Instructions for Form 7220

Instructions for Form 7220

(December 2025)

Prevailing Wage and Apprenticeship (PWA) Verification and Corrections

Section references are to the Internal Revenue Code

unless otherwise noted.

General Instructions

Future Developments

For the latest information about developments related to

Form 7220 and its instructions, such as legislation

enacted after they were published, go to IRS.gov/

Form7220.

What’s New

New Form 7220. Form 7220, Prevailing Wage and

Apprenticeship (PWA) Verification and Corrections, will be

used to report information if you’re claiming increased

credit or deduction amounts for satisfying certain PWA

requirements. This form is also used to calculate any

related penalties.

Purpose of Form

Use Form 7220 to report information for each facility that

you’re claiming increased credit or deduction amounts for

satisfying certain PWA requirements.

Note: For purposes of these instructions only, the term

“facility” also includes property, project, technology,

equipment, or residence, as applicable.

The increased credit or deduction amounts for

satisfying certain PWA requirements can be claimed on

the following forms.

• Form 3468, Investment Credit, Part III, V, or VI.

• Form 7205, Energy Efficient Commercial Buildings

Deduction.

• Form 7210, Clean Hydrogen Production Credit.

• Form 7211, Clean Electricity Production Credit.

• Form 7213, Nuclear Power Production Credit, Part II.

• Form 7218, Clean Fuel Production Credit.

• Form 8835, Renewable Electricity Production Credit.

• Form 8908, Energy Efficient Home Credit.

• Schedule A (Form 8911), Alternative Fuel Vehicle

Refueling Property, Part II.

• Form 8933, Carbon Oxide Sequestration Credit.

If applicable, file a separate Form 7220 for each facility

for which you’re claiming increased credit or deduction

amounts. For example, if you filed three Forms 8835 with

increased credit amounts for satisfying certain PWA

requirements, you must submit three Forms 7220.

You must file a separate Form 7220 to report ongoing

compliance with the prevailing wage requirements for

alterations or repairs on facilities placed in service in a

prior year that you claimed the increased credit or

deduction amounts.

Jan 7, 2026

Use Form 7220 to also calculate any penalties due to

failing to satisfy certain PWA requirements when

increased credit or deduction amounts were claimed.

Beginning of Construction (BOC) and One

Megawatt Exceptions

If you’re claiming the increased credit or deduction

amounts and satisfy the BOC or the One Megawatt

exception, you’re not required to file Form 7220. For more

information, see T.D. 9998, available at IRS.gov/irb/

2024-34_IRB#TD-9998; T.D. 10015, available at

IRS.gov/irb/2024-52_IRB#TD-10015; and T.D. 10024,

available at IRS.gov/irb/2025-12_IRB#TD-10024.

Prevailing Wage Requirements

Note: For purposes of these instructions only, the term

“construction” also includes re-equipping, expansion,

establishment, or installation (as applicable).

To meet the prevailing wage requirements with respect

to any qualified facility, a taxpayer must ensure that any

laborers and mechanics employed by the taxpayer or any

contractor or subcontractor in:

• The construction of such facility, and

• The alteration or repair of such facility (with respect to

any tax year, for any portion of such tax year that is within

the 10-year period beginning on the date the qualified

facility is originally placed in service), are paid wages at

rates not less than the prevailing rates.

The following apply.

• The section 45U nuclear power production credit

requires that laborers and mechanics be paid wages at

rates not less than the prevailing rates for alterations or

repairs of the facility. There are no prevailing wage

requirements during the construction of the facility. For

more information, see section 45U(d).

• For the section 45Q carbon oxide sequestration credit,

the prevailing wage requirement period for alterations and

repairs of facilities is 12 years after the facility was

originally placed in service. For more information, see

section 45Q(h).

• The section 30C alternative fuel vehicle refueling

property credit, the section 45L new energy efficient home

credit, the section 179D energy efficient commercial

buildings deduction, and the section 48C qualifying

advanced energy project credit require that laborers and

mechanics be paid wages at rates not less than the

prevailing rates during the construction of the facility.

