Treasury and IRS issue interim guidance on foreign-entity rules for clean energy tax credits
Treasury and the IRS issued Notice 2026-15 to guide when electricity-producing facilities, energy storage technologies, or 45X components receive material assistance from a prohibited foreign entity, which could render them ineligible for clean energy credits under Sections 45Y, 48E, and 45X. The notice outlines interim safe harbors, how to calculate the material assistance cost ratio, and notes that forthcoming regulations and additional guidance will define PFE and update safe harbors. Taxpayers may rely on these rules for projects begun after 12/31/2025 through 60 days after the forthcoming safe harbor tables, and for 45X components sold in taxable years after 7/4/2025 until those tables are published. Comments on definitional, anti-circumvention, and related issues are due within 45 days.