recyclable material
is used to produce an applicable critical
mineral at any point during the recycling
process. The determination of whether an
applicable critical mineral or associated
constituent material that is incorporated
into a battery via recycling is FEOC-com-
pliant takes into account only activities
that occurred during the recycling process.
Thus, for example, an applicable critical
mineral derived from recyclable material
that was recycled by an entity that is not a
FEOC would be FEOC-compliant even if

January 8, 2024 374 Bulletin No. 2024–2
such mineral may have been extracted by
a FEOC prior to its inclusion in the recy-
clable material.
Whether an entity is a FEOC is deter-
mined as of the time of the entity’s perfor-
mance of the relevant activity, which for
applicable critical minerals is the time of
extraction, processing, or recycling, and
for battery components is the time of man-
ufacturing or assembly. The determination
of whether an applicable critical mineral
is FEOC-compliant is determined at the
end of processing or recycling of the ap-
plicable critical mineral into a constituent
material, taking into account all applica-
ble steps prior to final processing or re-
cycling. Thus, for example, an applicable
critical mineral that is not extracted by a
FEOC but is processed by a FEOC is not
FEOC-compliant.
Proposed §1.30D-6(c)(4)(iv) provides
examples regarding determinations of
FEOC-compliant battery components and
applicable critical minerals.
5. Third-party manufacturers or
suppliers.
Proposed §1.30D-6(c)(5) would pro-
vide that the determinations under pro-
posed §1.30D-6(c)(2) through (4) may
be made by a third-party manufacturer or
supplier that operates a battery cell pro-
duction facility provided that the manu-
facturer or supplier performs the due dil-
igence described in proposed §1.30D-6
and provides the qualified manufacturer
of the new clean vehicle information suf-
ficient to establish a basis for the deter-
minations under proposed §1.30D-6(c)
(2) through (4). In addition, the manu-
facturer or supplier must be contractual-
ly required to provide such information
to the qualified manufacturer of the new
clean vehicle and must be contractually
required to inform the qualified manufac-
turer of any changes in the supply chain
that affect determinations of FEOC com-
pliance. In the case of multiple third-par-
ty manufacturers or suppliers (such as if
a manufacturer contracts with a battery
manufacturer, who, in turn, contracts
with a manufacturer or supplier who
operates a battery cell production facil-
ity), the due diligence and information
requirements must be satisfied by each
such manufacturer or supplier either di-
rectly to the qualified manufacturer or
indirectly through contractual relation-
ships.
D. Compliant-battery ledger
1. In general
Proposed §1.30D-6(d)(1) would pro-
vide that for new clean vehicles placed
in service after December 31, 2024, the
qualified manufacturer must determine
and provide information to the IRS to es-
tablish a compliant-battery ledger for each
calendar year, as described in proposed
§1.30D-6(d)(2)(i) and (ii). One compli-
ant-battery ledger may be established for
all vehicles for a calendar year, or there
may be separate ledgers for specific mod-
els or classes of vehicles.
2. Determination of number of
batteries
Proposed §1.30D-6(d)(2)(i) would pro-
vide that, to establish a compliant-battery
ledger for a calendar year, the qualified
manufacturer must determine the num-
ber of batteries, with respect to new clean
vehicles (as described in section 30D(d)
and proposed §1.30D-2(m)) for which the
qualified manufacturer anticipates provid-
ing a periodic written report during the
calendar year, that it knows or reason-
ably anticipates will be FEOC-compliant,
pursuant to the requirements of proposed
§1.30D-6(b) and (c). The determination
would be based on the battery compo-
nents and applicable critical minerals (and
associated constituent materials) that are
procured or contracted for the calendar
year and that are known or reasonably
anticipated to be FEOC-compliant battery
components or FEOC-compliant applica-
ble critical minerals, as applicable.
Proposed §1.30D-6(d)(2)(ii) would
provide a process for upfront review of
the number of batteries described in the
preceding paragraph. Specifically, the
proposed rule would provide that the
qualified manufacturer must attest to the
number of FEOC-compliant batteries de-
termined under proposed §1.30D-6(d)(2)
(i) and provide the basis for the determi-
nation, including attestations, certifica-
tions and documentation demonstrating
compliance with proposed §1.30D-6(b)
and (c), at the time and in the manner
provided in the Internal Revenue Bulle-
tin. The IRS, with analytical assistance
from the DOE, would review the attes-
tations, certifications, and documenta-
tion. Once the IRS has determined that
the qualified manufacturer has provided
the required attestations, certifications,
and documentation, the IRS will ap-
prove or reject the determined number of
FEOC-compliant batteries. The IRS may
approve the determined number in whole
or part. The approved number will be the
initial balance in the compliant-battery
ledger.
Proposed §1.30D-6(d)(2)(iii) would
provide rules for decreasing or increasing
the balance of the compliant-battery led-
ger. Specifically, once the compliant-bat-
tery ledger is established with respect to a
calendar year, the qualified manufacturer
must determine and take into account any
decrease in the number of FEOC-compli-
ant batteries for such calendar year, and
any of the prior three calendar years for
which the qualified manufacturer had a
compliant-battery ledger, within 30 days
of discovery. In addition, the qualified
manufacturer may determine and take
into account any increase in the number of
FEOC-compliant batteries. Such determi-
nations, and any supporting attestations,
certifications, and documentation, must be
provided on a periodic basis in the manner
provided in the Internal Revenue Bulletin.
The decrease described in the previ-
ous paragraph may decrease the compli-
ant-battery ledger below zero, creating a
negative balance in the compliant-battery
ledger. In addition, if any such decrease
is determined subsequent to the calendar
year to which it relates, the decrease will
be taken into account in the year in which
the change is discovered. The remaining
balance in the compliant-battery ledger
at the end of the calendar year, whether
positive or negative, will be included in
the compliant-battery ledger for the sub-
sequent calendar year. If a qualified man-
ufacturer has multiple compliant-battery
ledgers with negative balances, any neg-
ative balance would first be included in
the compliant-battery ledger for the same
model or class of vehicles for the subse-
quent calendar year. However, if there is
no ledger for the same model or class of
vehicles in the subsequent calendar year,

