The Trusted Professional

IRS Releases FAQs on Clean Fuel Production Tax Credits

On Aug. 21, the IRS released a fact sheet offering answers to frequently asked questions (FAQs) referring to Section 45Z of the Internal Revenue Code. The section, which was added by the Inflation Reduction Act, offers a Clean Fuel Production Credit for taxpayers who produce and sell qualifying clean transportation fuels from 2025 through 2027.

The FAQs answers which energy credits and deductions are expiring under the One Big Beautiful Bill Act, and what their new termination dates are in the following chart:

Code SectionSection TitleTermination Date
25CEnergy efficient home improvement creditThe credit will not be allowed for any property placed in service after December 31, 2025.
25DResidential clean energy creditThe credit will not be allowed for any expenditures made after December 31, 2025.
25EPreviously-owned clean vehicles creditThe credit will not be allowed with respect to any vehicle acquired after September 30, 2025.
30CAlternative fuel vehicle refueling property creditThe credit will not be allowed for any property placed in service after June 30, 2026.
30DNew clean vehicle creditThe credit will not be allowed for any vehicle acquired after September 30, 2025.
45LNew energy efficient home creditThe credit will not be allowed for any qualified new energy efficient home acquired after June 30, 2026.
45WQualified commercial clean vehicle creditThe credit will not be allowed for any vehicle acquired after September 30, 2025.
179DEnergy efficient commercial buildings deductionThe deduction will not be allowed with respect to any property the construction of which begins after June 30, 2026.

The FAQs also answered questions about acquiring a vehicle or purposes of the expiring clean vehicle credits under sections 25E, 30D, and 45W, what “acquired” means and what impact does “acquisition” of a vehicle have on a taxpayer’s ability to claim a credit under sections 25E, 30D, and 45W. According to the IRS, acquiring a vehicle prior to the termination date is an initial step, but acquisition alone does not immediately entitle a taxpayer to a credit.

The IRS also clarifies whether an election to transfer a clean vehicle credit be made at the time of acquisition and what will happen to the Energy Credits Online portal with the new termination periods for the clean vehicle credits.

The IRS also said that for purposes of the energy efficient home improvement credit under section 25C, qualified manufacturers are not required to make periodic written reports to the IRS regarding specified property. The tax agency also stated that for purposes of the residential clean energy credit under section 25D, a credit cannot be claimed for property installed after Dec. 31, 2025, or constructed after that date, if a taxpayer pays for the property on or before Dec. 31, 2025.