Nonprofit Resources
Treasury and IRS Provide Initial Guidance on Foreign Entity Restrictions for Clean Energy Credits
On February 12, 2026, the U.S. Department of the Treasury and the IRS released Notice 2026-15, offering initial guidance on the prohibited foreign entity (PFE) restrictions on certain clean energy credits introduced by the One Big Beautiful Bill Act (OBBBA).
Under the OBBBA, electricity-producing qualified facilities, energy storage technologies, and eligible components may be ineligible for certain clean energy tax credits if they receive material assistance from a PFE. Notice 2026-15 begins to clarify how those restrictions will apply.
Section 3 of the notice outlines the provisions Treasury and the IRS plan to include in the proposed regulations, which are open for public comment through March 30, 2026. Section 4 provides interim safe harbor guidance on determining whether material assistance from a PFE is present while the regulations are being developed.
Notice 2026-15 also states that taxpayers may rely on the rules within the notice to calculate the material assistance cost ratio for:
- Qualified facilities and energy storage technologies under Section 45Y or 48E that begin construction after December 31, 2025, until 60 days after the publication of the forthcoming safe harbor tables.
- Eligible components under Section 45X that are sold in taxable years beginning after July 4, 2025 (the date the OBBBA was enacted), until the publication of the forthcoming safe harbor tables.
Please contact us with any questions about how this may affect your organization or to learn more about our clean energy credit services for nonprofits.
Chris Purnell
Chris serves as Tax Counsel, Partner, CRI Advisors, LLC†, and Partner, CRI Capin Crouse Advisors, LLC†. A licensed attorney, Chris advises exempt organizations of all sizes on a wide range of issues, including tax and employee benefit related matters, representation before state and federal tax authorities, and assistance with firm audit or advisory engagements to formulate advice and counsel on important operating and tax issues. Chris also assists clients with general tax issues, unrelated business income, charitable solicitation, and missionary employment structures. Note: Although licensed to practice law in Indiana, Chris's services through CapinCrouse do not involve the practice of law and consequently do not result in the creation of an attorney-client relationship.