Bulletin No. 2024–2 375 January 8, 2024
the IRS can account for such negative bal-
ance in the ledger of a different model or
class of vehicles of the qualified manufac-
turer.
3. Tracking FEOC-compliant batteries
Proposed §1.30D-6(d)(3) would pro-
vide that the compliant-battery ledger for
a calendar year must be updated to track
the number of available FEOC-compliant
batteries of the qualified manufacturer,
by reducing the balance of the ledger as
the qualified manufacturer submits peri-
odic written reports reporting the VINs
of new clean vehicles as eligible for the
credit under section 30D, at the time and
in the manner provided in the Internal
Revenue Bulletin. If the balance of the
compliant-battery ledger for a calendar
year of the qualified manufacturer is zero
or less than zero, the qualified manufac-
turer would not be able to submit addition-
al periodic written reports with respect to
section 30D.
4. Reconciliation of battery estimates
Proposed §1.30D-6(d)(4) would pro-
vide that, after the end of any calendar
year for which a compliant-battery led-
ger is established, the IRS may require a
qualified manufacturer to provide attes-
tations, certifications, and documentation
to support the accuracy of the number of
FEOC-compliant batteries of the quali-
fied manufacturer for such calendar year,
including with respect to any changes de-
scribed in paragraph (d)(3)(iii), at the time
and in the manner provided in the Internal
Revenue Bulletin.
E. Rule for 2024
Proposed §1.30D-6(e) would provide
rules for new clean vehicles placed in
service in 2024. This rule may apply to
new clean vehicles for which the qualified
manufacturer submits a periodic written
report in 2024 as well as new clean ve-
hicles for which a qualified manufactur-
er submitted a periodic written report in
2023. Thus, for example, a vehicle that
was anticipated to be placed in service
in 2023 that remains unsold at the end of
2023 is subject to these rules if placed in
service in 2024.
Specifically, proposed §1.30D-6(e)
(1) would provide that, for new clean
vehicles that are placed in service after
December 31, 2023, and prior to January
1, 2025, the qualified manufacturer must
determine whether the battery compo-
nents contained in such vehicles satisfy
the requirements of section 30D(d)(7)(B)
and whether batteries contained in the
vehicle are FEOC-compliant under the
rules of proposed §1.30D-6(b) and (c).
The qualified manufacturer would be re-
quired to make an attestation with respect
to such determinations at the time and in
the manner provided in the Internal Rev-
enue Bulletin.
However, for any new clean vehi-
cles for which the qualified manufac-
turer provides a periodic written report
before the date that is 30 days after the
date these regulations are finalized, pro-
vided that the qualified manufacturer
has determined that its supply chain of
battery components with respect to such
vehicles contains only FEOC-compli-
ant battery components: (i) for purpos-
es of the determination of FEOC-com-
pliant batteries and FEOC-compliant
battery cells described in parts III.C.2
and III.C.3. of this Explanation of Pro-
visions, the determination of which
battery cells or batteries, as applicable,
contain FEOC-compliant battery com-
ponents may be determined without
physical tracking; (ii) for purposes of
the determination of FEOC-compliant
batteries, the determination of which
batteries contain FEOC-compliant bat-
tery cells may be determined without
physical tracking (and without the use
of a serial number or other identification
system); and (iii) for purposes of the
determination that a vehicle contains a
FEOC-compliant battery and therefore
is a new clean vehicle, as described in
part III.C.1. of this Explanation of Pro-
visions, the determination of which ve-
hicles contain FEOC-compliant batter-
ies may be determined without physical
tracking (and without the use of a serial
number or other identification system).
Under proposed §1.30D-6(e)(2), the
determination that a qualified manufactur-
er’s supply chain of battery components
contains only FEOC-compliant batteries
may be made with respect to specific mod-
els or classes of vehicles.
F. Inaccurate attestations, certifications
or documentation
1. In general
Proposed §1.30D-6(f)(1) would pro-
vide that if the IRS determines, with ana-
lytical assistance from the DOE and after
review of the attestations, certifications,
and documentation described in part
III.D. of this Explanation of Provisions,
that a qualified manufacturer provided
inaccurate attestations, certifications, or
documentation, the IRS may take certain
actions against the qualified manufacturer,
depending on the severity of the inaccura-
cy. Such actions would affect new clean
vehicles and qualified manufacturers on a
prospective basis.
2. Inadvertence
Proposed §1.30D-6(f)(2) would pro-
vide that if the IRS determines that the
attestations, certifications, or documenta-
tion for a new clean vehicle contain errors
due to inadvertence, the following may be
required: The qualified manufacturer may
cure the errors identified, including by a
decrease in the compliant-battery ledger
of the qualified manufacturer. Howev-
er, if the errors are not cured, in the case
of a new clean vehicle that has not been
placed in service but for which the qual-
ified manufacturer has submitted a peri-
odic written report certifying compliance
with the requirements of section 30D(d),
such vehicle is no longer considered a new
clean vehicle eligible for the section 30D
credit. If the errors are not cured, in the
case of a new clean vehicle that has not
been placed in service and for which the
qualified manufacturer has not submitted
a periodic written report, the qualified
manufacturer may not submit a periodic
written report certifying compliance with
the requirements of section 30D(d). Final-
ly, if the errors are not cured, in the case of
a new clean vehicle that has been placed
in service, the IRS may require a decrease
to the compliant-battery ledger.
3. Intentional disregard or fraud
Proposed §1.30D-6(f)(3) would pro-
vide guidance for cases of intentional dis-
regard or fraud. Specifically, the proposed

January 8, 2024 376 Bulletin No. 2024–2
regulations would provide that if the IRS
determines that a qualified manufacturer
intentionally disregarded attestation, certi-
fication, and documentation requirements
or reported information fraudulently or
with intentional disregard, the IRS may
determine that all vehicles of the qualified
manufacturer that have not been placed
in service are no longer considered new
clean vehicles eligible for the section 30D
credit. In addition, the IRS may terminate
the written agreement between the IRS
and the manufacturer, thereby terminating
the manufacturer’s status as a qualified
manufacturer. The manufacturer would be
required to submit a new written agree-
ment to reestablish qualified manufacturer
status at the time and in the manner pro-
vided in the Internal Revenue Bulletin.
G. Examples
Proposed §1.30D-6(g) would provide
examples illustrating the application of
the proposed rules regarding excluded
entities. Example 1 would provide a gen-
eral set of facts and analysis. Example 2
would provide an example illustrating the
rules for third-party suppliers. Example 3
would provide an example illustrating the
general rules for applicable critical min-
erals. Example 4 would provide a com-
prehensive example with specified battery
components and applicable critical miner-
als (and associated constituent materials).
VI. Severability
Proposed §1.30D-6(h) would provide
that if any provision in this proposed
rulemaking is held to be invalid or unen-
forceable facially, or as applied to any per-
son or circumstance, it shall be severable
from the remainder of this rulemaking,
and shall not affect the remainder thereof,
or the application of the provision to other
persons not similarly situated or to other
dissimilar circumstances.
Proposed Applicability Dates
Consistent with the April 2023 pro-
posed regulations, previously proposed
§1.30D-2(a) through (h) are proposed
to apply to new clean vehicles placed in
service on or after January 1, 2023, for
taxable years ending after April 17, 2023.
Newly proposed §1.30D-2(j) through (m)
are proposed to apply to new clean vehi-
cles placed in service on or after January
1, 2024, for taxable years ending after De-
cember 31, 2023.
Consistent with the April 2023 pro-
posed regulations, previously proposed
§1.30D-3(a) through (c) and (f) are pro-
posed to apply to new clean vehicles
placed in service after April 17, 2023, for
taxable years ending after April 17, 2023.
Newly proposed §1.30D-3(d) and (e) are
proposed to apply to new clean vehicles
placed in service on or after January 1,
2024, for taxable years ending after De-
cember 31, 2023.
Section 30D(d)(7) provides that the
excluded entity provisions apply to vehi-
cles placed in service after December 31,
2023, for battery components, and after
December 31, 2024, for applicable critical
minerals. Accordingly proposed §1.30D-6
is proposed to apply to new clean vehicles
placed in service after December 31, 2023.
Taxpayers may rely on these proposed
regulations for vehicles placed in service
prior to the date final regulations are pub-
lished in the Federal Register, provided
the taxpayer follows the proposed regula-
tions in their entirety, and in a consistent
manner.
Effect on Other Documents
This notice of proposed rulemaking
modifies proposed §§1.30D-2 and 1.30D-
3 of the April 2023 proposed regulations.
Special Analyses
I. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520) (PRA) generally
requires that a Federal agency obtain the
approval of the Office of Management
and Budget (OMB) before collecting in-
formation from the public, whether such
collection of information is mandatory,
voluntary, or required to obtain or retain
a benefit.
For purposes of the PRA, the report-
ing burden associated with the collection
of information in proposed §1.30D-6 re-
garding excluded entities will be reflect-
ed in the PRA Submissions associated
with OMB control number 1545-2311.
OMB Control Number 1545–2137 cov-
ers Form 8936 and Form 8936-A regard-
ing clean vehicle credits, including the
new requirement in section 30D(f)(9) to
include on the taxpayer’s return for the
taxable year the VIN of the vehicle for
which the section 30D credit is claimed.
Revenue Procedure 2022-42 describes
the procedural requirements for qualified
manufacturers to make periodic written
reports to the IRS to provide information
related to each vehicle manufactured by
such manufacturer that is eligible for the
section 30D credit as required in section
30D(d)(3), including the critical mineral
and battery component attestation or cer-
tification requirements in section 30D(e)
(1)(A) and (2)(A). In addition, Revenue
Procedure 2022-42 also provides the pro-
cedures for sellers of new clean vehicles
to report information required by section
30D(d)(1)(H) for vehicles to be eligible
for the section 30D credit. The collec-
tions of information contained in Rev-
enue Procedure 2022-42 are described
in that document and were submitted to
the Office of Management and Budget in
accordance with the PRA under control
number 1545-2137.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless it dis-
plays a valid control number assigned by
the Office of Management and Budget.
II. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. chapter 6), the Secretary
hereby certifies that these proposed regu-
lations will not have a significant econom-
ic impact on a substantial number of small
entities within the meaning of section
601(6) of the Regulatory Flexibility Act.
Pursuant to section 7805(f), this notice of
proposed rulemaking has been submitted
to the Chief Counsel for the Office of Ad-
vocacy of the Small Business Administra-
tion for comment on their impact on small
business.
The proposed regulations affect qual-
ified manufacturers that must determine
their compliance with the excluded entity
requirements in order to certify that their
new clean vehicles placed in service after
December 31, 2023, qualify for the sec-
tion 30D credit.