There are no prevailing wage requirements for alteration

or repair.

• For the section 48 energy credit and the section 48E

clean electricity investment credit, the prevailing wage

requirement period for alterations and repairs of the

project is 5 years beginning on the date such project is

originally placed in service. The increased credit amount

is subject to recapture during the 5-year period following

Instructions for Form 7220 (12-2025) Catalog Number 95579M

Department of the Treasury Internal Revenue Service www.irs.gov

the placed-in-service date if the prevailing wage

requirement is not satisfied with respect to any alteration

or repair during such period. For more information, see

Regulations sections 1.48-13(c) and 1.48E-3(e).

• For the section 45Z clean fuel production credit, if the

facility was placed in service before 2025, the prevailing

wage requirements apply only to any alteration or repair of

a facility that is performed after 2024. See section 45Z(f)

(6) and Regulations section 1.45Z-3. Prevailing wage

requirements apply to any construction, alteration, or

repair of a facility placed in service after 2024.

Correction and Penalty Related to Failure to

Satisfy Prevailing Wage Requirements

If you fail to meet the prevailing wage requirements, you

will still be eligible for the increased amount by making

certain correction and penalty payments if, for all laborers

or mechanics paid wages below the prevailing wage rate,

you:

• Pay each laborer or mechanic the sum of (i) the

difference between the amount of wages paid to the

laborer or mechanic during the period and the amount of

wages required to be paid to the laborer or mechanic

during that period in order to meet the prevailing wage

requirements, and (ii) interest on the amount under (i) at

the underpayment rate established under section 6621

(determined by substituting six percentage points for three

percentage points in section 6621(a)(2)) for the applicable

period; and

• Pay a penalty of $5,000 multiplied by the total number

of laborers and mechanics who were paid wages at a rate

below the prevailing wage rate described in section 45(b)

(7)(A) for any period during the year.

For more information, see Regulations section 1.45-7(c).

Note: The penalty payment is waived if you make

correction payments by the last day of the first month

following the end of the calendar quarter when the failure

occurred, and either:

• The failure occurred in less than 10% of pay periods of

the calendar year (or part thereof), or

• Total underpayments during the calendar year (or part

thereof) weren’t more than 5% below the prevailing wage

rate amount.

Apprenticeship Requirements

During the construction of a facility, you must satisfy the

apprenticeship requirements. The apprenticeship

requirements include three components: a labor hours

requirement, a ratio requirement, and a participation

requirement.

• The taxpayer must ensure that depending on when

construction began, 10% to 15% of the total labor hours

performed in the construction, alteration, or repair of the

facility are performed by qualified apprentices from a

registered apprenticeship program.

• The taxpayer must ensure that the applicable ratio of

apprentices to journeyworkers established by the

registered apprenticeship program are met for apprentices

working on the facility each day.

• Any taxpayer (or contractor or subcontractor) that

employs four or more individuals in the construction,

alteration, or repair of the facility must also hire at least

one qualified apprentice.

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For more information, see section 45(b)(8).

The section 45L new energy efficient home credit and

the section 45U nuclear power production credit don’t

have apprenticeship requirements.

Good Faith Effort Exception

You will be deemed to have satisfied the apprenticeship

requirements if you requested qualified apprentices from a

registered apprenticeship program, and:

• The request was denied (as long as you and your

contractors didn’t refuse to comply with the registered

apprenticeship program requirements), or

• The registered apprenticeship program did not respond

within 5 days.

See Regulations section 1.45-8(f)(1) for more information

and examples.

See Registered Apprenticeship Program, later.

Apprenticeship Cure Provision

If the Good Faith Effort Exception doesn’t apply, you will

be deemed to have satisfied the apprenticeship

requirements if you make a penalty payment to the IRS.

The penalty amount is $50 multiplied by the total labor

hours for which the labor hours requirement and/or the

participation requirement was not satisfied with respect to

the construction, alteration, or repair work of the facility.

