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03 October 2025

IRS issues inflation adjustments for certain 2025 IRC Section 45Y tax credits

  • The 2025 inflation adjustment factor for the 2025 IRC Section 45Y clean electricity production tax credit is 1.9971.
  • This factor, which is the same as the one previously released for 2025 PTC under IRC Section 45, specifically applies to the sales, consumption or storage of electricity produced in the United States or a possession at a qualified facility.
  • Taxpayers should assess their eligibility for the PTC based on facility placement dates and confirm compliance with prevailing wage and apprenticeship requirements to maximize credits.
 

The IRS released the 2025 inflation adjustment factor and reference prices for calculating the IRC Section 45Y clean electricity production tax credit (PTC) that applies to the sales, consumption or storage of electricity produced in the United States or a possession at a qualified facility under IRC Section 45Y(c)(1).

The inflation adjustment factor for calendar year 2025 for purposes of IRC Section 45Y(c)(1) is 1.9971.

In May 2025, the IRS released earlier guidance with inflation adjustment factors generally for calculating 2025 IRC Section 45 credits with the same factor of 1.9971 (see Tax Alert 2025-1160).

For facilities placed in service on or after January 1, 2022, the PTC for the sales, consumption, or storage of electricity is 0.6 cents per kilowatt hour on the sale of electricity from all eligible technologies (3 cents if prevailing wage and apprenticeship requirements are met). The inflation adjustment factor for calendar-year 2025 is 1.9971.

Implications

It is not surprising that the PTC rate for 45Y is the same as 45 for 2025. Taxpayers that have projects that will generate 45Y credits or that have or are considering purchasing 45Y credits under IRC Section 6418 should update their calculations/estimates accordingly.

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Contact Information

For additional information concerning this Alert, please contact:

Tax Credit Investment Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2025-2006

 

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