Bulletin No. 2024–2 377 January 8, 2024
While the tracking and reporting of
compliance with the excluded entity re-
quirements is likely to involve significant
administrative costs, according to public
filings, every qualified manufacturer had
total revenues above $1 billion in 2022.
There are a total of 11 qualified manufac-
turers that have indicated that they manu-
facture vehicles currently eligible for the
section 30D credit. Pursuant to Revenue
Procedure 2022–42, Revenue Procedure
2023-33, and following the publication
of these proposed regulations, qualified
manufacturers will also have to certify
that their vehicles comply with the ex-
cluded entity requirement and contain
batteries that are FEOC-compliant. The
proposed regulations provide definitions
and general rules for this purposes. Ac-
cordingly, the Treasury Department and
the IRS intend that the proposed rules
provide clarity for qualified manufactur-
ers for consistent application of the ex-
cluded entity requirements. The Treasury
Department and the IRS have determined
that qualified manufacturers do not meet
the applicable definition of small entity.
Accordingly, the Secretary certifies that
these proposed regulations will not have
a significant economic impact on a sub-
stantial number of small entities. The
Treasury Department and the IRS request
comments that provide data, other evi-
dence, or models that provide insight on
this issue.
III. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
that agencies assess anticipated costs and
benefits and take certain other actions be-
fore issuing a final rule that includes any
Federal mandate that may result in expen-
ditures in any one year by a State, local, or
Tribal government, in the aggregate, or by
the private sector, of $100 million (updat-
ed annually for inflation). This proposed
rule does not include any Federal mandate
that may result in expenditures by State,
local, or Tribal governments, or by the pri-
vate sector in excess of that threshold.
IV. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local gov-
ernments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding re-
quirements of section 6 of the Executive
order. This proposed rule does not have
federalism implications and does not im-
pose substantial direct compliance costs
on State and local governments or pre-
empt State law within the meaning of the
Executive order.
V. Regulatory Planning and Review
Pursuant to the Memorandum of
Agreement, Review of Treasury Regula-
tions 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.
Comments and Requests for a Public
Hearing
Before these proposed amendments to
the regulations are adopted as final regula-
tions, consideration will be given to com-
ments that are submitted timely to the IRS
as prescribed in this preamble under the
ADDRESSES section. The Treasury De-
partment and the IRS request comments
on all aspects of the proposed regulations.
Any comments submitted will be made
available at https://www.regulations.gov
or upon request.
A public hearing will be scheduled if
requested in writing by any person who
timely submits electronic or written com-
ments. Requests for a public hearing are
also encouraged to be made electronical-
ly. If a public hearing is scheduled, no-
tice of the date and time for the public
hearing will be published in the Federal
Register.
Announcement 2023-16, 2023-20
I.R.B. 854 (May 15, 2023), provides that
public hearings will be conducted in per-
son, although the IRS will continue to pro-
vide a telephonic option for individuals
who wish to attend or testify at a hearing
by telephone. Any telephonic hearing will
be made accessible to people with disabil-
ities.
Statement of Availability of IRS
Documents
Guidance cited in this preamble is pub-
lished in the Internal Revenue Bulletin
and is available from the Superintendent
of Documents, U.S. Government Publish-
ing Office, Washington, DC, 20402, or by
visiting the IRS website at https://www.
irs.gov.
Drafting Information
The principal author of these proposed
regulations is the Office of the Associate
Chief Counsel (Passthroughs and Special
Industries). However, other personnel
from the Treasury Department, the DOE,
and the IRS participated in their develop-
ment.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
Proposed Amendments to the
Regulations
Accordingly, the Treasury Department
and the IRS propose to amend 26 CFR
parts 1 as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by adding an entry
in numerical order for §1.30D-6 to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.30D-6 also issued under 26
U.S.C. 30D.
* * * * *
Par. 2. Section 1.30D-0, as proposed to
be added at 88 FR 23370 (April 17, 2023)
and proposed to be amended at 88 FR
70310 (October 10, 2023), is amended by:
a. Adding paragraphs (k), (l), and (m)
under §1.30D-2;
b. Revising paragraphs (e) and (f) un-
der §1.30D-3;
c. Adding paragraph (g) under §1.30D-
3; and
d. Adding an entry in numerical order
for §1.30D-6.
The additions and revisions read as fol-
lows:

January 8, 2024 378 Bulletin No. 2024–2
§1.30D-0 Table of contents.
* * * * *
§1.30D-2 Definitions for purposes of sec-
tion 30D.
* * * * *
(k) Manufacturer.
(l) Qualified manufacturer.
(m) New clean vehicle.
* * * * *
§1.30D-3 Critical mineral and battery
component requirements.
* * * * *
(e) Upfront review of battery compo-
nent and applicable critical minerals re-
quirements.
(f) Severability.
(g) Applicability date.
* * * * *
§1.30D-6 Excluded entities.
(a) Definitions.
(1) Applicable critical mineral.
(2) Assembly.
(3) Battery.
(4) Battery cell.
(5) Battery cell production facility.
(6) Battery component.
(7) Compliant-battery ledger.
(8) Constituent materials.
(9) Extraction.
(10) Foreign entity of concern.
(11) FEOC-compliant.
(12) Manufacturing.
(13) Non-traceable battery material.
(i) In general.
(ii) [Reserved]
(14) Processing.
(15) Recycling.
(b) Due diligence.
(1) In general.
(2) Transition rule for non-traceable
battery materials.
(c) Excluded entity restriction.
(1) In general.
(2) Determination of FEOC-compliant
batteries.
(3) Determination of FEOC-compliant
battery cell.
(i) In general.
(ii) Temporary allocation-based deter-
mination for applicable critical materials
contained in constituent materials of a bat-
tery cell.
(A) In general.
(B) Allocation limited to applicable
critical minerals in the battery cell.
(C) Separate allocation for each class
of constituent materials.
(D) Allocation within each product line
of battery cells.
(E) Limitation on number of
FEOC-compliant battery cells.
(F) Termination of temporary alloca-
tion-based determination.
(iii) Transition rule for non-traceable
battery materials.
(4) Determination of FEOC-compliant
battery components and applicable critical
minerals.
(i) In general.
(ii) Applicable critical minerals.
(A) In general.
(B) Associated constituent materials.
(C) Exception for applicable critical
minerals not contained in the battery.
(D) Recycling.
(iii) Timing of determination of
FEOC-compliant status.
(iv) Examples.
(A) Example 1: Timing of FEOC compliance
determination.
(B) Example 2: Form of applicable critical min-
eral.
(C) Example 3: Recycling of applicable critical
mineral.
(5) Third-party manufacturers or sup-
pliers.
(d) Compliant-battery ledger.
(1) In general.
(2) Determination of number of batter-
ies.
(i) In general.
(ii) Upfront review.
(iii) Decrease or increase to compli-
ant-battery ledger.
(3) Tracking FEOC-compliant batter-
ies.
(4) Reconciliation of battery estimates.
(e) Rule for 2024.
(1) In general.
(2) Determination.
(f) Inaccurate attestations, certifica-
tions, or documentation.
(1) In general.
(2) Inadvertence.
(3) Intentional disregard of fraud.
(g) Examples.
(1) Example 1: In general.
(2) Example 2: Rules for third-party
suppliers.
(3) Example 3: Applicable critical min-
erals.
(4) Example 4: Comprehensive exam-
ple.
(h) Severability.
(i) Applicability date.
Par. 3. Section 1.30D-2, as proposed
to be added at 88 FR 23370 (April 17,
2023) and proposed to be amended at 88
FR 70310 (October 10, 2023), is amended
by revising paragraphs (a), (f), and (i) and
adding paragraphs (k), (l), and (m) to read
as follows:
§1.30D-2 Definitions for purposes of
section 30D.
(a) In general. The definitions in this
section apply for purposes of section 30D
of the Internal Revenue Code (Code) and
the section 30D regulations.
* * * * *
(f) Section 30D regulations. Section
30D regulations means §1.30D–1, this
section, and §§1.30D–3 through 1.30D–6.
* * * * *
(i) Applicability date. Paragraphs (a)
through (h) of this section apply to new
clean vehicles placed in service on or after
January 1, 2023, for taxable years end-
ing after April 17, 2023. Paragraphs (j)
through (m) of this section apply for new
clean vehicles placed in service on or after
January 1, 2024, for taxable years ending
after December 31, 2023.
* * * * *
(k) Manufacturer. A manufactur-
er means any manufacturer within the
meaning of the regulations prescribed by
the Administrator of the Environmental
Protection Agency (EPA) for purposes of
the administration of title II of the Clean
Air Act (42 U.S.C. 7521 et seq.) and as
defined in 42 U.S.C. 7550(1). If multiple
manufacturers are involved in the produc-
tion of a vehicle, the requirements provid-
ed in section 30D(d)(3) must be met by
the manufacturer who satisfies the report-
ing requirements of the greenhouse gas
emissions standards set by the EPA under
the Clean Air Act (42 U.S.C. 7521 et seq.)
for the subject vehicle.
(l) Qualified manufacturer. A quali-
fied manufacturer means a manufacturer
that meets the requirements described
in section 30D(d)(3). The term quali-
fied manufacturer does not include any
manufacturer whose qualified manufac-
turer status has been terminated by the

