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Tax Credit
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Changes to FEOC Application from House Legislation in Senate Draft of June 16
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Changes to FEOC Application Embodied in Passed Senate Legislation of July 1
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Effective Date (for SFEs & FIEs)
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Material Assistance Cost Ratios (Qualified Facilities, Energy Storage Technology, & Eligible Components)
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Clean Energy Production Credit (Section 45Y)
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Previously had to begin construction within 60 days of enactment of legislation and place project in service by the end of 2028. Now must commence construction by 12/31/2025 if “Material Assistance” is received from a Prohibited Foreign Entity (PFE). FEOC restrictions previously effective January 1, 2026. New effective dates for Specified Foreign Entities (SFEs) & Foreign-Influenced Entities (FIEs).
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For taxable years beginning after the date of enactment, a taxpayer cannot be a PFE. Any qualified facilities that begin construction after December 31, 2025, cannot receive material assistance from a PFE (as under House version).
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SFE & FIE – Tax year after enactment of bill
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Qualified Facilities: 2026 (40%); 2027 (45%); 2028 (50%); 2029 (55%); after 2029 (60%).
Energy Storage Technology: 2026 (55%); 2027 (60%); 2028 (65%); 2029 (70%); after 2029 (75%).
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Clean Electricity Investment Credit (Section 48E)
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Previously had to begin construction within 60 days of enactment of legislation and place project in service by the end of 2028. Now must commence construction by 12/31/2025 if “Material Assistance” from a PFE. New effective dates.
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For taxable years beginning after the date of enactment, a taxpayer cannot be a PFE. Any qualified facilities that begin construction after December 31, 2025, cannot receive material assistance from a PFE (as under House version).
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SFE & FIE – Tax year after enactment of bill
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Qualified Facilities: 2026 (40%); 2027 (45%); 2028 (50%); 2029 (55%); after 2029 (60%).
Energy Storage Technology: 2026 (55%); 2027 (60%); 2028 (65%); 2029 (70%); after 2029 (75%).
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Zero-Emission Nuclear Power Production Credit (Section 45U)
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New effective dates.
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For taxable years beginning after the date of enactment, a taxpayer cannot be an SFE and two years after the date of enactment cannot be an FIE.
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SFE – Tax year after enactment
FIE – two years after enactment
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N/A
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Advanced Manufacturing Production Credit (Section 45X)
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No credit allowed for components manufactured beginning in 2026 if Material Assistance of a PFE. New effective dates.
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For taxable years beginning after the date of enactment, a taxpayer cannot be a PFE or receive any material assistance from a PFE. For taxable years beginning after the date of enactment, no credit will be available for any eligible components that are deemed to be produced through “effective control” by an SFE.
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SFE & FIE – Tax year after enactment of bill
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Eligible Components:
Solar: 2026 (50%); 2027 (60%); 2028 (70%); 2029 (80%); after 2029 (85%).
Wind: 2026 (85%); 2027 (90%).
Inverters: 2026 (50%); 2027 (55%); 2028 (60%); 2029 (65%); after 2029 (70%).
Battery Components: 2026 (60%); 2027 (65%); 2028 (70%); 2029 (80%); after 2029 (85%).
Critical Minerals: Sold after 12/31/2025 but before 1/1/2030 (0%); 2030 (25%); 2031 (30%); 2032 (40%); after 2032 (50%).
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Credit for Carbon Oxide Sequestration (Section 45Q)
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New effective dates.
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For taxable years beginning after the date of enactment, the taxpayer cannot be a PFE.
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SFE & FIE – Tax year after enactment
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N/A
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Clean Fuel Production Credit (Section 45Z)
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Previously no FEOC limitations; now FEOCs apply.
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For taxable years beginning after the date of enactment, a taxpayer cannot be an SFE, and for taxable years beginning two years after enactment, a taxpayer cannot be an FIE.
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SFE – Tax year after enactment
FIE – two years after enactment
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N/A
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