Nathan Smithson

By Nathan T. Smithson, Ali Abazari, and Travis Wussow On December 19, 2025, the IRS issued Notice 2026-1, providing a safe harbor for taxpayers seeking to claim the federal income tax credit for qualified carbon oxide sequestration under section 45Q of the Internal Revenue Code of 1986, as amended (the “Code”).

The One Big Beautiful Bill Act, enacted on July 4, 2025, imposed new restrictions on the availability of the Investment Tax Credit (ITC) and Production Tax Credit (PTC) for wind and solar projects under Code Sections 45Y and 48E. In order to be eligible for the ITC and PTC moving forward, new wind and solar projects must either be placed in service by December 31, 2027, or “begin construction” on or before July 4, 2026.

The One Big Beautiful Bill Act (the “OBBBA”) limits future opportunities for some of the clean energy tax credits previously enacted under the Inflation Reduction Act of 2022 (the “IRA”). During the election campaign President Trump expressed a strong interest for a complete repeal of the IRA credit provisions. Many pundits expressed their belief that any changes to the IRA would be more reflective of a scalpel than a sledgehammer.