Bulletin No. 2024–2 379 January 8, 2024
Internal Revenue Service (IRS). The IRS
may terminate qualified manufacturer
status for fraud, intentional disregard,
or gross negligence with respect to any
requirements of section 30D, the section
30D regulations, or any guidance under
section 30D, including with respect to
the periodic written reports described
in section 30D(d)(3) and §1.30D-2(m)
and any attestations, documentation, or
certifications described in §1.30D-3(e)
and §1.30D-6(d), at the time and in the
manner provided in the Internal Revenue
Bulletin (see §601.601(d)(2)(ii)(a) of this
chapter). See §1.30D-6(f) for additional
rules regarding inaccurate determina-
tions and documentation.
(m) New clean vehicle. A new clean
vehicle means a vehicle that meets the re-
quirements described in section 30D(d). A
vehicle does not meet the requirements of
section 30D(d) if—
(1) The qualified manufacturer fails to
provide a periodic written report for such
vehicle prior to the vehicle being placed
in service, reporting the vehicle identifi-
cation number (VIN) of such vehicle and
certifying compliance with the require-
ment of section 30D(d);
(2) The qualified manufacturer pro-
vides incorrect information with respect
to the periodic written report for such ve-
hicle;
(3) The qualified manufacturer fails to
update its periodic written report in the
event of a material change with respect to
such vehicle; or
(4) For new clean vehicles placed in
service after December 31, 2024, the
qualified manufacturer fails to meet the
requirements of §1.30D-6(d).
Par. 4. Section 1.30D-3, as proposed to
be added at 88 FR 23370 (April 17, 2023),
is amended by:
a. Revising paragraph (d);
b Redesignating paragraphs (e) and (f)
as paragraphs (f) and (g);
c. Adding new paragraph (e); and
d. Revising newly redesignated
paragraph (g).
The revisions and addition read as fol-
lows:
§1.30D-3 Critical mineral and battery
component requirements.
* * * * *
(d) Excluded entities. For rules regard-
ing excluded entities, see §1.30D-6.
(e) Upfront review of battery com-
ponent and applicable critical minerals
requirements. For new clean vehicles
anticipated to be placed in service after
December 31, 2024, the qualified manu-
facturer must provide attestations, certifi-
cations and documentation demonstrating
compliance with the requirements of sec-
tion 30D(e), at the time and in the manner
provided in the Internal Revenue Bulletin
(see §601.601(d)(2)(ii)(a) of this chapter).
The IRS, with analytical assistance from
the Department of Energy, will review the
attestations, certifications, and documen-
tations.
* * * * *
(g) Applicability date. Paragraphs (a)
through (c) and (f) of this section apply to
new clean vehicles placed in service after
April 17, 2023, for taxable years ending
after April 17, 2023. Paragraphs (d) and
(e) of this section apply to new clean vehi-
cles placed in service on or after January
1, 2024, for taxable years beginning after
December 31, 2023.
Par. 5. Section 1.30D-6 is added to
read as follows:
§1.30D-6 Excluded entities.
(a) Definitions. This paragraph (a) pro-
vides definitions that apply for purposes
of section 30D(d)(7) of the Internal Reve-
nue Code (Code) and this section.
(1) Applicable critical mineral. Appli-
cable critical mineral means an applica-
ble critical mineral as defined in section
45X(c)(6) of the Code.
(2) Assembly. Assembly, with respect to
battery components, means the process of
combining battery components into bat-
tery cells and battery modules.
(3) Battery. Battery, for purposes of
a new clean vehicle, means a collection
of one or more battery modules, each of
which has two or more electrically con-
figured battery cells in series or parallel,
to create voltage or current. The term
battery does not include items such as
thermal management systems or other
parts of a battery cell or module that do
not directly contribute to the electro-
chemical storage of energy within the
battery, such as battery cell cases, cans,
or pouches.
(4) Battery cell. Battery cell means a
combination of battery components (other
than battery cells) capable of electrochem-
ically storing energy from which the elec-
tric motor of a new clean vehicle draws
electricity.
(5) Battery cell production facility.
Battery cell production facility means a
facility in which battery cells are manu-
factured or assembled.
(6) Battery component. Battery compo-
nent means a component that forms part
of a battery and that is manufactured or
assembled from one or more components
or constituent materials that are combined
through industrial, chemical, and physical
assembly steps. Battery components may
include, but are not limited to, a cathode
electrode, anode electrode, solid metal
electrode, separator, liquid electrolyte,
solid state electrolyte, battery cell, and
battery module. Constituent materials are
not a type of battery component, although
constituent materials may be manufac
-
tured or assembled into battery compo-
nents. Some battery components may be
made entirely of inputs that do not contain
constituent materials.
(7) Compliant-battery ledger. A com-
pliant-battery ledger, for a qualified man-
ufacturer for a calendar year, is a ledger
established under the rules of paragraph
(d) of this section that tracks the number
of available FEOC-compliant batteries for
such calendar year.
(8) Constituent materials. Constituent
materials means materials that contain
applicable critical minerals and that are
employed directly in the manufacturing of
battery components. Constituent materials
may include, but are not limited to, pow-
ders of cathode active materials, powders
of anode active materials, foils, metals for
solid electrodes, binders, electrolyte salts,
and electrolyte additives, as required for a
battery cell.
(9) Extraction. Extraction means the
activities performed to harvest minerals
or natural resources from the ground or
a body of water. Extraction includes, but
is not limited to, operating equipment
to harvest minerals or natural resources
from mines and wells, or to extract min-
erals or natural resources from the waste
or residue of prior extraction. Extraction
concludes when activities are performed
to convert raw mined or harvested prod-

January 8, 2024 380 Bulletin No. 2024–2
ucts or raw well effluent to substances that
can be readily transported or stored for
direct use in critical mineral processing.
Extraction includes the physical processes
involved in refining. Extraction does not
include the chemical and thermal process-
es involved in refining.
(10) Foreign entity of concern. Foreign
entity of concern (FEOC) has the meaning
provided in section 40207(a)(5) of the In-
frastructure Investment and Jobs Act (42
U.S.C. 18741(a)(5)) and guidance pro-
mulgated thereunder by the Department
of Energy (DOE).
(11) FEOC-compliant. FEOC-compli-
ant means in compliance with the appli-
cable excluded entity requirement under
section 30D(d)(7). In particular--
(i) A battery component (other than a
battery cell), with respect to a new clean
vehicle placed in service after December
31, 2023, is FEOC-compliant if it is not
manufactured or assembled by a FEOC;
(ii) An applicable critical mineral, with
respect to a new clean vehicle placed
in service after December 31, 2024, is
FEOC-compliant if it is not extracted, pro-
cessed, or recycled by a FEOC;
(iii) A battery cell, with respect to a
new clean vehicle placed in service after
December 31, 2023, and before January 1,
2025, is FEOC-compliant if it is not man-
ufactured or assembled by a FEOC and
it contains only FEOC-compliant battery
components;
(iv) A battery cell, with respect to a
new clean vehicle placed in service after
December 31, 2024, is FEOC-compliant if
it is not manufactured or assembled by a
FEOC and it contains only FEOC-compli-
ant battery components and FEOC-com-
pliant applicable critical minerals; and
(v) A battery, with respect to a new
clean vehicle placed in service after De-
cember 31, 2023, is FEOC-compliant if
it contains only FEOC-compliant battery
components (other than battery cells) and
FEOC-compliant battery cells (as de-
scribed in paragraph (a)(11)(iii) or (iv) of
this section, as applicable).
(12) Manufacturing. Manufacturing,
with respect to a battery component,
means the industrial and chemical steps
taken to produce a battery component.
(13) Non-traceable battery materi-
als—(i) In general. Non-traceable battery
materials mean specifically identified,
low-value battery materials that originate
from multiple sources and are commin-
gled during refining, processing, or other
production processes by suppliers to such
a degree that the qualified manufacturer
cannot, due to current industry practice,
feasibly determine and attest to the origin
of such battery materials. For this purpose,
low-value battery materials are those that
have low value compared to the total val-
ue of the battery.
(ii) [Reserved].
(14) Processing. Processing means the
non-physical processes involved in the re-
fining of non-recycled substances or ma-
terials, including the treating, baking, and
coating processes used to convert such
substances and materials into constituent
materials. Processing includes the chemi-
cal or thermal processes involved in refin-
ing. Processing does not include the phys-
ical processes involved in refining.
(15) Recycling. Recycling means the
series of activities during which recycla-
ble materials containing critical minerals
are transformed into specification-grade
commodities and consumed in lieu of
virgin materials to create new constituent
materials; such activities result in new
constituent materials contained in the bat-
tery from which the electric motor of a
new clean vehicle draws electricity.
(b) Due diligence—(1) In general.
The qualified manufacturer must conduct
due diligence with respect to all battery
components and applicable critical min-
erals (and associated constituent mate-
rials) that are relevant to determining
whether such components or minerals
are FEOC-compliant. Such due diligence
must comply with standards of tracing
for battery materials available in the in-
dustry at the time of the attestation or cer-
tification that enable the manufacturer to
know with reasonable certainty the prov-
enance of applicable critical minerals,
constituent materials, and battery compo-
nents. Reasonable reliance on a supplier
attestation or certification will be consid-
ered due diligence if the qualified man-
ufacturer does not know or have reason
to know after its due diligence that such
supplier attestation or certification is in-
correct. Due diligence must be conducted
by the qualified manufacturer prior to its
determining information necessary to es-
tablish any compliant-battery ledger un-
der paragraph (d) of this section, and on
an ongoing basis.
(2) Transition rule for non-traceable
battery materials. For any new clean ve-
hicles for which the qualified manufac-
turer provides a periodic written report
before January 1, 2027, the due diligence
requirement of paragraph (b)(1) of this
section may be satisfied by excluding
identified non-traceable battery materials.
To use this transition rule, qualified man-
ufacturers must submit a report during the
up-front review process described in para-
graph (d)(2)(ii) of this section demonstrat-
ing how the qualified manufacturer will
comply with the excluded entity restric-
tions once the transition rule is no longer
in effect.
(c) Excluded entity restriction—(1) In
general. In the case of any new clean ve-
hicle placed in service after December 31,
2023, the batteries from which the electric
motor of such vehicle draws electricity
must be FEOC-compliant. A serial num-
ber or other identification system must
be used to physically track FEOC-com-
pliant batteries to specific new clean ve-
hicles. The determination that a battery is
FEOC-compliant is made as follows:
(i) Step 1. First, the qualified manu-
facturer determines whether battery com-
ponents and applicable critical minerals
(and associated constituent materials)
are FEOC-compliant, in accordance with
paragraph (c)(4) of this section.
(ii) Step 2. Next, the FEOC-compliant
battery components and FEOC-compliant
applicable critical minerals (and associ-
ated constituent materials) are physically
tracked to specific battery cells, in ac-
cordance with paragraph (c)(3)(i) of this
section. Alternatively, FEOC-compliant
applicable critical minerals and associat-
ed constituent materials (but not battery
components) may be allocated to battery
cells, without physical tracking, in accor-
dance with paragraph (c)(3)(ii) of this sec-
tion. In addition, the determination under
paragraph (c)(4) of this section may be
made by applying the transition rule for
non-traceable battery materials, in accor-
dance with paragraph (c)(3)(iii) of this
section.
(iii) Step 3. Finally, the battery com-
ponents, including battery cells, are phys-
ically tracked to specific batteries, in

