Treasury Weighs Energy Tax Credit Foreign Restriction Concerns

Upcoming guidance will attempt to solve taxpayer questions on strict foreign restrictions added to the energy tax credits by the 2025 GOP tax law, a Treasury Department official said.

The restrictions aim to prevent certain countries from benefiting from US tax breaks for energy projects, limiting components and contract payments with ties to prohibited foreign entities. Tax professionals have said that compliance complications may cause fewer projects to qualify for the tax credits.

Courtney Hutson, an attorney-adviser at Treasury, said guidance will address how detailed taxpayers need to be when determining whether sourcing for different components is from a prohibited ...