IRA Tax Credit Tracker
House Republicans have begun drafting the legislative text for the budget bill they intend to pass through the reconciliation process. This process bypasses the Senate filibuster and allows the bill to be sent to the President’s desk with only a simple majority vote. As debate is underway, the fate of the Inflation Reduction Act’s (IRA) tax credits remains to be seen.
Some House Republicans are urging the GOP party to “take a scalpel, not a sledgehammer approach” to the IRA. Most recently on March 10, 2025, 21 House Republicans, led by Rep. Andrew Garbarino (R-N.Y.), wrote a letter to House Ways and Means Chairman Jason Smith (R-Mo.) urging him to preserve IRA energy tax credits. While specific credits were not mentioned, Representatives such as Mariannette Meeks Miller (R-W.V.) have said that “Tax incentives like the tech-neutral clean energy credits under 45Y, 45E, and the 45Q carbon sequestration credit and the 45X advanced manufacturing credit aim to strengthen manufacturing capability and reduce the engineering, procurement and construction risk that have plagued major energy projects.” Activity on the Hill is also busy as numerous and various industry associations make their case to Republicans about preserving specific IRA energy tax credits.
Below, ML Strategies is actively tracking IRA tax credit developments, updating as needed.
| Tax Credit | Credit Type | IRC Number | Summary of Credit and Latest Guidance | |
|---|---|---|---|---|
| Cost Recovery for Qualified Facilities, Qualified Property, and Energy Storage … | Carbon Management Credits | §168 | Issued on December 12, 2024, the Final Rule offers certain qualification for clean energy facilities, property, and technology placed in service after 2024 may be classified as a 5-year property via the modified accelerated cost recovery system, making them eligible for the 5-year depreciation deduction. This allows qualifying properties or facilities to deduct the depreciating value of their business assets from their taxable income faster than the actual rate of the value declining. |
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| Credit for Cabon Oxide Sequestration | Carbon Management Credits | §45Q | Issued on July 24, 2024, the proposed guidance states that this credit is for qualified carbon oxide captured at a qualified facility using certain carbon capture equipment, which is disposed of in secure geological storage, used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of in secure geological storage, or utilized for certain purposes. |
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| Energy Efficient Commercial Buildings Deduction | Carbon Management Credits | §179D | Issued on May 26, 2022, the Final Rule offers claims on tax deductions for building owners who place in service energy efficient commercial building property or energy efficient commercial building retrofit property. An increased tax deduction is also offered for increased energy savings or for meeting prevailing wage and apprenticeship requirements. Beginning January 1, 2023, this deduction is also available to designers of energy efficient commercial building properties/energy efficient commercial building retrofit property owned by specific tax-exempt entities. |