Bulletin No. 2024–2 381 January 8, 2024
accordance with paragraph (c)(2) of this
section.
(2) Determination of FEOC-compliant
batteries. The determination that a bat-
tery is FEOC-compliant must be made by
physically tracking FEOC-compliant bat-
tery components (including battery cells)
to such battery. With respect to battery
cells, a serial number or other identifica-
tion system must be used to physically
track FEOC-compliant battery cells to
such batteries.
(3) Determination of FEOC-compli-
ant battery cell—(i) In general. Except
as provided in paragraph (c)(3)(ii) of this
section, the determination that a battery
cell contains FEOC-compliant battery
components and FEOC-compliant appli-
cable critical minerals and their associ-
ated constituent materials must be made
by physically tracking FEOC-compliant
battery components to specific batteries
cells and by physically tracking the mass
of FEOC-compliant applicable critical
minerals and their associated constituent
materials to specific batteries cells.
(ii) Temporary allocation-based de-
termination for applicable critical ma-
terials and associated constituent mate-
rials of a battery cell—(A) In general.
The determination that a battery cell is
a FEOC-compliant battery cell may be
based on an allocation of available mass,
produced or contracted for, of applicable
critical minerals and their associated con-
stituent materials to specific battery cells
manufactured or assembled in a battery
cell production facility, without the phys-
ical tracking of mass of applicable critical
minerals and associated constituent mate-
rials to specific battery cells.
(B) Allocation limited to applicable
critical minerals in the battery cell. The
rules of this paragraph (c)(3)(ii) are lim-
ited to applicable critical minerals and
their associated constituent materials that
are incorporated into a battery cell or its
battery components. Battery components
must be physically tracked.
(C) Separate allocation for each class
of constituent materials. Any allocation
under this paragraph (c)(3)(ii) with re-
spect to the mass of an applicable critical
mineral must be made within the type of
associated constituent materials (such as
powders of cathode active materials, pow-
ders of anode active materials, or foils) in
which such mineral is contained. Masses
of an applicable critical mineral may not
be aggregated across constituent materials
with which such applicable critical miner-
al is not associated, and an allocation of a
mass of an applicable critical mineral may
not be made from one type of constituent
material to another. For example, assume
that M, a qualified manufacturer, operates
a battery cell production facility. M manu-
factures a line of battery cells that contains
applicable critical mineral Z contained in
constituent material 1 and applicable crit-
ical mineral Z contained in constituent
material 2. With respect to constituent ma-
terial 1, M procures 20,000,000 kilograms
(kg) of applicable critical mineral Z for the
battery cell production facility, of which
4,000,000 kg are FEOC-compliant and
16,000,000 kg are not FEOC-compliant.
With respect to constituent material 2, M
procures another 15,000,000 kg of appli-
cable critical mineral Z for the battery cell
production facility, of which 7,500,000 kg
are FEOC-compliant and 7,500,000 kg
are not FEOC-compliant. M determines
which battery cells are FEOC-compliant
through an allocation-based determina-
tion with respect to battery cells manu-
factured or assembled in the battery cell
production facility. Under this paragraph
(c)(3)(ii)(C), any allocation with respect
to the mass of applicable critical mineral
Z must be made within the type of con-
stituent materials in which such mineral
is contained. Thus, M may not aggregate
the 4,000,000 kg mass of FEOC-com-
pliant applicable critical mineral Z con-
tained in constituent material 1 with the
7,500,000 kg mass of FEOC-compliant
applicable critical mineral Z contained
in constituent material 2, and allocations
may not be made from constituent materi-
al 1 to constituent material 2. As a result,
overall FEOC compliance is constrained
by the 20 percent of constituent material
1 that is FEOC-compliant due to having
4,000,000 kg of applicable critical miner-
al Z, even though 33 percent (7,500,000
+ 4,000,000)/(20,000,000 + 15,000,000)
of the total mass of critical mineral Z is
compliant.
(D) Allocation within each product line
of battery cells. Any allocation under this
paragraph (c)(3)(ii) with respect to appli-
cable critical minerals and their associated
constituent materials must be allocated
within one or more specific battery cell
product lines of the battery cell production
facility.
(E) Limitation on number of
FEOC-compliant battery cells. If a quali-
fied manufacturer uses an allocation-based
determination described in this paragraph
(c)(3)(ii), the number of FEOC-compliant
battery cells that can be produced from
such allocation may not exceed the total
number of battery cells for which there
is enough of every FEOC-compliant ap-
plicable critical mineral. That number
will necessarily be limited by the appli-
cable critical mineral that has the lowest
percentage of FEOC-compliant supply.
For example, if a qualified manufacturer
allocates applicable critical mineral A,
which is 20 percent FEOC-compliant and
applicable critical mineral B, which is 60
percent FEOC-compliant, to a battery cell
product line, no more than 20 percent of
the battery cells in that battery cell product
line will be treated as FEOC-compliant.
(F) Termination of temporary alloca-
tion-based determination. The rules of
this paragraph (c)(3)(ii) do not apply with
respect to any new clean vehicle for which
the qualified manufacturer is required to
provide a periodic written report after De-
cember 31, 2026.
(iii) Transition rule for non-traceable
battery materials. For any new clean vehi-
cles for which the qualified manufacturer
provides a periodic written report before
January 1, 2027, the determination of
whether a battery cell is FEOC-compliant
under this paragraph (c)(3) may be satis-
fied by excluding identified non-traceable
battery materials (and associated constitu-
ent materials). To use this transition rule,
qualified manufacturers must submit a
report during the up-front review process
described in paragraph (d)(2)(ii) of this
section demonstrating how the qualified
manufacturer will comply with the ex-
cluded entity restrictions once the transi-
tion rule is no longer in effect.
(4) Determination of FEOC-compli-
ant battery components and applicable
critical minerals—(i) In general. The
determination of whether battery compo-
nents and applicable critical minerals (and
their associated constituent materials) are
FEOC-compliant must be made prior to
any determination under paragraphs (c)(2)
and (3) of this section.