For more information, see Regulations section 1.45-8(f)

(2).

Project Labor Agreements (PLAs)

The penalty payment required to cure a failure to satisfy

the prevailing wage requirements or the apprenticeship

requirements does not apply to the construction,

alteration, or repair work of a qualified facility if the work is

done pursuant to a qualifying PLA and any correction

payment owed to any laborer or mechanic is paid on or

before the date on which you claim the increased amount

of credits or deduction. For more information, see

Regulations sections 1.45-7(c)(6)(ii) and 1.45-8(f)(2)(v).

Special rules apply for PLAs under section 45U,

Zero-emission nuclear power production credit. See

Regulations section 1.45U-3(b) for more information.

Definitions

Bona Fide Fringe Benefits

The term “bona fide fringe benefits” means fringe benefits

described in 29 CFR part 5. Bona fide fringe benefits

include medical or hospital care, retirement or death

benefits, job-related injury or illness compensation,

insurance for these benefits, unemployment benefits, life

and disability insurance, vacation or holiday pay, and cost

for apprenticeship or similar programs. They don’t include

benefits required by other federal, state or local laws. For

more information, see Regulations section 1.45-7(d)(2).

Construction, Alteration, or Repair

The term “construction, alteration, or repair” generally

means those activities described in 29 CFR part 5.2. It

doesn’t include routine maintenance done to keep a

facility running after it’s placed in service, including

inspections, cleaning, and replacement of materials with

limited life spans such as filters, light bulbs, or calibrating

Instructions for Form 7220 (December 2025)

equipment. Routine maintenance is regular, recurring, and

meant to preserve the facility, not improve it. Whether

work counts as construction, alteration, or repair depends

on the specific facts and circumstances. For more

information, see Regulations section 1.45-7(d)(3).

Contractor

The term “contractor” means any person that enters into a

contract directly with the taxpayer (or the taxpayer’s

designee, assignee, or agent) for the construction,

alteration, or repair of a facility.

Employed

The term “employed” means performing the duties of a

laborer or mechanic for the taxpayer, contractor, or

subcontractor (as applicable), regardless of whether the

individual would be characterized as an employee or an

independent contractor for other federal tax purposes.

Journeyworker

The term “journeyworker” means an individual who has

attained a level of skill, abilities, and competencies

recognized within an industry as having mastered the

skills and competencies required for the occupation. This

also refers to a mentor, technician, specialist, or other

skilled individual who has documented sufficient skills and

knowledge of an occupation, either through formal

apprenticeship or through practical on-the-job experience

and formal training.

Laborer and Mechanic

The terms “laborer” and “mechanic” mean individuals

whose duties are manual or physical in nature (including

individuals who use tools or who are performing the work

of a trade). They include apprentices and helpers. The

terms don’t apply to individuals whose duties are primarily

administrative, executive, or clerical, rather than manual.

Working forepersons who devote more than 20% of their

time during a workweek to laborer or mechanic duties,

and who don’t meet the criteria for exemption of 29 CFR

part 541, are considered laborers and mechanics for the

time spent conducting laborer and mechanic duties. See

Regulations section 1.45-7(d)(8) for examples.

Labor Hours

The term “labor hours” means the total number of hours

devoted to the performance of construction, alteration, or

repair work by any individual employed by the taxpayer or

by any contractor or subcontractor. Labor hours don’t

include hours worked by foremen, superintendents,

owners, or persons employed in bona fide executive,

administrative, or professional capacities (as defined in 29

CFR part 541).

Qualified Apprentice

The term “qualified apprentice” means an individual who

is employed by the taxpayer or by any contractor or

subcontractor and who is participating in a registered

apprenticeship program. For more information, see

Regulations section 1.45-8(g)(8).

Instructions for Form 7220 (December 2025)

Registered Apprenticeship Program

The term “registered apprenticeship program” means a

program that has been registered by the U.S. Department

of Labor’s Office of Apprenticeship or a recognized state

apprenticeship agency. For more information, see

Regulations section 1.45-8(g)(9).

