Tax insight

Making lemonade out of the proposed changes to IRA tax credits

Insight
5 minute read
May 29, 2025

What happened?

Passage by the House of H.R. 1, the “One Big Beautiful Bill Act” has set the stage for significant changes to the federal clean energy tax landscape. Although the Bill would repeal credits established by the Inflation Reduction Act (IRA) for clean vehicles and impose new limitations on others, many of the benefits of key IRA credits generally would remain intact for businesses, with earlier sunset dates. While the Senate has yet to respond with its own proposals, the House’s proposed changes have sparked concern across the clean energy sector, but a closer look reveals that substantial opportunities remain for companies that act decisively and strategically. The evolving policy environment is not an end, but a new beginning—one that rewards agility, innovation, and proactive planning.

Why is it relevant? 

Despite the headlines, the window to claim IRA credits and incentives remains open, but the timeline could be accelerated. In addition to new sunset dates, the biggest changes to the IRA credits included in the Bill would refine eligibility rules by disqualifying certain wind and solar activities, preclude foreign ownership and involvement, and restrict transferability. Congressional leaders have set a goal of sending a final bill to be signed by President Trump before Congress begins a July 4 recess, but the House and Senate will have to agree on a final identical version of H.R. 1 , meaning enactment could easily slip until late July or early August. Some Republican senators already have indicated that they do not support the accelerated phase-out of IRA credits proposed by the House. Enactment of the final Bill, whatever form it takes, is expected to create new opportunities for tax planning, supply chain realignment, and compliance innovation.

Action to consider 

The next 60 days are critical for companies to position themselves, as the House’s passage of H.R. 1 clears the way for Senate action on the legislation to begin in June. Now is the time for companies to assess project start dates to maintain eligibility for IRA credits, before new restrictions on foreign ownership and involvement apply, perhaps as soon as next year. Additionally, limitations proposed on the transferability of credits warrant a comprehensive review of IRA projects, whether existing or contemplated, to determine the potential impact on supply chains and investment structures. Finally, there still may be opportunities to influence the outcome of the Bill by engaging with policymakers and industry groups.