January 8, 2024 382 Bulletin No. 2024–2
(ii) Applicable critical minerals—(A)
In general. Except as provided in para-
graph (c)(4)(ii)(D) of this section, the de-
termination of whether an applicable criti-
cal mineral is FEOC-compliant takes into
account each step of extraction, process-
ing, or recycling through the step in which
such mineral is processed or recycled into
a constituent material, even if the mineral
is not in a form listed in section 45X(c)(6)
at every step.
(B) Associated constituent materials. A
constituent material is associated with an
applicable critical mineral if the applica-
ble critical mineral has been processed or
recycled into a constituent material, even
if that processing or recycling transformed
the mineral into a form not listed in sec-
tion 45X(c)(6).
(C) Exception for applicable critical
minerals not contained in the battery. An
applicable critical mineral is disregarded
for purposes of the determination under
this paragraph (c)(4) if it is fully con-
sumed in the production of the constitu-
ent material or battery component and no
longer remains in any form in the battery.
(D) Recycling. An applicable critical
mineral and associated constituent ma-
terial that is recycled is subject to the
determination under this paragraph (c)
(4) if the recyclable material contains an
applicable critical mineral, contains ma-
terial that was transformed from an appli-
cable critical mineral, or if the recyclable
material is used to produce an applicable
critical mineral at any point during the
recycling process. The determination of
whether an applicable critical mineral or
associated constituent material that is in-
corporated into a battery via recycling is
FEOC-compliant takes into account only
activities that occurred during the recy-
cling process.
(iii) Timing of determination of
FEOC-compliant status. Whether an enti-
ty is a FEOC is determined as of the time
of the entity’s performance of the relevant
activity, which for applicable critical min-
erals is the time of extraction, processing,
or recycling, and for battery components
is the time of manufacturing or assembly.
The determination of whether an applica-
ble critical mineral is FEOC-compliant
is determined at the end of processing or
recycling of the applicable critical miner-
al into a constituent material, taking into
account all applicable steps through and
including final processing or recycling.
(iv) Examples. The following examples
illustrate the rules under this paragraph (c)
(4):
(A) Example 1: Timing of FEOC compliance
determination. Mineral X, an applicable critical
mineral, was not extracted by a FEOC but was later
processed by a FEOC. Mineral X is not FEOC-com-
pliant because one step of the extraction and process-
ing was performed by a FEOC. Any battery contain-
ing Mineral X is not FEOC-compliant.
(B) Example 2: Form of applicable critical
mineral. Mineral Y is extracted by a FEOC and is
intended to be incorporated into the battery of an
electric vehicle. Mineral Y is not in a form listed in
section 45X(c)(6) at the time of such extraction, but
subsequently it is refined into an applicable critical
mineral form listed in section 45X(c)(6) by an entity
that is not a FEOC. Mineral Y is not FEOC-compli-
ant pursuant to this paragraph (c)(4) because it was
extracted by a FEOC, regardless of its form at the
time of extraction. Any battery containing Mineral Y
is not FEOC-compliant.
(C) Example 3: Recycling of applicable critical
mineral. Mineral Z, an applicable critical mineral
in a form listed in section 45X(c)(6), was processed
by a FEOC in a prior production process. Mineral Z
subsequently was derived from recyclable material
in a form not listed in section 45X(c)(6). Mineral Z
was recycled by an entity that is not a FEOC. Min-
eral Z is subject to a determination of whether it is
FEOC-compliant at the end of the recycling process,
because it was at one time an applicable critical min
-
eral. Mineral Z is FEOC-compliant pursuant to this
paragraph (c)(4) because it was not recycled by a
FEOC.
(5) Third-party manufacturers or sup-
pliers. The determinations under para-
graphs (c)(2) through (4) of this section
may be made by a third-party manufactur-
er or supplier that operates a battery cell
production facility provided that:
(i) The third-party manufacturer or sup-
plier performs the due diligence described
in paragraph (b) of this section;
(ii) The third-party manufacturer or
supplier provides the qualified manufac-
turer of the new clean vehicle information
sufficient to establish a basis for the deter-
minations under paragraphs (c)(2) through
(4) of this section, including information
related to the due diligence described in
paragraph (c)(5)(i) of this section;
(iii) The third-party manufacturer or
supplier is contractually required to pro-
vide the information in paragraph (c)(5)
(ii) of this section to the qualified manu-
facturer and is contractually required to
inform the qualified manufacturer of any
change in the supply chain that affects the
determinations of FEOC compliance un-
der paragraph (c)(2) and (4) of this sec-
tion; and
(iv) If there are multiple third-party
manufacturers or suppliers (such as a case
in which a qualified manufacturer con-
tracts with a battery manufacturer, who, in
turn, contracts with a battery cell manu-
facturer or supplier who operates a battery
cell production facility), the due diligence
and information requirements of this para-
graph (c) must be satisfied by each such
manufacturer or supplier either directly to
the qualified manufacturer or indirectly
through contractual relationships.
(d) Compliant-battery ledger—(1) In
general. For new clean vehicles placed
in service after December 31, 2024, the
qualified manufacturer must determine
and provide information to the IRS to es-
tablish a compliant-battery ledger for each
calendar year, as described in paragraphs
(d)(2)(i) and (ii) of this section. One com-
pliant-battery ledger may be established
for all vehicles for a calendar year, or
there may be separate ledgers for specific
models or classes of vehicles to account
for different battery cell chemistries or
differing quantities of cells in each battery.
(2) Determination of number of batter-
ies—(i) In general. To establish a compli-
ant-battery ledger for a calendar year, the
qualified manufacturer must determine the
number of batteries, with respect to new
clean vehicles (as described in section
30D(d) and §1.30D-2(m)) for which the
qualified manufacturer anticipates pro-
viding a periodic written report during the
calendar year, that it knows or reasonably
anticipates will be FEOC-compliant, pur-
suant to the requirements of paragraphs
(b) and (c) of this section. The determi-
nation is based on the battery components
and applicable critical minerals (and asso-
ciated constituent materials) that are pro-
cured or contracted for the calendar year
and that are known or reasonably antici-
pated to be FEOC-compliant battery com-
ponents or FEOC-compliant applicable
critical minerals, as applicable.
(ii) Upfront review. The qualified man-
ufacturer must attest to the number of
FEOC-compliant batteries determined un-
der paragraph (d)(2)(i) of this section and
provide the basis for the determination,
including attestations, certifications and
documentation demonstrating compliance
with paragraphs (b) and (c) of this section,