Subcontractor

The term “subcontractor” means any person that enters

into a contract with a contractor for the construction,

alteration, or repair of a qualified facility. It also includes

any person that agrees to perform or be responsible for

the performance of any part of a contract entered into

between the taxpayer (or the taxpayer’s designee,

assignee, or agent) and a contractor (or between a

contractor and another subcontractor) with respect to the

construction, alteration, or repair of a qualified facility.

Specific Instructions

Part I—Facility/Project Information

Line 1

If applicable, enter the pre-filing registration number that

you received from the IRS.

Line 2a

Enter a description of the facility or project.

Lines 2b and 2c

Enter the address and coordinates of the facility or project.

Line 3

Enter the date construction began.

Beginning of construction. There are two methods that

can be used to establish that construction of a facility has

started, the Physical Work Test and the Five Percent Safe

Harbor. Although both methods can be used, only one

method is needed to establish that construction of a

qualified facility has begun.

• Physical Work Test. Under this test, construction of a

facility begins when physical work of a significant nature

begins, provided that you maintain a continuous program

of construction.

• Five Percent Safe Harbor. Using this safe harbor,

construction of a facility will be considered as having

begun if you pay or incur (within the meaning of

Regulations sections 1.461-1(a)(1) and (2)) 5% or more of

the total cost of the facility, and you make continuous effort

to complete the facility. See Notice 2022-61, available at

IRS.gov/irb/2022-52_IRB#NOT-2022-61, and Notice

2025-42, available at IRS.gov/irb/

2025-36_IRB#NOT-2025-42, for more information.

Line 4

Enter the date the facility was originally placed in service.

For the section 45L new energy efficient home credit, use

the date the qualified residence was acquired by a person

for use as a residence.

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Line 5

Check “Yes” if the facility was placed in service in the

current tax year, and complete Parts II and III. Don’t

complete Part III if you’re claiming increased amounts for

meeting certain PWA requirements on Form 8908 or Form

7213, Part II. If the facility was not placed in service in the

current tax year (that is, it was placed in service in a prior

year), then skip lines 6 and 9.

Line 6

Check the box for the form on which you’re claiming

increased amounts for meeting certain PWA

requirements.

Line 7

Check “Yes” if the construction, alteration, or repair work

of the facility was done under a qualifying project labor

agreement. See Project Labor Agreements, earlier.

Line 8

Check “Yes” if you have made correction payments related

to the underpayment of prevailing wages to laborers

and/or mechanics and are reporting those prior correction

payments with any associated penalty payments (as

applicable). Complete Part IV if you checked “Yes.”

Line 9

Check “Yes” if you’re relying on the Good Faith Effort

Exception of Regulations section 1.45-8(f)(1) and

complete Part V. See Good Faith Effort Exception, earlier.

Check “Not applicable” only if you’re claiming increased

amounts for meeting certain PWA requirements on Form

8908 or Form 7213, Part II.

Line 10

Check “Yes” if you performed any alterations or repairs to

the facility during any portion of the tax year and complete

Part II. See Construction, Alteration, or Repair, earlier.

Also complete Part IV if you have made correction

payments related to the underpayment of prevailing

wages to laborers and/or mechanics and are reporting

those prior correction payments with any associated

penalty payments (as applicable). Complete Part IV if you

checked “Yes.”

Note: Don’t complete Parts II and IV for the section 30C

alternative fuel vehicle refueling property credit, the

section 45L new energy efficient home credit, the section

179D energy efficient commercial buildings deduction,

and the section 48C qualifying advanced energy project

credit if the facility was not placed in service during the tax

year.

Check “No” if there were no alterations or repairs and

attach a statement to the form attesting that no alterations

or repairs were performed to the facility during the tax

year. The statement should include the following.

• The taxpayer’s name, taxpayer identification number,

and facility description (including the owner information, if

different from the filer).

