The Treasury and IRS issued Notice 2026-15 on 12 February 2026, providing interim guidance on whether electricity-producing facilities, energy storage technologies, or components receive material assistance from prohibited foreign entities that would disqualify them from clean electricity credits (Sections 45Y and 48E) and advanced manufacturing credits (Section 45X)—with safe harbours available until forthcoming regulations are published.
The Department of the Treasury and the Internal Revenue Service (IRS) announced on 12 February 2026 that it is providing guidance for determining whether electricity-producing qualified facilities, energy storage technologies, or eligible components are receiving material assistance from a prohibited foreign entity (PFE) and would be ineligible for certain energy tax credits.
The One, Big, Beautiful Bill added new restrictions to clean electricity credits under Internal Revenue Code Sections 45Y and 48E, and the advanced manufacturing production credit under Section 45X to determine eligibility for credits when there is material assistance from a PFE.
Notice 2026-15 provides that Treasury and IRS intend to propose regulations with respect to the definition of a PFE and the calculation of the material assistance cost ratio that taxpayers must use to determine whether there was material assistance from a PFE. The notice also details how to use the interim safe harbours authorised by the OBBB and provides example calculations under those safe harbours.
The notice also provides that Treasury and IRS intend to propose regulations and other further guidance with respect to the definition of a PFE and the material assistance rules, including new safe harbour tables as authorised in the OBBB.
The notice explains that a taxpayer may rely on the rules provided in the notice to calculate the material assistance cost ratio for:
- any Section 45Y or 48E qualified facility or energy storage technology the construction of which begins after Dec. 31, 2025, until 60 days after the publication of the forthcoming safe harbour tables.
- any Section 45X eligible components sold in taxable years beginning after July 4, 2025, the date of the OBBB’s enactment, until the date that the forthcoming safe harbour tables are published.
Finally, the notice requests comments 45 days from the date of publication regarding definitional, anti-circumvention, and other issues for future guidance.