Bulletin No. 2024–2 383 January 8, 2024
at the time and in the manner provided in
the Internal Revenue Bulletin. The IRS,
with analytical assistance from the DOE,
will review the attestations, certifications,
and documentation. Once the IRS deter-
mines that the qualified manufacturer
provided the required attestations, certifi-
cations, and documentation, the IRS will
approve or reject the determined number
of FEOC-compliant batteries. The IRS
may approve the determined number in
whole or part. The approved number is
the initial balance in the compliant-battery
ledger.
(iii) Decrease or increase to compli-
ant-battery ledger—(A) Once the com-
pliant-battery ledger is established with
respect to a calendar year, the qualified
manufacturer must determine and take
into account any decrease in the number
of FEOC-compliant batteries for such cal-
endar year, and any of the prior three cal-
endar years for which the qualified man-
ufacturer had a compliant-battery ledger,
within 30 days of discovery. In addition,
the qualified manufacturer may determine
and take into account any increase in the
number of FEOC-compliant batteries.
Such determinations, and any supporting
attestations, certifications, and documen-
tation, must be provided on a periodic ba-
sis, in accordance with paragraph (d)(2)
(ii) of this section and the manner provid-
ed in the Internal Revenue Bulletin.
(B) The decrease described in para-
graph (d)(2)(iii)(A) of this section may
decrease the compliant-battery ledger be-
low zero, creating a negative balance in
the compliant-battery ledger.
(C) If any decrease described in para-
graph (d)(2)(iii)(A) of this section is de-
termined subsequent to the calendar year
to which it relates, the decrease must be
taken into account in the year in which the
change is discovered.
(D) Any remaining balance in the com-
pliant-battery ledger at the end of the cal-
endar year, whether positive or negative,
will be included in the compliant-battery
ledger for the subsequent calendar year.
If a qualified manufacturer has multiple
compliant-negative battery accounts, any
negative balance will first be included in
the compliant-battery ledger for the same
model or class of vehicles for the subse-
quent calendar year. However, if there is
no ledger for the same model or class of
vehicles in the subsequent calendar year,
the IRS can account for such negative bal-
ance in the ledger of a different model or
class of vehicles of the qualified manufac-
turer.
(3) Tracking FEOC-compliant bat-
teries. The compliant-battery ledger for
a calendar year must be updated to track
the qualified manufacturer’s available
FEOC-compliant batteries, by reducing
the balance in the ledger as the qualified
manufacturer submits periodic written re-
ports reporting the vehicle identification
numbers (VINs) of new clean vehicles as
eligible for the credit under section 30D,
at the time and in the manner provided in
the Internal Revenue Bulletin. If the bal-
ance in the compliant-battery ledger of
the qualified manufacturer for a calendar
year is zero or less than zero, the qualified
manufacturer may not submit additional
periodic written reports with respect to
section 30D until the number of available
FEOC-compliant batteries is increased as
described in paragraph (d)(2)(iii)(A) of
this section.
(4) Reconciliation of battery estimates.
After the end of any calendar year for
which a compliant-battery ledger is es-
tablished, the IRS may require a qualified
manufacturer to provide attestations, cer-
tifications, and documentation to support
the accuracy of the number of the qual-
ified manufacturer’s FEOC-compliant
batteries for such calendar year, including
with respect to any changes described in
paragraph (d)(2)(iii) of this section, at the
time and in the manner provided in the In-
ternal Revenue Bulletin.
(e) Rule for 2024--(1) In general. For
new clean vehicles that are placed in ser
-
vice after December 31, 2023, and prior
to January 1, 2025, the qualified manufac-
turer must determine whether the battery
components contained in vehicles satisfy
the requirements of section 30D(d)(7)(B)
and whether batteries contained in the ve-
hicle are FEOC-compliant under the rules
of paragraphs (b) and (c) of this section.
The qualified manufacturer must make
an attestation with respect to such deter-
minations at the time and in the manner
provided in the Internal Revenue Bulletin.
However, for any new clean vehicles for
which the qualified manufacturer provides
a periodic written report before the date
that is 30 days after the date these regula-
tions are finalized, provided that the qual-
ified manufacturer has determined that its
supply chains of each battery component
with respect such vehicles contain only
FEOC-compliant battery components:
(i) For purposes of paragraphs (c)(2)
and (3) of this section, the determination
of which battery cells or batteries, as ap-
plicable, contain FEOC-compliant battery
components may be determined without
physical tracking;
(ii) For purposes of paragraph (c)(2) of
this section, the determination of which
batteries contain FEOC-compliant battery
cells may be determined without physical
tracking (and without the use of a serial
number or other identification system);
and
(iii) For purposes of paragraph (c)(1)
of this section, the determination of which
vehicles contain FEOC-compliant batter-
ies may be determined, without physical
tracking (and without the use of a serial
number or other identification system).
(2) Determination. The determination
that a qualified manufacturer’s supply
chains of each battery component contain
only FEOC-compliant battery compo-
nents may be made with respect to specific
models or classes of vehicles.
(f) Inaccurate attestations, certifica-
tions or documentation—(1) In general.
If the IRS determines, with analytical as-
sistance from the DOE and after review
of the attestations, certification and doc-
umentation described in paragraph (d) of
this section, that a qualified manufacturer
has provided attestations, certifications, or
documentation that contain inaccurate in-
formation, it may take appropriate action
as described in paragraphs (f)(2) and (3)
of this section. Such action would affect
vehicles and qualified manufacturers on a
prospective basis.
(2) Inadvertence
. If the IRS determines
that the attestations, certifications or docu-
mentation for a specific new clean vehicle
contain errors due to inadvertence, the fol-
lowing may be required:
(i) The qualified manufacturer may
cure the errors identified, including by a
decrease in the compliant-battery ledger
as described in paragraph (d)(2)(iii) of
this section. If the qualified manufactur-
er has multiple compliant-battery ledgers,
the IRS may determine which ledger is to
be decreased.

January 8, 2024 384 Bulletin No. 2024–2
(ii) If the errors are not cured, in the
case of a new clean vehicle that has not
been placed in service but for which the
qualified manufacturer has submitted a
periodic written report certifying com-
pliance with the requirement of section
30D(d), such vehicle is no longer consid-
ered a new clean vehicle eligible for the
section 30D credit.
(iii) If the errors are not cured, in the
case of a new clean vehicle that has not
been placed in service and for which the
qualified manufacturer has not submitted
a periodic written report certifying com-
pliance with the requirement of section
30D(d), the qualified manufacturer may
not submit such periodic written report.
(iv) If the errors are not cured, in the
case of a new clean vehicle that has been
placed in service, the IRS may require a
decrease in the qualified manufacturer’s
compliant-battery ledger as described
in paragraph (d)(2)(iii) of this section.
If the qualified manufacturer has multi-
ple compliant-battery ledgers, the IRS
may determine which ledger is to be de-
creased.
(3) Intentional disregard or fraud. If
the IRS determines that a qualified man-
ufacturer intentionally disregarded at-
testation, certification, or documentation
requirements or reported information
fraudulently or with intentional disregard,
the following may be required:
(i) All vehicles of the qualified manu-
facturer that have not been placed in ser-
vice may no longer be considered new
clean vehicles eligible for the section 30D
credit.
(ii) The IRS may terminate the written
agreement between the IRS and the manu-
facturer, thereby terminating the manufac-
turer’s status as a qualified manufacturer
as described in §1.30D-2(l). The manufac-
turer would be required to submit a new
written agreement to reestablish qualified
manufacturer status at the time and in the
manner provided in the Internal Revenue
Bulletin.
(g) Examples. The following examples
illustrate the rules under paragraphs (b)
through (d) of this section:
(1) Example 1: In general—(i) Facts. M is a
manufacturer of new clean vehicles and batteries.
M also manufactures or assembles battery cells at its
own battery cell production facility. M manufactures
a line of new clean vehicles that it anticipates will be
placed in service in calendar year 2025. Each vehi-
cle contains one battery, and each battery contains
1,000 battery cells. All battery cells are produced at
the same battery cell production facility. The battery
cells are not manufactured or assembled by a FEOC.
Each battery cell contains 10 mass of battery compo-
nent A. M has procured or is under contract to pro-
cure 10,000,000 mass of battery component A for the
battery cell production facility, of which 6,000,000
mass is from supplier 1 and 4,000,000 mass is from
supplier 2.
(ii) Analysis. (A) Under paragraph (b) of this
section, M must conduct due diligence on all battery
components and applicable critical minerals (and as-
sociated constituent materials) that are contained in
the battery to determine whether such components or
minerals are FEOC-compliant.
(B) Under paragraph (c)(4) of this section, M
must first determine whether the battery components
and applicable critical minerals (and associated con-
stituent materials) are FEOC-compliant. From its due
diligence, M determines that, of the 10,000,000 mass
of battery component A, the 6,000,000 mass from
supplier 1 is FEOC-compliant while the 4,000,000
mass from supplier 2 is not FEOC-compliant. M de-
termines that all other battery components and ap-
plicable critical minerals (and associated constituent
materials) of the battery cell are FEOC-compliant,
that the battery cell is not manufactured or assembled
by a FEOC, and that all battery components (exclud-
ing components of the battery cell) of the battery are
FEOC-compliant.
(C) Under paragraph (c)(3) of this section, M
must determine which battery cells are FEOC-com-
pliant through the physical tracking of the 6,000,000
mass of FEOC-compliant battery component A to de-
termine which 600,000 (6,000,000/10) battery cells
are FEOC-compliant. Under paragraph (c)(2) of this
section, M must use a serial number or other iden-
tification system to track the 600,000 FEOC-com-
pliant battery cells to 600 (600,000/1,000) specific
batteries.
(D) Under paragraph (d)(1) of this section, a
compliant-battery ledger must be established for cal-
endar year 2025. For purposes of paragraph (d)(2)
(i) of this section, M determines that it will manu-
facture 600 batteries for calendar year 2025 that are
FEOC-compliant. Under paragraph (d)(2)(ii) of this
section, M attests to the 600 FEOC-compliant bat-
teries and provides the basis for the determination,
including attestations, certifications, and documenta-
tion demonstrating compliance with paragraphs (b)
and (c) of this section. Once the IRS, with analytical
assistance from the DOE, approves the number, a
compliant-battery ledger is established with a bal-
ance of 600 FEOC-compliant batteries.
(E) M manufactures 100 vehicles that it antici-
pates will be placed in service in 2025, for which it
provides periodic written reports providing the VINs
of the vehicles and indicating that such vehicles
qualify for the section 30D credit. Under paragraph
(d)(3) of this section, the compliant-battery ledger
is updated to track the number of FEOC-compliant
batteries. The number of batteries contained in the
compliant-battery ledger is reduced from 600 to 500.
Assuming all of the other requirements of section
30D and the regulations thereunder are met, the 100
vehicles are new clean vehicles that qualify for pur-
poses of section 30D.
(2) Example 2: Rules for third-party suppliers—
(i) Facts. The facts are the same as example 1, except
that M contracts with BM, a battery manufacturer,
for the provision of batteries, and BM contracts with
BCS, a battery cell supplier that operates a battery
cell production facility, for the provision of battery
cells.
(ii) Analysis. Under paragraph (c)(5) of this
section, BCS may make the determination in para-
graphs (c)(2) through (4) of this section, provided
that M, BM and BCS perform due diligence as de-
scribed in paragraph (b) of this section. In addition,
BM and BCS must provide M with information
sufficient to establish a basis for the determinations
under paragraphs (c)(2) through (4) of this section,
including information related to due diligence. Fi-
nally, BM and BCS must be contractually required
to provide the required information to M, and must
also be required to inform the qualified manufac-
turer of any change in supply chains that affects the
determinations of FEOC compliance under para-
graphs (c)(2) and (4) of this section. The contrac-
tual requirement may be satisfied if BM and BCS
each have the contractual obligation to M. Alterna-
tively, it may be satisfied if BCS has a contractual
obligation to BM and BM, in turn, has a contractual
obligation to M.
(3) Example 3: Applicable critical minerals—(i)
Facts. The facts are the same as example 1. In addi-
tion, each battery cell contains 20 kilograms (kgs) of
applicable critical mineral Z contained in a constitu-
ent material. M has procured or is under contract to
20,000,000 kgs of Z for the battery cell production
facility, of which 4,000,000 kgs are from supplier 3
and 16,000,000 kgs are from supplier 4.
(ii) Analysis. The analysis is the same as in ex-
ample 1. In addition, from its due diligence, M de-
termines that of the 20,000,000 kg of applicable
critical mineral Z, the 4,000,000 kg from supplier
3 is FEOC-compliant while the 16,000,000 kg from
supplier 4 is not FEOC-compliant. Under paragraph
(c)(3) of this section, M may determine which bat-
tery cells are FEOC-compliant through the physical
tracking of the 4,000,000 kg of FEOC-compliant ap-
plicable critical mineral Z to 200,000 (4,000,000/20)
of the battery cells that also contain battery compo-
nent A, in order to determine which 200,000 battery
cells are FEOC-compliant. Alternatively, M may de-
termine which 200,000 battery cells are FEOC-com-
pliant through an allocation of applicable critical
mineral Z (but not battery component A) to battery
cells, without physical tracking, under paragraph (c)
(3)(ii) of this section. Under paragraph (c)(2) of this
section, M must use a serial number or other iden-
tification system to track the 200,000 FEOC-com-
pliant battery cells to 200 (200,000/1,000) specific
batteries.
(4) Example 4: Comprehensive example—(i)
Facts. M is a manufacturer of new clean vehicles
and batteries. M also manufactures or assembles bat-
tery cells at its own battery cell production facility.
M manufactures a line of new clean vehicles. Each
vehicle contains one battery. All battery cells are
produced at the same battery cell production facility.
The battery cells are not manufactured or assembled
by a FEOC. Each battery contains 1,000 NMC 811
battery cells. M anticipates manufacturing 1,000,000
such battery cells for a line of new clean vehicles

