Guidance relating to the Tax Code section 45U existing nuclear tax credit and to Tax Code sections 7701(a)(51) and (52) regarding prohibited foreign entity and material assistance restrictions for energy tax credits were among the 105 projects listed in the U.S. Department of Treasury “2025-2026 Priority Guidance Plan” released Sept. 30.
APPA previously asked Treasury to address the lack of guidance for the nuclear tax credit and the prohibited foreign entity provisions.
The extended deadline for tax returns seeking to claim the first year of the existing nuclear tax credit is November 15 (for taxpayers operating on a calendar year basis). And, prohibited foreign entity provisions begin to take effect for taxable years beginning after July 4, 2025 – so on January 1, 2026, for entities operating on a calendar year basis.
On the latter, APPA said it does not believe any public power utility seeking to claim an energy tax credit would be a “foreign influenced” entity as defined in section 7701(a)(51).
However, APPA is concerned that a test of whether an entity’s debt is owned by a “specified foreign entity” could be quite burdensome or – under some readings of the statute – almost impossible to implement at all.
As a result, APPA is working with outside stakeholders to provide comments to Treasury on how best to implement this provision and is glad to see it listed on the Priority Guidance Plan, it noted.
In contrast to past guidance plans – which included projects that had languished for years – Treasury Assistant Secretary (Tax Policy) Kevin Salinger’s has said that this year’s priority guidance Plan represents the projects Treasury and IRS plan to complete during the 12-month plan year (from July 1, 2025, through June 30, 2026).
Because the plan is back dated, 11 of the projects have already been completed.
As expected, the plan primarily focuses on implementation of the One Big Beautiful Bill Act and the deregulatory mandate from the President’s February Executive Order.
The list does include six items related to “digital assets” but these are focused on the taxation of such assets, not investments in their creation, such as changes to private use rules allowing greater flexibility to public power providers in negotiating customized contracts with large load customers.
APPA said it is continuing to review the plan and will follow up with any additional detail if appropriate.