• A statement declaring that no alterations and repairs

were performed to the facility during the tax year. See

Construction, Alteration, or Repair, earlier.

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• A declaration, applicable to the statement and any

accompanying documents, signed by the taxpayer, or

signed by a person currently authorized to bind the

taxpayer in such matters, in the following form: “Under

penalties of perjury, I declare that I have examined this

statement, including accompanying documents, and to

the best of my knowledge and belief, the facts presented

in support of this statement are true, correct, and

complete.”

Part II—Prevailing Wages Paid by You

or Contractor or Subcontractor to

Laborers and Mechanics on the

Facility/Project

Note: Complete as many copies of Part II as necessary.

Column (a)

Enter the name of the entity that is directly employing the

laborers and/or mechanics. This could be the taxpayer,

contractor, or a subcontractor in the construction,

alteration, or repair of the facility.

Column (b)

Enter the employer identification number (EIN) of the

entity that is directly employing the laborers and/or

mechanics.

Column (c)

Enter each labor or work classification as defined by the

Davis-Bacon Act (subchapter IV of chapter 31 of title 40 of

the United States Code). These classifications should be

used throughout the construction, alteration, or repair of

the facility for where the work is performed.

Column (d)

Enter the total number of laborers and/or mechanics

within each labor or work classification for the entity listed

in column (a).

Column (e)

Enter the total hours worked by all laborers and/or

mechanics (including qualified apprentices) within each

labor or work classification for the entity listed in column

(a).

Column (f)

Enter the total hourly wages paid to all laborers and/or

mechanics (including qualified apprentices) within each

labor or work classification for the entity listed in column

(a).

Column (g)

Enter the total bona fide fringe benefits paid to all laborers

and/or mechanics (including qualified apprentices) within

each labor or work classification for the entity listed in

column (a). See Bona Fide Fringe Benefits, earlier.

Column (h)

Add columns (f) and (g) and enter the result in column (h).

Instructions for Form 7220 (December 2025)

Part III—Apprenticeship

Requirements and Penalties

Note: Complete as many copies of Part III as necessary.

Column (a)

Enter the name of the entity that is directly employing the

qualified apprentices. This could be the taxpayer,

contractor, or subcontractor in the construction, alteration,

or repair of the facility.

Part IV—Corrections and Penalties

Related to Failure to Satisfy Prevailing

Wage Requirements

See Correction and Penalty Related to Failure to Satisfy

Prevailing Wage Requirements, earlier.

Note: Complete as many copies of Part IV as necessary.

Column (a)

Column (b)

Enter the EIN of the entity that is directly employing the

qualified apprentices.

Enter the name of the entity that is directly employing the

laborers and/or mechanics. This could be the taxpayer,

contractor, or subcontractor in the construction, alteration,

or repair of the facility.

Column (c)

Column (b)

Enter each labor or work classification as defined by the

Davis-Bacon Act (subchapter IV of chapter 31 of title 40 of

the United States Code). These classifications should be

used throughout the construction, alteration, or repair of

the facility for where the work is performed.

Column (d)

Enter the number of qualified apprentices within each

labor or work classification for the entity listed in column

(a). See Qualified Apprentice, earlier.

Column (e)

Enter the total labor hours worked by all qualified

apprentices within each labor or work classification for the

entity listed in column (a).

Column (f)

Enter the total hourly wages paid to all qualified

apprentices within each labor or work classification for the

entity listed in column (a).

Column (g)

Enter the total bona fide fringe benefits paid to all qualified

apprentices within each labor or work classification for the

entity listed in column (a).

Column (h)

Enter the total labor hours for which the section 45(b)(8)

(A) labor hours requirement and/or the section 45(b)(8)(C)

participation requirement was not satisfied with respect to

the construction, alteration, or repair work of the facility.

See Apprenticeship Cure Provision, earlier. Leave blank if

the labor hours requirement and the participation

requirement were satisfied.