Bulletin No. 2024–2 385 January 8, 2024
that it anticipates will be placed in service in calen-
dar year 2025.
(A) Each battery cell contains 1 cathode elec-
trode, 1 anode electrode, 1 separator, and 1 liquid
electrolyte. Thus, M procures 1,000,000 of each
battery component for the battery cell production
facility.
(B) In addition, each NMC 811 cathode incorpo-
rates cathode active material (a constituent material)
produced using 2.5 kg of applicable critical minerals,
consisting of 0.5 kg of lithium hydroxide, 1.6 kg of
nickel sulfate, 0.2 kg of cobalt sulfate, and 0.2 kg of
manganese sulfate. Thus, M procures 2,500 metric
tons (2.5 kg * 1,000,000 / 1,000) of applicable crit-
ical minerals for the battery cell production facility,
resulting in purchase agreements for 500 metric tons
of lithium, 1,600 metric tons of nickel, 200 metric
tons of cobalt, and 200 metric tons of manganese.
(ii) Analysis. (A) Under §1.30D-6(b), M must
conduct due diligence on all battery components and
applicable critical minerals (and associated constit-
uent materials) that are contained in the battery to
determine whether such components or minerals are
FEOC-compliant.
(B) Under paragraph (c)(4) of this section, M
must first determine whether the battery components
and applicable critical minerals (and associated
constituent materials) are FEOC-compliant. From
its due diligence M determines that, of the cath-
ode electrodes, 600,000 are not manufactured by a
FEOC and are therefore FEOC-compliant; 400,000
are manufactured by a FEOC and are therefore
non-compliant. Of the critical minerals that M has
procured, M determines that 250 metric tons of lith-
ium hydroxide, 1,200 metric tons of nickel sulfate,
and all of the cobalt sulfate and manganese sulfate
are FEOC-compliant. All other battery components
and applicable critical minerals of the battery cells
are FEOC-compliant.
(C) Under paragraph (c)(3) of this section, M
must determine which battery cells are FEOC-com-
pliant through the physical tracking of battery com-
ponents. M may determine which battery cells are
FEOC-compliant through the physical tracking of
applicable critical minerals. Alternatively, M may
determine which battery cells are FEOC-compliant
through an allocation of applicable critical minerals
(and associated constituent materials) but not battery
components.
(D) Under an allocation-based determination,
M has procured 500 metric tons of lithium hydrox-
ide incorporated into a constituent material for the
battery cell production facility, of which 50 percent
(250 / 500 metric tons) is FEOC-compliant. M has
procured 1,600 metric tons of nickel sulfate incor-
porated into a constituent material for the battery
cell production facility, of which 75 percent (1,200
/ 1,600 metric tons) is FEOC-compliant. Since the
lithium hydroxide is the least compliant applica-
ble critical mineral or component, M allocates the
FEOC-compliant lithium hydroxide mass to 50
percent or 500,000 (50 percent * 1,000,000) of the
total battery cells, and to battery cells that contain
FEOC-compliant cathode electrodes and have been
allocated FEOC-compliant nickel sulfate. Under
paragraph (c)(2)(ii)(E) of this section, the quanti-
ty of FEOC-compliant battery cells is limited by
the applicable critical mineral (lithium hydrox-
ide) that has the lowest percentage (50 percent) of
FEOC-compliant supply.
(E) Under paragraph (c)(2) of this section, M
must use a serial number or other identification sys-
tem to track the 500,000 FEOC-compliant battery
cells to 500 (500,000/1,000) specific batteries.
(F) Under paragraph (d)(1) of this section, a
compliant-battery ledger must be established for cal-
endar year 2025. For purposes of paragraph (d)(2)
(i) of this section, M determines that it will manu-
facture 500 batteries for calendar year 2025 that are
FEOC-compliant. Under paragraph (d)(2)(ii) of this
section, M attests to the 500 FEOC-compliant bat-
teries and provides the basis for the determination,
including attestations, certifications, and documenta-
tion demonstrating compliance with paragraphs (b)
and (c) of this section. Once the IRS, with analytical
assistance from the DOE, has approved the number,
a compliant-battery ledger is established with a bal-
ance of 500 FEOC-compliant batteries.
(h) Severability. The provisions of this
section are separate and severable from
one another. If any provision of this sec-
tion is stayed or determined to be invalid,
it is the agency’s intention that the remain-
ing provisions will continue in effect.
(i) Applicability date. This section ap-
plies to new clean vehicles placed in ser-
vice after December 31, 2023.
Douglas W. O’Donnell,
Deputy Commissioner for Services and
Enforcement.
(Filed by the Office of the Federal Register December
1, 2023, 8:45 a.m., and published in the issue of the
Federal Register for December 4, 2023, 88 FR 84098)

Bulletin No. 2024–2 i January 8, 2024
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior rul-
ing is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previous-
ly published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cas-
es in litigation, or the outcome of a Ser-
vice study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI
—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

January 8, 2024 ii Bulletin No. 2024–2
Numerical Finding List
1
Bulletin 2024–2
Announcements:
2024-1, 2024-02 I.R.B. 363
2024-3, 2024-02 I.R.B. 364
Notices:
2024-1, 2024-02 I.R.B. 314
2024-2, 2024-02 I.R.B. 316
2024-3, 2024-02 I.R.B. 338
2024-4, 2024-02 I.R.B. 343
2024-5, 2024-02 I.R.B. 347
2024-6, 2024-02 I.R.B. 348
2024-7, 2024-02 I.R.B. 355
2024-8, 2024-02 I.R.B. 356
2024-9, 2024-02 I.R.B. 358
2024-11, 2024-02 I.R.B. 360
Proposed Regulations:
REG-118492-23, 2024-02 I.R.B. 366
Revenue Procedures:
2024-1, 2024-01 I.R.B. 1
2024-2, 2024-01 I.R.B. 119
2024-3, 2024-01 I.R.B. 143
2024-4, 2024-01 I.R.B. 160
2024-5, 2024-01 I.R.B. 262
2024-7, 2024-01 I.R.B. 303
Revenue Rulings:
2024-1, 2024-02 I.R.B. 307
2024-2, 2024-02 I.R.B. 311
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin
2023–52, dated December 26, 2023.

Bulletin No. 2024–2 iii January 8, 2024
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2024–2
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2023–27 through 2023–52 is in Internal Revenue Bulletin
2023–52, dated December 26, 2023.

Internal Revenue Service
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