Column (i)

Multiply column (h) by $50 and enter the result in column

(i). Report column (i), line 18, on the corresponding line of

Form 4255, Part I, columns (p)(1), (p)(2), and/or (p)(3). For

more information, see the Instructions for Form 4255.

Leave blank if column (h) was blank.

Enter the EIN of the entity that is directly employing the

laborers and/or mechanics.

Column (c)

Enter each labor or work classification as defined by the

Davis-Bacon Act (subchapter IV of chapter 31 of title 40 of

the United States Code). These classifications should be

used throughout the construction, alteration, or repair of

the facility for where the work is performed.

Column (d)

Enter the number of laborers and/or mechanics for whom

you are relying on penalty waiver requirements under

Regulations section 1.45-7(c)(6). See the Note under

Correction and Penalty Related to Failure to Satisfy

Prevailing Wage Requirements, earlier, for more

information.

Column (e)

Enter the number of laborers and/or mechanics for whom

you are reporting a penalty payment under section 45(b)

(7)(B)(i)(II). See Correction and Penalty Related to Failure

to Satisfy Prevailing Wage Requirements, earlier. Leave

blank if not applicable.

Column (f)

Multiply column (e) by $5,000 and enter in column (f).

Report column (f), line 18, on the corresponding line of

Form 4255, Part I, columns (o)(1), (o)(2), and/or (o)(3). For

more information, see the Instructions for Form 4255.

Leave blank if column (e) was blank.

Column (g)(i)

Enter total wages paid to laborers and/or mechanics by

the taxpayer, contractor, or subcontractor under section

45(b)(7)(B)(i)(I)(aa). This amount is the difference

between the amount of wages paid to the laborer and/or

mechanic for all hours worked during the pay period and

the amount of wages required to be paid to such laborer

and/or mechanic for all hours worked during such period.

Column (g)(ii)

Enter the total interest paid to laborers and/or mechanics

by the taxpayer, contractor, or subcontractor.

Instructions for Form 7220 (December 2025)

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Column (g)(iii)

Add columns (g)(i) and (g)(ii) and enter the result in

column (g)(iii).

Part V—Good Faith Effort Exception

Claimed for Purposes of the

Apprenticeship Requirements

See Good Faith Effort Exception, earlier.

used throughout the construction, alteration, or repair of

the facility for where the work is performed.

Column (d)

Enter the number of qualified apprentices you requested

for each labor or work classification from the registered

apprenticeship program.

Column (e)

Note: Complete as many copies of Part V as necessary.

Enter the number of hours needed to satisfy the

Regulations section 1.45-8(b) labor hours requirement.

Column (a)

Column (f)

Enter the name of the entity that is directly employing the

qualified apprentices. This could be the taxpayer,

contractor, or subcontractor in the construction, alteration,

or repair of the facility.

Enter the number of hours for which qualified apprentices

were requested and denied.

Column (g)

Enter the EIN of the entity that is directly employing the

qualified apprentices.

Check this box if the Registered Apprenticeship Program

denied or partially denied the request for qualified

apprentices. Leave this box unchecked if the Registered

Apprenticeship Program didn’t give a response.

Column (c)

Column (h)

Column (b)

Enter each labor or work classification as defined by the

Davis-Bacon Act (subchapter IV of chapter 31 of title 40 of

the United States Code). These classifications should be

Check this box if the Registered Apprenticeship Program

didn’t respond to the apprentice request.

Paperwork Reduction Act Notice. We ask for you to obtain the information on this form to carry out the Internal

Revenue laws of the United States. You are required to obtain this information.

You are not required to obtain the information requested on a form that is subject to the Paperwork Reduction Act

unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be

retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax

returns and return information are confidential, as required by section 6103.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden

for individual filers is approved under OMB control number 1545-0074, under OMB control number 1545-0047 for

tax-exempt filers, under OMB control number 1545-0123 for business filers, and under OMB control number 1545-0092

for trust filers. For the estimated averages, see the instructions for your income tax return.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler,

we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

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Instructions for Form 7220 (December 2025)